Re: Analysts - Putin to Launch Systematic Campaign Against Oligarchs

["Chris Doss" <nomorebounces@xxxxxxx>]

>
> The US Robber Barons participated in the creation of modern industry.  Will
> there be
> any positive legacy of their Russian counterparts?
> ---

BTW it looks like they may be gunning for Abramovich (to be fair to him, he does seem to have done a lot for Chukotka as governor there):

Radio Free Europe/Radio Liberty
www.rferl.org
May 25, 2004
Analysis: Another Oligarch, Another Investigation
By Julie A. Corwin

Question: What event of last July continues to have reverberations in
Russian political life? A) The arrest of Yukos head Mikhail Khodorkovskii;
B) The ending of the transitional period for full implementation of the law
on political parties; C) Oligarch and Chukotka Autonomous Okrug Governor
Roman Abramovich's purchase of the Britain's Chelsea soccer club for $233
million; or D) All of the above.

The correct answer is D. But if you answered C, then you will not be
surprised to learn that avowed economic liberal and Economic Development
and Trade Minister German Gref only last week condemned the purchase of
Chelsea by Abramovich, who formerly headed the Russian oil major Sibneft
and is the country's second-richest citizen. Gref told reporters on 21 May
that "if people have such capital, then their moral obligation is to invest
in their own country and to create jobs here," RBK reported.

Audit Chamber head Sergei Stepashin was much more quick to condemn
Abramovich's purchase publicly, and this week and last Stepashin and his
lead auditor investigating Abramovich's management of Chukotka's finances
revealed the findings of their three-month audit. Auditor Sergei Ryabukhin
announced on 21 May that the okrug is bankrupt. According to Ryabukhin, the
region's debt exceeded 9.3 billion rubles ($320 million) as of 1 January,
while revenues amounted to only 3.9 billion rubles in 2003, "Gazeta"
reported on 24 May. The audit found that illegal expenditures amounted to
1.09 billion rubles in 2003 and 23.5 million rubles in 2004, ITAR-TASS
reported. It also found that the okrug administration illegally raised the
salaries of local officials and public-sector employees during 2003, and as
a result wages for local bureaucrats exceeded those of their federal
counterparts by more than 5.6 million rubles.

Responding to the findings, Stepashin called on Abramovich to step down.
"Looking at the results of the audit, I can say that Abramovich has let
down the president badly," Stepashin told Interfax on 23 May. In an
interview the previous day with "Rossiiskaya gazeta," Stepashin compared
the Chukotka's financial violations unfavorably with Chechnya's. He said
auditors found that Chechnya had misspent almost 800 million rubles, but
noted that Chechnya is experiencing war. Chukotka, on the other hand, is
extremely small with a population of only 52,000. He also noted that
Ingushetia had fewer violations of financial discipline than Chukotka even
though that republic had to cope with an influx of refugees across its
borders. However, by 25 May, in an interview with the same newspaper,
Stepashin had tempered his criticism of Abramovich. Stepashin said that he
did not understand why this particular investigation has produced such a
storm of publicity, especially since the chamber has uncovered far greater
violations in Chechnya.

Stepashin had tried and failed to come up with enough evidence to launch a
criminal case against Abramovich, "Kommersant-Daily" concluded on 22 May.
As a result, Stepashin faced a choice -- avoid losing face or risk severely
defaming his political opponent, "Nezavisimaya gazeta" commented on 20 May.
(Both newspapers are tied to Abramovich's former business partner Boris
Berezovskii.) According to "Nezavisimaya gazeta," of the more than 1
billion rubles that were illegally spent in 2003, only around 200 million
rubles can be held against Abramovich and his subordinates. According to
"Gazeta" on 24 May, the okrug's debts started mounting years before
Abramovich took office. For example, the region took out a credit worth
$190 million in 1994-95.

According to "Izvestiya" on 20 March, an audit conducted by the Audit
Chamber in the late 1990s revealed substantial financial improprieties in
the operation of a Chukotka Development Fund set up by Abramovich's
predecessor in Chukotka, Aleksandr Nazarov. Documents were transferred to
the Prosecutor-General's Office but no criminal case ever materialized.
Nazarov subsequently went to work for the Audit Chamber, and "Izvestiya"
commented it might be time to toughen the law on the appointment of
auditors, as it is currently easy to appoint people who have a "dubious
credit history."

Asked why Stepashin appeared to be trying to scare Abramovich, Vyacheslav
Nikonov, president of the Politika Foundation, told "Kommersant-Daily" on
21 May that Stepashin has "personal grievances" against Abramovich. "He has
voiced them on several occasions both with regard to the purchase of the
Chelsea soccer team and the fact that Sibneft pays the least amount of
taxes of all of Russia's oil companies," Nikonov said. "But this does not
mean that storm clouds are gathering over Abramovich. In the regime's view,
he is behaving positively. And if Sibneft pays more tax, there will be no
complaints." Arkadii Murashev, president of the Association of Mortgage
Banks, had an alternative explanation for the animosity between Stepashin
and Abramovich: "Perhaps Stepashin is simply an Arsenal fan."