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August 5, 1999

Francais.

The Editor

Le Monde

21 Bis, Rue Claude-Bernard
75242 Paris CEDEX 05
France

Dear Sir:

We take strong exception to your editorial ("Le FMI et la Russie", August 6, 1999) and article ("Comment la Russie detournait l'argent du FMI, August 6), both of which are examples of irresponsible journalism. Under the pretext of "knowing how to read between the lines of the PricewaterhouseCoopers report," you conclude wrongly that funds from the international community to Russia were being diverted, through FIMACO, an offshore company, to the enrichment of oligarchs-and that this was done with the full knowledge of world leaders, including the Managing Director of the IMF. The report contains no such allegations. Moreover, your editorial relies on Moscow rumors to propagate the baseless charge that the IMF knew of these activities from the start.

Let me set the record straight. While IMF staff has been aware for some time that some of the reserves from the Central Bank of Russia were held in European subsidiaries, it was not told of FIMACO activities until this year. The IMF Executive Board has concluded that this episode constituted a fundamental lack of cooperation on the part of the Russian authorities and a serious violation of Russia's obligations to the IMF. Our strong disapproval of what has taken place has been unambiguously conveyed to the Russian leadership. The IMF's decision to release new financing to Russia reflected the considered judgment of its 182 member nations, in light of the economic policies that Russia is implementing. Le Monde is known worldwide for its high journalistic standards. Thus, it is extremely disappointing to see it stray so far from that tradition.

Sincerely yours,

John Odling-Smee
Director
European II Department