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Ingushetian Finance Minister Suspected Of Misuse Of Budget Funds

Ingushetia's leader, Yunus-Bek Yevkurov, is apparently no longer prepared to tolerate financial scandals that are grist to the mill of a political opposition that never lets slip an opportunity to implicate him personally in corruption.

Russia's Investigative Committee has opened a criminal case against Republic of Ingushetia Finance Minister Ruslan Tsechoyev. Tsechoyev, 55, is suspected of abusing his official position by using funds allocated from the federal budget for a purpose other than that for which the money was earmarked.

Specifically, the republican prosecutor's office determined last month that in December 2014, Tsechoyev used over 1.9 billion rubles ($38 million) intended to pay the wages of public-sector employees to balance the budget deficit. Tsechoyev was fined 350,000 rubles ($7,000), and a criminal case opened against him on suspicion of large-scale misuse of budget funds, which carries a penalty of up to seven years' imprisonment.

Such financial irregularities are not uncommon in a republic that is dependent on subsidies from Moscow for 86 percent of its annual budget, and has long been a byword for corruption. In August 2014, for example, the federal Audit Chamber made public the findings of its probe into how Ingushetia's government spent the federal subsidies it received in 2013 and the first quarter of 2014.

It established that in 2013 over 1.3 billion rubles was spent for purposes other than for which it had been allocated, while the republic's debt skyrocketed by 65 percent to reach 2.38 billion rubles. Part of the money was reportedly found to have landed in the bank account of a company controlled by Ingushetia's prime minister, Abubakar Malsagov.

Tsechoyev, whom Ingushetia head Yunus-Bek Yevkurov appointed as finance minister a year ago, is the third person to hold that position in the past four years. His immediate predecessor, Magomed-Bashir Aushev, lost his job for his failure to monitor whether budget funds were transferred to the correct recipient.

Yevkurov is apparently no longer prepared to tolerate financial scandals that are grist to the mill of a political opposition that never lets slip an opportunity to implicate him personally in corruption. Commenting last month on the criminal investigation opened against Tsechoyev, Yevkurov publicly acknowledged that "we realize that the money wasn't stolen, but everyone needs to understand that people must be held responsible for violating the provisions of the budget code."

Analysts note that since then-President Dmitry Medvedev named Yevkurov republic head in October 2008, Ingushetia's dependence on federal subsidies has fallen by only 8.7 percent, and its unemployment rate is still one of the highest in Russia. At the same time, as a result of a systematic crackdown on tax evasion and the shadow economy, budget revenues are increasing by 15-20 percent annually, albeit from an extremely low base.

In addition, the region's leaders are actively and assiduously soliciting foreign investment, not without success. Following almost 10 years of negotiations, they recently reached agreement with Chinese investors who plan to grow organic produce in Karabulak and may also embark on a joint venture with state-owned Rosneft to revive oil production, which has plummeted since the turn of the century from approximately 200,000 tons per year to just 63,600 tons in 2013.

But some Ingush commentators have voiced concern that reviving the oil industry will not benefit Ingushetia financially (it is not clear where the oil extracted will be refined), and carries serious environmental risks. In addition, one blogger has expressed resentment at Yevkurov's reported decision to rename one of the central squares in the new capital, Magas, China Square.

-- Liz Fuller

About This Blog

This blog presents analyst Liz Fuller's personal take on events in the region, following on from her work in the "RFE/RL Caucasus Report." It also aims, to borrow a metaphor from Tom de Waal, to act as a smoke detector, focusing attention on potential conflict situations and crises throughout the region. The views are the author's own and do not represent those of RFE/RL.


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