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. Last Updated: 07/27/2016

Prosecutors Say Nabiullina's Venture Firm Misused Funds

The Prosecutor General's Office urged Economic Development Minister Elvira Nabiullina on Monday to stop the misuse of government funds at a venture company that she oversees.

In a rare rebuke of a sitting minister, First Deputy Prosecutor General Alexander Buksman said the Russian Venture Company, which Nabiullina chairs, had improperly spent about $222 million on her watch.

The state company deposited 6 billion rubles ($173 million) in U.S. banks and spent another 1.7 billion rubles to buy shares of companies with foreign capital in 2007 and 2008 instead of using the money to spur investment and innovation in Russia, Buksman said in a statement on the prosecutor's office web site.

"Schemes were created where funds allocated for developing the innovative economy of the Russian Federation were transferred to the United States and onto the accounts of companies created there," the statement said.

The Russian Venture Company was also accused of overpaying its staff. Prosecutors have sent a warning to the company's general director, Alexander Korobov, the statement said.

Nabiullina's office did not respond to Buksman's statement Monday.

Political analysts have suggested that the inquiry into the Russian Venture Company is another manifestation of government infighting between a clan of security and law enforcement officials and a camp of liberal-minded economists, which include Nabiullina.

The Russian Venture Company was created two years ago to finance technology startups.