Russia Hands Ex-EBRD Director Suspended Prison Sentence

A Russian court handed the country’s former top representative at the European Bank for Reconstruction and Development a suspended sentence after finding her guilty of seeking a bribe of more than $1.4 million.

Elena Kotova, who’s also sought by U.K. authorities and denied any wrongdoing, was given a five-year suspended sentence, a judge at Moscow’s Simonovsky district court ruled today. A former Russian banker, Igor Lebedev, was also found guilty of acting as a go-between for Kotova in the attempted bribe-seeking and was given a four-year suspended term.

Kotova had demanded the payment in return for facilitating a $95 million loan by the London-based international lender to a Canadian oil and gas company, according to Russian investigators.

The case highlighted friction between the U.K. and Russia, with U.K. officials refusing entry to Russian detectives for more than a year. Relations between the countries reached a post-Cold War low after the 2006 assassination of dissident ex-KGB agent Alexander Litvinenko in London and soured again this year over the conflict in Ukraine.

Russia, which doesn’t extradite its citizens, opened a criminal case against Kotova in February 2011. She resigned as Russia’s representative at the bank in December 2010.

The U.K. investigated the former EBRD official, 59, for allegedly conducting a money-laundering operation in both Britain and the U.S. for several years. This left Russian authorities with no choice but to charge Kotova, according to Alexei Mukhin of the Center for Political Information in Moscow.

Russian Influence

The EBRD, set up by European governments to help former communist countries make the transition to capitalism, started an internal investigation into current and former Russian EBRD staff in July 2010.

Kotova, a former World Bank and International Monetary Fund official and senior manager at Russian state banks VTB Group and Vnesheconombank, says the EBRD targeted her to reduce Russian influence at the bank. A month after her resignation, she and three other Russians at the bank had their diplomatic immunity revoked at the request of both the U.K. and Russian governments.

In 2007, Russia protested after a U.S. court convicted a former Russian diplomat to the United Nations on charges of money-laundering, accusing the Bush administration of using the investigation to pressure it. The ex-envoy, Vladimir Kuznetsov, who was accused of laundering funds obtained by another Russian UN diplomat, was allowed to return to Russia in 2008 to serve the remainder of his four-year sentence.

To contact the reporter on this story: Henry Meyer in Moscow at hmeyer4@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net Andrew Langley, Alan Crawford

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