By Alexandra Halsey-Storch
Impunity Watch Reporter, Europe
MOSCOW, Russia–On Wednesday April 11, 2012 the Former Russian Finance Minister, Alexei Kudrin, attempted to set forth an explanation as to why $1 billion was stolen from the Russian budget while under his supervision between 2006 and 2010.
Kudrin claimed that by no fault of his own was this money stolen. Strangely, and perhaps even unbelievably, “Employees of the Treasury cannot challenge the appropriateness of [the illegal approvals of tax refunds for millions of dollars]. Neither the leadership of the Treasury, nor, especially, the leadership of the Ministry of Finance interfere in this process.” In other words, it simply was not part of Kudrin’s duty as a Finance Minister to protect the funds.
Kudrin went on to state that, “neither the Ministry of Finance, nor I, at that time as Minister of Finance and Deputy Prime Minister, had the authority [to investigate the thefts].”
Despite not being able to investigate the crime, Kudrin was aware of the illegal actions taking place. In August 2008, and again on October 13, 2009, Hermitage Capital—an investment fund that has invested about $4 billion in Russia— contacted Kudrin and provided detailed evidence of the tax official’s involvement in the thefts.
The 2008 letter “described evidence of the theft of $230 million” by way of tax inspections. No Russian official responded to the letter.
The 2009 letter described 10 transactions used by the same tax inspections in Moscow to steal $470 million from the 2006-2008 Russian budget. The Deputy Finance Minister responded to the letter stating that, “the Finance Ministry does not have authority to investigate the facts of budget thefts stated in [the] application.”
19 days after the receipt of the 2009 later, a Hermitage Capital attorney, who had initially exposed the tax rebate fraud, Sergei Magnitsky, was killed at the hands of abusive Russian authorities.
Magnitsky, who gave “sworn testimony against the officials involved, had been detained shortly after divulging the scheme. At the time of his death, he had been incarcerated for about a year.
In response to Kudrin’s naïve statements made this week, a Hermitage Capital representative countered that, “It is remarkable that the man whose responsibility was to protect the finances of the Russian state could say that he shouldn’t interfere when crimes were going on under his nose, in which $1 billion was stolen directly from the Russian treasury.”
Moreover, “not a single government employee [has] been charged or prosecuted for these successive crimes…” despite having been discovered over four years prior, said a Hermitage Capital representative.
Perhaps most egregious, is the blatant hypocrisy that the Russian government has emanated in the weeks following the tax fraud exposure: “the Russian budget is no longer functioning for the Russian people, but is now an unrestrained source of financing for corrupt officials and organized crime,” said a Hermitage Capital representative.”
