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Suppose, just suppose, that the real reason for running $50 billion in Russia’s Central Bank cash reserves through the accounts of a shelf company registered in the Channel Islands, was not to hide the money from foreigners intent on seizing state assets, but rather to hide from Russians trying to steal them.

And suppose, just suppose, that those Russians were high officials of the state.

How awkward indeed it would be for Victor Gerashchenko, current and former chairman of the Central Bank, to write a letter to Michel Camdessus, managing director of the International Monetary Fund (IMF) to explain what he’d been doing in the Channel Islands.

‘You see, dear Michel’ — the pen would falter, as Gerashchenko commenced to write — ‘since 1992 the Russian state has had no security to speak of. You know yourself just how well informed you and your representatives were kept in those amiable chats you had with Yegor Gaidar, Anatoly Chubais, Sergei Dubinin, Alexander Shokhin, Boris Fyodorov, and Sergei Kirienko. Remember the strolls in the woods, the kaffeeklatches, and those after-hours dinners… Remember how much George Soros and Jeffrey Sachs were able to relate from their chats with the same people, how well they’d read our files. ‘
‘You see, dear Michel’ — Gerashchenko would be mustering up his courage now — ‘there was nothing you and your Washington friends couldn’t discover, simply by asking. And if that didn’t work, a few well-placed, well-stuffed envelopes would do the trick, opening any file, any secret, any bank account anywhere on earth.’

‘And, of course, dear Michel’ — Gerashchenko now had to be careful –‘a country so vulnerable to being robbed of its state secrets is a country that is already being robbed of its state assets.’

‘Forgive me, dear Michel’ — Gerashchenko wrote in case his own secret paragraph was leaked — ‘for having to point out that the ease with which you penetrated our government and bank reflected the ease with which those entrusted with the state’s assets stole them. To reestablish law and order in our state is an uphill task, you’ve said yourself many times. But to do that, we were obliged to create mechanisms so secret, and also so obscure, none of the thieves of state would be able to uncover them. Had they been revealed to you, I confess that with the secret would also have been lost the money itself.’

What an embarrassment for Camdessus to receive such a letter, and with what awkwardness he would have to pick up his pen to reply.

‘Dear Victor’ — but there Camdessus would have to stop. He must consult the U.S. Government on what to say next. Gerashchenko insinuated as much. More, Gerashchenko was reminding Camdessus and the men at the US Treasury of the most awkward secret of all. He knew that they knew just how much had been stolen by officials whom the US — even now — prefers as Russia’s rulers to Prime Minister Yevgeny Primakov.

So what can be said by the IMF and the US Treasury in reply? Nothing.

The gauntlet that was thrown down by Procurator-General Yury Skuratov, when he exposed the use of a Channel islands front by the Central Bank, was a challenge to foreigners, like Camdessus and the Americans, to admit that of all the money laundering by Russians officials they knew about, whose ill-gotten gains they could have traced and seized, there hadn’t been a single penny they had either exposed, or threatened with lega! action.

The explanation for that is so embarrassing to Washington, and so damaging to the prospects of Gaidar and Chubais ever returning to power, Camdessus and the Americans must be deeply troubled about what next Prime Minister Primakov might order exposed. Right now, Washington (the collective noun that embraces Camdessus) cannot risk complaining too loudly at the Channel Islands deception, for fear the file on that one will be followed into the open with other files. They are the ones about billions of dollars that didn’t return with interest paid to the last kopeck.

Try to suppose, just suppose, what those files djscieag, and about whom.

‘Dear Michel’, the head of the Russian government might soon pick up his pei to write, heading a letter to send Camdessus scurrying over the US Treasury swifter than he’s ever run before.

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