We created a virtual open shop for thievery at a national level and for capital flight in terms of hundreds of billions of dollars, and the reaping of natural resources and industries on a scale which I doubt has ever taken place in human history. – E. Wayne Merry, chief political analyst at the U.S. Embassy in Moscow (1990-1994)

The foregoing article is an excerpt from Chapter 3 of my book “Grand Deception: the Truth about Bill Browder, Magnitsky Act and Anti-Russian Sanctions.” Part 1 is here.

Economic reforms and privatization were highly destructive for Russia. They were also achieved outside of the legitimate legal framework. To sidestep the government agencies and circumvent the parliament, Yeltsin’s government worked through a network of private agencies and non-governmental organizations set up by Anatoly Chubais, his associates, and their western advisers. One of the most important of these organizations was the Russia Privatization Center (RPC), set up by the HIID and Anatoly Chubais under a presidential decree. RPC’s directors were Andrei Schleifer and Chubais himself. Exemplifying corruption and conflicts of private and public interests in Yeltsin’s cabinet, Chubais simultaneously headed the private RPC and the government’s GKI (Federal Agency for State Property Management). This didn’t seem to bother RPC’s western sponsors; in addition to a $45 million grant from USAID, RPC obtained $59 million credit from the World Bank, $43 million from European Bank for Reconstruction and Development and further funding from the European Union, Japan and several individual European Governments.^[1] HIID also helped establish the Federal Commission on Securities, also with USAID’s money.