Funds Vanishing in Chechnya
Date: March 20-26, 2002
German journalists look into the theft of budget allocations for the rehabilitation of Chechnya
The influential German newspapers Frankfurter Allgemeine and Suddeutsche Zeitung have run a series of articles on the current situation in Chechnya. Besides "violations of civil rights" in that Russian region, the articles expose the continuing misappropriation of funds designated for the rehabilitation of Chechnya. One of the German journalists who wrote the articles, FLORIAN HASSEL, talks to MN's Dmitry Balburov.
Did you find many "black holes" in Chechnya?
Quite a few. But we focused mainly on the public health system - a highly sensitive sector. Uvais Magomadov, who was the republic's health minister in the Koshman administration, was sued on several counts of embezzlement. It seems that the cases have been dropped, for the present head of the Chechen administration Akhmad Kadyrov has decided against replacing the minister.
The misappropriation scheme is simple and efficient. Different enterprises in the same sector file requests for funds. Then all the requests are summed up and sent to Moscow. The money received is "put to use" in nonexistent projects.
Here is one example. In 2000, the Chechen administration's capital construction directorate applied for 107 million rubles to rebuild healthcare facilities. But a request made several months earlier was for 55 million rubles, supposedly to be used for the same purposes. I have copies of all the documents confirming the requests.
Deputy Health Minister Isa Dudayev told us that the minister had forced him to sign the 107 million rubles request. We checked the documents and discovered that the extra 50 million had gone to construction site SU-105 in the town of Salsk. Incidentally, the firm in charge of that site had previously pocketed 25 million rubles intended for the Chechen Ministry of Education. I called Salsk and was told that SU-105 had long been closed.
What other interesting things have you found out?
Last October, an audit of the state-owned pharmaceutical company Chechenfarmmedtekhnika revealed that the firm had misused a sum equivalent to 1.5 million euros. I made a round of several hospitals and medical centers in Chechnya which, according to documentary evidence, had received large sums to carry our repairs and purchase equipment. I saw for myself that nothing had been done there.
We also learned that the Health Ministry had bought 20 ambulances at 470,000 rubles each. (I was told in Grozny that one such vehicle cost 200,000 rubles at most). I looked inside one of them and saw no medical apparatus, which was supposed to have been paid for. The head physician of a hospital told me in private that a medical institution that wanted to get an ambulance from the Health Ministry had to produce a 10,000 ruble bribe.
As for other sectors, here is an example. A dry cleaning and laundry service is to be opened in downtown Grozny. The building for it is quite good, but the machinery inside is ancient, imported ages ago from former Czechoslovakia and East Germany.
From a private talk with one of the service's executives I learned that the service had had modern equipment, but it had been stolen and sold. The thieves are now waiting for the building to be destroyed or burnt down in the next mopping-up operation, so that they won't have to account for the money earmarked for buying up-to-date equipment.
Do you know what astounded me most? The indifference of Russian journalists in Grozny whom we told about our findings. Amazingly, they were not in the least interested. As if the money stolen in Chechnya belonged to Germany and not Russia!