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. Last Updated: 07/27/2016

Chubais Says Kremlin Lied for Loans




A key architect of Russia's economic transformation, Anatoly Chubais, said in a published interview that Russia "conned" the international community out of nearly $20 billion in loans by lying about the severity of the country's fiscal problems.


Chubais, who in July negotiated a $4.8 billion loan from the International Monetary Fund, said in an interview in Kommersant Daily on Tuesday that it was necessary and appropriate for Russia to lie in order to obtain infusions of cash.


If the government had told the truth, the longtime adviser to President Boris Yeltsin said in the interview, Russia's economy would have collapsed last spring and global lenders "would have stopped dealing with us forever."


Asked if the Russian government has the right to lie about the country's fiscal instability, Chubais replied: "In such situations, the authorities have to do it. We ought to. The financial institutions understand, despite the fact that we conned them out of $20 billion, that we had no other way out."


Chubais' comments come as Russia searches for a solution to the economic crisis that has paralyzed commerce, pushed banks to the verge of bankruptcy, and sent the ruble plunging in value almost daily to record lows.


Triggered by a devaluation of the ruble Aug. 17, the economic collapse has sparked a political crisis that has left the country without a functioning government for more than two weeks. Yeltsin, twice unable to win parliamentary confirmation of his nominee for prime minister, Viktor Chernomyrdin, met with advisers Tuesday but did not name a candidate for the post.


Some Russian officials say obtaining more foreign aid would be the best way to halt the economic slide. The IMF is scheduled to release another $4.3 billion loan next week, but the payment is in doubt because of Russia's inability to enact austerity measures and its decision to devalue the ruble and freeze payments on short-term government debt.


Chubais' statements to the respected business newspaper were especially startling because he has been widely viewed as one of the so-called young reformers who could be trusted by the West because he favored establishing a market economy.


He has served Yeltsin in numerous capacities, including privatization chief, presidential chief of staff, deputy prime minister, campaign manager and, most recently, special envoy to Western lending institutions.


Chubais now serves as chief executive of the state-owned electricity monopoly Unified Energy Systems, one of Russia's largest companies.


This summer, as Russia's economic woes mounted, Chubais played a crucial role in winning a pledge of $22.6 billion in loans from the IMF, the World Bank and the government of Japan.