Russian nuclear minister corrupt

Publish date: March 7, 2001

Written by: Vladislav Nikifоrov

The Russian State Duma anti-corruption commission has issued a report about Russian nuclear energy minister’s illegal business activities which undermine nuclear safety.

On March 2nd, Greenpeace-Moscow released a report from the Russian State Duma anti-corruption commission detailing the large-scale illegal business activities of the minister for nuclear energy, Evgeny Adamov. Adamov’s attempts to commercialise Ministry for Nuclear Energy and use its resources for his private commercial projects are not only illegal but also undermine nuclear safety, Russian Nuclear Regulatory says.

Duma’s anti-corruption commission recommended that all information related to Adamov’s activities be submitted to the President, Security Council, Russian Federation Government, Federal Security Service (former KGB), and General Prosecutor’s office, Moscow Times writes. The 20-odd page document by its tone reminds an indictment and contains three chapters: Adamov’s entrepreneurial activity, Adamov’s personnel policy, Adamov’s financial policy.

Family business
While working as the head of secret NIKIET Institute in Moscow from 1986to 1998 Evgeny Adamov violated many security regulations and created “various commercial organisations in Moscow and abroad and continues to be actively involved in entrepreneurial activities”. As an employee of the Ministry for Nuclear Energy, Minatom, and previously director of NIKIET Institute, it has been forbidden for Adamov to have any private business interests, however, the report reveals a complex business portfolio since the early 1990s.

For example, on August 24th 1994, he established consulting and management company “Omeka, Ltd”. Registered in Pensylvania, USA, however, according to the report, at the end of 1999, the company’s $5 million in assets were controlled by Adamov ($3.15 million), his wife ($1.5 million) and his US partner Mark Kaushansky ($410,000). This is a violation of article 289 of the Russian Penalty Code (illegal participation in entrepreneurial activities). Mark Kaushansky is also the main actor in a number of other Adamov’s commercial projects.

In March 1998, in the speech to the Duma Adamov said he had not been engaged in business since his appointment as minister. "There have been no deposits to my personal bank account since I have been minister," Adamov said.

The report, which says Adamov has admitted having a U.S. social security card, went on to say that when Adamov applied for a Diner’s Club card in 1996, he stated his total annual income at over $120,000. The Commission believes no tax have been paid in Russia, what violates article 198 of the Russian Penalty Code (deviation from tax payment).

The first chapter concludes that “The facts about Adamov’s engagement in commercial activity, while he worked as NIKIET director and being a minister of atomic energy, which were raised in the press, State Duma members’ letters and statements addressed to the Russian leadership, have been fully confirmed”.

Nuclear safety undermined
The chapter about Adamov’s personnel policy lists numerous cases when Adamov appointed people with no experience in the atomic industry to key positions in the ministry and state companies controlled by the ministry. Some of these officials were also listed as shareholders of private companies formed by Adamov before he became minister. He also illegally tried to take control over all the branches of nuclear industry in Russia and monopolise it as well by eliminating competitors and seizing license functions from the Russian State Nuclear Regulatory, or GAN.

GAN for its turn says that appointment of incompetent people to the key positions in the ministry have undermined the nuclear safety in the nuclear related industry. A disregard to the nuclear safety regulations has become an official stance of Minatom’s top rank officials when Adamov became the minister, GAN states.

Russo-American government deal on HEU involved
The last chapter reveals some facts about Adamov’s financial policy. The ministry’s international deals (about $2 billion annually) were channelled through the ministry-affiliated bank Konversbank. Then, according to the report, he ordered the bank’s officials to sell the bank’s controlling stake to MDM-Bank, an institution associated with Kremlin. Thereby, the report said, MDM got control over such lucrative deals as a $12 billion contract with the USA for processing weapons-grade uranium.

"At the present time, the purchase of Konversbank stakes for the benefit of MDM-Bank continues," the report said. MDM has been reported to have assets worth $850 million, while Konversbank has some $400 million to $500 million on its books.

Minatom rejects accusations
Talking to the Russian daily Segodnya, Minatom rejected accusations saying that interpretation of the mentioned facts and episodes was tendentious and incomplete. “Some groups want to shake up the government, which supports the program of importing foreign spent nuclear fuel to Russia,” Minatom representatives said.

Until recently Evgeny Adamov felt untouchable enjoying Kremlin’s absolute trust. But more and more competitors appear on the scene: managers of Unified Energy System of Russia, among them Anatoly Chubais, numerous top officials fired by Adamov as well as antinuclear lobby including some green activists and few State Duma deputies.

Deputy chairman of the Duma Security Committee Sergey Yushenkov in an interview to Segodnya said that if this report is just the Duma members initiative, then examination of Adamov’s activities would be just a formal procedure without any result, if some people are not pleased with him, his illegal activity would be definitely confirmed.

Spent fuel import a private business of Adamov?
The currently most discussed business proposal to import spent nuclear fuel to Russia is one of the initiative being actively promoted by Adamov. The commercialised minister says Russia may earn up to $20 billion on importing 20,000 tonnes of spent nuclear fuel from abroad. The required amendments to the Russia legislation to allow the project passed the first hearings in the State Duma in December 2000. The second hearing was scheduled for February 22nd but was postponed until March 22. The reason for postponement may well be the anti-corruption commission report.

Commenting once on the fuel import project, head of GAN, Yury Vishnevsky, said that "money earned will be either stolen or eaten up." The first option seems to be quite true on the background of the report, which obviously shows only the tip of all Adamov’s private business activities.