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Thursday, December 30

A timely reminder about the IMF-Ukraine Central Bank scandal

An alert reader sent Pundita a 11/29 report, The Yuschenko Mythos , written by Justin Raimondo of Antiwar.com. The reader believes the report supports the thesis presented in Pundita's 12/28 post .

I think the passage that caught the reader's eye is, "The Yushchenko-Timoshenko forces want to align with Georgia, Uzbekistan, Azerbaijan, and Moldova (the other nations in the GUUAM configuration of junior league NATO aspirants) in erecting a ring of iron around Putin and the former Soviet Union."

(Ms. Timoshenko, or The Robber Baroness, as she is fondly dubbed by her critics, is one of the more colorful oligarchs to be involved in the Ukraine election.)

I don't dispute Raimondo's observation as far as it goes. Yet my thesis is broader in the sense that I see the oligarch clans represented by Yuschenko, et al. as pawns of a west European plan to hem in Russia--a plan the US Department of State (and seemingly the Clinton administration) supported.

However, I was interested in one of the links provided in Raimondo's report, which is a September 2003 article by the Canadian newspaper, The Globe and Mail. The article is titled "Former Soviet republics poised to sign trade deal. Critics fear economic pact signals attempt to consolidate power in hands of Kremlin."

The countries involved in the discussion, which included Russia and Ukraine, were essentially proposing their own version of the European Union. The deal was abandoned, or at least suspended, according to the report. But the fears of EU leaders about such discussion help explain the knockdown battle that emerged in Ukraine between Yushchenko's State Department/European supporters and Yanukovich's Russian supporters.

And if you're looking for dirt on Yuschenko beyond the link that Pundita's 12/28 post provides, Raimondo's report is a great place to start. The caveat is that Raimondo's report takes aim at so many corrupt situations involving Ukraine and the oligarchs and takes so many pot shots at the Bush administration and American oil companies that the total effect is dizzying.

Yet we can't assume that even a remnant of the Bush administration will be in Washington after the next presidential election. However, the US Department of State will still be there. For all the wealth of information in Raimondo's report there is no mention of State's role in the Ukraine election campaigns and the aftermath. He does mention the words "US Treasury" and "George Soros" in passing, and it's possible that one of the many links he provides mentions State. But in the actual report, not a mention. Yet discussing the situation in Ukraine without mentioning State is akin to discussing Saddam's rise to power without mentioning the CIA.

This is not to discourage Pundita's readers from reading the report, which touches on the larceny of Ukraine's central bank under Yushchenko's leadership. Pundita confesses that the UN Oil for Food Program scandal had shoved the IMF-Ukraine scandal to the back of her mind. Raimondo's report is a timely reminder. The Ukraine central bank under Yushchenko's leadership embezzled $613 million or $200 million, depending on which source you favor, from the International Monetary Fund.

The IMF-Ukraine affair is a sobering reminder of the connection between the FSU oligarchs and the West European banks. The Ukraine Central Bank's scheme to embezzle the IMF depended on laundering funds through European banks. That's a tactic the oligarchs perfected while carving up the Soviet Union's government-controlled industries. The tactic underscores that the oligarchs' mind-boggling wealth can't be separated from banks outside the USSR regions.

When the electronic transfers get into the billions, the deposits the banks hold onto, if even only for a few hours or days, help them underwrite lots of business loans and make big investments in the financial markets, which oils the wheels of commerce.

So there is a house-of-cards situation looming for West Europe, if the Russian government continues to wrest back control of the major industries that the oligarchs took off the Soviet government's hands. This would be provided Moscow uses control of the profits to build up Russia's bank reserves.

The dollar figures involved in the Ukraine-IMF Affair are chump change when measured against the billions that were bilked by Saddam Hussein and many UN Oil for Food Program participants.

I interject that with hindsight, Bush should have just told other members of the UN Security Council, "We're going to invade Iraq because it's the only way to shut down the UN Oil for Food Program, you crooks."

Of course some American companies were involved in the faud but those companies are a drop in the bucket; probably companies from every nation were involved. But since recalling the Ukraine-IMF Affair, Pundita is beginning to worry. If the FSU oligarchs ever stop doing much of their banking in West Europe, and with the skimmed profits from the UN Oil for Food Program cut off, what's left to support the western part of the Eurozone economy?


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