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Document reveals alleged beneficiaries of bribes in Russian contract

Bribes were allegedly paid for contracts to renovate the Kremlin Keystone

A Swiss company is alleged to have paid bribes worth $62 million to secure contracts to renovate the Kremlin. The allegations are contained in a request for legal assistance sent to the Russian prosecutor general in July by the Geneva authorities.

This content was published on September 12, 2000 - 18:03

The request - a copy of which was obtained by swissinfo - accuses the Ticino-based Mercata construction company of handing out bribes to high-ranking Russian officials, including the Kremlin's former finance chief, Pavel Borodin.

It says Borodin and his family received more than $25 million from Mercata. It adds that $11 million was channeled into the accounts of the head of Mercata, Victor Stolpovskikh, and a further $18 million went to other people involved.

Mercata is alleged to have paid the bribes to secure nearly $500 million dollars in contracts to refurbish parts of the Kremlin.

Since April 1999, Geneva magistrate, Daniel Devaud, has been looking into financial affairs of Mercata and its parent company, Mabetex.

The 12-page document also implicates a company owned by Stolpovskikh, called Lightstar, which is based in the Isle of Man. Lightstar allegedly obtained two renovation contracts for Mercata, and received kickbacks in return.

Mercata paid $62.5 million dollars between 1997 and 1998 to a Midland bank account held by Lightstar on the Isle of Man. The money was then channeled to companies in Cyprus, the Bahamas, Liechtenstein, Panama and the Virgin Islands.

The firms' financial heads were all allegedly cronies of the former Russian presidential administration.

Most of the money was moved through Swiss banks, notably what is now UBS in Zurich, Camondo bank in Geneva, and the Gotthard and Adamas banks in Lugano. The United Overseas bank of Nassau and Hofmann bank in Guernsey were also said to have been involved.

The so-called "Kremlingate" investigation into money laundering, and involvement with a criminal organisation, concerns at least 14 people, all of whom deny any wrongdoing.

In his request for legal assistance, Devaud said it appeared they had used the Swiss banking system to distribute money obtained through illegal channels in Russia.

The document includes a request by Devaud to the Russian justice authorities for further information on how the contracts were allocated. The Russian authorities have yet to respond to the request.

However, the Russian prosecutor-general's office on Tuesday rejected allegations that Russia is dragging its feet. In a short statement, it said it had received the request and was currently working on it.

swissinfo

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