Kudrin Tries to Explain Why $1 Billion Was Stolen from the Russian Budget

April 12, 2012

For­mer Russ­ian Finance Min­is­ter Kudrin Tries to Explain Why $1 Bil­lion Was Stolen from the Russ­ian Bud­get in Con­nec­tion to the Mag­nit­sky Mur­der on His Watch and he Did Nothing
11 April 2012 — In an extra­or­di­nary state­ment issued on his polit­i­cal web­site, for­mer Russ­ian Finance Min­is­ter Alex­ei Kudrin explained how it was not his fault that $1 bil­lion was stolen from the Russ­ian trea­sury on his watch between 2006 and 2010 through a cor­rupt scheme uncov­ered by Her­mitage Fund’s Russ­ian lawyer Sergei Mag­nit­sky (http://akudrin.ru/news/otvety-na-voprosy.html#.T4Szz3lJri8.twitter).

In his state­ment refer­ring to the ille­gal approvals of tax refunds for mil­lions of dol­lars, Mr. Kudrin said: “Employ­ees of the Trea­sury can­not chal­lenge the appro­pri­ate­ness of such a deci­sion. Nei­ther the lead­er­ship of the Trea­sury, nor, espe­cial­ly, the lead­er­ship of the Min­istry of Finance inter­fere in this process.”
This state­ment came in response to a series of 7 pub­lic ques­tions to Kudrin from Andrei Illiar­i­onov, an oppo­si­tion politi­cian, post­ed in his blog on ‘Echo of Moscow’ web­site (http://www.echo.msk.ru/blog/aillar/875912-echo/), chal­leng­ing Alex­ei Kudrin after an inde­pen­dent inves­ti­ga­tion by a Russ­ian news­pa­per, Novaya Gaze­ta, uncov­ered that the same offi­cers from the Fed­er­al Tax Ser­vice and the same orga­nized crim­i­nals who were involved in the $230m theft that Sergei Mag­nit­sky dis­cov­ered, stole a fur­ther 11.4 bil­lion Rubles in ($444 m) in 2009 and 2010. These thefts were in addi­tion to anoth­er $240m that were stolen under the guise of “tax refunds” by the same group of offi­cials and crim­i­nals in 2006 and 2007.
“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,” said a Her­mitage Cap­i­tal representative.
Mr. Kudrin was also asked what he did when he learned about the theft of the $230m that Mag­nit­sky dis­cov­ered. He said: “I did not have this infor­ma­tion in my pos­ses­sion then, but based on what I learned from the media reports at the time, I ver­bal­ly asked the lead­er­ship of the Inte­ri­or Min­istry, if they were look­ing into it, and received an affir­ma­tive response… Nei­ther the Min­istry of Finance, nor I, at that time as Min­is­ter of Min­is­ter and Deputy Prime Min­is­ter, had the author­i­ty [to inves­ti­gate the thefts].”
In fact, his state­ments about his lack of knowl­edge are direct­ly con­tra­dict­ed by a series of peti­tions from Her­mitage Cap­i­tal seek­ing his inter­ven­tion imme­di­ate­ly after the ille­gal refunds were uncov­ered in 2008 and 2009. Her­mitage Fund’s rep­re­sen­ta­tives wrote to Min­is­ter Kudrin pro­vid­ing detailed evi­dence of the involve­ment of tax offi­cials in the thefts, includ­ing 15 August 2008 (http://russian-untouchables.com/rus/wp-content/uploads/2012/04/D410.pdf) and again on 13 Octo­ber 2009 (http://russian-untouchables.com/rus/wp-content/uploads/2012/04/D411.pdf). The first let­ter described evi­dence of the theft of $230 mil­lion via tax inspec­tions No 25 and 28 in Moscow which took place with­in one day, on 24 Decem­ber 2007. The sec­ond let­ter described 10 trans­ac­tions used by the same tax inspec­tions in Moscow to steal a total of $470 mil­lion from the Russ­ian bud­get dur­ing 2006 – 2008. There was no answer to the first let­ter. The reply to the sec­ond let­ter signed by Deputy Finance Min­is­ter Shat­alov on 28 Octo­ber 2009 (http://russian-untouchables.com/rus/wp-content/uploads/2012/04/D412.pdf) said: “The Finance Min­istry does not have author­i­ty to inves­ti­gate the facts of bud­get thefts stat­ed in your application.”This let­ter was sent 19 days before Sergei Mag­nit­sky was killed in cus­tody after expos­ing the offi­cials per­pe­trat­ing these thefts.
“It is notable that Alex­ei Kudrin fails to men­tion that not a sin­gle gov­ern­ment employ­ee had been charged or pros­e­cut­ed for these suc­ces­sive crimes total­ing $1 bil­lion of bud­get funds over 4 years since they were dis­cov­ered. It beg­gars belief that he thinks it is an accept­able expla­na­tion and he did noth­ing to stop the sit­u­a­tion when he learned about it,” said a Her­mitage Cap­i­tal representative.
“This is fur­ther evi­dence that 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.

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