Gore Under Fire in Russian Bank Scandal

Revelations about Russian money laundering through a major U.S. bank have presented Vice President Al Gore with a potentially difficult campaign issue.

A criminal investigation into charges that Russian mobsters and politicians may have laundered money--including diverted international aid funds--through accounts at the Bank of New York has revived a long-standing debate in Washington over whether the Clinton administration has given too much support to a Russian government known to be plagued by corruption.

As the chairman of a joint commission on bilateral ties with former Russian Prime Minister Viktor Chernomyrdin--a role he once proudly embraced--Gore has been one of the targets of past criticism.

Now, several of his opponents in the presidential race appear to sense an opportunity in the issue. Republican presidential candidate Steve Forbes said Thursday that Gore shares in the blame for the latest scandal. Foreign policy aides to Texas Gov. George W. Bush are arguing that the administration should have been more sensitive to the level of corruption in Moscow and that Gore too willingly accepted pledges of reform that were never carried out.

The Gore team has responded to the emerging issue with uncharacteristic speed, offering one of the most detailed accounts to date of the vice president’s conversations with Russian leaders about the crime problems. At the same time, aides have stressed that Gore, although touted as the “most involved vice president in history,” had no idea federal investigators were looking into allegations that the Bank of New York laundered billions for Russian criminals, including some with close connections to the government of President Boris Yeltsin.

“With respect to stories about the Bank of New York, the vice president would not have been aware of it,” said Leon Fuerth, Gore’s top national security advisor. “He learned of it reading the newspapers.”

Though no one has charged that Gore knew of the financial diversions, the still-emerging money laundering scandal has tendrils that could run close to the vice president. One of the Russians suspected of having engineered the diversion of millions of dollars through the New York accounts, Konstantin Kagalovsky, was Russia’s representative to the International Monetary Fund from 1992 to 1995, at a time when the Clinton administration was deeply involved in IMF lending to Russia.

Chernomyrdin, Kagalovsky’s boss and Gore’s partner in the bilateral commission from 1993 until last year, has himself been the target of numerous allegations of corruption, some of them compiled by Western intelligence agencies.

Consequently, after boasting for years about the vice president’s unique role overseeing relations with Russia, Gore’s advisors now find themselves shifting to the defensive about foreign policy credentials they hoped would be a campaign asset.

Forbes said Gore ignored warning signs that Russia was in economic trouble. “This is nothing new and yet they keep shoveling billions of IMF money into a government that misuses it and into a government that doesn’t pay its workers,” Forbes said.