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. Last Updated: 07/27/2016

Russia-Belarus Link Poses Fiscal Mystery

The often-touted union between Belarus and Russia may never in fact see the light of day, but it already has a budget f some 800 million rubles ($32 million) f and a bureaucracy to oversee it.

And that money is a lready being misused, say officials of Moscow-based television maker Rubin.

Some of the 14.5 million rubles allocated from that budget to fund a joint Russian-Belarussian venture called Soyuzny Televizor to produce televisions has been misused by Voronezh-based television tube maker VELT, one of the partners in the project, Anatoly Lashkevich, Rubin's general director, said at a news conference Tuesday.

The union budget is drawn from the Russian and Belarussian budgets, which set aside 0.1 percent and 1 percent of their total funds, respectively. It is administered by about 100 officials, and final oversight rests with the Russian-Belarussian Joint Assembly, a 64-member body consisting of 16 members from each nation's two houses of parliament.

While there is plenty of public debate over Russia's state budget and allocation of funds, there is very little oversight of union spending.

Russia's State Audit Chamber, a parliamentary watchdog, tries to verify each spending item, but it has no power to probe the union budget.

Few Russians even know of that budget's existence.

However, the Russia-Belarus Union, for which no ordinary citizen ever voted, was formalized in spring 1997 when Presidents Boris Yeltsin and Alexander Lukashenko signed a treaty for a union between Russia and Belarus. The accord pledged the two countries to work toward full political and economic union, but progress has been erratic and minor.

The major results have been a rather inefficient customs union, the joint assembly, its accompanying bureaucracy and the establishment of a union budget.

The following year, a union budget of 585 million rubles appeared. It was increased to 800 million rubles ($32 million) in 1999. Russia provided 379 million rubles toward it in 1998 and 520 million rubles this year, said Viktor Stepanov, the chief administrator of the union, the highest-ranking executive officer of the alliance. The official head of the union is Prime Minister Vladimir Putin.

What is 520 million rubles in 1999? The Russian budget has allocated 90 million rubles to support disabled children and 22 million rubles to support veterans disabled after wars in Afghanistan and Chechnya.

The union budget finances some 23 jointly approved programs, of which Soyuzny Televizor is the second largest, behind a 200 million ruble program to develop diesel car manufacturing, union officials said. Soyuzny's project totals 70 million rubles, of which 31.8 million has been disbursed this year.

Along with Rubin and VELT, Soyuz brings together Vitebsk-based Vityaz and Minsk-based Gorizont television manufacturers, the Belarus Integral research institute, Novgorod's Kvant and several other Russian and Belarussian enterprises.

No auditor, such as the State Audit Chamber, monitors cash flow to the union, and the way the union budget's cash is distributed is already raising questions.

The difficulties Rubin has been experiencing with Soyuzny Televizor, Lashkevich said, stem from the involvement of Electronniye Tekh-nologii, a holding company set up last year to coordinate the project.

Lashkevich accused Electronniye Tekhnologii of serving the interests of one of its branches, VELT, saying the tube maker had mismanaged some funds it was given and had held some of the money for "a long time in its accounts."

Stepanov confirmed that some of the 14.5 million rubles set aside for research to build a new generation of television tubes at VELT was spent to replenish the factory's working capital.

Russian laws impose fines for mismanagement of federal funds.

Stepanov defended VELT's actions. "Well, they need working capital," he said.