DATE=9/2/1999
TYPE=U-S OPINION ROUNDUP
TITLE=THE RUSSIAN MONEY HEMMORAGE
NUMBER=6-11452
BYLINE=ANDREW GUTHRIE
DATELINE=WASHINGTON
EDITOR=ASSIGNMENTS
TELEPHONE=619-3335
CONTENT=
TEXT: About two-weeks ago, "The New York Times"
reported that as much as four-point-two-billion U-S
dollars has been illegally siphoned out of Russia
during the past few years, much of it passing through
the Bank of New York.
The bank promptly fired one of its highest officials
in Europe, who happened to be the wife of an
International Monetary Fund official involved with
loans to Russia. And in the U-S Congress, the news
set off a clamor among Republicans about the efficacy
of lending Russia any more money.
The U-S press has joined the fray, with a good deal of
comment about this latest chapter of Russia's recent,
and rather erratic financial saga. We get a sampling
now from _____________ in today's U-S Opinion Roundup.
VOICE: In the latest development, the Clinton
administration is asking Russia to assure no
international financial aid sent to Russia has been
lost to the corruption uncovered by "The New York
Times".
It is still unclear whether the four-point-two-billion
dollars was private capital loaned by Western nations
to Russian businesses, illegal profits from criminal
activity, or from international loans. It may be from
all those sources.
Republican congressional leaders are using the news to
suggest that loaning any more money to Russia until
the economy stabilizes, and safeguards against future
loses are in place, is foolish. Some U-S papers
agree, while others suggest alternative paths.
TEXT: We begin our sampling in New York, where on
Long Island, "Newsday" laments the current state of
Russia, politically, socially, economically, and
generally.
VOICE: .. At the bottom of much of what is wrong
with Russia is corruption -- corruption so
pervasive and on a scale so vast that it is hard
for Americans to fathom. As much as 250-billion
[dollars] is believed to have been illegally
transferred to private accounts or investments
in the West in the last five years - at least
twice as much as Russia's national budget of 25-
billion dollars for 1999. . Yet, one-year after
its economic crisis, sparked by the collapse of
the ruble and the vertiginous rise in prices of
imported goods, Russia is now showing signs of
revival. The weaker ruble has created favorable
conditions for industrial growth by boosting
demand for domestically produced goods. . None
of this will help, however, if Russia does not
strengthen its legal system and the structure of
institutions needed to make a modern democracy
function in a competitive global economy.
TEXT: "The Los Angeles Times" calls the situation a
case of ". Russia Ruined by Looters," adding:
VOICE: Capital appears to have become one of
money-starved Russia's biggest exports. Last
year, according to an estimate from the state
prosecutor general's office, about nine-billion-
dollars illegally left Russia, an amount double
what the International Monetary Fund spent
trying to shore up Russia's collapsing currency.
Some of the continuing capital outflow comes
from the proceeds of organized crime. Some was
looted from companies that were set up under
economic reform policies to take control of
Russia's rich natural resources.. Russia, as it
stumbles toward a free-market economy, has been
seen in the West as too important to let fall.
But as evidence piles up that Russia's wealth is
being systematically drained by criminals and
corrupt oligarchs . political support for
helping sustain Russia erodes. The looting of
Russia will be halted only when a government in
Moscow is willing to act.
TEXT: To get a Texas perspective on the problem, we
check this editorial from "The Dallas Morning News",
which warns that: " U-S banks should not be
accomplices [to] . Russian crooks."
VOICE: The influence of Russian organized crime
both within Russia and overseas has been rising
since the fall of communism. It has been the
unspoken silent partner behind Russia's new
wealthy class, as well as a chilling pall on
legitimate foreign investment and meaningful
internal reforms. The latest evidence of mob
influence comes from reports that Russian
criminals may have illegally diverted more than
10-billion-dollars through the bank of New York
and several other institutions. About 200-
million is believed to have been siphoned from
payments by the International Monetary Fund to
help Russia through financial crises. In part,
this scandal can be blamed on the chaotic reign
of Boris Yeltsin, who has accomplished little to
advance Russia beyond a few infant steps toward
free markets. . More immediately, the scandal
gives fresh life to allegations that the
International Monetary Fund has been a poor
shepherd of its aid to Russia, a legitimate
complaint. But the incident also will be used
by some in the congress as a pretext to rail
against U-S funding of the agency. That would
be a major policy mistake.
TEXT: Also in Texas, "The Houston Chronicle" raises
another interesting point: that even with the
financial thievery going on, the United States and
other Western nations still cannot allow Russia to
sink into chaos.
VOICE: Even if Russian officials and U-S aid
are found to be involved in a massive money-
laundering scheme, the United States has little
choice but to make similar modest efforts to
stabilize the Russian economy, just as it could
not ignore Russia after the collapse of the
Soviet Union puts tens-of-thousands of nuclear
warheads and other weapons of mass destruction
up for grabs. Financial safeguards can be
strengthened, but the defeat of corruption must
come from the Russian people.
TEXT: In the Midwest, "The Chicago Tribune" suggests:
VOICE: It is not yet known how widespread the
Russian money laundering and other financial
scandals are, but this much is clear: The
various American, German, Swiss and Russian
investigations must follow these money trails
wherever they lead and, in so doing, shine a
spotlight on the corruption. That is the only
way to restore credibility to Russia's tarnished
finances.
TEXT: Turning to the nation's automobile center, we
read in a "Detroit News" editorial, this philosophical
summation:
VOICE: A country, like a person, learns
accountability by being held accountable. It
will not acquire the discipline to participate
in capitalist markets by being given loans to
pay off earlier loans. A central bank that
deliberately misleads the International Monetary
Fund, which is in large part funded by U-s
taxpayers, ought to lose its credibility. . The
State Department should give up on the notion
that it can fine-tune a complex economy like
Russia's from afar. Instead, it should provide
the Kremlin with a history of the American
experience and wish the Russians luck. . The
Clinton administration and International
Monetary Fund should stop throwing good money
after bad in Russia.
TEXT: With that summation from "The Detroit News", we
concluded this sampling of comment on the most recent
revelations about how people have illegally siphoned
off billions of U-S dollars from Russia during the
past few years.
NEB/ANG/RAE
02-Sep-1999 13:43 PM LOC (02-Sep-1999 1743 UTC)
NNNN
Source: Voice of America
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