09:23 GMT +3 hours26 November 2014
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Russian Govt. Backs Probe Into Glonass Fraud

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The Russian government is supporting a transparent investigation of an alleged embezzlement of 6.5 billion rubles ($206 mln) allocated for the development of the Glonass global navigation satellite system, Deputy Prime Minister Vladislav Surkov said on Friday.

MOSCOW, November 9 (RIA Novosti) – The Russian government is supporting a transparent investigation of an alleged embezzlement of 6.5 billion rubles ($206 mln) allocated for the development of the Glonass global navigation satellite system, Deputy Prime Minister Vladislav Surkov said on Friday.

“We are interested in ensuring complete transparency of financing for the implementation of space programs as well as for commercial application of Glonass technologies,” Surkov, who oversees the development and implementation of the Glonass project, told reporters in Moscow.

The Russian Interior Ministry announced earlier on Friday that a criminal case had been opened against several senior officials at the Russian Space Systems company who are suspected of involvement in a number of fraudulent schemes during the development of the Glonass system.

The Interior Ministry said a probe into this “complicated case” started more than two years ago and lead to the discovery of a subcontractor firm that is believed to be the main conduit of embezzled funds. The scheme also involved a number of fly-by-night firms.

The first signs of a looming scandal appeared in July when police raided the offices of Russian Space Systems and “unearthed facts of the unreasonable spending of 565 million rubles ($17 million).”

Meanwhile, Russia's Federal Space Agency, which hired Russian Space Systems to draft technical specifications for Glonass project, has reportedly conducted an internal investigation that confirmed the fraud allegations.

Russian Space Systems repeatedly denied the accusations and on Friday even attempted to ridicule the investigation, but the Kremlin was quick to issue a stern warning saying the company should not question the professionalism, competence, and decency of police officials working on this investigation.”

Glonass is Russia’s answer to the U.S. Global Positioning System, or GPS, and is designed for both military and civilian uses.

A group of 31 Glonass satellites is currently in orbit, with 24 operating to provide global coverage, four in reserve and one undergoing trials.

Russia may spend 346.5 billion rubles (almost $12 bln) on the maintenance and further development of the Glonass network in 2012-2020.