A Criminal Map of Russia, by Alexey Chelnokov

Observer of "Sovershenno Secretno"


Criminal Case Concerning Misappropriation of 10,000,000,000 Rubles of the Government Loan by Steppe Association Was Expedited to the General Office of Public Prosecutor

For the first time in the recent history of the country, the present head of the republic may appear in court.

Unfortunately, it became possible only after murder of Ms. Larisa Yudina, editor of the newspaper "Sovietskaya Kalmykia Segodnia" (Soviet Kalmykia Today).

Some people may consider this plea sacrilegious, but we believe that even more sacrilegious is the attitude of the authorities which shut their eyes to lawlessness having taken place in Kalmykia for several years thus actually instigating the journalists murder. It is clear that without patronage of some high-ranking officials in the Government and the Kremlin, Mr. Ilyumzhinov could hardly violate the human and legal laws with impunity for such a long period of time.

Kirsan Ilyumzhinov

Will Kirsan Go to Jail ?

Through "Zvezda" (Star) to Thorns

No doubt, Mr. Ilyumzhinov is a goal-seeking guy. He graduated from the secondary school with highest grades, but refused to continue his education. He started working as a fitter in Zvezda, defense enterprise, from which he was drafted a year later. He did it with open eyes. To smell powder, to become tempered? No, just for the reasons of his future career, pure and simple.

It was one hundred percent success calculation prompted by his elder brother's experience. Viacheslav was also drafted. In the army he became a member of the Communist Party and received the recommendation for becoming a MGIMO student, the elitist college of foreign relations. Zvezda provided the working class background and the army provided a waybill to Moscow. (Their mother who as the head of the veterinary service at a meat-packing factory in Elista could not provide the brothers with either of these things.) And further - down a well-known way. The career of the future father of the steppe people was almost terminated from the very start. While a senior student, he got into some strange business. There was a rumor that the Kalmyk student was experimenting with drugs, became a frequenter of gambling-dens and in general his lifestyle was reproachful for a Communist and future diplomat. He was disgracefully expelled from the college and the party, but he was lucky as the liberal period of Perestroyka started. The human resources policy also liberalized considerably. He was allowed to obtain the diploma, but evidently he had no chance to become a diplomat.

Mr. Ilyumzhinov launched into business. Having specialized in Japanese economy at college, he was hired as a manager of Lkiho-Raduga, Soviet Japanese joint venture. Two years later, in 1991, he became the head of SUN corporation. Expensive suits, luxurious foreign cars, elitist night clubs became attributes of his every day life. Rumors started to spread about a million dollar fortune of young businessman, and he only fed them up, gladly giving interviews, introducing himself as if not the son of Monte-Christo, but at least as a brilliant businessman.

Crowned, But Not a King

To demonstrate his enormous wealth, Mr. Ilyumzhinov showed the chess crown won by Gary Kasparov at the world championship. He said to the journalists: "It is unique and contains 1018 white and black diamonds. I have paid Mr. Kasparov over a million dollars for it".

Indeed, on July 7, 1991 Mr. Ilyumzhinov purchased form Mr. Kasparov, according to the agreement signed between them "a jewelry piece, fabricated by Korloff jewelry firm, to be awarded to the winner of a world chess competition...".

Everything else stated by Mr. Ilyumzhinov is bluff. The SUN president did not even have 10 million rubles on his account to pay for the crown. This amount was given to him as a loan by the commercial bank "Mosobltransbank" at a symbolic interest rate of 15 percent. The destiny of this loan (for acquisition of fixed assets according to the agreement) is unknown for certain, but it is easy to guess that it was not necessary to repay it in full. Very soon a heavy inflation hit the country and the diamond crown transferred into possession of Mr. Ilyumzhinov transferred 426 million rubles which he took from the famous "wool loan" mentioned later to SUN account with Mosobltransbank.

The result of the deal is as follows: Money was transferred to the account of Mr. Kasparov's charitable fund established to provide support for the Armenian refugees from Baku, and the crown itself was deposited to one of the Swiss banks. Mr. Ilyumzhinov might have planned to present it to the winner of 33 World Chess Olympic Games which he planned to conduct in Elista before he was elected President of Kalmykia. (Let's remember that he is firm of purpose).

Let us give him his due, he became President of the International Chess Federation, FIDE. By the way, with the help of Mr. Kasparov "who was done great favor" - because Mr. Ilyumzhinov's generous gesture could not but produce great impression on the management of FIDE, a very poor organization which trusted Russian business at that time.

He moved his pawn to make it the queen. In 1995 FIDE and Steering Committee for Physical Culture and Sports for President of the RF, approved Elista as the place of the chess Olympic Games. Of course it was stated that is was "for their own account", "in the name of renascence of the Kalmyk people". Then, at the press conference he said : "We shall construct the Olympic village and the first in the world Chess Palace. It will cost USD 150 Thousand. But Kalmykia will pay practically nothing. I shall present each participating country with one hectare of land. Each country will build a cottage for its delegation at its allotment of land, in its national style. Will it take them much effort to construct a building for eight hundred people? Thus, we will have our own UN. Or even better."

