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. Last Updated: 07/27/2016

Paper: Mabetex Gave Yeltsins $1M




The head of the Mabetex company -- a Swiss-based contractor that has won lucrative Kremlin refurbishment contracts f has admitted to supplying more than $1 million in "pocket money" to President Boris Yeltsin and his two daughters, an Italian newspaper reported Wednesday.


The money was supplied by Mabetex head Bahgjet Pacolli to Yeltsin to cover personal expenses of the president and his family rung up during a 1994 trip to Budapest, Hungary, according to the Italian newspaper Corriere della Sera.


The newspaper reported that Pacolli had provided the information f along with documentation that included pay slips from credit cards the Mabetex chief reportedly arranged for the Yeltsin entourage f to former Swiss Federal Prosecutor Carla del Ponte.


The newspaper said Pacolli paid off credit cards for Yeltsin, his daughters Tatyana Dyachenko and Yelena Okulova, and the former Kremlin security chief and erstwhile Yeltsin confidante Alexander Korzhakov.


"The president does not seem to have abused Pacolli's cards," the daily wrote. "But his daughters? Their accounts are the least stingy. Tanyushka [Dyachenko], the tsarina, the little princess of the Kremlin above all. She spent millions of lire [thousands of dollars] in a single day."


Corriere della Sera cited unidentified sources it described as being close to del Ponte's investigations into Russian corruption.


A spokeswoman for Mabetex, reached by telephone at the company's offices in Lugano, Switzerland, said Pacolli had seen the Italian newspaper report and viewed it "extremely negatively," calling it an "excellent fiction." The spokeswoman said Pacolli was on vacation and could not be contacted.


The Kremlin press office said the report was untrue. The Swiss prosecutor's office had no comment. Korzhakov, now a State Duma deputy, could not be reached to comment.


The Mabetex fit-out company, which has won lucrative contracts to redo government buildings in Russia f including the presidential residence in the Kremlin and its ceremonial facilities f sits at the hub of graft allegations aimed at presidential functionaries.


Last month, Geneva city prosecutor Bernard Bertossa froze Swiss bank accounts he said belonged to Pavel Borodin, the head of the Kremlin's household affairs directorate. Bertossa's staff have said Borodin's accounts are under suspicion of money laundering.


Borodin's Swiss bank accounts also figure in the latest allegations: Pacolli told Swiss prosecutors he used them to channel "pocket money" to the Yeltsins, Corriere della Sera reported.


In the Italian newspaper's account, the case broke when a Swiss informant at some point told Prosecutor General Yury Skuratov of the existence of Swiss bank accounts in the names of high Russian officials.


Skuratov asked Swiss prosecutors to check into account numbers at two Swiss banks f Banca del Gottardo and UBS. As a result of that investigation, those accounts were frozen, Corriere reported.


The UBS branch in Geneva, where, according to Bertossa, Borodin's accounts were frozen, could not be reached for comment.


Roberto Gianola, the official who heads the department that deals with Russian clients at Banca del Gottardo in Lugano, said Wednesday, "We do not release any comments."


The Corriere della Sera report says the Yeltsin family credit cards were issued against the account of a small Lugano clothing store owned by Silvia Fenini f whose husband Franco Fenini, the paper says, once headed Banca del Gottardo's Russian operations before Gianola.


Reports of the involvement of a banking official's spouse in a dubious financial scheme were reminiscent of the scandal surrounding allegations that billions of dollars in Russian money may have been laundered through the Bank of New York: Natasha Gurfinkel Kagalovsky,a senior vice president who supervised the bank's Russia business, is married to Konstantin Kagalovsky, Russia's representative to the International Monetary Fund from 1992 to 1995 and now vice president of oil giant Yukos.


Swiss media also reported last week that prosecutors froze the accounts of Dyachenko ally Boris Berezovsky f along with accounts belonging to two Swiss-based companies linked to Berezovsky that are suspected of having been used to siphon off the foreign revenues of state-owned Aeroflot airlines.


Valery Okulov, Yeltsin's son-in-law, is general director of Aeroflot.


The Lausanne premises of those two firms, Andava SA and Forus Service SA, were searched this spring by Swiss prosecutors, who seized documents.


"Those seized documents are here [in our offices]," del Ponte said in an interview with the Swiss daily Neues Z?rcher Zeitung last week. "I have almost a roomful of them, and they are now being sorted through."


The Corriere report that Mabetex paid Yeltsin's personal bills marks the first time the president himself has been linked to suspected graft in the Mabetex case. Kremlin officials have viciously fought Skuratov's investigations, to the point of televising a videotape of him cavorting with prostitutes and using it as a pretense to oust him.


A warrant for Berezovsky's arrest was quietly canceled when the political patron of Skuratov's investigations, Prime Minister Yevgeny Primakov, was fired in May.


Primakov was subsequently replaced by Sergei Stepashin, a former interior minister who once accused del Ponte of meddling in Russian internal affairs by assisting Skuratov, and also once announced he simply intended to ignore an arrest order for Berezovsky.


But even so, the investigations seem to crawl forward. Del Ponte has said she continued to receive requests for investigative assistance from the Russian prosecutor even under the leadership of Skuratov's deputy, Yury Chaika, Neues Z?rcher Zeitung reported.


Both Chaika and del Ponte, however, have received promotions in recent days, feeding suspicion that they are being kicked upstairs in hopes their investigations will cease.


Chaika was quietly fired, then named justice minister last week, while del Ponte was named the chief prosecutor on war crimes in Yugoslavia and Rwanda at the United Nations International Criminal Tribunal.


Staff writers Oliver Ready and Robin Munro contributed to this report.