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. Last Updated: 07/27/2016

Grachev Accused Of Massive Graft

The general who led the Russian Army's assault on Grozny on Friday accused former defense minister Pavel Grachev and his entourage of embezzling tens of millions of dollars, in a potentially devastating attack on the man who has come to be known as "Pasha Mercedes."

The assault on Grachev came as Russia's new security overlord Alexander Lebed, who forced Grachev's dismissal from office last month, flexed his muscles in a new test of strength shaping-up inside the Kremlin.

Grachev was "mired in corruption and surrounded himself with spongers and thieves," General Lev Rokhlin, who is now retired from active service and heads the State Duma's committee for defense affairs, told parliament, The Associated Press reported.

Rokhlin cited one example, in which Colonel General Vasily Vorobyov, the former head of the Defense Ministry's finance department, transferred to a German bank $23.1 million from army ammunition sold to Bulgaria. The money disappeared without trace, Rokhlin said.

In another example, Grachev's brother-in-law, Colonel General Dmitry Kharchenko, took $5 million in government funds, turned them into rubles and put them into a commercial bank, pocketing the interest.

In another, chief military inspector Konstantin Kobets, who is now rumored as a candidate for defense minister, was said to have closed his eyes to a deal in which a construction company undertook to build apartments for army officers but never delivered them.

"One has the impression that the Defense Ministry leadership could do anything without fearing any consequences," AP quoted Rokhlin as saying.

Kobets, whose son Rokhlin said was the construction firm's co-founder, denied the allegations Friday, as did Vorobyov.

Grachev and his inner circle have been the subject of corruption allegations and investigations for several years already, and until now Grachev -- known as Pasha Mercedes for his purchases of flashy cars -- had emerged unscathed.

But President Boris Yeltsin fired the unpopular defense minister last month, after inviting Lebed, Grachev's bitter personal enemy, into the Kremlin as his national security adviser and Security Council chief. Lebed followed up by forcing out seven generals close to Grachev, and it now appears to be open season on the ex-defense minister.

Yeltsin has given Lebed a brief to fight crime, reform the army and root out corruption. The general was quoted in Friday's edition of Izvestia as saying he plans to start in Transdnestr, the separatist enclave in Moldova where he served as commander of the 14th Army.

"I plan to take adequate measures toward those who turned Transdnestr into one of the most popular corridors for contraband in the [Common Lebed last week produced an economic security program with wide-ranging suggestions touching on questions of economic management, which the prime minister said Thursday he considered his exclusive territory.

In the Izvestia article, Lebed also said he has given Yeltsin a list of his preferred candidates to fill key security positions and other cabinet posts -- although it is Chernomyrdin who has been charged with forming the government.

Some observers have speculated that Lebed might be forced out of the Kremlin, now that he has served his purpose in securing Yeltsin's re-election by prompting the 11 million voters who backed him in the first round to choose Yeltsin in the second.

But Dmitry Rogozin, head of the Congress of Russian Communities, or KRO, the nationalist bloc which nominated Lebed as its presidential candidate last January, said Friday he was not worried that Lebed would be forced out.

Lebed, Rogozin said, understands his departure from the government would be worse for those in power than for him, hinting that the ex-general could become a formidable threat to the Yeltsin government were he to be forced out of his posts.

"The elections which took place July 3 are not the last ones ... and I think it would be in the interest of any candidate for president -- [Communist leader Gennady] Zyuganov or Yeltsin -- to leave Lebed with this necessary powerful authority," Rogozin told reporters.

Sergei Markov of the Moscow center of the Carnegie Endowment for International Peace said the growing signs of bad blood between Chernomyrdin and Lebed should be viewed against the backdrop of Yeltsin's ill health.

"Now, after the presidential elections, the regime is more or less stable, but the question of a successor has not been solved," he said. "And there will be a big battle for this position."

Lebed again spelled out his wide-ranging national security concept in an interview published Friday in the daily Nezavisimaya Gazeta, and condemned "the tempo, extraordinary in world experience, of the reductions of military production" in Russia.

Andrei Piontkowsky of the Moscow-based Center for Strategic Studies said Lebed has replaced former deputy prime minister Oleg Soskovets, who was fired last month along with other Kremlin hardliners, in representing the interests of Russia's military-industrial complex.

This, he said, is one of the sources of his conflict with Chernomyrdin.

"It is not only a matter of personal animosity, but a very fundamental confrontation between two mighty political-economical clans," he said. "Chernomyrdin represents the oil and gas industry, and Lebed is promoted by the military-industrial complex. So their clash is inevitable."

Lebed's statements on religious, economic and other areas not obviously connected with security since his appointment have caused alarm among Kremlin watchers because of their hardline and interventionist tone.

Rogozin said leftist economist Sergei Glazyev, a member of KRO who formerly advised Lebed, is playing a "great role" in helping Lebed to restructure the Security Council. During the campaign, Glazyev had been replaced on Lebed's team by a more market-oriented economic adviser.

That switch would appear to have been part of a game plan. In an interview published in this week's Obshchaya Gazeta, Leonid Radzikhovsky, who also advised Lebed during the campaign, said his team's main task had been to "seduce" the intelligentsia to Lebed's side.

"It is simpler to charm the intelligentsia than the people -- it is stupider," he told the newspaper. "For that, several lures turned out to be enough: 'for the market,' 'against communism,' 'not an anti-Semite.' It was all based on that."