Albright backs more aid, tells Russia to end corruption; Assistance prevents spread of weapons, secretary says


WASHINGTON -- Responding to criticism of U.S. policy toward Russia, Secretary of State Madeleine K. Albright urged continued aid for Moscow yesterday as the best defense against nuclear proliferation but warned Russia to crack down on corruption.

"We have made clear that we will not support further multilateral assistance to Russia unless fully adequate safeguards are in place," Albright said. "Our message to Russian leaders has been to get tough on corruption and to cooperate in full with investigations into it."

Albright's speech, at the Carnegie Endowment for International Peace, came as Congress debates new assistance for Russia and investigates allegations that billions in Western aid got siphoned into private Russian pockets.

Republicans in Washington have grasped the Russian banking scandal as a weapon against Democrats in the 2000 elections.

Reports that a huge amount of aid to Russia has been laundered through Western financial institutions "marks the effective end of the Clinton-Gore administration's approach to Russian reform," House Majority Leader Dick Armey, a Texas Republican, said this week. "Russia has become a looted and bankrupt zone of nuclearized anarchy."

Albright acknowledged that Russia has enormous problems, but she said the country's increasing openness, its independent news media and its multiparty system hold the promise of positive change.

"These are reasons to increase our efforts with Russia, not, as some suggest, to cut our aid and walk away," she said.

Congress has proposed cutting President Clinton's request for aid to Russia and other former Soviet republics by up to 30 percent, or $300 million, next year.

While the United States shouldn't throw good money after bad, "neither should we turn our backs on good people doing the right things," Albright said. "And that is precisely who and what our aid programs are designed to support."

Clinton has asked for $14.6 billion in total foreign aid for next year. The Republican-controlled Congress is threatening to cut that by almost $2 billion, to $12.7 billion, an amount equal to this year's foreign aid budget and slightly less than the $13.1 billion spent in 1998.

Committees in both houses of Congress plan hearings this month on allegations of Russian money laundering and the possibility that billions were pilfered from aid packages. Scrutiny of assistance to Russia has grown since it was revealed in August that the Justice Department is investigating the flow of at least $4 billion in Russian funds through the Bank of New York.

Investigators believe some of the money is tied to Russian organized crime or political corruption. There has been speculation, but no evidence, that some was stolen from International Monetary Fund loans or other international assistance.

"There have been obvious lapses," said Stephen Larrabee, a defense analyst at the Rand Corp. "On the other hand, corruption has been historically endemic in Russia. It's bad in this situation, but I don't think any other administration would have done better."

Besides not wanting to lose money to Russian corruption, many in Congress argue that aid should be stopped or curtailed until Russia stops transferring missile technology to Iran.

But the Clinton administration believes international assistance is crucial to preventing a total Russian collapse and to avoiding the spread of its vast arsenal of nuclear weapons.

"The job of preventing loose nukes is far from complete," Albright said. "This is why the overwhelming majority of our assistance dollars to Russia go to programs that lower the chance that weapons of mass destruction or sensitive missile technology will fall into the wrong hands."

The answer to Russian corruption, the Clinton administration and supporters say, is increased oversight, not less aid.

"The response should be to tighten up the monitoring" of aid, said Sen. Paul S. Sarbanes, a Maryland Democrat who sits on the Foreign Relations Committee. "I don't think the response should be to withdraw from trying to be helpful."

Many analysts say that direct U.S. aid to Russia -- mostly for nuclear nonproliferation -- is adequately accounted for; it is the multicountry aid that seems at risk.

For example, the IMF has acknowledged that it does little or no monitoring of Russian aid packages, which are expected to surpass $4 billion over the next year and a half. Once the money is wired to Russia, the Russian central bank is charged with allocating and auditing it.

Reform proposals have focused on better controls after the funds leave IMF accounts.

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