Zubkov Asks Kudrin About Missing Cash

Prime Minister Viktor Zubkov on Thursday publicly quizzed Finance Minister Alexei Kudrin over the disappearance of 1 billion rubles ($40.1 million) in earthquake aid to Sakhalin.

"And now to finance -- we held several meetings here and I remember all the figures by heart," Zubkov told Kudrin in his opening televised remarks at the Cabinet meeting. "And somewhere along the way, Alexei Leonidovich, a billion [rubles] went missing."

Zubkov, who has just returned from a trip to Sakhalin island, where an earthquake in August left about 8,000 people homeless, said the money had been destined for the town of Nevelsk as part of the relief effort.

Andrei Saiko, a spokesman for the Finance Ministry, said Thursday evening that the ministry was preparing to put out a statement in response to Zubkov's comments.

The public dressing-down of officials has become a hallmark of Zubkov's style of government. In his first Cabinet meeting after his appointment in September, Zubkov lambasted the government for its sluggish response in providing relief to Sakhalin.

Turning on the government official responsible for ensuring the money reached the island, Zubkov ordered that he be dispatched to Sakhalin to ensure the money arrived.

Sakhalin's governor at the time, Ivan Malakhov, resigned in the aftermath of the quake. Government officials denied that his departure was linked to the authorities' response to the disaster.

"It's another example of Zubkov's way of dealing with these problems, which is a little Soviet, but shows to the country that he is very decisive and tough with his subordinates," said Nikolai Petrov, an analyst at the Carnegie Moscow Center.

Petrov said he doubted that Zubkov's comments were "a move against Kudrin personally," although he noted that there had been "sharp conflicts" in the past between them. Before his appointment as prime minister, Zubkov headed the Federal Financial Monitoring Service, which was then a semi-autonomous agency under the aegis of Kudrin's ministry. It now reports directly to the prime minister.

In August, the Finance Ministry wired the Sakhalin regional administration 2 billion rubles to help the rebuilding effort, Kommersant reported. The local authorities estimate that the total damages in Nevelsk will require 6.5 billion rubles ($266 million) in aid, the newspaper said.

Zubkov's comments come at a time when Kudrin is facing political pressure following the November arrest of Deputy Finance Minister Sergei Storchak, the country's leading debt negotiator, on charges of attempting to embezzle $43.4 million in a foreign debt deal with Algeria. Kudrin has staunchly defended his deputy.

Analysts have said the arrest of Storchak, who prior to his arrest had oversight for the $144 billion stabilization fund, is part of a wider campaign to discredit or assert pressure on Kudrin as the different power groups within the Kremlin jostle for control and influence ahead of March's presidential elections.