Corruption scandal threatens close Yeltsin ally

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The Independent Online
Prosecutors in Moscow will quizz one of the government's top officials, Anatoly Chubais,chief architect of its privatisation programme and darling of Western investors, over a corruption scandal.

Mr Chubais is one of several top officials who received a $90,000 book advance from a publishing company partly owned by a bank which is one of the biggest beneficiaries of state sell-offs. One of the five authors, Alexander Kazakov, Boris Yeltsin's first deputy chief of staff, was fired by the President yesterday, prompting rumours that Mr Chubais will suffer the same fate.

Mr Yeltsin will be loathe to lose him. He was the driving force behind his reelection campaign, and is a key contact point with Western governments and investors and international institutions, notably the International Monetary Fund.

A nervous-looking Mr Chubais, who is first deputy prime minister, appeared on television yesterday, where he admitted the fee was "high". He denies wrongdoing, however, offering to pay most of the money to a new charity, the Fund for the Protection of Private Property.

Although the book, titled The History of Russian Privatisation is unpublished, its chances of being a hot seller are seen as nil. Yesterday, the Moscow prosecutor, Sergei Gerasimov, said he intended to interrogate Mr Chubais and other officials about the payment, which was from Segodnya-Press, an affiliate of Oneximbank. The bank was recently among the winning bidders for a valuable slice of the state telecoms monopoly, Svyazinvest. The scandal is suspected as being an attempt at revenge by Boris Berezovsky, a tycoon and rival of Mr Chubais recently sacked by Mr Yeltsin. He was a losing bidder for Svyazinvest.

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