ST. PETERSBURG ELECTION WINNER ENUMERATES CASES OF HIGH-LEVEL CORRUPTION…

Meanwhile, Yuri Boldyrev, whose political bloc turned in an impressive performance in Sunday’s run-off vote for St. Petersburg’s legislative assembly, held forth Monday (December 21) on the issue of corruption. Addressing a national parliamentary commission set up to examine corruption in the “higher echelons of power,” Boldyrev said the Audit Chamber, the federal watchdog agency in which he serves as deputy head, had uncovered a number of instances of high-level misuse of government funds and corruption. According to Boldyrev, the Audit Chamber discovered that exemptions from import tariffs, which had been granted to the National Sports Fund (NSF), a “charitable” organization founded by Shamil Tarpishchev–Yeltsin’s favorite tennis partner and one-time de facto “sports minister,” now Luzhkov’s sports adviser–cost the federal budget 37 trillion nondenominated rubles (some US$7 billion) in 1995 alone. It should be noted that the tariffs on the items imported into Russia under NSF waivers–mostly cigarettes and alcoholic drinks–were extremely high, up to 300 percent, which accounts for the Audit Chamber’s whopping figures. Some analysts believe that the rates were set as high as they were precisely to give favored organizations such as the NSF monopoly control over the import of such items. Other such organizations include various Afghan War veterans groups and even the Russian Society for the Deaf. The NSF fell into eclipse in 1996, after an assassination attempt on its head, Boris Federov, and the ouster from the Kremlin of its main patron, Presidential Security Service chief Aleksandr Korzhakov. Federov should not be confused with Russia’s former finance minister and tax chief, Boris Fedorov. The Russian Orthodox Church has reportedly taken over the cigarette-import monopoly.

Boldyrev also told the parliamentary commission that in 1996, Gazprom, Russia’s natural gas monopoly, United Energy Systems, its electricity grid, and other organizations paid money into Yeltsin’s re-election fund, in return for which their debts to the federal government, such as unpaid taxes, were forgiven. Boldyrev noted that a decree signed by Yeltsin had handed over 33 percent of Gazprom’s shares to its chairman, Rem Vyakhirev, to be held in trust. Boldyrev said that while the decree meant that the state-controlled gas monopoly was allowed to keep for itself some 33 trillion rubles (roughly $6 billion) in profits in 1996, Gazprom paid 250 percent less than it should have in taxes.

In addition, Boldyrev claimed that in 1996, the Audit Chamber discovered that Garantiya Bank, at that time headed by Sergei Kirienko, failed to pay 110 billion rubles (roughly US$22 million) it owed to the federal Pension Fund, while at the same time guaranteeing a deal between Norsi Oil, a Nizhny Novgorod-based company, and an oil enterprise in the Khanti-Mansy autonomous region. In November 1996, Kirienko left Garantiya Bank to head Norsi Oil. Kirienko, meanwhile, who was Russia’s prime minister during most of 1998, until the August 17 financial collapse, was named “Man of the Year” by “Ogenyok” magazine (Russian agencies, December 21).

…AND MAY HAVE BIGGER FISH TO FRY.