By Anatoly Medetsky A large Primorye energy utility printed $1 million worth of its own money to make up for the lack of real rubles, an inspection discovered recently. The Central Bank and State Tax Inspectorate partially prohibited the substitutes after a check of Lutek, a company combining coal mines and a power plant. The inspectorate announced the decision October 7. The practice undermined the national currency, the ruble, and violated the law on Russian Central Bank, which says that only the bank may issue bills of legal tender, the State Tax Inspectorate said. Local money also laid grounds for tax evasion and other financial frauds. The use of the fake money also shows that there is still not enough cash in the country, even after more rubles were printed following the last year's economic crisis. Non-payments continue to plague the national economy. Lutek used special coupons to pay not only its workers but contractors from 1996 until recently, said its Director Valter Kozlov. Kozlov said he had cut coupon payments to his contractors, but he would continue to pay his workers with his own money. The Central Bank said it complied with its orders. The coupons were printed on low quality paper the size of a business card. They have a face value ranging from one kopeck to 100 rubles, like the real money. Lutek's own printing house issues them and each has a stamp of the company. After the inspection, every coupon is inscribed to a specific worker. Workers voluntarily received up to 10 percent of their salaries in the coupons. Stuffing their wallets with the ersatz money, they can go shopping, buy a meal at a cafe, and use services. Contractors including railways and construction firms took the coupons for their work. In turn, they used them to pay their employees or each other. The situation was made possible because the village of Luchegorsk, where Lutek is located, is a closed conglomeration of related companies consisting of the utility and its contractors. All villagers work for the companies and go to the same Lutek-owned shops and cafes, thus creating a relatively self-sufficient community. "Luchegorsk is like a separate state on the territory of Primorye," said Natalia Nesterenko, an officer with the tax inspectorate. Lutek, which generates two thirds of the region's electricity, has excused its coupons by saying it lacks the necessary cash to survive. He blamed consumers for failing to pay their bills. "You all don't pay for electricity and Dalenergo [the seller of the electricity] doesn't pay us," Kozlov said. Dalenergo owes Lutek 875 million rubles ($34 million), he said. Even with the coupons, his company is only beginning to pay the salaries for March. © copyright 1998 the Vladivostok News. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed in any form. [Back to News page]  [Back to Front page]  [Write to us]