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. Last Updated: 07/27/2016

Storm Swirls Around Top Kremlin Official




If the money scandals swirling around the Kremlin have a vortex, his name is Pavel Pavlovich Borodin.


Borodin's title - director of the Kremlin's property department - may not pack a wallop. But the nine telephones on his desk demonstrate his might. Four are direct lines to Russia's most powerful men: the heads of the two houses of parliament, the prime minister and President Boris Yeltsin.


"I spoke to the president just before you came," he said Tuesday in an interview. "He told me: `Don't pay attention to such filth. I would ignore the scoundrels.'"


Borodin is the only Russian official Swiss prosecutors so far have named as a target in a probe of Kremlin ties to a Swiss company. As FBI investigators seek the source of what they suspect is massive Russian money laundering through U.S banks, Borodin is also the first Kremlin official to go on the offensive.


As Borodin portrays it, the Russian financial scandal is a clever political conspiracy by hard-liners in Russia and the United States seeking to discredit their respective presidents.


In Russia, he said, Yeltsin's political enemies are trying to use him to get at the president. And in the United States, he added, Republicans who can't criticize the administration's economic program are taking aim instead at its policies toward Russia.


"The Republicans are staging a savage attack against [Vice President Al] Gore. They can't find anything serious on him. The [U.S.] economy is in a good state ... so they write that he lobbied the IMF [on behalf of Russia] and $15 billion was stolen," he said, referring to the International Monetary Fund.


Some reports have speculated about a link between the money and top officials in the Russian government, but so far the Kremlin has not been implicated.


But in a separate scandal Russian and Swiss investigators are looking into whether Borodin, Yeltsin or others accepted bribes or kickbacks from Mabetex, a Swiss engineering company that took part in the renovation of a number of Kremlin properties.


In July, Swiss authorities launched an investigation into two dozen bank accounts allegedly belonging to Russian officials. The only account owner they have listed by name is Borodin.


Last week, an Italian newspaper, Corriere della Sera, reported that the head of Mabetex provided Yeltsin and his family with credit cards and deposited $1 million in a Hungarian bank for their personal use. Both the Kremlin and Mabetex director Bahgjet Pacolli have denounced the stories as untrue.


Should the Mabetex allegations be proved, Yeltsin would be seen not only as the president who helped dismantle the Soviet Union but as the president who looted its ruins.


In the interview Tuesday, Borodin insisted he also has no bank accounts or credit cards outside Russia.


"I don't rule out that somebody may have opened an account in my name, just as someone may have opened a credit card in my name," he said. "This is simply politics. I am of little interest here. They are after Yeltsin."


He left unnamed the "they" but made clear whom he meant: the new political team of former Prime Minister Yevgeny Primakov and Moscow Mayor Yury Luzhkov, who have formed an anti-Kremlin election bloc.


Daniel Deveau, a Geneva-based magistrate investigating the Swiss accounts, confirmed that Borodin is implicated in his inquiry. He declined to provide further details, but he ridiculed Borodin's suggestion that someone could have opened an account in his name without his knowledge.


Borodin controls an empire of Kremlin-owned facilities that includes government buildings, country homes, resorts and fleets of official vehicles. His department employs about 100,000 people and takes in about $2.5 billion annually.


Compared with the size of his operation, Borodin claimed, Mabetex is small potatoes. During his six years in the job, he said, his department has awarded about 340 renovation contracts, of which Mabetex received six. Those six contracts, totaling about $300 million, were awarded in a process overseen by the country's Ministry of Trade.