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. Last Updated: 07/27/2016

Storchak Makes His Case In Letter

Pleas for justice or clemency are nothing new from the thousands of people in the country awaiting trial in detention at any point in time, but Deputy Finance Minister Sergei Storchak has couched his appeal in the language of Christian ethics and national interests.

Storchak, under investigation for the attempted embezzlement of $43.4 million of state funds, said in a letter published in the newspaper Gazeta on Wednesday that, in the eight months he has been behind bars, he has not even had the benefit of a proper questioning.

In the letter, he also described the charges against him, which have been broadly seen as a chapter in an ongoing feud between Kremlin clans, as a "calculated move directed against state interests."

Storchak's boss, Deputy Prime Minister and Finance Minister Alexei Kudrin, said Wednesday that he believed in his integrity and imminent return to the ministry.

"Regretfully, even after eight months of being held in custody, I have no idea when they plan to really start working with me, meaning asking questions and taking down my answers," Storchak said in the letter, referring to the Investigative Committee.

"Is this Christian? Is it legal not to listen to an accused party for eight months? Is it fair that they have limited themselves to studying the conclusions of experts closely tied to the probe?" Storchak wrote.

Igor Pastukhov, Storchak's lawyer, refused to comment on the letter Wednesday, as did the Investigative Committee press service.

Storchak, who oversaw foreign debt negotiations in the Finance Ministry, was arrested on November 15 and charged with fraud a week later. According to investigators, Storchak teamed up with Sodexim company head Viktor Zakharov and two bankers from the Interregional Investment Bank in an attempt to embezzle $43.4 million from the federal budget. Investigators said they tried to channel the money to Sodexim under the guise of compensation for losses the company suffered as the result of a decision to write off Algerian debt to Russia. The other three men also remain in custody.

If convicted, Storchak faces a prison sentence of up to 10 years.

In December, the Investigative Committee opened another probe into Storchak's activities, alleging corrupt dealings in debt negotiations with Kuwait. The Prosecutor General's Office, to which the Investigative Committee formally answers, demanded that the investigation be closed a few days later, but the committee complied only last month.

The Storchak case is believed to be a byproduct of a fierce power struggle between the so-called St. Petersburg economists, led by Kudrin, and the siloviki, or individuals with close ties to the security services — the two main groupings associated with the country's two main political figures, President Dmitry Medvedev and Prime Minister Vladimir Putin.

The semiautonomous Investigative Committee, led by Alexander Bastrykin, a former classmate of Putin's, is often seen as one of the weapons wielded by the siloviki in exerting their power.

Storchak wrote that his arrest had already had negative financial ramifications, disrupting debt negotiations with Libya and South Korea, resulting in losses for the federal budget.

"I have every grounds to believe that this action was directed against national interests," he wrote, without identifying anyone as being behind the move.

The Finance Ministry ignored an inquiry Wednesday about possible economic harm caused by Storchak's arrest, while a number of business analysts surveyed said the arrest had no visible impact on financial markets or investor perception of the country.

"While such issues are not of sufficient magnitude to drive investors away in isolation, they do justify a slightly higher risk premium and therefore a hit on valuations," said Chris Weafer, chief strategist at UralSib.

One former Finance Ministry official said on condition of anonymity that Storchak was one of the country's most effective debt negotiators and that his detention had, indeed, disrupted talks with Libya and South Korea.

For his part, Kudrin said in a statement posted on the ministry's web site Wednesday that he and his colleagues in the ministry considered Storchak's case a "matter of principle."

"I never wavered in my belief in [Storchak's] professional or human qualities" Kudrin said, adding that his jailed deputy's office was waiting for him.

"Sergei, we are with you!" Kudrin said.

Kudrin has already called for Storchak's release, providing a personal guarantee that he would not flee the country during the investigation, but his requests have been denied.

In the latest attempt to get Storchak out of detention, his friend, billionaire Alexander Lebedev, sent a letter to State Duma Deputy and former Deputy Prosecutor General Vladimir Kolesnikov, asking him to call on the Investigative Committee to release Storchak.

Lebedev received a response earlier this month, but not from Kolesnikov.

Investigative Committee investigator Anatoly Iskantsev, who was assigned to the Storchak case in April, wrote to Lebedev that none of the circumstances that factored in the decision by Moscow's Basmanny District Court to keep Storchak in detention had changed, so there was no reason to revisit the ruling.

Lebedev wrote in his LiveJournal blog, where he posts letters he exchanges with Storchak, that the fact the reply came from the Investigative Committee perplexed him.

Contacted by phone Wednesday, Lebedev said the motivation for the Storchak case was "purely political."

"Investigators have nothing, and that is why they are dragging their feet on bringing the case to court," Lebedev said.

He said reforms to the judicial system might eventually prevent prosecutors from holding people in pretrial detention for extended periods because they can't make a case against them, but Storchak's only hope would be intervention by Medvedev to either remove Bastrykin from his post or order him to close Storchak's case.

There has been speculation in the Russian media that Medvedev might step in to resolve the conflict by replacing Bastrykin and Prosecutor General Yury Chaika, both Putin appointments.

Staff Writer Miriam Elder contributed to this report.