DATE=9/2/1999 TYPE=U-S OPINION ROUNDUP TITLE=THE RUSSIAN MONEY HEMMORAGE NUMBER=6-11452 BYLINE=ANDREW GUTHRIE DATELINE=WASHINGTON EDITOR=ASSIGNMENTS TELEPHONE=619-3335 CONTENT= TEXT: About two-weeks ago, "The New York Times" reported that as much as four-point-two-billion U-S dollars has been illegally siphoned out of Russia during the past few years, much of it passing through the Bank of New York. The bank promptly fired one of its highest officials in Europe, who happened to be the wife of an International Monetary Fund official involved with loans to Russia. And in the U-S Congress, the news set off a clamor among Republicans about the efficacy of lending Russia any more money. The U-S press has joined the fray, with a good deal of comment about this latest chapter of Russia's recent, and rather erratic financial saga. We get a sampling now from _____________ in today's U-S Opinion Roundup. VOICE: In the latest development, the Clinton administration is asking Russia to assure no international financial aid sent to Russia has been lost to the corruption uncovered by "The New York Times". It is still unclear whether the four-point-two-billion dollars was private capital loaned by Western nations to Russian businesses, illegal profits from criminal activity, or from international loans. It may be from all those sources. Republican congressional leaders are using the news to suggest that loaning any more money to Russia until the economy stabilizes, and safeguards against future loses are in place, is foolish. Some U-S papers agree, while others suggest alternative paths. TEXT: We begin our sampling in New York, where on Long Island, "Newsday" laments the current state of Russia, politically, socially, economically, and generally. VOICE: .. At the bottom of much of what is wrong with Russia is corruption -- corruption so pervasive and on a scale so vast that it is hard for Americans to fathom. As much as 250-billion [dollars] is believed to have been illegally transferred to private accounts or investments in the West in the last five years - at least twice as much as Russia's national budget of 25- billion dollars for 1999. . Yet, one-year after its economic crisis, sparked by the collapse of the ruble and the vertiginous rise in prices of imported goods, Russia is now showing signs of revival. The weaker ruble has created favorable conditions for industrial growth by boosting demand for domestically produced goods. . None of this will help, however, if Russia does not strengthen its legal system and the structure of institutions needed to make a modern democracy function in a competitive global economy. TEXT: "The Los Angeles Times" calls the situation a case of ". Russia Ruined by Looters," adding: VOICE: Capital appears to have become one of money-starved Russia's biggest exports. Last year, according to an estimate from the state prosecutor general's office, about nine-billion- dollars illegally left Russia, an amount double what the International Monetary Fund spent trying to shore up Russia's collapsing currency. Some of the continuing capital outflow comes from the proceeds of organized crime. Some was looted from companies that were set up under economic reform policies to take control of Russia's rich natural resources.. Russia, as it stumbles toward a free-market economy, has been seen in the West as too important to let fall. But as evidence piles up that Russia's wealth is being systematically drained by criminals and corrupt oligarchs . political support for helping sustain Russia erodes. The looting of Russia will be halted only when a government in Moscow is willing to act. TEXT: To get a Texas perspective on the problem, we check this editorial from "The Dallas Morning News", which warns that: " U-S banks should not be accomplices [to] . Russian crooks." VOICE: The influence of Russian organized crime both within Russia and overseas has been rising since the fall of communism. It has been the unspoken silent partner behind Russia's new wealthy class, as well as a chilling pall on legitimate foreign investment and meaningful internal reforms. The latest evidence of mob influence comes from reports that Russian criminals may have illegally diverted more than 10-billion-dollars through the bank of New York and several other institutions. About 200- million is believed to have been siphoned from payments by the International Monetary Fund to help Russia through financial crises. In part, this scandal can be blamed on the chaotic reign of Boris Yeltsin, who has accomplished little to advance Russia beyond a few infant steps toward free markets. . More immediately, the scandal gives fresh life to allegations that the International Monetary Fund has been a poor shepherd of its aid to Russia, a legitimate complaint. But the incident also will be used by some in the congress as a pretext to rail against U-S funding of the agency. That would be a major policy mistake. TEXT: Also in Texas, "The Houston Chronicle" raises another interesting point: that even with the financial thievery going on, the United States and other Western nations still cannot allow Russia to sink into chaos. VOICE: Even if Russian officials and U-S aid are found to be involved in a massive money- laundering scheme, the United States has little choice but to make similar modest efforts to stabilize the Russian economy, just as it could not ignore Russia after the collapse of the Soviet Union puts tens-of-thousands of nuclear warheads and other weapons of mass destruction up for grabs. Financial safeguards can be strengthened, but the defeat of corruption must come from the Russian people. TEXT: In the Midwest, "The Chicago Tribune" suggests: VOICE: It is not yet known how widespread the Russian money laundering and other financial scandals are, but this much is clear: The various American, German, Swiss and Russian investigations must follow these money trails wherever they lead and, in so doing, shine a spotlight on the corruption. That is the only way to restore credibility to Russia's tarnished finances. TEXT: Turning to the nation's automobile center, we read in a "Detroit News" editorial, this philosophical summation: VOICE: A country, like a person, learns accountability by being held accountable. It will not acquire the discipline to participate in capitalist markets by being given loans to pay off earlier loans. A central bank that deliberately misleads the International Monetary Fund, which is in large part funded by U-s taxpayers, ought to lose its credibility. . The State Department should give up on the notion that it can fine-tune a complex economy like Russia's from afar. Instead, it should provide the Kremlin with a history of the American experience and wish the Russians luck. . The Clinton administration and International Monetary Fund should stop throwing good money after bad in Russia. TEXT: With that summation from "The Detroit News", we concluded this sampling of comment on the most recent revelations about how people have illegally siphoned off billions of U-S dollars from Russia during the past few years. NEB/ANG/RAE 02-Sep-1999 13:43 PM LOC (02-Sep-1999 1743 UTC) NNNN Source: Voice of America .