September 11 Commission Report - Gnostic Liberation Front

“oligarchs.” In doing so, the Yelstsin administrators (the “Family”) took hefty profits up
front.
“Borovoi gave an example of how government funds are looted: If a government ministry wants
funding, it must allocate up to 3 percent of the requested sum for bribes to lawmakers and officials.
The lawmakers then approve the request, and the ministry must then pay up to half of the funding to
the lawmakers and officials to get the money.” [Organized Crime Thriving in Russia, Barry Renfrew,
AP Wire, August 31, 1999]
As those companies defaulted on their loans, the banks (and not surprisingly, the Board
Directors of those banks) became the primary owners of Russian industry, with
significant percentages held by various off shore ‘holding companies.’ (At this point, it
may be fair to speculate that the Bush family and affiliates own a share of those “holding
companies,” given the role of Jonathon Bush and Valmet in the financial plundering of
Russia, and Neil Bush’s ongoing relations with Russian investors.) Subsequent, “official”
loans from the IMF, went to cover investment banker’s fees and bank interest
“Russia’s bankers made serious money on Yeltsin’s electoral weakness by buying government bonds
at distressed prices using cheap money handed over from government deposits. The lion’s share of the
domestic bonds’ high yields have always been paid with IMF loans. Russia’s first representative to the
World Bank, Leonid Grigoriev, explained, "Of course, the government was to return this money and
that is why the yields on 3-month paper reached as much as 290 percent. The government’s paying
such huge, impossible rates on treasury bills, well, it’s completely unbelievable. It had nothing to do
with the market and therefore such yields can only be understood as a payback, just a different
method." [The Rape of Russia, Anne Williamson, testimony before the Committee on Banking and
Financial Services of the U.S. House of Representatives, presented Sept. 21, 1999]
The U.S. arranged for additional funding to be provided to Russian Defense firms
through a collection of banks and financial institutions. U.S. Defense firms and financial
agencies started buying into former Soviet firms. The first official US program began in
1992:
“The Cooperative Threat Reduction Program was initiated in FY 1992 to reduce the threat posed by
weapons of mass destruction remaining in the former Soviet Union. In June 1994, DoD (Department of
Defense) established the Defense Enterprise Fund to assist Belarus, Kazakhstan, Russia, and Ukraine
in the privatization of defense industries and conversion of military technologies and capabilities for
civilian use.”
At the same time in Russia, defense firms and energy companies were being consolidated
under the banner of privatization:
“Military Industrial Investment Company (VPIK): Also known as the Defense Industrial Investment
Company (DIIC), VPIK was organized by a combination of government and industry to aid the
defense industry in adjusting to the transformation to a market economy. Its major goal is to finance
complete and partial conversion of defense enterprises throughout Russia and promote the
development and production of dual-use technologies. Several large defense plants, including major
aerospace and communications firms are among its founding members. The most prominent members
are listed below.”
• Russian groups involved in this conversion were led by Viktor Chernomyrdin, and included:
• The Military Industrial Stock Exchange
THE SEPTEMBER 11 COMMISSION REPORT Page 223