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Russia: Top Navy Official Charged With Massive Misuse Of Funds

Moscow, 18 June 1997 (RFE/RL) -- After months of investigation, military prosecutors have officially charged the former second man in the Russian navy with misuse of millions of dollars in funds.

The charges, pressed by the Pacific Fleet Prosecutor's Office against ex-chief of the naval staff Admiral Igor Khmelnov, are officially formulated as "abuse of power entailing grave consequences." If found guilty, Khmelnov, who served as commander of the Pacific Fleet from 1994 to 1996 before promoted to chief of the naval staff, could spend 10 years in prison.

The fleet's chief prosecutor, Valery Suchkov, told ITAR-TASS yesterday that Khmelnov allegedly misused millions of dollars in proceeds from selling 64 aged warships, including two aircraft carriers, to South Korean and Indian scrappers while still in command of the Pacific Fleet.

RFE/RL's defence correspondent in Moscow reports that the proceeds from these sales were to have been used to build free apartments for the neediest of local naval servicemen. And, 273 apartments were indeed constructed, but a substantial number of them were distributed among Khmelnov's friends and relatives, and not the neediest of local naval servicemen.

Moreover, its alleged that before leaving to become the chief of naval staff in Moscow late last year, Khmelnov illegally privatised and sold his five-room apartment in the far eastern port of Vladivostok. Pacific Fleet prosecutors also believe Khmelnov has also misappropriated huge sums the federal government has channeled to the Pacific Fleet fleet for construction of a naval memorial centre in Vladivostok, according to local military prosecutors.

Suchkov said Khmelnov has already arrived from Moscow together with his lawyer to prepare for the legal battle in Vladivostok. Reports of the allegations against Khmelnov were first leaked by military prosecutors to the Russian press last February, in what was seen as an attempt to block the further rise of Khmelnov. He was at the time tipped to replace the present chief of the Russian navy, Admiral Felix Gromov. Gromov, who will have to retire this August when he turns 60, is said to dislike Khmelnov.

Gromov even barred Khmelnov from fulfilling his duties at the naval staff early this year without waiting for military prosecutors to file charges.

It was not until April, however, that President Boris Yeltsin issued a decree to sack Khmelnov as well as Commander of the Ground Forces Vladimir Semyonov, his deputy Anton Terentyev and First Deputy Commander of the Northern Fleet Vyacheslav Kharnikov, who were also accused of housing machinations and misuse of defence ministry funds.

Since then several other top commanders have been sacked on corruption charges, including Deputy Defence Minister General Konstantin Kobets, who allegedly accepted gifts, including a luxurious country dacha, from a building contractor paid by the army and which employed the general's son. Yeltsin lashed out at top brass corruption last month, accusing generals of "fattening themselves" at the expense of their soldiers.

Misuse of material assets as well as other property-related crimes have soared in the Russian military since the ill-planned division of the mighty Soviet war machine between independent republics. That and the pull-out of troops form East Europe in the early 1990s opened vast opportunities for camouflaged embezzlers.

Russian prosecutors are currently investigating dozens of alleged crimes by senior officers, including misdeeds by 18 generals. Last year alone the Chief Military Prosecutor's Office sent 3,310 cases of property-related crimes committed by soldiers and officers, many of whom had seen no wages for months, to military courts. The Defence ministry is currently carrying out a detailed inventory of its resources, assets, weaponry and manpower to determine what is missing and what should be disposed of.