Two brothers belonging to President Vladimir Putin's inner circle lobbied for the appointment of Deputy Transport Minister Oleg Belozerov as the new head of Russia's vast state railway monopoly, the newspaper Vedomosti reported on Friday, citing anonymous sources.
The paper quoted several sources as saying Belozerov was close to Arkady and Boris Rotenberg, who are subject to U.S. sanctions over Russia's role in the Ukraine conflict for their business ties to Putin.
"Arkady and Boris Rotenberg supported Belozerov's appointment," Vedomosti quoted a source close to the government as saying. "They wanted to enter the railway business."
Belozerov, 45, studied and worked for many years in Putin's hometown of St Petersburg. He was named the head of Russian Railways on Thursday after its boss of 10 years, Vladimir Yakunin, also a member of Putin's inner circle, unexpectedly stepped down to run for a largely ceremonial role as a regional senator.
The Russian railway network is the world's third largest, employing almost a million people and setting freight rates for the huge energy, mining and agriculture sectors.
When the U.S. Treasury imposed sanctions on Russian companies and officials last year, it said Arkady and Boris Rotenberg had "made billions of dollars in contracts for (the state-controlled gas monopoly) Gazprom and the Sochi Winter Olympics awarded to them by Putin".
"Both brothers have amassed enormous amounts of wealth during the years of Putin's rule in Russia. The Rotenberg brothers received approximately $7 billion in contracts for the Sochi Olympic Games and their personal wealth has increased by $2.5 billion in the last two years alone," it said.