But, they did not manage to do it better. It turned out worse. No foreign partners agreed to drink kumiss for the money invested in construction of the cottages. Then "multimillionaire" Ilyumzhinov took the adequate actions. He demanded that Presidents of the Russia Federation should provide him with USD 150 million (!) from the budget to construct the Olympic village in Elista, otherwise "the prestige of the Russian state will be damaged".

Mr. Yeltsin wrote to Mr. Chernomyrdin, prime minister: "According to Mr. Ilyumzhinov's appeal, Moscow bureaucrats again try to frustrate fulfillment of the order of President and the Government." Mr. Chernomyrdin forwarded the massage to Mr. Shamil Tarpischev, Director of Sports at that time. President's tennis partner told Mr. President the truth. "The Government of Kalmykia undertook to finance the major part. Nevertheless, it is planned to finance the ?????? project from direct allocation of funds from the budget in the amount of USD150 million (this is only for construction of the Olympic village)". The Russian literature is aware about the example of construction in an individual city under the aegis of a major chess entity.

Mr. Tarpischev was quite pragmatic and suggested Mr. Yeltsin to transfer the Olympic games to St. Petersburg where the authorities were ready to arrange the Games only for USD 3 million.

Mr. Ilyumzhinov was not likely to receive those longed-for USD 150 million and he remembered about Stalin bonds. He required that the citizens should transfer one thousand (denominated) rubles to the account of the Major's office of Elista.

"In connection with the election of Mr. Ilyumzhinov as President of Kalmykia, telegrams of congratulations in his name are coming. The telegram of Mr. Malykhin-Monomakh, Chairman of the Chamber of Personality, besides congratulations contained the information that Mr. Ilyumzhinov was awarded the title of duke.

Newspaper "Izvestia Kalmykii"

Very Free Zone

There is another myth about Mr. Ilyumzhinov, that he brought his millions of dollars to Kalmykia. Well-informed people among businessmen say that before his election, Kirsan looked like a pigeon picking grains from a hand. He did not have any funds either to carry out his election campaign, or to receive any high-ranking officials. At that time (and still) he lived on his sponsor's funds.

So, in 1993 Mr. Ilyumzhinov became President of a far away republic. And the first thing he did was to declare about the establishment of the offshore zone - the zone free from tax control - on its territory. He believed that since then there would be a large inflow on investments into Kalmykia. And there was an inflow, but not of investments but of faked advices. Kalmykia became Klondike for neighboring Chechnia.

Mr. Bembia Khudkhachiev, former deputy of the State Duma, recollects:

"Several strong Caucasian young men entered my room in the Russia hotel. I am Rustam Labazanon (who was considered Chechen Robin Hood) and he continued: "You are against Mr. Ilyumzhinov, but my people are with him. Thus, you'll have to step over us first."

Many people spoke about close and far from charitable relations of Mr. Ilyumzhinov and Chechen separatists. For example, Mr. Vladimir Timofeev, former head of UFSB (Department for Federal Security Service) for Kalmykia, stated that "... our airport was projected by international drug dealers for drugs imported to and exported from Russia, as an airport to deliver arms to Chechen men participating in hostilities."

By the way, competent authorities associate catastrophic reduction of the number of sheep flocks (from 3 million to 600 thousand) with the fact that Kalmykia became the major supplier of meat to Chechnia.

Hundreds of articles have been written about large-scale misappropriations in Kalmykia. Dozens of audits have been carried out, including by the General Office of Public Prosecutor. I do not know how good is Mr. Ilyumzhinov in chess but he really deserves the title of a grand master in the game of government funds.

Let us, for instance, consider the so called "wool case" which deals with the government loan for 14 billion rubles granted to Kalmykia for purchase for wool. To avoid any allegations. I'd like to mention the letter of Mr. Shiliyev, the Republic Prosecutor, addressed to Mr. Yerin, Minister of Internal Affairs.

"The funds were transferred to the CB "Steppe" to the account of Steppe Association (president Ilyumzhinov), a dealer of Rostekstil concern. Instead of the planned loans to the concern's enterprises, Steppe association lent 9.4 billion rubles to different commercial structures of Moscow, St. Petersburg and Nizhni Tagil. At present, wool has not been purchased yet, and Steppe association has disintegrated. Actuality, the loans to the commercial structures have been misappropriated...

There are dozens of such criminal episodes. Let us consider the results of audit by the Audit Department of President of the RF carried out in 1995.

"In 1994, from the target funds in the amount of 10.4 billion rubles, the republic authorities allocated only 5.3 billion rubles for implementation of Kaspiy program."

"From transferred 3.3 billion rubles, only 128 million rubles or 3.9 percent were allocated for establishment and maintenance of working places. Only 29 working places were established during a year."

