[CTRL] Audit: Central Bank Cooked Books, (fwd)
-Caveat Lector- August 03, 1999 THE ST. PETERSBURG TIMES RUSSIA ENGLISH Audit: Central Bank Cooked Books, THE ST. PETERSBURG TIMES Catherine Belton RUSSIA WorldSources, Inc. 209 PENNSYLVANIA AVENUE, S.E., 2nd Floor WASHINGTON, D.C. 20003 COPYRIGHT 1999 BY WORLDSOURCES, INC., A JOINT VENTURE OF FDCH, INC. AND WORLD TIMES, INC. NO PORTION OF THE MATERIALS CONTAINED HEREIN MAY BE USED IN ANY MEDIA WITHOUT ATTRIBUTION TO WORLDSOURCES, INC. MOSCOW - Just when it seemed there could be no new allegations involving the Central Bank's tangled relationship with the offshore FIMACO company, an audit performed by the international accounting firm PricewaterhouseCoopers has reported the Central Bank kept all FIMACO transactions recorded elsewhere. In other words, the Central Bank - like so many other Russian enterprises - kept double books. The audit, demanded by the International Monetary Fund, also offers the startling revelation that when it wasn't parking the nation's hard currency reserves in an obscure company in the Channel Islands, the bank loaned them to Russia's commercial banks. In 1994, the audit says, the Central Bank extended $300 million of its reserves as credit lines to commercial banks. The audit did not say which banks were beneficiaries. And the audit confirms the worst allegations: That the Central Bank used both IMF loans and its own hard currency reserves to speculate on the Russian treasury bill market, earning profits that apparently have not been shared with the government - and, again, have apparently been kept off the books. The PricewaterhouseCoopers audit ``reveals the extent of the Central Bank's cavalier attitude towards managing its investments,'' said Ariel Cohen, the influential head of the Washington-based Heritage Foundation in a telephone interview. ''It also raises questions about the care taken by the IMF in releasing funds to Russia,'' he said. ``Congress will be very interested in seeing a copy of the report.'' The U.S. House of Representatives has already raised a storm about the possible misuse of taxpayers' money sent in loans to Russia. They have demanded the report looking into FIMACO be published. FIMACO was first outed when then Prosecutor General Yury Skuratov wrote a letter to parliament alleging that the Central Bank ran more than $50 billion in the nation's reserves through the Jersey island company over a period of years. Current and former Central Bank officials subsequently confirmed that allegation. They said FIMACO - a company based in an offshore haven notorious for money laundering, and founded with just $1,000 in start-up capital - was a necessary and useful tool for managing Russia's wealth. Central Bank officials say all of the reserves run through FIMACO eventually came home. But they have little to say about how the reserves were invested or what happened to profits from such investments. Central Bank officials have claimed that the PricewaterhouseCoopers audit exonerates the FIMACO arrangement. However, the so-far-unpublished audit - a copy of which was obtained by The St. Petersburg Times on Friday - in fact confirms many of the most damaging allegations hurled at the Central Bank by critics like Skuratov and a crusading State Duma deputy, Nikolai Gonchar. Upon receiving the audit last week, IMF officials lambasted the bank for falsifying information on the size of its reserves by secretly channeling $1 billion in 1996 through FIMACO. Despite this clear deception, the Fund still agreed to release another $4.5 billion credit to Russia. But while the Fund has dourly criticized the 1996 misreporting of reserves, it has said nothing about the other serious allegations. In 1996, the Central Bank funneled a total of $1.2 billion from its reserves - including money from IMF loans - into the market for Russian treasury bills, or GKOs. The money went into FIMACO and then back into Russia through Evrofinans, a Russian-based firm part-owned by FIMACO and Eurobank, a Central Bank subsidiary based in Paris that is the direct owner of FIMACO. Russia's agreement with the IMF prohibits the use of reserves for investment in volatile short-term instruments like GKOs. ''If the Central Bank played on the primary state treasury bill market and invested its own hard currency reserves, that is a clear breach of Central Bank ethics,'' said former Central Bank deputy chairman Andrei Khandruyev in a telephone interview. Khandruyev said he had not been aware of FIMACO during his tenure at the bank. PricewaterhouseCoopers notes that Russia began to transfer funds from the IMF in 1993 through Evrofinans into the secret off-shore FIMACO company. IMF funds were kept in FIMACO from 1993 to 1997. They were also kept in Eurobank: The audit reports that in 1996 Eurobank retained $450 million of
