Washington, 10 September 1998 (RFE/RL) -- The comments of Anatoly Chubais that Russia had "conned" the international community, including the IMF and the World Bank, to get the $22.5 billion emergency rescue package in July were met with stony silence at the institutions headquarters' in Washington Wednesday.
But his words were quickly picked up by U.S. congressional Republic leaders intent on preventing any more American money going to the IMF or to Russia.
House Majority leader Richard Armey (R-Texas) said Chubais' comments only strengthened his resolve to cut the IMF off now or in the future, unless there is greater U.S. control.
House speaker Newt Gingrich (R-Georgia) added that for six years the IMF has given money to Russia and now it's clear "it didn't work" -- that the policies and promises were not being honored.
The head of the Republican policy advisory committee to the House of Representatives, Christopher Cox (R-California), said it was clear that the Russian government "deliberately and directly" lied in order to get IMF funding. He said it also showed that the IMF "knew" that Russia was not in compliance even when it approved a $4.8 billion first drawing from the rescue package in July.
The U.S. House of Representatives has been refusing to pass a request from the Clinton administration to approve $18, billion as America's share of new membership quotas and a new emergency fund.
The administration, embattled by the sex scandal involving the President and a young White House aide, continued to push for approval of the U.S. contribution, but House members ignored the pleas and turned their attention to the report on the scandal sent to the Congress by Independent Counsel Kenneth Starr.
Since IMF quota increases require approval by 85 percent of the members voting power, the U.S. with about 17 percent of the vote, can prevent implementation of the rise if it is not approved by the congress.
U.S. Treasury officials, who strongly supported the emergency rescue package for Russia, declined all comment on Chubais' statements.
IMF and World Bank officials also remained silent on their reaction to what he said.
In the interview with the business newspaper Kommersant Daily in Moscow, Chubais said the Russian economy would have collapsed last spring without the emergency rescue package put together by the IMF. It was necessary and appropriate for Russia to lie to get the cash because with a collapse, global lenders "would have stopped dealing with us forever," he said.
Chubais was President Boris Yeltsin's special representative to international financial institutions when he led the Kremlin's negotiations with the IMF, the World Bank and Japan for the package.
Chubais used the Russian slang word "kinuli" which means "we conned" or "we cheated," according to his spokesman Andrei Trapeznikov. But that is a harsher word than Chubais really intended, said the spokesman, a Russian word that sounds "very rough" in English.
"I think this passage should not be interpreted as malicious intent," said Trapeznikov. "There was no ill intent on the part of Russia to cheat the IMF out of its money," He said. However, he did not challenge the accuracy of the quotes, saying that Chubais had reviewed the text before it was published.
Whatever Chubais' intent, opponents of U.S. financial support for Russia and the IMF signaled that his remarks will become the centerpiece of their campaign.
Meantime, the deputy finance ministers of the G-7 group of major industrial nations are tentatively scheduled to meet in London Monday to discuss Russia. But the U.S. representative, Deputy Treasury Secretary Larry Summers, says it will only be a meeting to review the situation and discuss future options, not adopt new plans.
The talks between the U.S., Great Britain, Germany, France, Japan, Italy and Canada will be "more analytical and tentative," said Summers, an attempt to understand what is happening in Russia and think about possible scenarios going forward.
Until the political authorities in Moscow decide what they are going to do, added Summers, it is "very difficult to calibrate an international response."
He said there is no alternative to a stable currency, sound financial practices, the rule of law, sturdy banks and guaranteed property rights, but that in the end, the choices are Russia's to make. There are many choices that can be made in different ways, said Summers, but the challenges Russia faces now "first and most of all are political."