Financier's arrest linked to power battle

RUSSIA:A top Russian finance official accused of embezzling some $30 million (€20 million) could be the latest victim of a clandestine battle for power and wealth that is intensifying as the country prepares for general and presidential elections.

Sergei Storchak and two Moscow businessmen were seized by police last Thursday for allegedly trying to steal $43.4 million from the state budget.

The arrest of a man who led many of Russia's most sensitive and successful debt negotiations of recent years stunned his boss, finance minister Alexei Kudrin, who has been accumulating power as one of the few liberals left alongside President Vladimir Putin.

"I do not fully understand the kind of charges I've heard about," said Mr Kudrin, who was not warned of the impending arrest of his close colleague, "and I understand even less the measures taken against a man who has fought for years for every kopek, every cent, in defending Russia's interests in all debt talks."

Several Moscow analysts said the arrest of Mr Storchak was part of an attack on Mr Kudrin by conservative elements of the political elite, spearheaded by the new prime minister Viktor Zubkov and former security service agents who are now senior Kremlin officials.

They are said to want to reduce Mr Kudrin's political clout before next month's general election and next March's presidential vote, and to weaken his control over a $148 billion stabilisation fund made up of oil revenues, which he oversaw with Mr Storchak.

Mr Zubkov has said he might run in an election to succeed Mr Putin, while Mr Kudrin is a potential rival with enough political and financial power to attract considerable support.

"This is a struggle among the clans," insisted Vladimir Pribylovsky, head of the Panorama think tank.

"The Petersburg 'chekists' have gone after the Petersburg liberals," he said, using a Soviet-era term for members of the secret police.

The political power struggle comes against the backdrop of a feud between Russia's anti-narcotics agency and its main domestic security service, which are allegedly vying for control of lucrative money-laundering and smuggling operations.

The battle for influence and assets is expected to intensify as Mr Putin approaches the end of his presidential term next year.

The former KGB spy will top the list of candidates for the main pro-Kremlin party in the December 2nd general election, stoking suggestions that he may become prime minister.