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IMF Loans to Russia Said OK

August 30, 1999

WASHINGTON (AP) _ The International Monetary Fund already has put tight controls in place to prevent its loans to Russia from being misused and has seen no evidence of illegal diversions through U.S. banks, a senior IMF official said today.

The comments by Tom Dawson, director of external affairs at the international lending agency, followed a statement by the chairman of the House Banking Committee that IMF loans to Russia should be halted until controls are put in place to prevent diversions of the sort that reportedly have occurred through the Bank of New York.

``We continue to have absolutely no indication of any IMF money having been diverted″ through Bank of New York or other U.S. banks, Dawson told reporters in a conference call. Nonetheless, he added, ``We continue to take the allegations seriously.″

The Banking Committee chairman, Rep. Jim Leach, R-Iowa, spoke Friday amid concern that some of the $10 billion or so allegedly funneled through the bank by Russian gangsters in a money-laundering scheme may have involved IMF loans to Russia.

Federal authorities are investigating whether there was a diversion of IMF loans or of U.S. credits extended to the Russian government for buying grain, corn and other farm products.

An IMF team has been in Russia for several days and is scheduled to return at the end of the week, Dawson said.

``We believe we are being open and transparent in terms of what’s been going on,″ he said. ``We just don’t believe there are any grounds for this particular accusation.″

Auditing firm PricewaterhouseCoopers has been conducting a study for the IMF of possible manipulations of loan money by Russia’s central bank, Dawson noted. He said the IMF had previously instituted tight controls, keeping the loan money at the international fund rather than transferring it to the central bank.

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