As the allegations of Russian money-laundering schemes continue to unfold, attention in the United States is turning to how much the U.S. government knew about Russian corruption -- or what some say it should have known. RFE/RL correspondent Lisa McAdams looks at the discussion about what, if anything, could have been done differently to safeguard U.S. aid to Russia.
Washington, 6 September 1999 (RFE/RL) -- U.S. President Bill Clinton is scheduled to return to work tomorrow from vacation, just in time to face questions over how much his administration was aware of alleged Russian corruption. White House and State Department officials are also likely to face questions very soon. Like the president, the U.S. Congress returns from its summer recess this week, and House of Representatives Banking Committee chairman Jim Leach (R-Iowa) plans to open hearings into the matter.
The issue is also expected to dominate talks in Moscow this week between Deputy U.S. Secretary of State Strobe Talbott and senior Russian Foreign Ministry officials. The questions stem from charges that billions of dollars were channeled through the Bank of New York in the last year, in what could be the biggest money-laundering operation by Russian organized crime in the United States.
Money laundering is a term used by law enforcement to describe a common activity of organized crime. Criminals "launder" the proceeds of crime by moving the money through a series of transactions with banks so that, in the end, the money appears as though it came from a legitimate business.
U.S. press reports estimate that as much as $15 billion may have flowed through the bank -- $10 billion of which may have come from loans granted Russia by the International Monetary Fund (IMF).
Aleksandr Livshits, Russian minister without portfolio in charge of ties with the G-7 leading industrial nations, has said Russia is ready and willing to provide the United States with fresh explanations on how it spent its IMF loans. And Russian Finance Minister Mihail Kasyanov has dismissed charges that the government might be involved.
So far, no one has been formally charged in Russia or in the United States. However, the New York bank that is the subject of part of the investigation, the Bank of New York, has fired two senior executives involved in Russian transactions.
In Washington, the U.S. Departments of Treasury and State, as well as the National Security Council, have begun immediate reviews of their Russia policy, while the U.S. Justice Department is investigating.
The IMF and the Treasury Department have said it would be "premature" to halt further aid to Russia until there has been a thorough investigation and an adequate accounting of the money already lent. Briefing reporters in Washington late last week, White House spokesman Jake Siewart said:
"The bottom line is that, before we disburse any money under an IMF program, we look first to make sure that it is supporting reform, and second to make sure that it is adequately protected and that there are safeguards in place and that any previous money has not been misused. To date, there is no evidence that any of that money has been misused, and obviously the IMF is taking some steps to ensure that we have a full accounting of that."
In the wake of the allegations, The New York Times reported that some U.S. officials, as well as outside critics, have suggested that the U.S. administration ignored indications of corruption in Russia. They say the administration wanted to ensure Russian President Boris Yeltsin's support for U.S. national security interests. But others say the U.S. government could not have done anything about the corruption.
Anders Aslund is an outspoken advocate of macroeconomic stabilization as the key to Russian reform. He has often been critical of the Russian government, saying it has lacked the political will to implement those policies. Aslund, a senior associate at the Washington-based Carnegie Endowment for International Peace, spoke with RFE/RL about the current controversy. He says the notion the United States could or should act against corruption in Russia is, in his view, "quite absurd."
"The U.S. is not omnipotent. Most countries in the world are corrupt regardless of what the U.S. says about it. Russia is a sovereign country, so how can you expect to be able to dictate what it should do? There seems to be some kind of general view that the U.S. is entitled to and can impose any policy on other countries. The U.S. role in Russia is limited, and it will become much more limited."
Aslund also says he saw no real trouble for Russian leaders because ordinary Russians view the allegations as largely "an anti-Russian campaign." He says the matter seems to be gaining more critical attention in the United States, particularly as it pertains to U.S. Vice President Al Gore.
"There are a lot of people who think that this will stick to Gore. To my mind, the U.S. could not do very much, has not done very much and, therefore, can not be blamed for very much."
Republican presidential candidate Steve Forbes disagrees. Forbes told reporters that Gore shares in the blame, having, in Forbes' view, ignored the warning signs that Russia was in grave trouble. Foreign policy aides to Texas Governor George Bush, another Republican presidential contender, have said the administration should have been more sensitive to the alleged level of corruption in Moscow and that Gore too willingly accepted pledges of reform that were never carried out.
Aslund adds that in his view, there is really no major reason to continue U.S. aid to Russia now, no matter the outcome of the allegations. As he put it, "the time of technical assistance has essentially passed."
Aslund was equally dismissive of the possibility that new legislative controls regarding U.S. aid to Russia would be instituted in the aftermath
Clinton and Gore have received briefings on the corruption issue from both intelligence and law enforcement sources. But in line with other U.S. agencies, White House Chief of Staff John Podesta declined full comment until confirmed facts are brought to light. The U.S. State Department has said that, if the reports are shown to be true, they would be of "great concern."