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. Last Updated: 07/27/2016

Far East Officials Accused of Energy Scam

Combined Reports

A presidential auditing commission Thursday accused officials in the Russian Far East of bilking the federal government of billions of rubles by charging illegally high prices for energy.

Alexei Kudrin, head of President Boris Yeltsin's auditing commission, said regional authorities created an illegal two-tier pricing system that, in effect, extracted money from the federal government.

Under the pricing scheme, federal government bodies, such as the military or state-owned enterprises, paid extremely high rates. Local customers paid extremely low rates, he said.

He said regional authorities also created paper companies to resell electric energy at a fat profit.

The case, he said, has been turned over to the federal prosecutor general.

The commission was ordered to investigate the energy crisis in the Russian Far East after a series of strikes by coal miners and power plant workers who aren't getting paid and after the region was struck with a series of blackout and brownouts earlier this year.

The regional electric company, Dalenergo, claimed it had run out of money to buy fuel because some of its biggest federal customers, including military installations and state enterprises, weren't paying their bills.

The coal company, too, claimed it was hobbled by unpaid debts.

Yeltsin this week ordered the governor of the Primorsk region, Yevgeny Nazdratenko, to fire the head of the regional energy commission and suggested that the head of Dalenergo be fired, too.

As for the coal miners, Kudrin said the inspectorate found that the governor was diverting money intended to pay the coal miners. In February, for example, the federal government sent him 60 billion rubles ($11.3 million) to pay coal miners. Only 20 billion reached the miners, Kudrin said.

Yeltsin has issued a reprimand to Nazdratenko, one of Russia's most powerful local officials and the frequent target of corruption allegations, and given him until Sept. 15 to resolve the energy crisis in his region.

Nazdratenko will come under additional pressure following a court decision in Moscow this week reinstating Viktor Cherepkov, the former mayor of Vladivostok, the biggest city in Nazdratenko's Primorsky Krai.

Cherepkov, a bitter political enemy of Nazdratenko's, was dismissed in 1994 by presidential decree following a round of corruption allegations.

Cherepkov protested the decision because, according to reports in the newspaper Izvestia, Nazdratenko had mounted an elaborate undercover operation to have him framed. Nazdratrenko has denied the charge. ()