In a message dated 9/6/99 1:04:17 PM Central Daylight Time, AOL News writes: << Subj: IMF Probes Russia's Use of Loans Date: 9/6/99 1:04:17 PM Central Daylight Time From: AOL News BCC: Ahab42 IMF Probes Russia's Use of Loans .c The Associated Press By ANNA DOLGOV MOSCOW (AP) - The International Monetary Fund began a new probe Monday into whether the Russian central bank misused IMF loans, officials said. The probe comes amid allegations that IMF loan money may have been illegally diverted through the Bank of New York. American investigators reportedly believe that up to $10 billion may have been funneled by Russians through the bank, and some suggested that IMF aid may have been among those funds. However, IMF officials have insisted that the new investigation is unrelated to the allegations involving the Bank of New York. The central bank probe is being conducted by the IMF and accounting firm PriceWaterhouseCoopers, and looks into whether the bank misused IMF loans by means of foreign affiliates, a source close to the investigation told Dow Jones Newswires. The Russian central bank has misled the IMF about the state of its finances before, and the Russian government had to agree to independent reviews of its books as a condition for a $4.5 billion loan from the IMF approved in July. Russia has received the first $640 million installment of the loan. The second installment, expected next month, depends on the IMF's assessment of Russia's compliance with the loan terms. ``We are not going to make excuses for ourselves, we are ready to provide the necessary information,'' Russian Deputy Finance Minister Oleg Vyugin was quoted as saying Monday by ORT television. After the allegations of money laundering through the Bank of New York were made public, the United States - the IMF's biggest member - delayed deciding whether it should support new IMF loans to Russia until a full accounting is made of IMF money already lent. An earlier investigation by PriceWaterhouseCoopers found that the central bank in 1996 secretly moved $1.2 billion of its reserves to an offshore company, FIMACO, based on the Channel Island of Jersey. IMF Deputy Managing Director Stanley Fischer said the fund would have suspended Russia's loan program in place at the time if the truth were known. Money laundering and capital flight have been major problems for Russia throughout this decade, with tens of billions of dollars pouring out of the country. The IMF investigation and the Bank of New York case are among several financial scandals that allegedly link prominent Russian political or business figures to corruption and money laundering. Switzerland is helping Russia investigate allegations that Swiss construction company Mabetex bribed top Kremlin officials, including President Boris Yeltsin, to win lucrative renovation contracts. Last month, the Italian newspaper Corriere della Serra said Mabetex deposited more than $1 million in a Swiss bank account and a top Kremlin aide made the money available to Yeltsin and his daughters. Yeltsin has not commented publicly on the scandal. And he doesn't intend to, presidential spokesman Dmitry Yakushkin said Monday. ``One doesn't need to go out into the town square and state publicly that he is not guilty,'' Yakushkin was quoted as saying by the Interfax news agency. ``The methods of the Inquisition should not be restored at the end of the 20th century. (PROFILE (CO:Bank of New York; TS:BK; IG:BNK;) AP-NY-09-06-99 1404EDT Copyright 1999 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without prior written authority of The Associated Press. Announcement: America Online has added Reuters newswires to News Profiles. To add Reuters articles to your daily news delivery, go to KW: <A HREF="aol://5862:146">News Profiles</A> and click on "Modify Your News Profiles." Then click "Edit" and add Reuters from the list on the left. To edit your profile, go to keyword <A HREF="aol://1722:NewsProfiles">NewsProfiles</A>. For all of today's news, go to keyword <A HREF="aol://1722:News">News</A>. >>
IMF Probes Russia's Use of Loans .c The Associated Press By ANNA DOLGOV MOSCOW (AP) - The International Monetary Fund began a new probe Monday into whether the Russian central bank misused IMF loans, officials said. The probe comes amid allegations that IMF loan money may have been illegally diverted through the Bank of New York. American investigators reportedly believe that up to $10 billion may have been funneled by Russians through the bank, and some suggested that IMF aid may have been among those funds. However, IMF officials have insisted that the new investigation is unrelated to the allegations involving the Bank of New York. The central bank probe is being conducted by the IMF and accounting firm PriceWaterhouseCoopers, and looks into whether the bank misused IMF loans by means of foreign affiliates, a source close to the investigation told Dow Jones Newswires. The Russian central bank has misled the IMF about the state of its finances before, and the Russian government had to agree to independent reviews of its books as a condition for a $4.5 billion loan from the IMF approved in July. Russia has received the first $640 million installment of the loan. The second installment, expected next month, depends on the IMF's assessment of Russia's compliance with the loan terms. ``We are not going to make excuses for ourselves, we are ready to provide the necessary information,'' Russian Deputy Finance Minister Oleg Vyugin was quoted as saying Monday by ORT television. After the allegations of money laundering through the Bank of New York were made public, the United States - the IMF's biggest member - delayed deciding whether it should support new IMF loans to Russia until a full accounting is made of IMF money already lent. An earlier investigation by PriceWaterhouseCoopers found that the central bank in 1996 secretly moved $1.2 billion of its reserves to an offshore company, FIMACO, based on the Channel Island of Jersey. IMF Deputy Managing Director Stanley Fischer said the fund would have suspended Russia's loan program in place at the time if the truth were known. Money laundering and capital flight have been major problems for Russia throughout this decade, with tens of billions of dollars pouring out of the country. The IMF investigation and the Bank of New York case are among several financial scandals that allegedly link prominent Russian political or business figures to corruption and money laundering. Switzerland is helping Russia investigate allegations that Swiss construction company Mabetex bribed top Kremlin officials, including President Boris Yeltsin, to win lucrative renovation contracts. Last month, the Italian newspaper Corriere della Serra said Mabetex deposited more than $1 million in a Swiss bank account and a top Kremlin aide made the money available to Yeltsin and his daughters. Yeltsin has not commented publicly on the scandal. And he doesn't intend to, presidential spokesman Dmitry Yakushkin said Monday. ``One doesn't need to go out into the town square and state publicly that he is not guilty,'' Yakushkin was quoted as saying by the Interfax news agency. ``The methods of the Inquisition should not be restored at the end of the 20th century. (PROFILE (CO:Bank of New York; TS:BK; IG:BNK;) AP-NY-09-06-99 1404EDT Copyright 1999 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without prior written authority of The Associated Press. Announcement: America Online has added Reuters newswires to News Profiles. To add Reuters articles to your daily news delivery, go to KW: <A HREF="aol://5862:146">News Profiles</A> and click on "Modify Your News Profiles." Then click "Edit" and add Reuters from the list on the left. To edit your profile, go to keyword <A HREF="aol://1722:NewsProfiles">NewsProfiles</A>. For all of today's news, go to keyword <A HREF="aol://1722:News">News</A>.
