MOSCOW (AP) -- An International Monetary Fund loan of $4.8 billion went mostly to well-connected banks and wasn't used to stabilize Russia's economy as intended, the country's suspended prosecutor claimed in an interview published Wednesday.
The prosecutor, Yuri Skuratov, has alleged high-level corruption in several prominent cases, although he has not been able to pursue them since being suspended by President Boris Yeltsin in March.In the latest case, Skuratov said he believes Russia mishandled a large IMF loan in July 1998 that was designed to stabilize Russia's shaky economy. Instead, the economy imploded a month later.
Russia was supposed to use the money to firm up the Russian ruble, which was under pressure from investors who were pulling out following financial turmoil in many developing countries.
Skuratov did not say what law, if any, was broken. But his comments suggested the government used the IMF money to help powerful, insider banks rather than to support the overall economy.
Skuratov said 18 Russian banks bought dollars from Russia's Central Bank after it received the IMF loan in July 1998 and before the financial meltdown the next month.
The banks, like most businesses and individuals, wanted to put their assets in dollars because they feared the ruble would collapse.
Skuratov claimed that only $471 million went to support the ruble exchange rate on the Moscow Interbank Currency Exchange, the main forum for hard currency exchange.
The bulk of the money, $3.9 billion, never entered Russia and was sold directly to Russian banks, which deposited the funds in their accounts at U.S. banks, Skuratov told The Moscow Times, an English-language daily.
"I cannot understand why only $471 million went to support the ruble, and the rest -- without even landing in Russia -- was sold to commercial banks," he was quoted as saying by the newspaper.
The Central Bank received the $4.8 billion IMF loan on July 23, 1998, and then sold $4.4 billion from that account in the days leading up to the financial crash on Aug. 17, 1998, Skuratov said.
Also, the Bank of New York, which is at the center of an international money laundering investigation, was involved in the money transfers from the Central Bank to the accounts of the commercial banks in the West, Skuratov claimed.
The IMF's Moscow office declined to comment, referring inquiries to its Washington headquarters.
Skuratov has granted a series of interviews in the past two weeks, offering up new allegations of corruption on several occasions.
The prosecutor was investigating high-level Kremlin corruption when Yeltsin tried to fire him. When parliament refused to accept Skuratov's resignation, Yeltsin then suspended him.
Skuratov is himself being investigated by authorities who suspect he may have accepted the services of prostitutes in exchange for dropping criminal investigations.
It is legal for banks, businesses and individuals to buy dollars and keep dollar accounts, and many in Russia do so. However, large dollar transactions are normally conducted at the Moscow Interbank Currency Exchange.
The Central Bank declined to comment on Skuratov's claims.
Sergei Dubinin, the chairman of the Central Bank at the time, was on vacation and was unavailable for comment.
Last month, Dubinin told Dow Jones Newswires that all the IMF money was spent to support the ruble and wasn't even handled by the Central Bank, but by the Finance Ministry.