Russian space chiefs shaken by graft probe

Nov 09, 2012 by Dmitry Zaks

Russia's cash-strapped space industry appeared headed for a new shakedown on Friday after a top police official warned about a growing embezzlement probe against its management.

The interior ministry said the Russian Space Systems construction bureau had misspent 6.5 billion rubles (about $200 million) while developing its much delayed GLONASS satellite navigation system for consumers and the military.

"We have established that around 6.5 billion has been stolen," former GLONASS investigation chief and current Moscow metro security overseer Igor Bozhkov told reporters.

"We are talking about Russian Space Systems management," which was contracted by Roscosmos to build the GLONASS constellation—a pride of Russian President Vladimir Putin that now works in top Western smartphones.

Bozhkov said Roscosmos had commissioned its work to the agency with explicit instructions about how to syphon off some of the money for the benefit of top space executives.

He added that the original charges had been filed two years earlier under the assumption that much smaller sums had been involved.

Russian Space Systems dismissed the claims as yet another attack amid an ongoing fight for control of financial resources by top space officials.

"Soon, your basic beat cop will be making statements about Russian Space Systems and GLONASS," said company spokesman Alexander Zabukhin in reference to the accusing interior ministry official's current rank.

"And the lower the status of the person issuing the statement, the higher the sum involved. Now they are mentioning 6.5 billion," he remarked.

But his comments were immediately denounced by a senior aide to Putin who spoke to Russian news agencies without giving his name.

"As the fight against corruption continues, one should not question the professionalism, competence and honesty of law enforcement officials," the Putin aide was quoted as saying.

Speculation had swirled this week that the probe may result in the sacking of Roscosmos space agency chief Vladimir Popovkin—a controversial figure who was himself appointed to the post only in April of last year.

Popovkin and his predecessors have had repeated run-ins with Russian Space Systems which many in the media attribute to a fight for control of more than 400 billion rubles (about $12.7 billion) assigned to GLONASS development and deployment.

But some analysts said the probe may spread from Russian Space Systems to Popovkin's Roscosmos as Putin seeks to bolster his image as a fighter against corruption and graft.

"Russian Space Systems was a subcontractor of Roscosmos," police representative Bozhkov stressed.

Industry insiders blame graft and a continuing brain drain caused by meagre salaries for a recent series of launch and production problems that have left Russia's once-proud space programme on its knees.

The agency has seen a rapid succession of bad satellite launches—one of which delayed the GLONASS systems' deployment by nearly a year—and problems affecting rockets that take cargo to the International Space Station.

New space chief Popovkin gave the full go-ahead to the cautiously advancing GLONASS investigation immediately upon taking office.

He then turned into the star of a short-lived but sensational media story about an alleged illicit affair that he said was falsely spread by his Russian Space Systems rivals.

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