August 5, 1999
Washington - The IMF Thursday attacked a report in the French newspaper Le Monde alleging that money it loaned to Russia was finding its way into the hands of mafia gangs. "We take strong exception to the Le Monde editorial and we considerate it irresponsible," the IMF said in a letter to the newspaper, read to AFP by spokesman William Murray. "The editorial concludes wrongly that the funds from the international community to Russia were being diverted through FIMACO to enrich oligarchs and that was done with full knowledge of world leaders, including our managing director, (Michel Camdessus)," it continued.
Le Monde claimed that an audit by the international company PriceWaterhouse Coopers showed that "one of this planet's world powers and an influential member of the UN Security Council is diverting money like a common thief through offshore companies used as tax havens." Le Monde added that though world powers may not sanction such a practice, most were well aware of it. "The IMF for a long time has known about the practice of diverting public funds in Russia but it nonetheless decided to continue giving loans to the country," the article said. But in the letter the IMF insisted that the PriceWaterhouse report "contains no such allegation and the Le Monde editorial relies on Moscow rumors that have been propagated."
"The decision to release new financing to Russia reflected the judgement of the IMF 182 member nations in light of the economic policies that Russia will be implementing," the letter said. The IMF had been aware that some of the reserves from the Russian central bank were held in European subsidiaries, but conceded it had not been informed of FIMACO activities (an off-shore management company) until this year.
"The Fund's executive board has concluded that the FIMACO episode constituted fundamental lack of cooperation on the part of Russian authorities and was a serious violation of Russia's obligations to the IMF." And the institution had conveyed its disapproval, the letter said, according to Murray. The IMF in July approved a 17-month 4.5 billion-dollar line of credit for Russia aimed at averting a devastating default by Moscow on its external debt.
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