* Financial police needed to fight illegal capital flight - top investigator
* Anti-corruption battle plagued by turf wars, police graft
By Jason Bush
MOSCOW, Feb 21 Russia needs to create a specialised financial police force to combat illegal capital flight and monitor state spending, Alexander Bastrykin, the country's top investigator, said on Thursday.
Bastrykin, the head of Russia's Investigative Committee, appeared to be responding to concerns raised by the central bank over illegal schemes to siphon tens of billions of dollars out of the country each year.
"A range of measures has been worked out to decriminalise the Russian economy and oppose the illegal export of capital abroad," Bastrykin said at a meeting of Committee officials, linking the creation of a financial police to these measures.
His comments, reported by Russian news agencies, came a day after the head of the central bank, Sergei Ignatyev, said that $49 billion was illegally transferred out of Russia last year.
More than half of that sum was shifted out of the country by "one well-organised group", Ignatyev told the Vedomosti daily in an interview, also published on the central bank's web site, without elaborating.
The claim has highlighted the rampant scale of corruption in Russia under President Vladimir Putin, raising embarrassing questions about law enforcers' effectiveness. Russia has several agencies responsible for investigating financial crimes.
Both the Ministry of the Interior, which controls the police, and the Federal Security Service, the successor to the KGB, have economic security departments tasked with fighting fraud and corruption.
In addition, most ministries and state companies have internal security and oversight divisions that are tasked with monitoring expenditures.
Bastrykin said that this system of internal control was ineffective, referring to recent scandals at the Defence Ministry that have cast a spotlight on high-level government corruption.
Last year, losses from corruption in the armed forces amounted to 7.5 billion roubles ($248 million), the Investigative Committee's top military investigator told RIA news agency on Thursday - two-and-a-half times more than in 2011.
Bastrykin's proposal to create a single financial police force is likely to run into resistance from the existing agencies as they jealously guard their powers.
For example, Bastrykin's Investigative Committee is frequently at loggerheads with the Interior Ministry. The two agencies have recently clashed in public over the investigation into Defence Ministry corruption.
An additional complicating factor may be widespread corruption within the law enforcement agencies themselves.
Russian investigators have frequently been accused of complicity in financial crimes - including ones that they are investigating.
In one of the highest-profile cases, London-based investment fund Hermitage Capital Management accused Interior Ministry and FSB officials of complicity in the theft of its subsidiaries and $230 million in budget funds - a charge Russia denies. ID:nL6N0BI1CX]
Bastrykin told the Rossiyskaya Gazeta newspaper in 2009 that state officials were "in almost all cases" involved in thefts of companies, including police who "frequently" steal corporate documents and accept bribes to open criminal cases.
An opinion poll by the Levada Centre last year showed that 83 percent of Russians regard corruption of the law enforcement agencies as a serious problem, compared with 11 percent who think otherwise.