A longtime former finance minister who is close to President Vladimir Putin has called the arrest of a prominent American investment-fund manager an "emergency" for the Russian economy, suggesting it could further damage the country's image and harm the investment climate.
With his comment in a tweet on February 18, Aleksei Kudrin became the latest prominent figure in the Russian economic establishment to criticize the state's treatment of Michael Calvey, whom a Moscow court two days earlier ordered jailed in pretrial detention for two months while prosecutors pursue their case against him on suspicion of large-scale fraud.
Calvey, a U.S. citizen who founded the Baring Vostok private equity fund in 1994 and is one of the most prominent foreign investors in Russia, denies wrongdoing and says that the charges do not warrant criminal prosecution. Senior Russian financial figures including Sberbank CEO German Gref and business ombudsman Boris Titov have spoken out in his favor or said they could vouch for his character.
Kudrin, who was finance minister from 2000 to 2011 and now heads a financial oversight agency called the Audit Chamber, wrote that the court ruling ordering Calvey to be held in pretrial detention showed that an order from Putin that people accused of economic crimes should not be jailed was "clearly" not being implemented.
"I consider this particular situation to be an emergency for the economy," Kudrin wrote on Twitter. He did not elaborate, but his tweet appeared to reflect concern that the treatment of Calvey could damage the prospects for foreign investment in Russia, which have already been dimmed by longtime worries about corruption and the rule of law as well as geopolitical actions that have prompted the United States and other Western countries to impose sanctions on Moscow.
Kudrin, a highly respected economist, is seen as more liberal than many of the former KGB and security-services officers in circles close to Putin, who has suggested in the past that he listens closely to the former finance minister's advice but does not always follow it.
Kudrin also wrote that he had "heard" that he has vouched for Calvey, but that he has not done so "yet" while other "respected people" have. He did not say why he had not
Calvey's arrest on February 14, which was not widely revealed until he appeared in an enclosure in a Moscow courtroom the following day at a custody hearing, sent shockwaves through Western business circles.
The American was detained in Moscow along with three other Baring Vostok employees and two other suspects. All six have since been ordered held in pretrial detention, which is normally served in a jail.
Kudrin's tweet came hours after Titov, the presidential commissioner for entrepreneurs' rights, said that the pretrial detention order was "obviously illegal" as the case against him stems from a corporate dispute.
The American Chamber of Commerce (AmCham) in Russia said on February 19 that it was "deeply concerned" by Calvey’s arrest, calling it a "business conflict."
"Launching a criminal case in order to resolve a commercial dispute does great damage to Russia's investment climate," AmCham said in a statement, adding that commercial disputes should be "a civil matter without recourse to arrest and detention."
It also described Calvey and his partners as "some of the most respected promoters of investing in Russia, supporting entrepreneurs and building businesses that created sustainable value."
Bill Browder, a British-American financier who has become a campaigner against Russian human rights abuses, spoke about Calvey's case in an interview with RFE/RL in Brussels on February 19.
"The main similarity is that I was the largest foreign investor in Russia in 2005, when I was expelled, and he is the largest foreign investor in Russia in 2019, when he was arrested," Browder said, adding: "The main difference is that I was a critic of the regime and he was complimentary of the regime."
Browder also said that Calvey’s arrest was "not an isolated incident" or a "low-level decision."
"I don't think that the people who were behind this would have been allowed to arrest him if Putin hadn't given the green light," he said.
Baring Vostok is one of the largest private-equity firms in the former Soviet Union, according to its website. It manages more than $3.7 billion in assets, is particularly active in the technology sector, and owns a stake in the Yandex search engine.
Before founding Baring Vostok, Calvey worked for the European Bank for Reconstruction and Development and the investment bank Salomon Brothers. He is a member of the board of directors of the Atlantic Council think tank in Washington.
Amid severely strained ties between Moscow and Washington, Calvey is the second U.S. citizen to be arrested in a high-profile case in Russia in as many months.
Paul Whelan, an ex-Marine who says he is innocent and was in Moscow for a friend's wedding, was detained in late December on an espionage charge and is in pretrial detention.