DATE=8/26/1999
TYPE=CORRESPONDENT REPORT
TITLE=RUSSIA SCANDAL (L-ONLY)
NUMBER=2-253153
BYLINE=PETER HEINLEIN
DATELINE=MOSCOW
CONTENT=
VOICED AT:
INTRO: Russia's top prosecutor is accusing President
Boris Yeltsin of blocking a probe into allegations of
high-level Kremlin corruption. Moscow correspondent
Peter Heinlein reports the first shots (initial round)
in what promises to be a nasty war of compromising
materials (Russian: kompromat) involving many of
Russia's top political figures.
TEXT: In an interview published (Thursday) in an
Italian newspaper, Russia's chief prosecutor Yuri
Skuratov said Kremlin officials first tried to
obstruct his work, then suspended him this year for
investigating corruption at the highest levels.
The same paper, "Corrierre della Serra", reported
Wednesday that Swiss magistrates had seized documents
linking President Yeltsin and his family to suspected
kickbacks in return for construction contracts.
The allegations -- and a flurry of denials -- have
rapidly replaced the conflict in Dagestan as the lead
story in Russian news. It has also fueled a fierce
competition between pro-and anti-Yeltsin media
conglomerates. The suspended prosecutor, Mr. Skuratov
was quoted by "Corrierre della Serra" as saying the
majority of Russian media support him, with the
exception of those controlled by the state, or by
Kremlin insiders.
The paper's allegations center on Mabetex, a Swiss-
based construction firm that won lucrative contracts
to refurbish government facilities, including the
parliament building shelled by Russian tanks in 1993.
Wednesday's article said Mabetex's chief executive
admitted placing more than one-million-dollars in a
Hungarian bank account to cover personal expenses of
President Yeltsin and his two daughters during a 1994
trip to Hungary.
The Kremlin's information machine swung into high gear
to refute the allegations.
A state-run television channel broadcast a taped
interview with the Mabetex chief describing the
newspaper report as -- a fairy tale. And a Kremlin
spokesman denied that President Yeltsin or his
daughters had ever had a foreign bank account.
The corruption allegations come at an awkward time for
the Kremlin's inner circle. With parliamentary and
presidential elections taking place in the coming
months, the charges provide ammunition for political
opponents -- especially the alliance of Moscow's
powerful Mayor Yuri Luzhkov and the popular former
prime minister Yevgeny Primakov.
They enjoy the backing of powerful media magnate
Vladimir Gusinsky, whose chain of newspapers, radio,
and television stations have featured the allegations
prominently.
The Kremlin can counter with the competing empire of
Yeltsin confidant Boris Berezovsky and the still
influential state-run media.
Observers say the "Corrierre della Serra" articles are
just the beginning of what promises to be an
especially nasty political campaign. The Kremlin has
hinted it has its own ammunition, in particular about
Mayor Luzhkov's business dealings, but is withholding
details until closer to election day. (SIGNED)
NEB/PFH/PCF/RAE
26-Aug-1999 13:47 PM LOC (26-Aug-1999 1747 UTC)
NNNN
Source: Voice of America
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