WHAT'S MOST dispiriting about the latest spate of revelations and allegations of official corruption in Russia is the response of Russian officialdom. President Boris Yeltsin and his advisers are quick to fire activist prosecutors, and they shrug off any accusations as the product of some great anti-Russian conspiracy in the West. But their casual dismissal of the issue is misguided -- both as a matter of fact and as a matter of tactics. The leaders would serve their country better if they acknowledged the seriousness of the problem and pledged to cooperate with Western law enforcement agencies in combating it.

The latest allegations touch directly on Mr. Yeltsin. Swiss investigators have uncovered evidence that a Swiss company that won lucrative contracts to renovate Kremlin offices paid tens of thousands of dollars of credit card bills in the names of Mr. Yeltsin and his two daughters and transferred $1 million to a bank account intended for the president, The Post's Sharon LaFraniere reported from Switzerland. Mr. Yeltsin's spokesman has denied any wrongdoing, and one can imagine a range of explanations, including lower-ranking officials acting corruptly in Mr. Yeltsin's name. But the allegations should be aired and explained, as should other accusations -- involving far larger sums -- of money-laundering and financial shenanigans.

It has been evident for some time that private and public officials were intermingling their duties in dishonest ways and that a few favored industrialists had been given access to Russia's natural-resource wealth at shamefully low prices. It's also important to note that such corruption doesn't by itself indicate that Russia has "failed" in some total and systemic sense. Russia 10 years after the collapse of the Soviet Union presents a complicated picture, with progress in some areas (democratic elections, growth of small business) and disappointment in others. Corruption even at the highest levels doesn't mean that Russia is doomed, any more than systemic corruption in Japan, Mexico or Italy in recent years meant that those countries should be written off.

But the problem of corruption should not be minimized. It is corroding central institutions. It threatens the viability of an emerging market economy, spreads cynicism among a population still undecided about the merits of democracy and scares away badly needed foreign investment. It will not be easily or quickly uprooted. But Russia could at least begin to minimize the damage it is now suffering if its leaders acted as though they understood the seriousness of the challenge.