Investigators Probe Ex-Defense Minister’s Land Sales – Report
14:53 08/07/2013 MOSCOW, July 8 (RIA Novosti) – Russian military investigators have launched a probe into the sale of forest land outside Moscow sanctioned by ex-Defense Minister Anatoly Serdyukov, Kommersant business paper reported on Monday.
The investigation is the latest in a series of suspected frauds uncovered in the domestic defense sector, some of which have led to investigators to question Serdyukov, who was fired last year after a scandal at Oboronservis, a Defense Ministry property management company.
Investigators are probing the sale of 140 hectares of forest area in the Krasnogorsk district northwest of Moscow. The forest previously served as a testing ground, which the military intended to return to the Federal Forestry Agency.
Instead, at Serdyukov’s order, the forest sites were sold in 2011-2012 at below market value to two companies that may be “affiliated with oligarchic structures,” the paper said.
The probe was launched after a check by Russia’s Audit Chamber, the Interior Ministry and the local Forestry Department.
According to the audit, Russia’s Defense Ministry received 2,634 hectares of forest in 1999 as a testing ground for engineering troops. In 2011, the military unit using the area was disbanded and the forest area was destined to be returned to the local state forest farm.
However, on September 1, 2011, then-Defense Minister Serdyukov ordered the sale of 23 forest sites, in announcements made through the Defense Ministry’s Krasnaya Zvezda newspaper and on the ministry’s website.
At a first auction, held on October 11, 2011, two lots of 48.4 and 45.4 hectares were sold for 959 million rubles ($29 million) and 739 million rubles ($22 million) compared with their market value of 1.8 billion rubles ($54.5 million) and 1.7 billion rubles ($51.5 million) at that time, according to the audit.
At another auction held in 2012, a 50-hectare forest area with a lake was sold for 1.3 billion rubles ($39 million) compared with its market value of 2.3 billion rubles ($69.7 million) at that time, according to the audit.
According to Audit Chamber estimates, losses to the state from the actions of the Defense Ministry’s property department totaled 2.9 billion rubles ($87 million). In addition, the Interior Ministry has estimated 1.7 billion rubles ($51 million) from the proceeds of the property sales which should have gone to the federal budget is missing.
The investigation is the latest episode in a string of high-profile scandals involving the Defense Ministry in the last year, many of them linked to lucrative real estate deals.
Serdyukov was subsequently questioned twice by investigators about various instances of fraud within the ministry after being fired last November, but has not yet been charged.
One of the issues he was questioned about, in March, was the alleged use of Defense Ministry assets to help renovate a road leading to his brother-in-law’s country house near Moscow.
Meanwhile, the Russian Union of Machine-Building Enterprises accused Oboronservis on Monday of breaking the law to win munitions disposal contracts.
“Among non-bona fide participants in the federal munitions disposal program for 2011-2015 and until 2020, Oboronservis and its subsidiary companies are mentioned,” the Russian Union of Machine-Building Enterprises said in a statement on its website, referring to the results of an audit conducted by Russia’s Audit Chamber.
“Only these entities were admitted to the closed tenders, although they did not have the relevant licenses,” the statement said.
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