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Subject: Yeltsin Linked To Bribe Scheme
Yeltsin Linked To Bribe Scheme
Swiss Probe Finds Firm Made Payoffs To President,
Other Russian
Officials
By Sharon LaFraniere
Washington Post Foreign Service
Wednesday, September 8, 1999; Page A01
GENEVA, Sept. 7—A Swiss investigation has uncovered
construction company that received major Kremlin
contracts paid tens of thousands
of dollars in bills on credit cards in the names of
President Boris Yeltin and his two
daughters, according to law enforcement authorities.
The contractor, a Swiss firm called Mabetex, also
provided $1 million that was
transferred to a Hungarian bank account several years
ago for Yeltsin's benefit, the
authorities said.
In all, Mabetex made between $10 million and $15
million in payoffs to high-ranking
Russian officials, including Yeltsin, and their
families, according to one official
familiar with the inquiry.
The investigation has been in and out of the news for
more than a year, but the size
of the alleged payoffs to Yeltsin and his family was
not previously disclosed. A
spate of allegations in recent weeks of high-level
Russian financial corruption has
caused political storms in Russia and the United
States. In a separate
money-laundering inquiry, revealed last month, U.S.
prosecutors are investigating
billions of dollars that flowed from Russia through
accounts at Bank of New York.
Mabetex's top official, Behgjet Pacolli, has denied
paying any bribes. Yeltsin's press
spokesman also said neither the president nor his
family engaged in any wrongdoing.
The investigation into Mabetex has been overseen in
Bern by Swiss prosecutor Carla del Ponte, who is resigning next week to
become
the new U.N. war crimes prosecutor in The Hague.
The Swiss have been aggressively pursuing a
money-laundering case against Pavel
Borodin, the Russian official who managed Mabetex's
Kremlin contracts and has
denied any wrongdoing. Investigators have determined
that Mabetex set up bank
accounts for Borodin's benefit in the Swiss cities of
Lugano and Geneva.
But the Swiss money-laundering inquiry can bear fruit
only if Russian officials
prosecute Borodin for corruption. The Swiss are
relying on the Russians to show
that the money that went to Borodin's accounts came
from improper sources.
"The Russians have the main investigation," Del Ponte
said in an interview today.
"We hope they can go on and complete it."
However, there is a widespread perception in Moscow
that Yeltsin's government is
impeding the Russian side of the investigation.
Earlier this year, Yeltsin suspended
chief Russian prosecutor Yuri Skuratov, who was
investigating the case. The
suspension came just a few days after Del Ponte
described the links between
Mabetex and Yeltsin in a telephone conversation with
Skuratov, according to knowledgeable sources.
The Mabetex probe has also been slowed by the recent
transfer of the principal
Russian investigator on the case.
Swiss investigators uncovered the credit cards issued
to Yeltsin and his two
daughters while looking for payments from Mabetex to
Borodin, officials said.
Mabetex's records showed the company made regular
credit card payments over two
to three years to a Swiss bank. Investigators later
determined the cards had been for
Yeltsin and his daughters, the officials said. It is
not clear what the credit cards were
used to purchase.
In Moscow, suspended prosecutor Skuratov said that
he'd been told by Swiss
authorities that Mabetex spent a total of 15 million
Swiss francs (about $10 million)
on bribes to high-ranking officials, including
Yeltsin, and their families.
In an interview with the newspaper Versia, Skuratov
called for a full investigation
and raised anew the question of credit cards allegedly
given to Yeltsin and his
daughters by Mabetex president Pacolli.
In a separate television interview tonight, Skuratov
said he was told in March by the
Swiss investigators that Pacolli's bank accounts were
used to "fill the credit cards of
Yelena Okulova, Tatyana Dyachenko and Boris
Nikolayevich [Yeltsin] himself."
Okulova and Dyachenko are Yeltsin's daughters;
Dyachenko is a Kremlin aide.
He said the Swiss prosecutor, del Ponte, "gave this
figure, which in their opinion
was the money spent by Mr. Pacolli to bribe the
Russian officials."
In Washington, three senior U.S. officials briefed a
handful of reporters today on
how and when they learned of the separate Bank of New
York probe, saying that
they knew few details until the case became public
last month.
The State Department first heard about the movement of
huge amounts of money from Russia to the Bank of New York in March,
officials said. Authorities in another
country brought the case to their attention and
suggested that Russian organized crime might be involved. At the time,
there was no
suggestion that any U.S. or Russian government officials or U.S. or IMF
money was
involved, officials said.
The State Department then contacted the National
Security Council and, with
officials from the NSC, took the information to the
Justice Department, officials said.
Justice officials declined to discuss the matter,
which was already under
investigation by the Federal Bureau of Investigation.
The Treasury Department, meanwhile, learned about the
FBI investigation in April
from officials at the Federal Reserve Bank of New
York. Because the FBI was investigating, officials said, the Treasury
Department
took no action.
Attorney General Janet Reno and other senior
adminstration officials -- including
Vice President Gore -- were not briefed in detail
about the case until late last month,
the officials said.
Correspondent David Hoffman in Moscow and staff writer
Robert O'Harrow Jr. in New York contributed to this report.
© Copyright 1999 The Washington Post
Company
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