In all the countries of the region, politicians and managers abuse the state and its simulacrum institutions in close symbiosis with felons. Patronage and sinecures extend to collaborating lawbreakers. Veritable villains gain access to state owned assets and resources in a cycle of money laundering. Law enforcement agencies and the courts are "encouraged" to turn a blind eye, or even to help criminals eliminate internal and external competition in their turf.
Criminals, in return, serve as the "long and anonymous arm" of politicians, obtaining for them illicit goods, or providing "black" services. Corruption often flows through criminal channels or via the mediation and conduit of delinquents. Within the shared sphere of the informal economy, assets are shifted among these economic players. Both players oppose attempts at reform and transparency and encourage - even engender - nationalism and racism, paranoias and grievances to recruit foot soldiers.
Fortunately, there is the irrepressible urge to become legitimate. Politicians, who grope for a new ideological cover for their opportunism, partner with legitimacy- seeking, established crime lords. Both groups benefit from a swelling economic pie. They fight against other, less successful, criminals, who wish to persist in their old ways and, thus, hamper economic growth. The battle is never won but at least it succeeds to firmly drive crime where it belongs: underground.
VII. FIMACO - Russia's Missing Billions
Russia's Audit Chamber - with the help of the Swiss authorities and their host of dedicated investigators - may be about to solve a long standing mystery. An announcement by the Prosecutor's General Office is said to be imminent. The highest echelons of the Yeltsin entourage - perhaps even Yeltsin himself - may be implicated - or exonerated. A Russian team has been spending the better part of the last two months poring over documents and interviewing witnesses in Switzerland, France, Italy, and other European countries.
About $4.8 billion of IMF funds are alleged to have gone amiss during the implosion of the Russian financial markets in August 1998. They were supposed to prop up the banking system (especially SBS-Agro) and the ailing and sharply devalued ruble. Instead, they ended up in the bank accounts of obscure corporations - and, then, incredibly, vanished into thin air.
The person in charge of the funds in 1998 was none other than Mikhail Kasyanov, Russia's current Prime Minister - at the time, Deputy Minister of Finance for External Debt.
His signature on all foreign exchange transactions - even those handled by the central bank - was mandatory. In July 2000, he was flatly accused by the Italian daily, La Reppublica, of authorizing the diversion of the disputed funds.
Following public charges made by US Treasury Secretary Robert Rubin as early as March 1999, both Russian and American media delved deeply over the years into the affair. Communist Duma Deputy Viktor Ilyukhin jumped on the bandwagon citing an obscure "trustworthy foreign source" to substantiate his indictment of Kremlin cronies and oligarchs contained in an open letter to the Prosecutor General, Yuri Skuratov.