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. Last Updated: 07/27/2016

Audit Finds Theft Of Chechen Cash

Investigators with the Audit Chamber say that federal money intended to rebuild Chechnya has been embezzled and top officials in the Finance Ministry and Economic Development and Trade Ministry have played a part.

"We are sending materials to the Prosecutor General's Office and there are concrete officials there, officials of MinFin [the Finance Ministry] and Minekonomiki [the Economic Development and Trade Ministry,]" said Sergei Stepashin, head of the Audit Chamber.

Stepashin did not name names and would only say two highly placed officials were involved.

The Audit Chamber also found that the Kremlin-installed Chechen administration of Akhmad Kadyrov misspent 27.4 million rubles (just under $1 million) — including 4.1 million rubles ($146,000) meant to pay the wages of teachers and doctors, but which the Audit Chamber found was spent on travel and purchases by Kadyrov's officials.

Officials with the Finance Ministry and Kadyrov's administration both rejected Stepashin's allegations.

Speaking after a closed-door meeting Friday of the collegium of the Audit Chamber, at which the investigation into Chechen reconstruction funding had just been presented, Stepashin also had harsh words for how little has been done to restore order in Chechnya.

"We must admit that the situation is simply pathetic," he told reporters. "Nothing is being rebuilt there and nothing works.

"Since July of this year, the program of restoring Chechnya has been virtually at a standstill. No plan for the restoration of Chechnya exists," Stepashin said. He said not one major industrial concern had been put back on its feet since the second war began in fall 1999.

State wages are also going unpaid, according to Malika Gezimiyeva, head of the Gudermes city administration.

"Our teachers had not been paid since May. They have just been paid up through August, only because they went on strike. Our doctors have not been paid for five months now," Gezimiyeva said in a telephone interview Friday from her office.

Kadyrov has said not a single apartment block in the mangled republic has been rebuilt, and he has asserted that federal troops are looting metals and oils from Chechnya.

Kadyrov's office chronicled such looting by the military in a report first brought to light by the German newspaper Frankfurter Rundschau, but the federal response seems to have been to grow just a bit wearier of Kadyrov.

Last week, President Vladimir Putin appointed a new Cabinet minister for Chechnya, Vladimir Yelagin. But it is unclear how the two Kremlin civilian appointees — Kadyrov and Yelagin — will divide power with each other and with federal military forces.

Yelagin said Friday, "The situation [in Chechnya] is worsening every day," adding "we have only a little time left."

Kadyrov and Stepashin both echoed that Friday.

"If in the next five to six months the situation with the funding of Chechnya does not become better, including the problem with the restoration of housing, the situation in Chechnya may spin out of control," Kadyrov said.

Stepashin said the situation in Chechnya "is already reminiscent of that of August 1996" — a time when President Boris Yeltsin had declared an end to military operations, but peace had not yet been struck and chaos reigned.

And amid all of the dire talk Friday of embezzlement and chaos, in Chechnya a series of hit-and-run rebel attacks in the past 24 hours left 13 federal soldiers dead.

In response to Stepashin's allegations, Finance Minister Alexei Kudrin told Interfax his employees had "nothing to do with the serious violations that could have led to the opening of criminal cases" and said the materials of the Audit Chamber "need to be checked again."

A spokeswoman for Economic Development and Trade Minister German Gref, Galina Bronnikova, had no comment.

The Audit Chamber's financial audit found that only 60 percent of the cash set aside in the budget for Chechnya for the eight-month period of January to August — or 1.23 billion rubles — was actually allocated by the Finance Ministry.