Russia’s Economy Minister Arrested for Allegedly Taking $2 Million Bribe

Raeesa Ashique - 2B Electrical
Posted on: November 22, 2016

Russian economy minister Alexei Ulyukayev was arrested on Tuesday, November 15th as part of a sting operation, for allegations of receiving a $2 million bribe to approve the takeover of oil company Bashneft by oil giant Rosneft. After appearing in court that afternoon, Ulyukayev was dismissed for “breach of trust”, the Kremlin said, and placed under house arrest until January 15 while the investigation continues. His deputy, Yevgeny Yelin, was appointing as acting economy minister for the time being.

Ulyukayev has denied the charges, but says “I am determined to cooperate as much as possible with the investigation, it is in my objective interests because I want to save my reputation and my good name.” He faces 8-15 years in jail, if convicted.

Ulyukayev had been under investigation by the Federal Security Service (FSB) for over a year, including having his phone tapped and communication monitored. President Putin’s spokesperson, Dmitry Peskov, told state news agencies that Putin had been “informed at the moment the operation began.” He also said that, “This is a very serious accusation that requires very serious proof. In any case only a court can decide.”

The 60-year-old economic liberal served in the finance ministry in the 1990s and in Russia’s central bank since 2004, since becoming economy minister in 2013. Ulyukayev has spoken out against increasing government involvement in the economy in the past. He is the highest ranking government official to be arrested since the failed coup in 1991, in what was then the Soviet Union.

There is much speculation regarding the political significance of this situation. Tatyana Stanovaya, a political analyst at the Institute of Modern Russia, has said, “The choice of Ulyukayev as a victim [of the investigation] was dictated by the fact that he was the weakest link and stood against the privatization of Bashneft by Rosneft.”

It may also be evidence of hidden tensions within the government. Other high-ranked officials are calling his arrest “absurd” and a “strange accusation”.

Bashneft is a mid-sized oil company which was seized by the state after owner Yevtushenkov was put under house arrest in 2014 for money-laundering. Since then, Rosneft owner Igor Sechin has been interested in taking over over Bashneft. Earlier this year, the government put just over half of the company on the market, and Rosneft won the tender with a $5 billion bid. This was seen as a victory for Sechin, who is a longtime friend of Putin.

Ulyukayev had spoken out against the deal in August, as he opposes the privatization of state companies. However, in early September he changed his mind.

The Investigative Committee said that “the legality of the sale of Bashneft to Rosneft is not being disputed by anyone and is not a subject of the investigation”, and there has been no wrongdoing on the part of Rosneft. A Rosneft spokesperson said that this case will not affect their work.