Originally created 12/30/98

Russian Central Bank under investigation for misappropriations

MOSCOW -- Russian police are investigating the nation's Central Bank over suspicions that up to $1 billion may have been misappropriated, the government said Tuesday.

The probe covers Central Bank activities since 1992, when Russia launched market reforms, Interior Minister Sergei Stepashin told a news conference. He would not give any names or provide additional details.

Saveli Tesis, the chief investigator in the probe, said misappropriation of public funds might have contributed to Russia's economic crisis -- the worst since the 1991 Soviet collapse.

Former Central Bank chief Sergei Dubinin denied any criminal activity. "I'm not guilty of any wrongdoing," he told the Echo Moscow radio on Tuesday.

Dubinin was ousted along with Prime Minister Sergei Kiriyenko for the Aug. 17 devaluation of the ruble, which caused Russia to default on some debts and worsened the economic crisis.

In recent weeks, officials have accused Dubinin and other bank officials of spending the bank's resources on ambitious construction projects and high salaries for themselves instead of using them to ensure financial stability.

No charges have been brought.

Discussing other matters, Stepashin said there were 2.5 million crimes in Russia this year, up from 2.4 million reported last year.

Russian police have tended to underreport crime to give a better picture of the situation -- but last week President Boris Yeltsin ordered Stepashin to report more realistic figures.


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