News Release

Russian Scandal

As congressional hearings on the Russian financial scandal continue, the following analysts are available for interviews:

JANINE WEDEL
Author of Collision and Collusion: The Strange Case of Western Aid to Eastern Europe and associate professor at the Graduate School of Public and International Affairs at the University of Pittsburgh, Wedel said: “As more becomes known about Western participation in the laundering of Russian money, the Washington establishment will likely try to hide behind stories of faraway organized crime and distance itself from any culpability. But U.S. policy toward Russia has contributed to that country’s sorry condition. Among those under investigation for allegedly laundering billions of dollars to the Bank of New York are the Russian ‘reformers’ to which the West pinned its hopes for a new relationship with Moscow and entrusted hundreds of billions of dollars in aid.”

DAVID KOTZ
Economics professor at the University of Massachusetts at Amherst and co-author of Revolution From Above: The Demise of the Soviet System, Kotz said: “The pervasive corruption and criminality in Russia, highlighted by the money-laundering scandal, are the result of misguided policies — especially rapid privatization — that American officials, Democratic and Republican, have urged on Russia since 1991. Our government has given unconditional support to Russian political leaders who not only permit but protect the brazen thefts that are now front-page news. It should not be surprising that an old-line bank like the Bank of New York got embroiled in this scandal. It is well known that tens of billions of dollars have been illicitly leaving Russia every year since the beginning of this decade, a flow that could not happen without the involvement, however innocent, of respectable Western financial institutions.”

MARK WEISBROT
Research director of the Preamble Center, Weisbrot said: “It has been one debacle after another since the IMF introduced its ‘shock therapy’ program in 1992. Like a battered spouse who sees no alternative but to return to her abuser, Russia comes back to the IMF for more credits. But the hundreds of billions that have fled the country in the 1990s have canceled out this ‘aid,’ as well as the meager foreign direct investment, many times over. At the same time Russia has accumulated more than $150 billion in foreign debt, with the burden of debt service now reaching a crushing 29 percent of export earnings. The economy has shrunk by more than half. Russian men can now expect to die in their fifties. The chief economist of the World Bank, Joseph Stiglitz, has noted that the number of Russians living in poverty climbed from 2 million to 60 million in just a few years.”
More Information

For more information, contact at the Institute for Public Accuracy: Sam Husseini, (202) 347-0020