BTW this is the Russian newspaper Izvestia commenting
on Schleiffer's fall from grace.
Izvestia
August 10, 2004
HARVARD PROFESSOR'S SPOUSE LINED HER POCKETS IN
PRIVATIZATION
An update on the scandal around the so called Harvard
Project.
Author: Konstantin Getmansky
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
HARVARD PROJECT, A PROGRAM GENEROUSLY FINANCED BY THE
US
ADMINISTRATION, WAS SUPPOSED TO HELP RUSSIA MAKE A
TRANSITION TO
FREE MARKET IN THE MIDDLE OF THE 1990'S. IN FACT,
AMERICAN
CONSULTANTS ANDREI SCHLEIFER AND JONATHAN HAY USED
INSIDER
INFORMATION ON PRIVATIZATION OF MAJOR RUSSIAN
ENTERPRISES FOR
PERSONAL ENRICHMENT
Harvard Project, a program generously financed by the
US
Administration, was supposed to help Russia make a
transition to
free market in the middle of the 1990's. In fact,
American
consultants Andrei Schleifer and Jonathan Hay used
insider
information on privatization of major Russian
enterprises for
personal enrichment. Their wives participated. Nancy
Zimmerman
recompensed the US Administration for the damage
estimated by
attorneys at $1.5 million last Thursday.
Zimmerman decided to pay up to avoid criminal
charges. It
happened a month after the verdict of the federal
court of
Massachusetts that convicted her husband, Harvard
Professor of
Economics Schleifer, for machinations and
falsification of his
reports on his activities in the capacity of adviser
to the
government of Russia.
Schleifer spent between 1994 and 1997 in Moscow,
involved
with the already non-existent Harvard Institute of
International
Development within the framework of the American
program of
assistance to Russia in transition to free market
economy. Along
with everything else, Schleifer was a consultant of
the Federal
Commission for Securities that received hefty grants
from the
United States then for establishment of the securities
markets in
Russia.
The first accusations concerning integrity of
the professor
and his wife appeared right upon his return to the
United States
in 1997. The prosecutor's office initiated criminal
proceedings
and an investigation only in 2000. When it was over,
it filed
lawsuit against Schleifer and Zimmerman demanding
recompense to
the US Administration for its losses. Investigation is
convinced
that Schleifer with the help from his wife used his
position for
personal enrichment. Using the insider information he
was privy
to, he and his wife established several dummy
corporations through
which they bought shares in Russian enterprises slated
for
privatization. The accord between the US
Administration and
Harvard expressly banned this.
Aware of that and using their personal capitals,
Schleifer
and Zimmerman bought $464,000 worth of shares in
Russian oil
companies. Schleifer also used his relatives' fortunes
to buy into
Gazprom.
"This is blatant neglect of all norms of
ethics," said Sarah
Bloom, Massachusetts Assistant DA. "Two experts hired
to promote
observance of the law, integrity and openness of
market in Russia
taught the Russians something altogether different."
On June 28, the federal court of Massachusetts
convicted
Schleifer. Judge Douglas Woodlock did not set the sum
Schleifer
and Jonathan Hay (his colleague and former head of the
Harvard
Institute of International Development) are supposed
to return to
the US Administration. DA office insists on $102
million. The
final verdict will be passed on September 13.
As for Zimmerman, the court did not even begin.
Last
Thursday, he returned to the state $1.5 million worth
of damage as
estimated by the prosecution.
"Zimmerman is one of the owners of Farallon
Fixed Income
Associates," said Samantha Martin of the Massachusetts
DA office.
"We believe that FFIA used the resources, personnel,
and influence
of the Harvard Project in Russia for its own
investments in the
Russian economy. Between December 1995 and June 1997,
FFIA made
use of all these resources and insider information on
the
activities of New World Capital. The company bought
and sold
shares in Russian companies using the arrangement that
permitted
it not to pay taxes to the Russian budget."
"This solution of the problem shows that the
United States
will always be after whoever uses government programs
for his or
her own benefit," said Massachusetts DA Michael
Sullivan. "We will
not permit the use of taxpayers' money for personal
enrichment."
Translated by A. Ignatkin
--- Michael Perelman <[EMAIL PROTECTED]>
wrote:
> Did he get fired? Just from the development
> institute?
> --
> Michael Perelman
> Economics Department
> California State University
> Chico, CA 95929
>
> Tel. 530-898-5321
> E-Mail michael at ecst.csuchico.edu
>
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