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  •   Russian Tycoon Faces Charges

    Boris Berezovsky, AP
    Investigators suspect Russian tycoon Boris Berezovsky of setting up a Swiss company to hide hard-currency earnings of Russia's largest airline, Aeroflot. (Misha Japaridze — AP-file)
    By David Hoffman
    Washington Post Foreign Service
    Wednesday, April 7, 1999; Page A14

    MOSCOW, April 6 Boris Berezovsky, an outspoken tycoon and friend of President Boris Yeltsin's family who became an informal leader of the Russian financial and political elite, was named in an arrest warrant today on charges of money laundering and corruption, a prosecutor announced.

    Berezovsky, a businessman who got his start selling cars and became the unofficial spokesman for the group of Russian magnates known here as the oligarchs, was put on the "wanted" list and will be arrested if found, prosecutor Vladimir Kazakov said.

    At the same time, there were unconfirmed reports that a second prominent tycoon, Alexander Smo lensky, the former head of SBS- Agro, one of Russia's biggest commercial banks until it went under in the ruble crash in August, also will be named in a warrant soon and charged with corruption.

    The announcement about Bere zovsky marked the first formal charges against one of the seven powerful bankers and industrialists who backed Yeltsin's reelection campaign in 1996 and came to dominate Russia's unruly evolving capitalism. Berezovsky once boasted that the seven men controlled half of Russia's economy, and while that claim was often in doubt, his influence as a media, oil, auto and airline magnate was not. Most of the tycoons suffered significantly when the ruble was devalued Aug. 17.

    Kazakov told Interfax news agency that Berezovsky is wanted along with an associate, Nikolai Glushkov, a former first deputy director of Aeroflot, the Russian national airline. The two men are accused of "illegal enterprise" and "laundering of money or property acquired by illegal means."

    Berezovsky is now in France. Last week, he was to return to Moscow from Paris but was unable to, complaining that Russian special services had refused his plane permission to enter Russian airspace. By telephone from France, he told Interfax today that the case against him was concocted and said, "They have not the slightest chance of success." He bitterly assailed the prosecutor's office, which also is involved in a separate dispute with the Kremlin.

    Kazakov said Berezovsky and Glushkov had failed repeatedly to respond to summonses for questioning. According to recent Russian news reports, the prosecutor has been probing the finances of Aeroflot. There have been reports that foreign exchange earnings from Aeroflot's overseas ticket sales were channeled through a Swiss company, Andava, which is controlled by Berezovsky.

    In a letter to Yeltsin sent last week and made public today, Russia's embattled chief prosecutor, Yuri Skuratov, said that the Swiss had provided evidence prompting the investigation of "abuses" in the activity of Andava.

    Berezovsky, 54, said he does not intend to ask another country for political asylum and intends to live in Russia. But last week, he said he was planning to take a long vacation outside the country. His lawyer, Anatoly Kucherena, said it was unlikely Berezovsky would return soon.

    Berezovsky has long argued that Russia's political leadership should pay heed to its new capitalists, and he tried to make this a reality through endless political maneuvering, often aimed at installing his allies in high governmental posts, including prime minister.

    Berezovsky moved quietly between business and government; he twice held official posts, most recently as executive secretary of the Commonwealth of Independent States, the loose confederation of former Soviet republics. Yeltsin fired him from that position. He reportedly financed the Yeltsin family, including the president's daughter and adviser, Tatyana Dyachenko. Analysts and competitors have said Berezovsky engaged in a unique style of business, often shunning actual ownership of a company but putting key people in the management and then taking over the cash flow.

    This year, Berezovsky ran afoul of Prime Minister Yevgeny Primakov, who vowed to make space in Russia's jails for some of the oligarchs. Masked police raided some of Berezovsky's businesses, and a newspaper reported that he had been discovered tapping the phones of the Yeltsin family. Although Berezovsky is a prominent symbol of Russia's unbridled capitalism in recent years, he is not the only tycoon on the scene, and others appear to have made their peace with the government.

    "We all hope that this is not just an episode in a fight that is now unfolding in Moscow," lawmaker Vladimir Ryzhkov said. "The worst that can happen is when the general prosecutor's office and law enforcement bodies become a tool in someone's political fight."

    The charges against Berezovsky come even as the chief prosecutor, Skuratov, renewed his request to the upper house of parliament, the Federation Council, to relieve him of his post. Yeltsin and Primakov have been trying to oust Skuratov, but the parliament wants him to remain and it has the final say. Skuratov, who was at the center of a call girl scandal, has been probing irregularities in the Kremlin administration and the Central Bank. He is scheduled to appear before the parliament Wednesday.

    © Copyright 1999 The Washington Post Company

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