The Russia-Austria Money Laundering Murder Scandal Continues

This blog has been closely following the unfolding investigation by Austrian prosecutors into the activities of Raiffeisen Zentralbank (RZB) in Russia, which was reported to have received upwards of $60 million from Diskont Bank in an alleged money laundering scheme during its final days last August. This obscure “pocket bank” was being targeted by the crusading central banker Andrei Kozlov right around the same time as his assassination. (This story was blown open by two major investigative pieces in the new Russian magazine The New Times, which are exclusively available in English here and here).

Russian Blog

What was unusual about the subsequent investigation into the Kozlov murder, notes Andrew Kramer in a new article on the matter, is that for a high-profile contract hit in a country famously incapable of solving crimes – the Kozlov murder was suspiciously an open and shut case. Russia’s procuracy is currently blaming banker Alexei Frenkel for Kozlov’s murder – a mid-level financial executive who had nothing to do with Diskont but had had numerous run-ins and problems with Kozlov and a disputed reputation. The critical questions are pretty clear: Did Kozlov get killed because there was government corruption involved in the Diskont-Raiffeisen money laundering scheme? Was Alexei Frenkel made to be the fall guy for this murder to cover it up? Why aren’t Russian investigators responding to Austrian requests for information and cooperation? Kramer reports:

Now, however, the authorities in Austria have cast doubt on the quality of the Russian sleuthing in Kozlov’s murder, which they linked to a multimillion-dollar money laundering scheme that made use of a bank in Vienna. “We stated there could be a link and it should be investigated,” Gerald Hersztera, a spokesman for the Austrian Interior Ministry, said in a telephone interview. … Two weeks before his murder, Kozlov had been cooperating closely with the Austrian authorities on the money laundering case, a detail the Austrians made public in April in a report posted on that country’s Interior Ministry Web site. It said the Austrian police could not rule out “official corruption” in Russia as a motive for murder. “We didn’t get any information about how the investigation is going in Russia,” Hersztera said.

There are also other worrying precedents of RZB’s activities with Russian and Central Asian partners, including their management of a major stake in RosUkrEnergy, a non-transparent entity that is widely suspected of facilitating corruption in the Turkmen-Ukraine natural gas trade under the stewardship of none other than Gazprom. RZB was also the leading bidder for Nurbank, which was majority owned by Rakhat Aliyev, the son-in-law of the president of Kazakhstan, Nursultan Nazarbayev. Aliyev was recently arrested in Austria accused of using Nurbank in connection with a kidnapping scandal. Does the Kozlov murder, money laundering from Diskont to RZB, the Turkmen gas corruption, and the complex political drama in Kazakhstan all connect in Vienna? I highly doubt it, but there are lots of questions to be answered that this blog will be following closely.