Jan. 15 (Bloomberg) -- Russia charged its former top representative at the European Bank for Reconstruction and Development with seeking a bribe of more than $1.4 million.
Elena Kotova, who is also sought by U.K. authorities, demanded the payment in return for facilitating a $95 million loan by the London-based international lender to a Canadian oil and gas company, the Interior Ministry in Moscow said in a statement on its website today. The decision to charge Kotova, who faces as many as seven years in prison if convicted, is “totally unfounded,” her lawyer Sergei Mirzoev said by phone.
The former EBRD official, 58, was charged along with a top manager of a major Russian bank who acted as a go-between in the attempted bribe-seeking, the ministry said.
Russia in February 2011 opened a criminal case against Kotova, who resigned as Russia’s representative at the bank in December 2010. She is wanted for allegedly conducting a money-laundering operation in Britain and the U.S. over several years, according to a person familiar with the U.K. probe who declined to be identified because the investigation is underway.
The City of London Police said in August that it was working with the Crown Prosecution Service, which is responsible for filing charges. Russia said at the time it would send detectives to the U.K. to interview current and ex-managers at the EBRD.
“We note the decision by the Russian authorities,” Jonathan Charles, the EBRD’s director of communications, said by e-mail today. “It follows their investigation with which we have been cooperating.”
The EBRD, set up by Western 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 in January 2011 at the request of both the U.K. and Russian governments.
Russian authorities had no choice but to charge Kotova even as the case damaged the country’s reputation because it is conducting a major anti-corruption campaign, said Alexei Mukhin of the Center for Political Information in Moscow.
Russia protested in 2007 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.
Russian President Vladimir Putin in November sacked Defense Minister Anatoly Serdyukov over an alleged case of fraud of $132 million involving his subordinates. Serdyukov has been questioned twice as a witness.
“The Russian leadership doesn’t want to be covering up corrupt officials,” Mukhin said by phone.
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