Russian economy minister sacked, held over '$2mn-bribe' charges

MOSCOW: Russian Economy Minister Alexei Ulyukayev was sacked Tuesday and put under house arrest on suspicion of pocketing a two-million-dollar bribe in a deal involving state-controlled oil giant Rosneft.

Ulyukayev is the highest ranking official detained over suspected corruption since Putin took power in 2000, and his arrest unleashed speculation as to whether the probe was linked to an internal power struggle.

News agencies quoted Kremlin spokesman Dmitry Peskov as saying that President Vladimir Putin had “published a decree relieving Ulyukayev of his functions”, adding that the president had “lost confidence” in the minister.

Before his dismissal was announced, police had ushered Ulyukayev, without handcuffs and wearing a suit and tie, into a Moscow courtroom, according to an AFP correspondent at the scene.

His lawyer Timofei Gridnev said Ulyukayev protested his innocence and denounced the charges as a “provocation”.

“He is going to work with the investigation, because to him it is a matter of honour to restore his good name,” Gridnev told journalists at the court.

Sting operation

Judge Artur Karpov ordered 60-year-old Ulyukayev confined to his residence in the southwest of the capital until January 15 as the investigation continues.

The FSB security service, the KGB’s successor, detained him after a sting operation Monday as he was receiving an alleged bribe, Russia’s Investigative Committee said.

It said he had “illegally demanded” payment to greenlight Rosneft’s move to acquire a majority state in Russian oil company Bashneft. The deal, worth $5.2 billion, was completed last month.

The committee did not indicate who handed the alleged bribe to Ulyukayev, but described him as “threatening (and) using his ministerial powers to create obstacles to the company’s activities in the future”.

At least two people have given testimony to investigators incriminating him, local media reported.

Ulyukayev had headed the ministry of economic development since 2013.  The large-scale bribe-taking charge could see him face a jail term of between eight and 15 years.

‘Internal fight for influence’

Ulyukayev’s detention sent shockwaves through the Russian elite, which had appeared immune to criminal prosecution.

Former MP Gennady Gudkov, a staunch Kremlin critic who once served in the KGB, said the move was the result of a high-level internal power struggle.

“What we are seeing today is not a fight against corruption,” Gudkov wrote in an op-ed published on the website of Ekho Moskvy radio station.

“It is a fierce internal fight for influence, financial flows and positions.”

Putin’s critics insist the Russian leader oversees widespread corruption as his close allies have amassed vast fortunes during his time in power.

Rosneft’s move to acquire the 50.07-percent stake in Bashneft, Russia’s sixth-largest oil producer, came after months of wrangling.

Its boss Igor Sechin, a powerful Putin ally, faced some government opposition. Ulyukayev originally opposed the sale but later endorsed it after Putin said it could help fill state coffers.

Investigators have said that the acquisition itself was not subject to a criminal probe.

A Rosneft spokesman declined comment but said that it acquired the Bashneft stake “in accordance with Russian law on the basis of the best commercial offer made to the operating bank”.

‘Very serious accusation’

As minister of economic development, Ulyukayev was tasked with pulling Russia out of the protracted economic crisis sparked in late 2014 by falling oil prices and Western sanctions over Moscow’s actions in Ukraine.

RIA Novosti agency cited a law enforcement source as saying he had been detained in a “sting operation” after investigators received “serious evidence” from “tapping his conversations and the conversations of his associates”.

Kremlin spokesman Peskov said Putin had been informed of the start of the operation. “This is a very serious accusation that requires very serious proof. In any case only a court can decide,” Peskov told Interfax news agency.

He later told reporters that Russia’s fight against corruption was “systematic and not selective”.

In another recent high-profile corruption case, the acting head of an anti-graft agency at the interior ministry was arrested in September for taking bribes after police found more than $120 million in cash during a raid of his Moscow flat.

Ulyukayev’s detention is “a shock for the whole establishment,” sociologist Olga Kryshtanovskaya, who studies Russian elites, told AFP.

“A person of that level has never been arrested here on suspicion of a criminal offence,” she said.