Russian minister detained over alleged $2 million bribe

By NATALIYA VASILYEVA

MOSCOW (AP) — A long-serving Russian minister has been detained over an alleged $2 million bribe in an investigation of the most senior government official to face charges in years.

Economic Development Alexei Ulyukayev was detained late Monday after he allegedly received a $2 million bribe in a sting set by the FSB, the KGB's main successor agency, the Investigative Committee said in a statement Tuesday. The investigators said Ulyukayev took the bribe for giving the green light to state-controlled oil giant Rosneft to take part in bidding for another oil company. He is the highest-ranking Russian official to have been arrested since the failed 1991 coup.

Ulyukayev has been formally charged with bribery for taking a bribe from Rosneft and threatening "to use his powers to put obstacles to the company's activities." As of Tuesday afternoon, Ulyukayev was still being interrogated.

Ulyukayev, who held the post since 2013 and worked in the government since 2000, is a known liberal figure who has spoken against an increasing government presence in the Russian economy. He has opposed Rosneft's bidding for Bashneft, saying it was wrong for a state-owned company to take part in the privatization drive.

President Vladimir Putin had defended the deal, saying that because Rosneft has minority foreign investors, the sale wasn't simply a transfer of assets from one part of the state to another.

The lucrative Bashneft was transferred to government ownership in 2014 after its owner Vladimir Yevtushenkov was charged with money laundering and accused of acquiring the company illegally. The charges were soon dropped. Yevtushenkov's arrest was then widely seen as Rosneft's move to take control of Bashneft which was posting an industry-leading growth in oil production.

The government put 50.1 percent of Bashneft on the market earlier this year but the tender was postponed in August over the opposition of the government's liberal ministers, including Ulyukayev, to Rosneft's potential bidding. Rosneft won the tender with a $5 billion bid when the bidding was held last month.

The 60-year-old minister is expected to face a court hearing later Tuesday where he could be formally arrested and charged.

Russian state-owned television early Tuesday ran Ulyukayev's detention as the top story headlined "Fight on corruption," featuring comment from lawmakers who lauded the investigation as a major breakthrough in the long-anticipated clampdown on official corruption.

Unlike in other publicized corruption investigations, state television didn't show footage of Ulyukayev allegedly caught red-handed receiving a bribe or handcuffed and led into custody.

Putin spokesman Dmitry Peskov told the RIA Novosti news agency that the president had been informed of the FSB operation in its planning stage. Peskov wouldn't say if the bribery case could affect Rosneft's deal.

Rosneft spokesman Mikhail Leontyev said in televised comments that he doesn't expect the investigation to affect the deal.

"There cannot be any threat of the cancellation of the deal," Leontyev said on Rossiya 24 on Tuesday. "No one including the Investigative Committee has expressed any questions about the legality of the deal."

Banking and finance professionals were aghast that Ulyukayev, who was never perceived as a corrupt official, has been made the face of the Kremlin's campaign to fight corruption.

"This is a big tragedy," Bella Zlatkis, deputy chairwoman of Russia's biggest lender Sberbank, told Russian news agencies. "I feel really sorry about what happened and even the very fact that such an investigation is taking place."

Alexander Shokhin, head of a major business lobbying group, said that he was convinced Ulyukayev was innocent and said he may have been framed.

Shokhin, chairman of the Russian Union of Entrepreneurs and Industrialists, told the Business FM radio station that it was highly unlikely for someone as experienced as Ulyukayev to try to extort bribes from Rosneft, which is chaired by Putin's close ally Igor Sechin.

"You have to be mad to threaten Rosneft and extort $2 million from Igor Ivanovich Sechin who is one of the most influential people in this country a month after the deal got both the legal and the political approval," Shokhin said.

Ulyukayev's detention coincided with the 25th anniversary of the first session of the reformist governor of Yegor Gaidar, who ushered in unprecedented economic reforms. Top Russian economists and officials including Ulyukayev and Shokhin, who hail from Gaidar's liberal inner circle, were expected to celebrate the anniversary later Tuesday.

Copyright 2014 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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