Russian Economic Development Minister Alexei Ulyukayev has been detained after being charged with taking a bribe to endorse a state takeover.
According to the country’s Investigative Committee (SK), Alexei Ulyukayev received a payment of $2 million.
He is the highest-ranking Russian official held since the 1991 coup attempt in what was then the USSR.
The SK said Alexei Ulyukayev had “threatened” to create obstacles for Rosneft’s operations when it took a 50% stake in another state oil company, Bashneft.
According to SK spokeswoman Svetlana Petrenko, “Ulyukayev was caught red-handed”, receiving a $2 million bribe on November 14 for giving a favorable assessment of the Rosneft deal.
Image source kremlin.ru
The apparent sting operation came after months of electronic surveillance, including phone-tapping, officials said.
Alexei Ulyukayev’s arrest was big news on Russia’s state-run TV channels, under the headline “Battle against corruption”.
If found guilty, Alexei Ulyukayev could face a prison sentence of between eight and 15 years.
Alexei Ulyukayev, 60, was appointed economy minister in 2013. An economic liberal in the 1990s, he became deputy chairman of Russia’s central bank in 2004.
It was only in October that Rosneft, an oil giant controlled by the Russian government, bought 50% of Bashneft for 330 billion roubles ($5 billion). Bashneft itself was one of Russia’s largest state oil companies.
Russia is in the middle of an economic slump, largely because of the fall in crude oil prices, and had lined up several state companies for privatization to replenish state coffers.
The sell-off of Bashneft had been shelved in August, reportedly by the Kremlin because of a dispute over who would take it over.
The controversial privatization returned to the agenda early last month, apparently because of the government’s need to raise money.
Alexei Ulyukayev promised last month that the entire sum paid by Rosneft would go to the Russian budget.
Economic liberals had fiercely opposed the idea of a state-owned company acquiring the government’s share in another state oil firm. It was seen as a victory for Rosneft’s chief executive, Igor Sechin, who has long been a close adviser to President Vladimir Putin.
Vladimir Putin said last month that he had been “rather surprised” by the government’s earlier position to delay the deal as Rosneft was “strictly speaking” not a state company as part of it was owned by BP.
Russian President Vladimir Putin has sought to ease fears over his country’s economy, insisting that the dramatic fall in the ruble will stabilize.
Speaking at his end-of-year news conference, which lasted over three hours, Vladimir Putin blamed “outside factors” for the currency hitting an all-time low.
However, he admitted Russia’s central bank could have acted more swiftly.
Russia is on the verge of recession due to falling oil prices and sanctions over its role in the Ukraine crisis.
However, Vladimir Putin denied pursuing an “aggressive” foreign policy and accused the US and EU of conspiring to weaken Russia.
He accepted Russia had failed to diversify its economy for the past two decades and relied too heavily on its oil and gas exports.
But the president insisted the nation’s currency reserves were sufficient to keep the economy stable, saying the central bank should not “burn” its $419 billion reserves.
“I don’t believe you can call it a crisis – you can call it what you like,” he told a packed conference hall.
If the economic problems persisted, Vladimir Putin said, the government would have to “reduce social spending and future growth”.
He added: “Our economy will get out of this crisis. How long? Maybe two years, but after that, growth is inevitable.”
Although the ruble strengthened on Thursday morning, it has taken a battering in recent days.
The currency’s collapse came after a drastic 6.5 percentage point rise in Russian interest rates to 17%.
Earlier this week, there were reports of Russians flocking to the shops to spend their cash before prices shoot back up. Many were said to be buying cars and home appliances.
Vladimir Putin estimated that Western sanctions, put in place after Russia annexed Crimea from Ukraine in March, had accounted for roughly 25-30% of the ruble’s troubles.
On Ukraine, he said he was hopeful the conflict could be solved through peace talks.
Vladimir Putin urged the Ukrainian government and pro-Russian rebels in the east of the country to conduct a quick “all for all” prisoner swap before Christmas.
Ukraine and the West accuse the Russian president of sending troops to fight with the rebels, but the Kremlin denies the allegations.
Vladimir Putin accused the US of hypocrisy, saying that Russia has just two military bases outside its borders while there are American bases “all over the world”.
Meanwhile, the EU approved further sanctions against Russia on December 18. They target investment in Crimea and oil and gas exploration in the Black Sea and come into force on Saturday.
“We are doing this because the EU has said the annexation [of Crimea] is illegal and what we’re doing is part of implementation of non-recognition of this policy by Russia,” EU spokeswoman Maja Kocijancic told reporters.
President Barack Obama is also expected to sign legislation this week authorizing new economic sanctions on Russia.
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