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The Moscow Tribune
November 10, 2001
Many doubt use of war on corruption
By Dmitry Polikarpov

Despite pledges by the Audit Chamber Chief Sergei Stepashin and Prosecutor General Vladimir Ustinov to battle corruption at the highest level, many analysts believe that the ongoing campaign against financial fraud will not cause serious changes in upper spheres of the government.

Stepashin, who made news this week by foretelling massive attacks on high-ranking state officials involved in financial wrongdoings, warned that every corrupt bureaucrat should remember that "his turn may come soon" to account for financial misdeeds.

According to Stepashin, the Auditing Chamber has submitted to the Prosecutor General's office reports featuring alleged wrongdoings at the Railways Ministry, the State Fisheries Committee, the Emergency Situations Ministry, the State Customs Committee, and the Press Ministry. Investigations into activities of the Natural Resources Ministry and the presidential property department are also under way.

Stepashin said his subordinates have discovered since the beginning of 2000 that 64 billion roubles ($2.13 billion) were spent incorrectly by different state institutions and companies with state capital.

The Prosecutor General's office has already filed criminal charges against Railways Minister Nikolai Aksyonenko and requested that the official not leave Moscow until the investigation continues. The Audit Chamber uncovered some $370 million worth of misappropriations and inefficient use of funds by Aksyonenkoès subordinates.

The next object of Ustinov's interest might be Emergency Situations Minister Sergei Shoigu, who was hospitalised last week with hypertension after rumours surfaced that Stepashinès auditors were investigating the use of funds allocated for rebuilding the city of Lensk in Yakutia. The town was destroyed earlier this year by massive floods.

The calibre of ôtargetsõ of the anti-corruption crusade prompted political analysts to say that the campaign was an attempt by President Vladimir Putin's team to undermine the positions of former President Boris Yeltsinès appointees who still control key government posts.

"This campaign, which evidently contains a strong political element, has two main goals. First, to demonstrate to the society that Putin it getting hard on corrupt officials of the Yeltsin era. Second, to get major financial and power resources (concentrated in the Railways Ministry and Ministry of Emergency Situations) under control of Putin's team," said President of the INDEM think-tank Georgy Satarov in an interview with The Moscow Tribune.

Stepashin himself indirectly confirmed these allegations, saying that Putin was supporting the campaign.

"There is something behind (these investigations) what we lacked before ó the political will," Stepashin told Argumenty i Fakty this week.

However, according to Satarov, the investigations will neither seriously change the balance of power, nor will they end with corruption among state officials.

"This crusade against corruption will end in nothing as it has happened in many cases before. No serious reshuffles will be made in the top brass, which may offer a scapegoat to convince the society," Satarov said.

Last year, the Audit Chamber completed several important audits, including those of RAO Unified Energy Systems (RAO UES) and Gazprom. However, despite great expectations and promises by Stepashin, alleged violations by managers of the two major state monopolies found by the auditors went unpunished.

Curiously, RAO UES chairman Anatoly Chubais criticised the Prosecutor General's latest activities, describing the investigations as a "witch hunt."

"Chubais' reaction was quite natural. He protested not against the struggle against corruption but against methods used by the Prosecutor Generalès office," said Satarov.

Vyacheslav Nikonov, part of the Politika Foundation think-tank, said that Stepashinès campaign lacked any specific political target.

"It might have seemed to many that Stepashinès team finally started to work against a specific sector of Russiaès political landscape. However, he was apparently assigned to make disturbing attacks on different sectors, which look much like sham fights," Nikonov said.

The Audit Chamber, which has checked several major companies, may be planning to benefit from the inside data. Stepashin said earlier that his office was looking forward to advising foreign businessmen on how to choose a partner in Russia.

Earlier this year Stepashin said that the auditing chamber would provide data over reliability of Russian companies to Canadian entrepreneurs who are involved in local business or plan to invest here in the near future. According to Stepashin, this would "make joint business more successful and avoid investments which have no future."

The chamber has also signed a cooperation agreement with the Federal Security Service (FSB) to examine together several key Russian companies and state institutions. The two bodies cooperate in "data collection and evaluation" and in "making decisions based on the results of the checks." The cooperation agreement means that the special service will accompany Stepashin's team during investigations and get access to all the data under examination.

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