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. Last Updated: 07/27/2016

THE ANALYST: FIMACO Shows All Hope Is Lost for Future of Russia




If you ever again hear an optimist claim that Russia will defy the world's expectations, that the worst of the economic crisis is behind and an upswing is around the corner, that the country's leaders have learned from past mistakes and are ready to lay the foundation for a story-book recovery, just look them condescendingly in the eye and whisper one word: FIMACO.


This article is a confession of sorts. I never write in the first person, as I believe that such an approach to writing columns is somewhat conceited, if not narcissistic. A good columnist, while maintaining an editorial spirit, informs or proves a point, and does not emote. No "I this" or "I that" should be forced upon readers' better judgment. But due to the appalling "offshore" events recently revealed, my emotions have gotten the better of me. I can no longer restrain myself.


This is what I must confess: Russia is going nowhere. Forget about it. Progress in a country that doesn't punish those who flagrantly rip off the state is impossible. Progress in a country where the FIMACO scandal is not only possible, but acceptable, is impossible.


So long as shameless connivance continues to be the predominant value in Russia's political culture, we can get on with our lives knowing that nothing good will come out of this country in the next 30 to 40 years. If the entire system is so thoroughly apathetic, so hopelessly corrupt, that no one will stand up to these self-serving parasites who sucked the nation's reserves to a British Channel backwater and stuffed their pockets with part of it, then let Russia wallow in its own misery for another century. The country deserves no better.


FIMACO, when all is said and done, adds new dimension to the Russian kleptocracy. All those years the nation's leadership f from Yeltsin and Chernomyrdin on down the ladder f whined and moaned about flight capital, about how the nation was bleeding hard currency by the billions, yet they and their cronies were doing the exact same thing f with the nation's strategic reserves. With money that belongs to the citizens of Russia.


FIMACO, the Financial Management Co. based in the tax haven of Jersey, was used to conceal up to $50 billion of Russia's hard currency that churned through it between 1993 and 1998.


We still have not received adequate answers to questions about the size of profits and management fees, and who exactly were the beneficiaries. In any civilized country Viktor Gerashchenko and Sergei Dubinin would have been arrested and put before judge or grand jury until every last question was answered in full. But in Russia they walk on water. Because f as far as this operation went f everyone was is on it. The blatant audacity and hypocrisy of FIMACO is so mind-boggling that its magnitude doesn't sink in straight away. At some point, a group of individuals, acting under the guise of the highest authorities in the land, decided to siphon off part of Russia's international reserves to a nameless fund manager located on a piece of mud between England and France and get rich in the process. It made everyone feel warm and fuzzy because there was plenty of profit to go around. It was an offshore orgy in which communist and capitalist alike could partake in.


While there certainly may have been some justification in 1992 to transfer some reserves through an offshore investment operation and thereby beat the annual inflation rate on the U.S. dollar, the complete lack of transparency with which this operation was pulled off is stupefying. And herein lies the criminality of it all.


If only these individuals could see themselves from outside, they could hear how false their preposterous "explanations" sound. One person stands out as a shining example of this: Sergei Alexashenko, the Dubinin-lackey who now wants to set up monuments to Central Bank chiefs and who equates the Jersey-island investment company FIMACO to an inviolable state secret.


Former Prosecutor General Yury Skuratov, while deserving credit for revealing this disgusting episode of graft, obviously knew about FIMACO for quite some time, and only decided to blow the whistle out of desperation. (Which leads one to ask: What other nifty schemes is the prosecutor's office keeping mum on?)


Russia is going nowhere because the nation's leadership is, and will continue to be, devoid of anyone who will undertake any real efforts to sweep up the widespread graft, budgetary misapproprations and endemic ineffectiveness that is typified by this nation's economy. How can there be improvement when those who are running the show are covertly pocketing profits and fees through an offshore operation? How can these people f Yeltsin, Chernomyrdin, Dubinin, Gerashchenko, even Kiriyenko f possibly understand things such as integrity, virtue and honest enterprise, the stuff needed to make an economy work? The truth is they can't. Which is why we should give up all hope. I know I have.