Ah, the glory that was the Soviet Communist Party: chauffeur-driven sedans, opulent dachas, private medical clinics and special schools. These perks evaporated for the party elite within days of the abortive August coup, when President Mikhail Gorbachev quit his post as General Secretary and authorized local elected councils to take control of the organization's extensive property holdings. Today, the Communist Party lies stripped of its buildings, its publications and its domestic bank accounts, which were frozen in August.
But the Communists' complex financial affairs could take years to untangle. The main mystery is where the party stashed its fortune, estimated to be as much as $176 billion. Two official inquiries are under way -- one by the Russian parliament, which is probing party involvement in the Aug. 19 putsch, and another by Russia's prosecutor general, Valentin Stepankov. So far, little light has been shed on the whereabouts of the vanished loot. But the source appears indisputable: the Soviet treasury. "The party did not see any difference between its budget and that of the state," says Nikolai Fedorov, justice minister of the Russian Federation. "Tens of millions of dollars have been siphoned off."
At the time of the coup attempt, the party put its wealth at no more than $3.1 billion. But most Soviets consider that sum laughably low. In recent weeks, one newspaper started its own investigation into the missing riches; a coalition of emerging Soviet businesses launched another. Their probes place the money everywhere from hard-currency accounts in foreign banks to gold bullion in Swiss vaults.
One of the most intriguing accounts came from Pavel Voshchanov, press & secretary to Russian President Boris Yeltsin. In a series in the daily Komsomolskaya Pravda, he quoted extensively from confidential party memorandums revealing that in 1988, eager to acquire foreign currency, the Communists had set up an "invisible party economy" that permitted them to hide money in overseas joint ventures and launder it through a network of domestic and foreign commercial banks. According to another story in the paper, since last December alone, the party has sold 280 billion rubles for $12 billion in U.S. currency, which was then funneled through party-controlled Soviet banks to secret accounts in Western financial institutions. Investigators believe there may be as many as 7,000 such hard-currency accounts around the world, totaling some $100 billion.
According to Voshchanov, the party acted like a criminal cartel, financing what it called "friendly firms" abroad. He claimed to have seen a list of 60 such companies, all created by Western Communists. Last week Justice Minister Fedorov told parliamentary investigators the party had shamelessly used Western credits to shore up debt-ridden friendly companies in Europe instead of buying much needed grain or baby food.