Financial monitoring service finds “kickbacks” in former Moscow government’s contracts

Rosfinmonitoring has reported “systemic problems” in the Moscow authorities’ activities regarding financial contracts, first of all, in healthcare.

The announcement came as new Moscow Mayor Sergey Sobyanin and a number of federal bodies have ordered checks of activities of different structures of the previous city administration.

Former Mayor Yury Luzhkov, who headed the city government for 18 years, was relieved of his duties by President Dmitry Medvedev on September 28. The head of state explained the move as due to “a loss of confidence in Luzhkov.”

“We have launched checks into the Moscow authorities’ work jointly with law enforcement agencies,” head of the Federal Financial Monitoring Service (Rosfinmonitoring) Yury Chikhanchin told Prime Minister Vladimir Putin on Tuesday. “Systemic problems” exist primarily at healthcare establishments, departments and hospitals, Chikhanchin said.

“Contracts are signed with mediators,” he noted, explaining the schemes. “The money goes from mediators directly to Moscow’s health department, and the pay-off vanishes,” Interfax news agency quoted him as saying.

Such schemes were possible thanks to “an incorrectly devised tender component,” Chikhanchin stressed, adding that the sum involved is some 1.2 billion rubles ($38.6 million).

The work of the previous city government is also being investigated by the Prosecutor General’s Office, Interior Ministry and other law enforcement agencies. State purchases made by the city authorities and the housing utility complex are also being checked.

Under Luzhkov, many criticized the work of the Mayor’s Office. However, numerous large-scale checks have been initiated only since his resignation.

The Russian Federal Property Management Agency (Rosimushchestvo) has filed a lawsuit against Inteko, a company which belongs to Yelena Baturina, Luzhkov’s wife. The agency is seeking the return of land plots belonging to the company, insisting that they were allocated by presidential decree in 1993 for the construction of foreign embassy buildings.

Inteko “legally owns the land plots in the west of Moscow purchased from AOZT Matveyevskoye in 2003,” the company’s spokesman Gennady Terebkov told Interfax on Tuesday. To settle the issue surrounding “the fulfillment of the state’s international obligations as soon as possible,” the company is ready to discuss possible out-of-court solutions,” he added.

­Sergey Borisov, RT