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. Last Updated: 07/27/2016

Moscow Ponders What Snared Borodin

With Pavel Borodin sitting in a New York jail, the question being asked in Moscow is was the former Kremlin property chief foolhardy or was he fooled.

Borodin was arrested on a Swiss warrant when he arrived Wednesday at John F. Kennedy International Airport planning to travel to Washington to attend George W. Bush's inauguration.

Following a hearing Thursday in Brooklyn federal court, Borodin was ordered held until at least Thursday. At that time, Judge Victor Pohorelsky agreed to consider a Russian request to put Borodin under house arrest at the Russian Consulate until the court rules on whether he should be extradited to Switzerland, a process that could take several weeks.

The facts suggest that Borodin was careless for traveling abroad while the Swiss had an international warrant out for his arrest on charges of money laundering and that U.S. authorities acted no differently than they would in any other case when a wanted man tries to go through passport control.

But the theories being floated suggest he may have been fooled, either by the U.S. government or by his own.

Nezavisimaya Gazeta and others speculated that Borodin's arrest could be a U.S. attempt to put pressure on Russia over the case of Media-MOST head Vladimir Gusinsky or to retaliate for the espionage conviction of U.S. businessman Edmond Pope.

A lawyer for Borodin, Alexander Fishkin, also suggested that Borodin might have been set up, but he did not speculate by whom. "The arrest warrant is issued on Jan. 10, he receives an invitation to the inauguration on Jan. 13 and a complaint is filed in New York for his arrest on Jan. 17," he said. "It could be a coincidence, yes, but it looks too strange to be a coincidence."

Officials in Washington said the United States was tipped off by someone in Russia that Borodin was on a plane to New York. While he was en route, the officials said, the Justice Department and State Department determined there was a valid warrant for his arrest, under the extradition treaty with Switzerland, and that he was not protected by diplomatic immunity. By the time he landed, everything was cleared for his arrest, they said.

While the Russian Foreign Ministry responded immediately to the arrest, demanding Borodin's unconditional release, President Vladimir Putin has remained silent.

Borodin's detention could serve as an embarrassment to Putin, who named him to his job as secretary of the body that governs the Russia-Belarus Union. But it also could serve as a way for Putin to end a longstanding corruption scandal that has focused on whether two Swiss contractors, Mabetex and Mercata, paid huge bribes to high-ranking officials, including Borodin and others in former President Boris Yeltsin's inner circle.

The web site speculated that Putin himself may have "given up" Borodin in order to further reduce the influence of the Family in his Kremlin.

Putin has a difficult dilemma: defend Borodin and draw accusations of covering up corruption, or stand by and face political criticism for allowing Russia to be humiliated.

Borodin arrived in New York after receiving an invitation to an inaugural "candlelight dinner" from Vincent Zenga, a lawyer and telecommunications executive from West Palm Beach, Florida, who has contributed sizable sums to the Republican National Committee and to Bush's 1998 campaign for governor.

Zenga, who was in Washington for the inaugural festivities, said in an interview that the invitation had been sent to Borodin "inadvertently."

Last year, Zenga and his wife each contributed $20,000 to the Republican committee, and they and other family members made individual contributions to the Bush presidential campaign, according to federal filings. In 1998, he and his wife gave a total of $10,000 to the Bush campaign for governor, according to Texans for Public Justice, which was relying on records from the Texas Ethics Commission.

"This was a pretty big pop, especially for an out-of-state contribution," said Andrew Wheat, research director at Texans for Public Justice.

Zenga also contributed $100,000 to the inaugural committee, but after Borodin's arrest, Republican Party officials returned the donation and told Zenga not to attend the inauguration.

Borodin, appearing grave in a blue suit and a gray necktie, said little during his brief appearance in U.S. District Court.

"Yes, I understand that well," he said through an interpreter after the judge explained that he was being detained on an extradition request from the Swiss authorities.

Moscow's ambassador to the United States, Yury Ushakov, said he spoke to Borodin by telephone and he has agreed to answer Swiss investigators' questions if he is released from detention, RIA Novosti reported Saturday.

"Pavel Borodin is staying totally calm and his mood is more or less alright. He denies all charges against him and says he is ready to clear up and answer any questions but only as a free man," Ushakov was quoted as saying.

The Swiss prosecutors say Borodin, 54, received tens of millions of dollars in payments in return for awarding contracts to two Swiss companies to undertake lavish renovations at the Kremlin and other government properties.

Prosecutors in Moscow last month dropped their investigation into the same charges, but the Swiss issued a new warrant for Borodin's arrest last week, according to a complaint filed in the Brooklyn court.

The invitation from Zenga said that Borodin had been provided with a room at the Westin Fairfax in Fairfax, Virginia, from Wednesday through Sunday, and that he would have the use of a car as well.

But Zenga said the invitation was sent by someone in the Moscow office of one of his companies, Star Capital.

Zenga, 52, said he had never met Borodin and that his signature on the invitation had been penned electronically.

"Neither I nor anyone in our company was aware of his legal problems," Zenga said. "We're trying to get to the bottom of this."

But lawyers for Borodin in New York said the Russians considered Zenga's offer a government-to-government invitation, thereby placing Borodin on official business and affording him diplomatic immunity from prosecution.

The lawyers said Borodin had been traveling with a standard Russian passport on a multiple business visa, instead of his diplomatic passport, only because the American Embassy in Moscow had not processed his request for a diplomatic visa in time.

Administration officials denied that the invitation from Zenga amounted to official government business and said Borodin did not qualify for diplomatic immunity, regardless of the passport he was carrying. They said he did not apply for the diplomatic visa until after closing hours on Tuesday, the night before his departure.

On Wednesday, the Foreign Ministry called the embassy, according to the officials, and said the visa was no longer needed, because Borodin had left for New York.

In New York, Borodin's lawyer Fishkin said Borodin did not know the Swiss had issued an arrest warrant last week.

"All he knew was that the Russian investigation was closed, and all of a sudden he is arrested," Fishkin said.

The Prosecutor General's Office in Moscow closed its files on the investigation on Dec. 8 "for lack of evidence," Ruslan Tamayev, the deputy chief of the major crime branch, said at the time.

"The matter was carefully checked because of the possible involvement of state officials," Tamayev said. "Well, I can tell you right here and now that the investigation didn't uncover anything of the kind." Shortly afterward, the Swiss requested the return of documents lent to the Russians during the investigation, saying they needed the papers to continue their own inquiry.

According to a complaint filed Wednesday in the federal court in Brooklyn, the Swiss said Borodin concealed kickbacks paid to him by Mercata and Mabetex by creating two fictitious companies. (MT, NYT, AP, Reuters)