Bloomberg News

Russia Said to Near Decision to Charge Ex-Defense Minister

January 18, 2013

Russian investigators are said to be near a decision on whether to charge the country’s ex-defense minister amid the biggest anti-graft drive of President Vladimir Putin’s 12 years in power, according to two officials.

Anatoly Serdyukov has been implicated by people questioned in an embezzlement inquiry, said a senior law-enforcement official with knowledge of the matter, who asked not to be identified because the investigation is in process.

Rather than embezzlement, the former minister will probably face a lesser charge, such as exceeding his authority, the person said. The second government official with knowledge of the matter also said Serdyukov will probably face charges, while asking not to be identified because the information is confidential.

Putin in November made Serdyukov the most senior official ousted over corruption of his rule, sacrificing a member of his inner circle. Frustration with graft, the worst among major economies according to Transparency International, helped fuel the biggest protests against the Russian leader since he ascended to the presidency in 1999.

“Opening a case against Serdyukov is almost inevitable as the” anti-corruption campaign,’’ said Gleb Pavlovsky, a former Kremlin adviser who heads the Moscow-based Effective Policy Foundation “He will be the face of the campaign. If Serdyukov is jailed, this will be as important as was Mikhail Khodorkovsky’s arrest in 2003.”

‘New Tensions’

The arrest of the former billionaire Yukos Oil Co. owner, once Russia’s richest man, was a signal that the rules of the game the between Kremlin and oligarchs changed. A jail term for Serdyukov would be a similar signal for the political elite, according to Pavlovsky.

“Serdyukov was one of the closest ministers to Putin, he said. ‘‘This will create new tensions within the elite. Clans will start fighting to get themselves out of the line of fire.’’

Svetlana Petrenko, a spokeswoman for the Investigative Committee, which is responsible for filing charges, declined to comment when contacted by phone. Serdyukov’s lawyer, Genrikh Padva, wasn’t available for comment yesterday because he’s in the hospital, according to his office.

Serdyukov, a witness in the embezzlement case, has refused to cooperate with the inquiry, which may lead to a change in his status, the Investigative Committee said on its website on Jan. 11. Padva said at the time that his client denies any wrongdoing and criticized the committee’s threat to charge him with the crime as ‘‘unacceptable.”

$132 Million

Three of Serdukov’s former subordinates have been charged in connection with an alleged 4 billion-ruble ($132 million) fraud case involving the sale of property by OAO Oboronservis, a company supplying goods and services to the military. At least five more ministry officials face charges over a separate $13 million fraud, according to the Investigative Committee.

The only Cabinet minister to be prosecuted under Putin to date has been Yevgeny Adamov, the former Russian nuclear-energy minister who was sentenced in 2008 to 5 1/2 years after the U.S. accused him of embezzling $9 million of a grant aimed at increasing security at Russian nuclear facilities. His sentence was suspended later that year.

To contact the reporters on this story: Henry Meyer in Moscow at hmeyer4@bloomberg.net; Ilya Arkhipov in Moscow at iarkhipov@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


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