Finance official says his arrest harms Russia's interests

MOSCOW, July 23 (RIA Novosti) - A senior Russian Finance Ministry official in custody on embezzlement charges said in a letter to a newspaper that his arrest was aimed at damaging Russian interests.

Deputy Finance Minister Sergei Storchak, who oversaw foreign debt talks at the ministry and was a key figure in Russia's talks with the Paris Club, was detained in November 2007 on charges of attempting to embezzle $43 million in state funds.

In a letter to Gazeta, Storchak said: "One thing is clear, that this [arrest] was a premeditated action. I have every reason to believe that it was aimed against state interests."

Storchak said his arrest had delayed talks on the early payment of debts to South Korea and talks with Libya, to Russia's disadvantage. "The talks will be completed without me," he said, but "the tempo has slowed down."

Finance Minister Alexei Kudrin earlier offered personal guarantees to secure his deputy's release. The Finance Ministry said Storchak possessed information which was crucial for ongoing debt talks with the World Bank, Libya, and other countries.

In the letter, Storchak repeated his complaint that he has not been properly questioned since his arrest. Media reports earlier said the official had sent his own testimony to investigators, fearing his brief preliminary explanations would dominate the probe.

He called the accusations against him absurd, in particular charges relating to state company Sodexim.

Sodexim was one of Russian companies that were granted the right to sell Algerian goods with which the country was to pay its $1.2 billion Soviet-era debt. Algeria's debt was written off in 2006, while Sodexim said it had received no goods. The firm claimed $43.4 million from the Finance Ministry as compensation for losses.

Investigators said Storchak drafted a letter on the need to include $43.4 million in the budget for settlements with Sodexim, while being aware of the illegitimacy of the firm's claims. The firm's general director Viktor Zakharov was arrested along with Storchak.

Commentators have called the case part of a turf war between rival Kremlin factions.

The deputy minister faces five to ten years in prison if convicted.

Storchak was upbeat about his chances of winning the case. In the letter he said he would like to resume his post of deputy minister and that he was writing lectures for his future teaching career.

Later on Tuesday, Kudrin, who is also deputy prime minister, reiterated his support for Storchak, hailing his professionalism and character.

"I believe he will return to the Finance Ministry," Kudrin said.

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