Albright Clears Loan To Russian Oil Company
By John Lancaster
Secretary of State Madeleine K. Albright approved the loan from the U.S. Export-Import Bank to Russia's Tyumen Oil after determining that the firm had cleaned up the corrupt business practices that led her to delay the transaction in December, said State Department spokesman James B. Foley.
The loan had been opposed by disgruntled Western investors in Russia and by human rights groups dismayed by Russia's brutal military tactics in the rebellious republic of Chechnya. Albright's decision to let the loan go forward comes just days after the election of Vladimir Putin as Russia's next president, an event that has been welcomed in Washington as an opportunity to restore tattered U.S.-Russian relations.
Foley said the timing of Albright's decision was coincidental and had nothing to do with politics. He said it followed efforts by the Russian government and Tyumen to restore the rights of Western investors--including oil giant BP Amoco and financier George Soros--who had accused the Russian firm of cheating them out of their share in a giant Siberian oil field.
"The administration has been involved in an extensive review of the concerns and allegations that were raised in the case," Foley said. "We've been able to clarify a number of concerns to our satisfaction."
Foley also noted that "in recent appearances, President-elect Putin has made clear public statements recognizing the importance of protecting investor and creditor rights and the role they play in creating a welcoming climate for foreign and domestic investment."
Albright had blocked the loans by invoking a seldom-used law that allows her to override decisions of the Ex-Im bank if doing so is "in the national interest." Her intervention came just hours before the bank's four-member board was to give final approval to loan guarantees of almost $500 million for upgrading Tyumen's oil operations. Bank Chairman James A. Harmon had argued that Tyumen met all the bank's financial criteria.
While some human rights advocates had argued that the loans should be banned in light of Russia's actions in Chechnya, administration officials said their decision to delay the transaction was based on concern for protecting investor rights and promoting the rule of law in Russia.
Western investors had accused Tyumen of a variety of shoddy and corrupt business practices. A civil lawsuit filed in New York last fall by an investment group that includes the Soros Fund and Harvard University described Tyumen's moves to acquire Siberia's Chernogorneft field--at the expense of BP Amoco and Soros--as "one of the most brazen acts of corporate theft in recent memory."
But Tyumen has since taken steps toward forming a partnership with its critics--steps that apparently figured prominently in Albright's decision to approve the Ex-Im loans. After yesterday's announcement, a spokesman for BP Amoco said in a statement: "Progress to date has been encouraging and is reflected in the decision made by the secretary of state."
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