Re: [CTRL] Audit: Central Bank Cooked Books, (fwd)
-Caveat Lector- How in the Hell are we little peons going to fight against corruption of this magnitude? I say that all central banks should be abolished. Go back to Gold and silver and other commodities as a basis for a currency that must be immediately redeemable upon demand in the valuable commodity reserves of that particular currency. WE must abolish fractional reserve currency, i.e., fiat money. We Must Make all taxes 100% VOLUNTARY!!! What a dream - It will never happen. The human race is destined for socialist slavery. -Original Message- From: Conspiracy Theory Research List [mailto:[EMAIL PROTECTED]]On Behalf Of MICHAEL SPITZER Sent: Tuesday, August 03, 1999 5:02 PM To: [EMAIL PROTECTED] Subject: [CTRL] Audit: Central Bank Cooked Books, (fwd) -Caveat Lector- August 03, 1999 THE ST. PETERSBURG TIMES RUSSIA ENGLISH Audit: Central Bank Cooked Books, THE ST. PETERSBURG TIMES Catherine Belton RUSSIA WorldSources, Inc. 209 PENNSYLVANIA AVENUE, S.E., 2nd Floor WASHINGTON, D.C. 20003 COPYRIGHT 1999 BY WORLDSOURCES, INC., A JOINT VENTURE OF FDCH, INC. AND WORLD TIMES, INC. NO PORTION OF THE MATERIALS CONTAINED HEREIN MAY BE USED IN ANY MEDIA WITHOUT ATTRIBUTION TO WORLDSOURCES, INC. MOSCOW - Just when it seemed there could be no new allegations involving the Central Bank's tangled relationship with the offshore FIMACO company, an audit performed by the international accounting firm PricewaterhouseCoopers has reported the Central Bank kept all FIMACO transactions recorded elsewhere. In other words, the Central Bank - like so many other Russian enterprises - kept double books. The audit, demanded by the International Monetary Fund, also offers the startling revelation that when it wasn't parking the nation's hard currency reserves in an obscure company in the Channel Islands, the bank loaned them to Russia's commercial banks. In 1994, the audit says, the Central Bank extended $300 million of its reserves as credit lines to commercial banks. The audit did not say which banks were beneficiaries. And the audit confirms the worst allegations: That the Central Bank used both IMF loans and its own hard currency reserves to speculate on the Russian treasury bill market, earning profits that apparently have not been shared with the government - and, again, have apparently been kept off the books. The PricewaterhouseCoopers audit ``reveals the extent of the Central Bank's cavalier attitude towards managing its investments,'' said Ariel Cohen, the influential head of the Washington-based Heritage Foundation in a telephone interview. ''It also raises questions about the care taken by the IMF in releasing funds to Russia,'' he said. ``Congress will be very interested in seeing a copy of the report.'' The U.S. House of Representatives has already raised a storm about the possible misuse of taxpayers' money sent in loans to Russia. They have demanded the report looking into FIMACO be published. FIMACO was first outed when then Prosecutor General Yury Skuratov wrote a letter to parliament alleging that the Central Bank ran more than $50 billion in the nation's reserves through the Jersey island company over a period of years. Current and former Central Bank officials subsequently confirmed that allegation. They said FIMACO - a company based in an offshore haven notorious for money laundering, and founded with just $1,000 in start-up capital - was a necessary and useful tool for managing Russia's wealth. Central Bank officials say all of the reserves run through FIMACO eventually came home. But they have little to say about how the reserves were invested or what happened to profits from such investments. Central Bank officials have claimed that the PricewaterhouseCoopers audit exonerates the FIMACO arrangement. However, the so-far-unpublished audit - a copy of which was obtained by The St. Petersburg Times on Friday - in fact confirms many of the most damaging allegations hurled at the Central Bank by critics like Skuratov and a crusading State Duma deputy, Nikolai Gonchar. Upon receiving the audit last week, IMF officials lambasted the bank for falsifying information on the size of its reserves by secretly channeling $1 billion in 1996 through FIMACO. Despite this clear deception, the Fund still agreed to release another $4.5 billion credit to Russia. But while the Fund has dourly criticized the 1996 misreporting of reserves, it has said nothing about the other serious allegations. In 1996, the Central Bank funneled a total of $1.2 billion from its reserves - including money from IMF loans - into the market for Russian treasury bills, or GKOs. The money went into FIMACO and then back into Russia through Evrofinans, a Russian-based firm part-owned by FIMACO
