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. Last Updated: 07/27/2016

EDITORIAL: New Scandal Cannot Go Unprobed




If the Russian parliament and media are shy about wading into the incredible allegations that the Central Bank misappropriated tens of billions of dollars in the nation's reserves, then the American and European parliaments and media ought to step forward with questions of their own.


Prosecutor General Yury Skuratov's allegations against the Central Bank are credible f in no small part because Central Bank chief Viktor Gerashchenko has largely confirmed them. Gerashchenko told the Duma that the Central Bank had for years been allowing an obscure shell company set up in the Channel Islands to "manage" the nation's hard currency reserves, in return for an unspecified commission.


In Skuratov's account, this involved billions of dollars and included some International Monetary Fund money as well. This gives the West every right to request details. The IMF, the World Bank and other foreign donors should be publicly on the record as demanding some answers.


Instead, they are silent. So are both the Russian media and the Russian political elite.


This is no doubt because focusing real attention on the Central Bank's fishy relationship with the FIMACO shell company would be an enormous national embarrassment that would taint everyone associated with the Boris Yeltsin regime over the past five years f from liberals like Anatoly Chubais and Sergei Kiriyenko to foreign backers like the IMF and Washington to left-wingers like Gerashchenko and Yevgeny Primakov.


Hardly anyone gets much political advantage out of pursuing this scandal. This is particularly so because too much talk of FIMACO would also threaten Russia's dwindling hopes of getting more IMF and other Western cash. That's bad for Russia, but also bad for the IMF, which desperately needs to find a way to keep Russia on its payments schedule, or face another evil precedent: the world's first IMF default.


And so we have a mutually convenient silence. After sitting placidly through Gerashchenko's unconvincing rebuttal to Skuratov on Friday, the Duma then turned to choose the bank's official auditor. Here indeed was absurdity: We have a tender to choose a mere auditor, an open process that has attracted lots of parliamentary and media attention ? but where was the tender to choose who would manage the money?


There never was one: Gerashchenko's bank simply created a shell company and let it earn profits by risking billions borrowed from Russia's vaults. How much did it earn in commissions? Exactly how did it invest this money? Where are those profits? It would be nice to have answers f but in a way, it would be nicer to hear responsible voices in the West and in Russia asking these questions.