A crackdown on kleptocrats

The law is catching up with Russia’s corrupt oligarchs

Moscow’s White House is a fairly pleasing pile, at least by the standards of late Soviet architecture. Its colonnaded white stone façade enjoys handsome views over the Moscow River, and its interiors are a symphony in green malachite, light teak and gold ormolu, a mid-1990s decorating style best described as mafia rococo. From the corner offices, now occupied by the Prime Minister, Vladimir Putin, and his deputies, one can gaze over gridlocked traffic, enlivened by the blue flashing lights of government Mercedes as they charge down the reserved central lane.

‘Do you remember Mabetex?’ I asked one of Putin’s deputy premiers a few months ago. My notebook was closed, and we sipped tea and chatted for a few minutes after the end of a formal interview. ‘Before my time — but a great job they did!’ he said, gesturing to the tastefully brown-tinted Swiss windows. ‘But what a scandal! And over, what, $30 million?’ We had a good chuckle at that. A scandal — over such kopecks!

Mabetex was a Swiss-based, Albanian-owned company contracted in 1994 to refurbish the White House and the Kremlin. But the tender process for the refurbishment was, in the opinion of Carla Del Ponte, then the Swiss prosecutor-general, opaque. Del Ponte, who went on to head the international war crimes court for former Yugoslavia, launched a money-laundering investigation, alleging that kickbacks had been paid.

In the end no one was convicted. But the affair alarmed Russia’s elite. During the five years that Del Ponte was investigating the Swiss bank accounts which she alleged were linked to top Kremlin functionaries, none of Russia’s bureaucrats and businessmen felt safe. And when Pavel Borodin, former head of the Kremlin’s property management department, was arrested in 2001 in New York on money-laundering charges, alarm escalated to near-panic.