"The prospectus of the second issue for 270 billion rubles of six joint stock ventures of Khopior company was registered with violations of the established procedure."

"Document audit of the Tax Police Department of the Republic of Kalmykia found out that during 1992-1993 in Kamneft department USD 1.8 million were misappropriated."

And so on, on many pages of the report.

"We'd like to express our sincere gratitude to the personnel of the Republican Narcological Center which during this election campaign, expressing their support for Mr. President's reforms, provided free treatment of alcohol addicts on the basis of Dovzhenko method."

Newspaper "Izvestia Kalmykii"

Moscow Hand is the Ruler

Despite all the extraordinary results of audits, all criminal cases have been successfully closed "due to absence of corpus dilectii". What is the reason?

"I believe that the Ministry of Internal Affairs of Kalmykia," Prosecutor Shishiyev wrote to Mr. Yerin, "is not capable to conduct the required investigation since one of the key person connected with credit misuse is Mr. Ilyumzhinov, the acting President of Kalmykia. Our ministry is not able to conduct the adequate investigation of the case also due to involvement in credit abuses of Rostekstil executives, commercial structures of other regions of the country and foreign entities."

Finally, the management chose the interim option: evidence concerning Steppe was handed over to the Oblast Office of Public Prosecutor of Astrakhan. Of course, procrastination with closing and initiating the case continued in Astrakhan too. "We do not manage to interrogate Mr. Ilyumzhinov", Mr. Victor Orekhov, Oblast Prosecutor said. "We have several times applied to the General Prosecutor with the request to take the case". Mr. Orekhov has the reasons for his complaints: All legal requests of the local investigators are simply ignored by Mr. Ilyumzhinov and his associates. Moscow is the only place where justice can be found, where there are roots of everything."

Recently, the prosecutor's words have not been listened to in Moscow. Intermittent deafness of Moscow can be partly diagnosed on the basis of another document. One of top officials in the RF President Administration stated in a confidential note addressed to Mr. Chernomyrdin: "Pay attention to Mr. Babichev, RF Government Apparatus head, and his five deputies to unsatisfactory execution by the apparatus employees of orders of President of the RF, for example, in connection with Kalmykia."

Of course, Mr. Ilyumzhinov felt very safe under the protection of almighty politician Babichev. In the past, Mr. Babichev was Deputy Chairman of the Ministry of Kalmykia. But their friendly relations were far from being just sympathy of two fellow countrymen. Mr. Ilyumzhinov established the foundation for their friendship, and again account of the state.

For example, how another diamond was inserted in the crown of the "wool grandmaster". After another audit in Kalmykia producing grave results, Mr. Ilyumzhinov went to Moscow, where he managed to receive another loan for 495 billion rubles straight off (!). Having returned to Moscow, smart Kirsan could not but boast that Mr. Babichev had helped him to receive the loan, and he left in Moscow 10 % of the "recoil" as his gratitude for the assistance.

It was the thing which has to be proved.

While high-ranking public officials were bought for billion ruble "recoils", in the republic itself the simple system of bribing was flourishing. Let us examine another confidential document forwarded by Kalmykian tax police officer to the address of Mr. Kartyshev, Deputy General Prosecutor, which stated in particular: "In 1995, the tax police received VAZ-21503 car for closing the case against managers of Kalmyki Corporation. In May 1996, Opel-Sentor car as brought to Mr. Neberikutin head of the Tax Police Department from Belgium. To avoid customs clearing procedures, he purchased a counterfeited technical passport in the city of Khasavyurt."

Do you think that Mr. Neberikutin was fired from the department? It is impossible to imagine such a situation, since he has been Mr. Ilyumzhinov friend since their school years and he became the head of the police due to the personal protection of President of Kalmykia, he is a close relative of Mr. Neberikutin, and so on. The same situation has formed in local MVD (Department of Internal Affairs).

Ms Larisa Yudina knew much, guessed much and boldly wrote about the corruption and lawlessness in Kalmykia. Actually, she alone faced the mechanism of "recoils" and bribes established by Mr. Ilyumzhinov.

Mr. Ilyumzhinov bought not only officials and officers of law enforcement bodies. He successfully lured journalists. People do remember journalist caravans to Kalmykia arranged two years ago by one of the advertising agencies well-known in Moscow. Of course, for account of the Steppe president, and for considerable amount. Presentation of non-existent plants, toasts to the father of Kalmyks, morning tasting of kumiss.

Later, numerous paid-for interviews (one of them was published under the title "Kirsan Ilyumzhinov - Honesty is the Biggest Craftiness"). The magazine "The People" leased its pages for the life term appreciating the success of "honest" Kirsan.

Total venality has nourished in Mr. Ilyumzhinov and people surrounding him the convenient feeling of their 100 % protectability. Was this the main reason for Ms. Larisa Yudina death?

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