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. Last Updated: 07/27/2016

Prosecutors Investigating Kasyanov

Itar-TassA view of the gate to former Prime Minister Mikhail Kasyanov's cottage at the Troitse-Lykovo gated community.
The Prosecutor General's Office said Monday that it was investigating whether Mikhail Kasyanov broke the law when he obtained a government-owned cottage shortly before being fired as prime minister in early 2004.

Kasyanov denied any wrongdoing.

Political analysts said the case appeared to be a Kremlin-orchestrated attempt to derail Kasyanov's possible presidential ambitions by tainting him with allegations of corruption.

Prosecutors said they opened a criminal investigation into possible charges of fraud and abuse of office in response to a complaint from Alexander Khinshtein, a State Duma deputy and muckraking reporter who has written expos?s based on information from his vast connections inside the law enforcement and intelligence communities.

"The case was opened on July 1 and is based on an inquiry by Khinshtein. A check into whether Kasyanov purchased the property illegally is under way," a Prosecutor General's Office spokeswoman, who declined to give her name, said by telephone.

Khinshtein wrote last Monday in Moskovsky Komsomolets that Kasyanov, knowing he was on his way out as prime minister, used three fly-by-night companies and a rigged auction to obtain a government-owned cottage at a knockdown price in the elite Troitse-Lykovo gated community in western Moscow.

He also suggested that Kasyanov might have helped "a very well-known oligarch" secure a cottage there.

In an interview with Komsomolskaya Pravda three days later, Khinshtein identified the oligarch as Alfa Group head Mikhail Fridman.

Nobel Prize-winning author Alexander Solzhenitsyn also lives in the gated community.

Kasyanov, who is on vacation, said through his spokeswoman that the claims were groundless.

"In all of my years in government service, I never founded any commercial organization and never owned any shares or stakes in any company," he said.

"As for commercial activities after leaving government service, they have been and are being conducted in strict accordance with the law," he said.

Kasyanov also reiterated his recent criticism of the Kremlin, saying he believed Russia was on the wrong political course and that the country's future was in danger.

His spokeswoman, Tatyana Razbash, said Kasyanov would return to Moscow on July 25, and declined to give his whereabouts, saying only that he was out of the country.

Alfa Group officials could not be reached for comment late Monday, and a spokeswoman for Alfa Group subsidiary Alfa Bank refused to comment about the case to Gazeta.ru.

President Vladimir Putin fired Kasyanov in February 2004 in what was widely seen as part of an attempt to wrestle power away from some of the country's wealthiest businessmen. Kasyanov, a liberal reformer, had a reputation of being the oligarchs' point man in government, and he had denounced the politically tinged case against Yukos billionaire Mikhail Khodorkovsky, who was arrested in October 2003. The criminal investigation into Khodorkovsky, incidentally, also began with a complaint from a Duma deputy.

Kasyanov signaled in February this year that he might run for president in 2008, when Putin's second term ends.

Political analysts expressed doubt that the investigation would end up in court and said it appeared to be a case of selective prosecution.

"The real goal ... is to prove that Kasyanov was involved in corruption and by doing so discredit him in the country and, more importantly, in the eyes of public opinion in the West," said Sergei Markov, a Kremlin-connected political analyst.

"The case is unlikely to reach court, but the investigation, which could do massive damage to his political career, might drag on for months or years," Markov said.

He said the claims might be true but that "similar charges could be pressed against dozens of other current and former senior officials -- as well as against representatives of big businesses -- but they aren't."

A conviction on charges of fraud and abuse of office could carry up to five years in prison.

Nikolai Petrov, a political analyst with Carnegie Moscow Center, said the investigation showed the Kremlin was getting serious about the 2008 election.

"The move against Kasyanov indicates that Kremlin discussions and arguments about the possible scenarios for 2008 have reached a critical point and entered the action phase," Petrov said.

He said, however, that the Kremlin was probably just baring its teeth. "As a former prime minister, Kasyanov has enough information and resources to strike back. The question is whether he would want to," he said.

Furthermore, Petrov said, the Kremlin has a limited hand to play with because other than the new investigation, the only other claims of possible wrongdoing stem from Kasyanov's days in the Finance Ministry in the 1990s.

"Accusing him of corruption now would mean that the Kremlin would have to share responsibility for his sins and embarrass itself by admitting that it hired a man with such a reputation as prime minister in 2000 and then kept him in the post for four years," Petrov said.

Other than Putin, Kasyanov is the best known politician in the West due to his years as prime minister and a stint before that as Russia's chief debt negotiator, said Alexei Makarkin, a political analyst with the Center for Political Technologies.

"This criminal case spells out the negative sides of Kasyanov's image, including his alleged involvement in corruption and close links to the oligarchs," Makarkin said.

He said Kasyanov was better placed than any other liberal politician to become a strong opposition presidential candidate.

"Kasyanov left a good impression because he left his post quietly, and his Cabinet, which tended to err on the side of caution, was more popular than the current one led by Mikhail Fradkov," he said.

Khinshtein, a United Russia deputy who was elected from the Nizhegorodsk region in 2003, denied Monday that his complaint against Kasyanov was politically motivated.

"This is in no way a political attack," Khinshtein told the Nizhny Novgorod Telegraf news agency. "There are concrete crimes that must be punished regardless of who committed them. And the opposition's affection for thieves is a problem within the opposition."

Signs that Kasyanov might be targeted surfaced in recent months when the Federal Security Service opened investigations into two of his associates: Sergei Kolotukhin, the former head of the Finance Ministry's foreign debt department; and Denis Mikhailov, the deputy head of the Finance Ministry's department for international financial relations, state debt and state financial assets.

Investigators are looking into whether Kolotukhin abused his office in connection with Russia's debt repayments to the Czech Republic and whether Mikhailov accepted a Mercedes car in exchange for passing over information about Vietnam's Soviet-era debt.