The Nation 12/23/96
BAGMEN IN MOSCOW
Fred Weir, Moscow
Russia is in the grip of a political scandal that makes Watergate (or President
Clinton's Indogate campaign finance mess) look like a kindergarten prank,
although you won't learn much about it from the U.S. media. The revelations of
upper-echelon corruption reach back to Boris Yeltsin's desperate re-election
campaign against the Communist contender, Gennady Zyuganov, last spring --
an effort solidly backed by Washington.
On November 15, Moskovsky Komsomolets, Russia's largest-circulation daily,
published an alleged transcript of a bugged June 22 meeting of three top
Yeltsin aides, in which the main topic was how to prevent public exposure
three days after a pair of Yeltsin campaign workers, Sergei Lisovsky and
Arkady Yevstafyev, were caught toting $500,000 in undocumented cash from
a government building. The three are shown discussing a flood of illegal
funding for Yeltsin, planning ways to protect the bagmen and taking action to
quash any public investigation.
The principals were Anatoly Chubais, then head of Yeltsin's re-election
committee and now the President's chief assistant and personal gatekeeper; and
Viktor Ilyushin, then first presidential aide and now a Deputy Prime Minister.
There is some doubt about the identity of the third man, but the newspaper
gives it as Sergei Krasavchenko, another top Kremlin official.
The editor of M.K., Pavel Gusev, says he is "100 percent certain" the tape in
his possession is authentic. Most observers agree with him and, tellingly, all
three subjects have declined to sue the newspaper under Russia's liberal libel
laws. Of those three, Chubais is the one to watch. In an earlier incarnation he
designed and supervised Russia's deeply corrupt privatization drive, and
emerged as the good buddy and political patron of the winners -- a gang of
seven financiers and industrial tycoons who today control an estimated 50
percent of the country's wealth. Theatrically fired by Yeltsin this past January
for "gross mistakes" in the conduct of privatization, Chubais was quickly
brought back to direct the President's re-election effort because of his proven
ability to mobilize the plutocrats and their money.
But it all nearly unraveled for Chubais on the night of June 19, between the
first and the decisive second round of the election, when his two operatives
were nabbed with the incriminating box of money. The incident threatened to
expose the vast secret slush fund fueling the Yeltsin campaign's TV advertising
blitz, lavish free rock concerts, slick literature and omnipresent billboards.
The M.K. transcript shows how Chubais covered up the public trail and turned
the affair to his own advantage by blaming his Kremlin rivals. Russia's NTV
television network, owned by banker and Chubais pal Vladimir Gusinsky,
depicted the arrest in hysterical late-night broadcasts as an attempted coup by
Kremlin "hard-liners": Yeltsin's sinister bodyguard, drinking buddy and
eminence grise Aleksandr Korzhakov; First Deputy Prime Minister Oleg
Soskovets; and security chief Mikhail Barsukov.
Documents published by M.K. show that Korzhakov had warned Yeltsin that
millions of campaign dollars were being pilfered and stashed in bank accounts
abroad. The arrest of bagmen Lisovsky and Yevstafyev was apparently
Korzhakov's attempt to prove that and nail his enemy Chubais, but it backfired.
Chubais went to Yeltsin the next morning and convinced him to fire the "hard-
liners," whose actions were threatening to sabotage his re-election campaign.
Later that day, Chubais told journalists that the story about illegal money was
just a "typical K.G.B.-style provocation" by Korzhakov and his boys, who
were out to cancel the second round of the election.
Most of the media, eager to see Yeltsin re-elected, hailed the Kremlin purge as
a much-needed "cleaning of the Augean stables." Lisovsky and Yevstafyev
were released, and no charges have been made against them. But money there
apparently was, and lots of it. At one point in the M.K. tape, Ilyushin tells the
others how he persuaded Yeltsin not to be surprised that his campaign workers
could be found with wads of illegal cash.
"I was talking to the Chief yesterday, and I said to him: 'Boris Nikolayevich,
right now, if one wanted to, one could catch at least fifteen or twenty people
leaving the President Hotel [Yeltsin campaign headquarters] with sports bags
full of money.'
"He said, 'I understand.'"
Yelena Dikun, an investigative journalist with the weekly Obshaya Gazeta, has
conservatively estimated that the Yeltsin campaign doled out about $100
million -- thirty-three times the legal spending limit -- to secure triumph at the
polls.
At another point on the tape, the three officials discuss spiriting Lisovsky and
Yevstafyev away to Turkey, or sending them to Finland with an orchestra until
the affair blew over. Later still in the transcript, the three are shown phoning
the public prosecutor, Yury Skuratov, and bullying him.
"Please keep them [the documents pertaining to the case] personally for a
while. Don't pass them on to anyone for launching an investigation," Ilyushin is
quoted as telling Skuratov. "Then we'll think about it, because at present it is
not in our interest."
After publication of the M.K. transcript, the same prosecutor (a fox and
henhouse arrangement if ever there was one) announced that he was finally
launching an investigation into the matter. But investigation or not, Russia's
political pot is boiling over with slime that threatens to engulf the Kremlin and
gum up Yeltsin's much-ballyhooed second term.
Fred Weir is a correspondent for Canadian Press in Moscow.Copyright (c)
1996, The Nation Company, L.P. All rights reserved. Electronic redistribution
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