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Putin Fires Economics Minister Charged In Shock $2 Million Bribe Case

  • RFE/RL

Aleksei Ulyukayev is escorted before a hearing at the Basmanny district court in Moscow on November 15.

Aleksei Ulyukayev is escorted before a hearing at the Basmanny district court in Moscow on November 15.

Russian President Vladimir Putin has fired Economic Development Minister Aleksei Ulyukayev, whose arrest on charges of large-scale bribe taking has jolted Russia’s ruling elite.

Kremlin spokesman Dmitry Peskov said on November 15 that Putin dismissed Ulyukayev due to a "loss of trust," Russian news agencies reported.

Ulyukayev’s dismissal comes less than 24 hours after he was detained on charges of taking a $2 million bribe for facilitating state-owned oil giant Rosneft's takeover of another state-held oil company, Bashneft, in October.

His arrest sent shock waves through the country’s ruling elite.

A Moscow court on November 15 ordered Ulyukayev under house arrest.

Ulyukayev’s detention in connection with the case is the highest-level arrest to have occurred during Putin’s 16 years in power and has stunned the political and financial classes. Prime Minister Dmitry Medvedev said it was “beyond my comprehension.”

The charges come amid a high-profile antigraft campaign and recent shake-ups among senior Russian officials that observers have tied to the presidential election due in March 2018, in which Putin is widely expected to seek a new six-year term.

Svetlana Petrenko, a spokeswoman for Russia’s federal Investigative Committee, said Ulyukayev "was caught red-handed as he received a bribe."

The agency, a Russian analogue of the U.S. Federal Bureau of Investigation, said Ulyukayev has been charged with extortion and "grand bribe taking" and that it asked the court to allow him to be held under house arrest.

NEWS ANALYSIS: Ulyukayev Arrest Could End Up Costing Russia Dearly

Moscow's Basmanny District Court on November 15 granted that request, ordering Ulyukayev to remain under house arrest until mid-January.

Ulyukayev's lawyer, Timofei Gridnev, said that Ulyukayev has "not admitted his guilt" and that he thinks his detention is "a provocation against a state official." Russian investigators also said Ulyukayev has denied that he is guilty.

The Investigative Committee said the case was initiated after Rosneft reported extortion of $2 million.

It added that Bashneft's $5 billion sale to Rosneft is indisputable.

President Vladimir Putin (back) ruled that state-controlled Rosneft, headed by Igor Sechin (right), could participate in the Bashneft privatization.

President Vladimir Putin (back) ruled that state-controlled Rosneft, headed by Igor Sechin (right), could participate in the Bashneft privatization.

Rosneft is controlled by Igor Sechin, a Kremlin insider who is regarded as one of the most powerful people in Russia.

Medvedev told pro-Kremlin lawmakers on November 15 that "what has happened" in the Ulyukayev case "is beyond my comprehension" but added that "neither a minister, nor a lawmaker, nor a governor, nor any other state servant has immunity if they are involved in corruption-related crimes," the state-owned TASS news agency reported.

Medvedev issued a statement earlier in the day calling for a "thorough investigation" and said he had discussed Ulyukayev's case with Putin. He also appointed Deputy Economy Minister Yevgeny Yelin as acting economy minister.

The criminal charge Ulyukayev faces is punishable by up to 15 years in prison.

Aleksandr Shokhin, head of the Russian Union of Industrialists and Entrepreneurs, which is often labeled "the oligarchs' union," said he believes Ulyukayev is innocent.

"This could trigger a serious government shake-up," he told Gazeta.ru.

Ulyukayev, 60, has overseen the massive privatization of state companies, capped by regional oil firm Bashneft's sale to state-controlled Rosneft in a controversial deal last month.

The deal was postponed in August after Ulyukayev and other ministers objected to Rosneft’s participation, arguing that a state company cannot participate in a privatization process. Putin himself intervened, ruling that Rosneft could participate because it is partially owned by British Petroleum.

Rosneft was the only bidder for the stake after rival Lukoil dropped out shortly before the deadline.

Interfax quoted an unnamed law-enforcement source as saying the government is not investigating Rosneft. Rosneft spokesman Mikhail Leontyev told TASS that no one is questioning the Bashneft privatization, which was "absolutely aboveboard."

Ulyukayev was appointed economic development minister in 2013 and had been deputy chairman of Russia's central bank for a decade before that. He is seen as a member of the more liberal camp in circles surrounding Putin, who observers say seeks to maintain power and control by balancing various forces in the elite and playing them off one another.

Ulyukayev's detention is the latest in a spate of high-profile official corruption cases in Russia in recent weeks. In June, then-Kirov Oblast Governor Nikita Belykh was arrested and accused of accepting a 400,000 euro bribe. In September, Interior Ministry Colonel Dmitry Zakharchenko was arrested after police found $120 million during a raid on his Moscow apartment.

With reporting by RFE/RL's Russian Service, Reuters, TASS, AFP, Interfax, and Business FM
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