Sunday, April 20, 2014


Caucasus Report

Fraud Case Targets Daghestani Deputy Premier

Daghestan Deputy Prime Minister Magomedgusen Nasrutdinov in Russian custody on January 21, two days after his detention in Moscow.
Daghestan Deputy Prime Minister Magomedgusen Nasrutdinov in Russian custody on January 21, two days after his detention in Moscow.
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Republic of Daghestan Deputy Prime Minister Magomedgusen Nasrutdinov was detained on arrival in Moscow from Makhachkala late on January 19 and remanded in custody two days later in connection with the illegal privatization of gas distribution networks in the early 2000s. He has not, however, been formally charged.

Expert opinions differ as to whether Nasrutdinov has fallen victim to a struggle with Russian gas giant Gazprom over Daghestan’s own natural-gas supplies, or whether he is the most recent target of Republic of Daghestan head Ramazan Abdulatipov’s high-profile campaign to stamp out corruption.

Nasrutdinov, 53, is a member of one of Daghestan’s five most influential Kumyk families. (The Kumyks are the third-largest of the republic’s 14 titular ethnic groups.) His father, Nasrutdin, headed the republic’s gas sector in the late Soviet era. Magomedgusen Nasrutdinov too made his career in the gas sector. In 1997-99, he served as director of the Daghestan subsidiary of Mezhregiongaz, then for three years as general director of Dagestanregiongaz. In March 2010, he was named minister for industry, energy, and communications, and in February 2013 made acting deputy premier.

Suspicions of Nasrutdinov’s involvement in the illegal machinations first surfaced in 2009, when he was accused of profiting personally from the sale in 2005-06 at knockdown prices of office and factory buildings in the towns of Derbent, Izberbash, Kaspiisk, and Dagestanskie Ogni. But Nasrutdinov countered by accusing then-Republic of Daghestan President Mukhu Aliyev of seeking to fire him in order to give his job to the brother of his most senior bodyguard, and Daghestan’s Supreme Court subsequently acquitted him.

Three years later, however, in August 2012, new charges were brought against Nasrutdinov at the instigation of the Russian Interior Ministry’s Main Directorate for Economic Security and Countering Corruption (GUEBiPK). He was accused first of abuse of his official position and then of large-scale fraud -- specifically of having illegally engineered the purchase by Daggas, whose board he chaired, of gas-distribution networks worth 200 million rubles ($5.9 million at the current exchange rate) for just 58 million rubles. But Nasrutdinov again managed to persuade his accusers of his innocence. He explained that the 2002 sale of the distribution networks was necessitated under a Russian government decree under which no legal entity could simultaneously transport and sell gas.

Nasrutdinov attributed the “attempt to discredit him” to his efforts to impose order on the gas-distribution system and curtail the republic’s astronomical debts for gas supplies. He said those debts resulted not from nonpayment by law-abiding consumers but from widespread theft to which local gas distributors turned a blind eye. A Makhachkala district court duly ruled that the criminal case opened against Nasrutdinov was illegal, and both charges were dropped.

Nasrutdinov’s arrest this week is reportedly connected with the charge of having illegally privatized gas-distribution networks: It was GUEBiPK officials who detained him at Moscow’s Vnukovo Airport. He is said to have offered to sell those networks back to Gazprom for 5 billion rubles.

Some observers, including Milrad Fatullayev, editor of the weekly “Nastoyashchee vremya,” see Nasrutdinov’s arrest as part of Republic of Daghestan head Abdulatipov’s systematic crackdown on corruption. The most prominent casualty of that campaign to date has been Makhachkala Mayor Said Amirov. But Fatullayev doubts any link between Amirov and Nasrutdinov.

Others, however, point out that it was Abdulatipov who promoted Nasrutdinov to the post of deputy prime minister. Andrey Melamedov, the economic observer of the weekly “Novoye delo,” believes Nasrutdinov’s arrest is linked to a battle between Gazprom and the Daghestani authorities for control of the republic’s gas. He explained to the website Caucasus Knot that Daghestan sells the gas it extracts to Gazprom for two rubles per cubic meter then buys back gas from Gazprom for five rubles. Abdulatipov, according to Melamedov, wants Daghestan to supply the gas it extracts directly to domestic consumers, which would deprive Gazprom of a handsome profit.

-- Liz Fuller
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by: Anonymous
January 27, 2014 06:34
its an old revenge from "communist era" , not a national cause.

About This Blog

This blog presents analyst Liz Fuller's personal take on events in the region, following on from her work in the "RFE/RL Caucasus Report." It also aims, to borrow a metaphor from Tom de Waal, to act as a smoke detector, focusing attention on potential conflict situations and crises throughout the region. The views are the author's own and do not represent those of RFE/RL.