DATE=10/6/1999 TYPE=CORRESPONDENT REPORT TITLE=RUSSIA CORRUPTION (LO) NUMBER=2-254736 BYLINE=BARRY WOOD DATELINE=WASHINGTON INTERNET=YES CONTENT= VOICED AT: INTRO: A leading U-S scholar on corruption says the financial scandal involving the Bank of New York and deposits from Russian criminal interests is merely the tip of an iceberg. V-O-A's Barry Wood reports that researcher Louise Shelley believes the scandal will implicate leading politicians in Russia. TEXT: Professor Shelley says this is the biggest money laundering scandal in U-S history. She told a forum at American University (in Washington, where she heads the Transnational Crime and Corruption Center), that the investigation into the Russian operations of the Bank of New York may go on for years. Ms. Shelley says the investigation is likely to reveal that prominent Russian politicians and business leaders are involved in the scandal. /// FIRST SHELLEY ACT // We're going to find very many top Russian leaders involved in this. And if we really pursue this investigation from our side, as we should, we are going to find American complicity and complicity from other countries also at very high levels, from our political spheres, our legal spheres and other parts of the elite in our societies. /// END ACT /// Professor Shelley says high level corruption has been common in Russia and other states of the former Soviet Union. She says the existence of such corruption should not come as a surprise. She says western business executives are accomplices because they often are prepared to pay bribes and use false invoicing to permit local partners to skim off investment dollars. Professor Shelley says capital flight from Russia is huge. She calls the theft of state assets by criminal interests the plundering of Russia. Ms. Shelley says some American banks want to stop congressional investigations into Russian money laundering because they fear American banks will lose business to their foreign competitors. /// SECOND SHELLEY ACT /// There's been pressure placed by banks on the banking committee to only go so far because what this does in undermining American banking interests. One high-ranking official said maybe someone on Capitol Hill needs to supoena these banking records and put this out in public view, so people can go and start to investigate from the private sector. Because the government may not be able to do this as far as it should. /// END ACT /// This week investigators in New York issued their first indictments in the Bank of New York case. A senior bank official (Lucy Edwards) and her husband have been charged with breaking U-S law in making certain Russian originated deposits. Mrs. Edwards, in addition to handling the bank's Russian operations from London, was also its in-house authority on money laundering. Researcher Shelley says the problem of financial corruption will worsen as long as global financial markets remain largely unregulated. (Signed) NEB/BDW/ENE/gm 06-Oct-1999 16:25 PM EDT (06-Oct-1999 2025 UTC) NNNN Source: Voice of America .
