AUDITING COMMISSION CRITICIZES THE CABINET

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AUDITING COMMISSION CRITICIZES THE CABINET

Izvestia, November 15, 2001, p. 2

Auditing Commission Chairman Sergei Stepashin has addressed the upper house. Reporting on the Auditing Commission’s achievements over the last year, Stepashin was sharply critical of the Cabinet, emphasizing each time that he meant the Cabinet as a whole, not any individual ministers. According to Stepashin, the Cabinet has been neglecting “the evidence we send it.” The Cabinet was sent evidence relating to at least 36 cases, and “we have received only three replies from it,” Stepashin said.

Stepashin is not going to let this go. According to the Auditing Commission chairman, the Cabinet will soon receive evidence of its own failure to abide by the acting legislation. “I hope Mikhail Mikhailovich will heed me now,” Stepashin said. “Otherwise we will have to approach the president directly.”

Stepashin admits that he and the president have already discussed “the Cabinet’s indifference”. He is glad that Auditing Commission experts have the “active support” of the president and law enforcement agencies. Stepashin offered the same sort of cooperation to the upper house, promising that this would enhance the importance f the Federation Council. “If our cooperation with the Federation Council is truly close, the expediency of Federation Council’s existence will never be doubted again,” Stepashin said.

AN INTERVIEW WITH VLADISLAV IGNATOV OF THE AUDITING COMMISSION

Izvestia, November 15, 2001, p. 2

Question: Which ministries and organizations are now at the focus of the Auditing Commission’s attention? Which are awaiting their turn?

Vladislav Ignatov: We constantly check natural monopolies and companies where the state owns large stakes. Our officials can always be found at Gazprom or Russian Joint Energy Systems. We audited Rosspirtprom recently, and some airlines (Vnukovo Airlines, Tyumen Airlines, and Baikal Airlines). The State Civil Aviation Institute will be next.

Along with everything else, we analyze overall implementation of the budget. We discovered, for example, that the state does not get its due share of dividends from state unitary enterprises… has not been receiving anything for some time now. We are talking about 110 billion rubles or so.

Question: Do you always send your findings to the Prosecutor General’s Office?

Vladislav Ignatov: Infringments all too frequently result from ignorance of the law. This, and the lack of proper legislation in 1991-93, cost the state a great deal in the process of privatization. We are dealing with that nowadays. When corruption or fraud are uncovered, we do forward the evidence to the prosecutor’s office.

PRIME MINISTER KASIANOV HOPES TO EXCHANGE DEBTS FOR SPANISH INVESTMENT

Izvestia, November 15, 2001, p. 5

Russia’s debts to Spain are relatively small, amounting to $980 million, or 2% of its debts to the Paris Club. Kasianov’s Spanish counterpart, Jose Maria Aznar, visited Moscow in May. Following his meeting with President Vladimir Putin, Aznar resolved to convert part of Russia’s debts into private investment, and accept repayment of the rest in goods. Everything is more or less clear with the latter part – Russia will pay in ships and fishing trawlers. However, the investment program is not yet ready, according to sources in the Finance Ministry.

There are two reasons Madrid is interested in debt to equity conversion. In the first place, Spain has already used this arrangement with some North African countries. The experiment was officially labelled a success. Secondly, Spain is out to expand its market presence in Russia.

The Spaniards already have some specific projects to offer. Campa-Prio (a company with a controlling interest in Campomos foods) is prepared to build its third factory in Russia and write off some debts. There are other proposals as well.

For the time being, this is all it amounts to: just proposals. The Paris Club as a whole needs to authorize the use of the debts for equity conversion plan for Spain (it authorizes all decisions with regard to debts owed to its members). The Paris Club still hopes to get cash from Russia.

PROSECUTOR GENERAL VLADIMIR USTINOV VERSUS TERRORIST SALMAN RADUYEV

Nezavisimaya Gazeta, November 15, 2001, p. 2

There is a security alert in two Caucasus regions. In both cases, this state of affairs is attributed to trials of terrorists.

A court in the Stavropol territory convicted five residents of Karachaevo-Cherkessia charged with responsibility for apartment block explosions in Moscow and Volgodonsk. Brothers Aslan and Murat Bastanov, and Muratbi Tuganbayev, were sentenced to 15 years imprisonment, Taikan Frantsuzov to 13 and a half years, and Muratbi Bairamukov to nine years.

The trial of Salman Raduyev opened yesterday in Makhachkala, Dagestan. Raduyev and three others (Turpal-Ali Atgeriyev, Aslambek Alkhazurov, and Husein Gaisumov) are accused of being responsible for the raid on Kizlyar in January 1995. Raduyev is also charged with organizing an explosion in Pyatigorsk in April 1997 and the abduction of Penza OMON servicemen in December 1996.

The whole Dagestani police force has been placed on alert. Prosecutor General Vladimir Ustinov has come to Makhachkala in person to participate in the trial as part of the prosecution. Baguzhi Unzholov, judge of the Supreme Court of Dagestan, says the trial could take over two months.

DUMA DEBATES MILITARY REMUNERATION

Rossiiskaya Gazeta, November 15, 2001, p. 1

The debate resulted in the decision to reject the bill. In April the Duma passed a bill amending Article 12 of the federal law on the status of military personnel, and the Federation Council confirmed it. But the president vetoed that bill, and another one was submitted to the Duma (Defense Committee Chairman Andrei Nikolayev called it the Finance Ministry’s bill). This bill would abolish benefits enjoyed by military personnel, in exchange for slightly higher wages. Leaving the benefits alone and raising wages as well would have been ideal, but the state cannot afford to do so. Hence the frantic attempts to reach a compromise.

AUDITING COMMISSION REPORTS TO THE FEDERATION COUNCIL

Parlamentskaya Gazeta, November 15, 2001, p. 2

They revealed that 23.3 billion rubles had been misspent. The budget failed to receive 41.7 billion rubles in taxes and duties.

Stepashin reminded the Federation Council that the Auditing Commission has recently dealt with the Railroads Ministry, Russian Joint Energy Systems, and Gazprom.

Better laws are required in order for the Auditing Commission to function more effectively, Stepashin said, advocating further improvement of the law on the Auditing Commission. It ought to be possible to appeal to regular courts and arbitration courts to protect the interests of the state; it should be permitted to deploy administrative measures of preventing economic and financial abuses.

Amendments to the Criminal Code and the Administrative Code are needed, Stepashin said.

According to Stepashin, the law on the Central Bank should be amended as well. As things stand, the Central Bank is transparent for foreign auditing companies and all but closed to the Auditing Commission and the Russian parliament.

UNDERFED CONSCRIPTS

Trud-7, November 15, 2001, p. 2

Twenty young men in Vladimir were not drafted into the Armed Forces this autumn, because the conscription commission found them underfed and therefore underweight. The Vladimir mayor’s office appealed to the Public Support Foundation with a request to feed the youths. The Board agreed to provide them with proper and nutritious food for a month.

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