Daughter's Influence Could Doom Yeltsin 'The Family' Draws Charges of Corruption

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MOSCOW -- Some Russians see her as a modern-day czarina -- or worse, a female Rasputin in league with rapacious oligarchs. By her own description, President Boris Yeltsin's younger daughter is simply a trusted confidante who can tell her mercurial father "unpleasant things" while lovingly straightening his tie.

Now, Tatyana Dyachenko's name is surfacing repeatedly in a broadening corruption scandal that has besieged the Kremlin -- even prompting a new round of rumors that Yeltsin may resign soon.

Dyachenko, her father and older sister are under investigation, accused of accepting bribes from a Swiss company that won millions of dollars in Kremlin construction contracts, according to a former Russian prosecutor who has been suspended after tangling with Yeltsin's government.

The Kremlin also is embroiled in a massive money-laundering case, which has threatened to further sour relations between the United States and Russia. The scandal erupted in late August when the New York Times reported that Russian organized-crime figures had laundered as much as $10 billion through accounts at the Bank of New York.

Since Dyachenko's emergence as Yeltsin's adviser, press accounts have suggested a steady accumulation of wealth, including a yacht, a castle in Germany, accounts in foreign banks and a luxury dacha near Moscow, none of which has been confirmed.

Similar allegations of corruption were leveled against a daughter of Soviet leader Leonid Brezhnev in the early 1980s, as other Communists began struggling to succeed the ailing Brezhnev.

One of the most potentially damaging recent reports centers on allegations that high-ranking Kremlin officials accepted millions of dollars in bribes from the Swiss-based Mabetex construction firm in exchange for lucrative renovation contracts.

In late August, the Italian newspaper Corriere della Sera reported that Swiss investigators had seized documents and bank statements containing evidence of suspected bribes paid to Yeltsin, Dyachenko and her older sister.

The head of Mabetex, Behgjet Pacolli, transferred $1 million into a Budapest bank account for the president's use, arranged for credit cards to be issued in the names of Yeltsin and his daughters and settled their bills for thousands of dollars, the newspaper reported. Dyachenko spent several thousand dollars in a day, according to the report.

Both the Kremlin and Mabetex have vigorously denied the allegations. But Russia's suspended prosecutor general, Yuri Skuratov, has confirmed that Yeltsin and his daughters are under investigation in the "Swiss connection" controversy and said that more than "90 percent" of the press accounts about the case are accurate.

Virtually unknown to many Russians a few years ago, Dyachenko is now regarded as the third-most influential person in Russia, behind her father and ambitious Moscow Mayor Yuri Luzhkov, according to a poll in one Moscow newspaper.

The Russian press has dubbed Dyachenko the head of what Russians now know as "the Family" -- an exclusive cadre of insiders who engineered some of Yeltsin's biggest decisions in recent years, including four government shake-ups over the last 18 months.

The Family includes two of the richest men in Russia -- financier Boris Berezovsky and Sibneft Oil Co. President Roman Abramovich. It also includes two other trusted presidential advisers -- former chief of staff Valentin Yumashev, the ghostwriter of Yeltsin's autobiography, and Alexander Voloshin, Yeltsin's chief of staff. …