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PEOPLE - Storchak's Fate

The detention of Russia’s Deputy Finance Minister Sergei Storchak on charges of corruption has sent a chill through Moscow’s financial community, as Kremlin infighting intensifies ahead of President Vladimir Putin’s scheduled surrender of power in March.

Prosecutors charged Storchak on November 15 with conspiracy to embezzle $43 million through a complex scheme involving Algerian obligations to Russia. But observers fret that the charges were part of a plan to weaken the position of his boss, finance chief Alexei Kudrin, who was promoted to deputy prime minister in a government shake-up in September, and maybe weaken his control over the $148 billion stabilization fund from oil revenue that Kudrin has guarded against mounting pressure to spend or invest in Russian stocks.

“One interpretation is that people are undermining Kudrin politically,” says Katya Malo­feeva, chief economist at Renaissance Capital in Moscow. “Another is that people are fighting for how the stabilization fund should be managed.”

Kudrin pleaded personally for Storchak’s release until trial, but to no avail: Law enforcement authorities denied the deputy prime mini­ster even a visit to Moscow’s Lefortovo prison, where Storchak is being held.

Comments Yuri Korgunyuk, an analyst with the Indem Foundation, a think tank in Moscow, “There is not much chance of his being freed until after the election, anyway.”