NEW YORK – A Russian diplomat who chairs a powerful U.N. budget committee pleaded not guilty Friday to charges alleging he conspired to hide hundreds of thousands of dollars from foreign companies seeking contracts with the world body.
The FBI arrested Vladimir Kuznetsov (search) on Thursday, less than a month after arresting another Russian U.N. official over alleged money laundering.
Kuznetsov, 48, was held on $1.5 million bail. His lawyer, Marion Seltzer, said it was unlikely he could arrange bail in the next week.
According to a grand jury indictment unsealed Friday, Kuznetsov established an offshore company in 2000 to hide criminal proceeds he received from an unidentified U.N. procurement officer who had taken secret payments from foreign companies seeking contracts to provide goods and services to the United Nations.
Prosecutors said in a statement that the procurement officer in return gave the companies confidential U.N. information about the contracts. When the procurement officer told Kuznetsov about the scheme, Kuznetsov agreed to accept a share of the proceeds rather than report the conduct, prosecutors said.
U.N. Secretary-General Kofi Annan (search) waived Kuznetsov's diplomatic immunity at the request of U.S. authorities, U.N. associate spokesman Farhan Haq said.
U.S. Ambassador John Bolton (search) praised Annan "for his personal and very prompt decision," and declined to comment further.
A Russian Foreign Ministry spokesman said his government was awaiting more information from U.S. law enforcement agencies and the U.N. Secretariat (search) before making any statements, the ITAR-Tass news agency reported.
While the indictment did not identify the procurement officer, U.N. deputy spokeswoman Marie Okabe said the charges against Kuznetsov stem from an internal U.N. investigation of Alexander Yakovlev (search), a Russian who worked in the U.N. procurement office.
Okabe said Kuznetsov had not been under U.N. investigation.
Yakovlev was arrested Aug. 8 for allegedly soliciting a bribe from a company seeking an oil-for-food contract. He already has pleaded guilty to wire fraud and money laundering for allegedly accepting nearly $1 million in bribes from U.N. contractors in his work outside the oil-for-food program (search).
The indictment does not mention the oil-for-food program, which was launched in 1996 to help ordinary Iraqis cope with U.N. sanctions imposed after Saddam Hussein's (search) 1990 invasion of Kuwait.
Okabe said there was some initial misunderstanding when Kuznetsov's name was confused with another U.N. official from Russia who works in the Department of General Assembly Affairs (search) and has a similar name, Vadim Kouznetsov. "He has nothing to do with this case," Okabe said.