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  •   Gore Feels Fallout of Russian Scandal

    Vice President Al Gore (AP)
    By Ceci Connolly
    Washington Post Staff Writer
    Friday, August 27, 1999; Page A1

    New revelations about Russian money laundering through a major U.S. bank have presented Vice President Gore with a potentially difficult campaign issue, and once again illustrated the pitfalls of running for the White House from the vice president's chair.

    A criminal investigation into charges that Russian mobsters and politicians may have laundered money -- including diverted international aid funds -- through accounts at the Bank of New York has revived a long-standing debate in Washington over whether the Clinton administration has given too much support to a Russian government known to be plagued by corruption. As the chairman of a joint commission on bilateral ties with former Russian prime minister Viktor Chernomyrdin -- a role Gore once proudly embraced -- the vice president has been one of the targets of past attacks.

    Now, several of his opponents in the presidential race appear to sense a new opportunity. Republican presidential candidate Steve Forbes said yesterday that Gore shares in the blame for the latest scandal. Foreign policy aides to Texas Gov. George W. Bush (R) are arguing that the administration should have been more sensitive to the level of corruption in Moscow and that Gore too willingly accepted pledges of reform that were never carried out.

    The Gore team has responded to the emerging issue with uncharacteristic speed, offering one of the most detailed accounts to date of the vice president's conversations with Russian leaders about the country's crime problems. At the same time, aides have stressed that Gore, although touted as the "most involved vice president in history," had no idea federal investigators were looking into allegations that the Bank of New York laundered billions for Russian criminals, including some with close connections to the government of President Boris Yeltsin.

    "With respect to stories about the Bank of New York, the vice president would not have been aware of it," said Leon S. Fuerth, Gore's top national security adviser. "He learned of it reading the newspapers."

    Though no one has charged that Gore knew of the financial diversions, the still-emerging money laundering scandal has tendrils that could run close to the vice president. One of the Russians suspected of having engineered the diversion of millions of dollars through the New York accounts, Konstantin Kagalovsky, was Russia's representative to the International Monetary Fund from 1992 to 1995 at a time the Clinton administration was deeply involved in IMF lending to Russia. Chernomyrdin, Kagalovsky's boss and Gore's partner in the bilateral commission from 1993 until last year, has been the target of numerous allegations of corruption, some compiled by Western intelligence agencies.

    Consequently, after boasting for years about the vice president's unique role in overseeing relations with Russia, Gore's advisers now find themselves shifting to the defensive about foreign policy credentials they hoped would be a campaign asset. Ironically, Gore has been forced into an initial response that sounds a little like that of th the father of his leading Republican opponent; as vice president and a candidate for the White House, George Herbert Walker Bush was forced to argue in 1988 that he had been "out of the loop" in decision making about arms deals with Iran.

    As was the case during that earlier Bush campaign, there is frustration in the Gore camp about the vice president being held responsible by critics for Clinton administration policies made by others, as well as for alleged crimes in a foreign country.

    "It is quite clear that people are going to try to turn this into an effort to assail what the vice president has been doing on foreign policy by attacking one of the things he's worked hardest at," said one Gore strategist.

    Forbes, who plans to talk regularly on the campaign trail about the Russian economic crisis, said Gore long ignored warning signs that the country was in grave trouble.

    "It's long been in the papers that tens of millions of Russians are not being paid; it's long been known billions are being siphoned off," Forbes said. "This is nothing new and yet they keep shoveling billions of IMF money into a government that misuses it and into a government that doesn't pay its workers."

    Some in the Gore camp attempted to put a little distance between the vice president and Russia's economic woes. "Gore clearly chaired this commission but this was an administration policy, not Al Gore's policy," said one Gore adviser.

    Fuerth said that Gore never met Kagalovsky and had long pressed Russian leaders to reform. The subject of organized crime in Russia "has come up on a number of occasions through the [bilateral] commission," he said, noting that Gore "went out of his way to make sure the Russians participated" in a global conference on crime and corruption held in late February at the State Department.

    "On many other occasions, the vice president has talked about the need to get a grip on this," Fuerth added.

    Specifically, Fuerth said that last month Gore urged then-Prime Minister Sergei V. Stepashin to accept IMF demands to submit to an extensive audit before receiving any more financial aid. "The vice president told Stepashin to satisfy the IMF," Fuerth said. He said Gore's staff had not disclosed this information at the time of the meeting but was doing so now because "it is important to try to keep the record straight."

    Other senior White House officials involved in Russia policy said they, like Gore, knew nothing about the allegations of money-laundering through the Bank of New York. Among those caught by surprise, officials said, was White House national security adviser Samuel R. "Sandy" Berger. A senior administration official said Clinton aides are pressing to learn more about the investigation, and hope to be briefed soon.

    Staff writers John F. Harris and Dan Balz contributed to this report.

    © 1999 The Washington Post Company

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