The admission followed charges by Federation Council deputy Yury Boldyrev that the farmers' association AKKOR misused government aid for private farms, which they had a monopoly right to distribute under an arrangement with former acting prime minister Yegor Gaidar's cabinet.
Boldyrev, once President Boris Yeltsin's chief anti-corruption inspector, alleged last week that AKKOR helped canvass support for Gaidar's election campaign last year in gratitude for the right to distribute aid to farmers.
"The ministers who gave this public organization a chance to get rich on the misdirection of taxpayers' money co-founded the Russia's Choice political bloc with AKKOR," Boldyrev said. "This is a case of straightforward corruption."
Yury Linin, AKKOR's vice president in charge of financial affairs, admitted that checks in a number of the group's regional branches found cases of misappropriation of government money.
"It's only natural, because in 1992, when these cases were found, AKKOR was growing fast, despite enormous pressure from all sides," he said. "Nobody picked the staff very carefully."
Linin downplayed the political connection with Gaidar. "There is no union between Russia's Choice and AKKOR," he said. "We were present when Gaidar was setting up the party, and there are some farmers in the party, but that's it."
However, Gaidar and AKKOR president Vladimir Bashmachnikov intended to sign an "interaction and cooperation agreement" Tuesday. Both the signing and a press conference scheduled after it were canceled because Gaidar was sick.
The reformist leader's press secretary commented only that he considers Boldyrev's charges unfair.
Linin said the government began channeling aid to farmers through the association in 1991, before Gaidar became prime minister. He added that under Gaidar the government aid started dwindling, and then practically stopped under the current government.
However Yury Chernichenko, a Federation Council deputy who was one of the first politicians to call for private land ownership and the development of family farming in the late 1980s, said in an interview that he remembers Gaidar's support for the idea of giving the funds to AKKOR rather than to individual farmers. "It was an illegal decision," Chernichenko said. "A prime minister cannot make such an arrangement with one group and give it a monopoly like this."
Chernichenko said there were only about 20,000 private farmers in Russia in 1992, and it would have been possible to subsidize each individual farm rather than give the money to AKKOR, in which practically all the farmers were members. According to Chernichenko, AKKOR functionaries delayed handing over the money to farmers by several months, using the time to earn interest. When the aid finally came, it was distributed unevenly, leading to 37,000 farms going under this year, he said.
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