Kudrin Criticized for 'Overspending'

Dmitry Astakhov . ApMedvedev and Kudrin speaking at a meeting outside of Moscow on Tuesday.
State Duma deputies from the pro-Kremlin United Russia party have criticized the Finance Ministry for overspending, a move that could put further pressure on its veteran head, Alexei Kudrin.

An open letter signed by some prominent deputies was posted Monday on the web site of United Russia, which has a two-thirds majority in the Duma and previously voted for Finance Ministry budgets.

"The speed of spending the money we have been saving for years forced us, a group of deputies from the United Russia faction, to openly state our opposition to the policy carried out by the Finance Ministry's bureaucrats," the deputies wrote.

Prime Minister Vladimir Putin, who heads the party but is not a member, authorized a plan worth more than 200 billion to support the economy, but the deputies said the money was not being spent efficiently.

The money, they said, went mostly to large corporations and banks, which converted it into foreign currency because, with the ruble being gradually devalued, this was more profitable than investing or issuing loans.

Putin and President Dmitry Medvedev used verbal attacks on banks and threatened to cut off government support, but with the ruble down 19 percent against the dollar since its July peak, the warnings were ignored.

"It looks like the orders of the president and the prime minister are fulfilled only on paper," Alexander Khinshtein, one of the letter's signatories, told a news conference Tuesday.

Instead, the deputies proposed raising direct subsidies to the citizens through higher pensions and public sector wages. They also sought to cancel the planned increase in regulated prices, such as domestic tariffs for gas and electricity.

The influence of Kudrin, finance minister since 2000, has risen since the crisis started, and his harshly criticized policies of saving windfall oil revenues for a rainy day proved right, enabling Russia to face the crisis fully armed.

Several recent incidents, however, such as criticism of the Finance Ministry from Medvedev over a delay in drafting a law that would enable the Central Bank to place agents in commercial banks, suggest that Kudrin's opponents are gaining ground.

The signatories of the letter belong to a so-called populist wing of the party, with some 2 million members. The deputies said they wanted discussion but still trusted their leader.