Russian U.N. diplomat charged with money laundering freed on US$500,000 bail

A Russian U.N. official accused of money laundering was freed from jail Friday after the Russian government posted US$500,000 (Ђ428,100) bail.

Vladimir Kuznetsov, 48, who chaired the powerful U.N. budget oversight committee, had been in jail since Sept. 1 on an indictment charging that he conspired with a U.N. procurement officer to launder hundreds of thousands of dollars (euros) from foreign companies seeking contracts with the world body.

"We can confirm that he was freed today after bail was paid." said Maria Zakharova, press secretary at Russia's U.N. Mission. "Russia paid the US$500,000 bail and hopes that this will lead to the case moving forward."

Kuznetsov was arrested by the FBI and charged with conspiracy to commit money laundering in an indictment that was unsealed at U.S. District Court in New York City. He has pleaded innocent.

Moscow is keeping a close eye on the case and is providing Kuznetsov with full consular assistance, Foreign Ministry spokesman Mikhail Troyansky told The Associated Press in the Russian capital.

Posting the bail "will help speed up the consideration of his case," Troyansky said.

U.N. officials said the charges against Kuznetsov stem from an internal U.N. investigation of another Russian, Alexander Yakovlev, who worked in the U.N. procurement office.

The U.N. took its findings against Yakovlev to U.S. authorities, who arrested him on Aug. 8.

He pleaded guilty the same day to soliciting a bribe from a company seeking a contract under the U.N. oil-for-food program in Iraq. He also admitted his guilt on wire fraud and money laundering charges for accepting nearly US$1 million (Ђ860,000) in bribes from U.N. contractors not related to the oil-for-food program.

A yearlong investigation of the US$64 billion (Ђ54.6 billion) oil-for-food program found widespread corruption and management failures in the United Nations, and the U.N.'s internal watchdog has been looking into activities of the procurement office.

Kuznetsov was not accused of any involvement in the oil-for-food scandal.

The indictment against him alleged that in 2000 he established an offshore company to hide criminal proceeds from an unidentified U.N. procurement officer, who received secret payments from foreign companies seeking contracts to provide goods and services to the United Nations.

Prosecutors said the procurement officer provided the companies with confidential and other information from the United Nations about the contracts.

When the procurement officer told Kuznetsov about the scheme, Kuznetsov agreed to receive a share of the proceeds to keep quiet, prosecutors said.

U.N. Secretary-General Kofi Annan waived Kuznetsov's immunity at the request of U.S. authorities.

Kuznetsov, a budget expert and career diplomat, worked at both the Soviet and Russian U.N. Missions from the mid-1980s until the mid-1990s, and then on Russian delegations to various U.N. and international bodies including the Council of Europe, mainly dealing with budget issues.

He was appointed to the General Assembly's powerful Advisory Committee on Administrative and Budget Questions in 1999. The budget oversight committee then elected him chairman, AP reported. V.A.