Top Russian officials held on tax charges

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The Independent Online
RUSSIA'S top number-cruncher faces charges of fiddling his books to help big companies evade tax, after the security services found more than a $1m in cash hidden in his Moscow apartment.

The arrests of Yuri Yurkov, head of the State Statistics Committee, and more than 20 of his subordinates, mark the biggest criminal scandal involving top officials here for months.

The timing of the arrests looks deliberate, as they coincide with a renewed attempt by the government to cajole big firms and rich Russians into paying tax, and to clean up the widespread corruption in the bureaucracy.

Low tax revenue was cited as one of the causes of the recent bout of market panic over Russia's economy which almost led to the crash of the rouble, and prompted the government temporarily to raise interest rates to 150 per cent. It is also one reason why millions of workers have been receiving wages up to 10 months late.

After keeping Mr Yurkov and others from the committee, a Soviet-era bureaucracy know as Goskomsta, under surveillance for at least a year, the Federal Security Service (FSB) pounced on Monday night.

The FSB declared that the accused had been distorting data on large firms, allowing them to evade tax. They had also been selling information to competitors, the agency said.

Anxious to demonstrate that a purge is under way, the FSB released a videotape purporting to show more than $1.5m in new dollar bills found in the suspects' apartments, mostly in Mr Yurkov's. A "wealth of jewels" was also found, the agency said.

Last month, President Boris Yeltsin fired the head of his tax service, replacing him with Boris Fyodorov, a former finance minister.

Yesterday Mr Fyodorov announced that he was sacking a number of corrupt officials and declared war on tax dodgers, singling out wealthy Russians and foreigners.

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