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Shuvalov's Dubious Trust
An Unfolding Financial Scandal May Push Igor Shuvalov, a Leading Liberal Politician,
out of Medvedev's Future Cabinet
Andrew Roth - Russia Profile - russiaprofile.org - 3.29.12 - JRL 2012-59

One of Russia's highest ranking pro-business politicians, Deputy Prime Minister Igor Shuvalov, is under fire this week after The Wall Street Journal and The Financial Times reported that they had seen documents linking the former lawyer to millions in profits in an offshore family account. Shuvalov's camp responded to the charges by saying that the money was made legally and that the Russian leadership, Vladimir Putin and Dmitry Medvedev, are aware of the trust. Yet rumors abound that despite Shuvalov's close relationship with Medvedev, he'll likely be passed over for a position when the next cabinet appointments are announced.

Igor Shuvalov File Photo
file photo
According to documents accessed by The Financial Times and The Wall Street Journal, Shuvalov had already amassed a fortune of close to $18 million when he joined the government's Federal Property Fund, his first government post, in 1997. Both broadsheets reported on a possible conflict of interest for Shuvalov, when the Property Fund privatized 20 percent of oil giant Sibneft at the same time as he owned a small stake in the company and was close friends with its majority stakeholder Roman Abramovich. The documents also showed that Shuvalov had invested heavily in Gazprom stocks from an offshore company through an investment vehicle owned by oligarch Suleiman Kerimov. Altogether, Shuvalov's family fund boosted its worth by more than $200 million since its creation, wrote the newspapers.

Shuvalov, who has held his current post since May 2008, responded to the accusations this week by saying that he has done nothing illegal according to laws governing bureaucrats and their business interests. "As a lawyer I steadfastly followed the rules and principles on conflict of interests," Shuvalov told journalists. He also said that the money he had accumulated served to protect him from wealthy interest groups. "[The funds] are a basis for my independence from different influence groups when I make a decision as a deputy prime minister," he said.

Shuvalov, a senior member of Vladimir Putin's cabinet, was long considered a close ally of Medvedev and is a strong contender for a leading role in Medvedev's cabinet when the latter takes the reins as prime minister. Yet today Vedomosti reported that sources expect Shuvalov could end up far away from the nerve center of the government in Moscow, perhaps running the a government corporation assigned to the economic development of Siberia and the Far East. "The government corporation [for Siberia and the Far East] would be the logical conclusion for Shuvalov's political career," said Alexei Mukhin, the director of the Center for Political Information. Despite Shuvalov's powerful network, Mukhin noted that so far the deputy prime minister had received little support from other powerful politicians. "The decision [of Shuvalov's future] will be made by two men. Putin and Medvedev. As far as I understand, those who don't support Shuvalov are trying to help them make that decision," he said.

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