U.S. revoked Deripaska visa - State Dep't official

WASHINGTON Fri May 11, 2007 6:33pm EDT

WASHINGTON May 11 (Reuters) - The United States revoked an

entry visa last July of Oleg Deripaska, a Russian billionaire

at the heart of a possible bid for DaimlerChrysler

AG'sDCXGn.DE Chrysler Group, a State Department official said

on Friday.

The official, who asked not to be named, declined to state

reasons for canceling the visa issued two years ago to

Deripaska, who at 39 is reported to be Russia's second-richest

person.

The U.S. government may review foreign bids for ownership

of U.S. companies for a number of reasons, including possible

national security implications.

The Wall Street Journal has tied the entry ban to what it

called concerns that Deripaska may have ties to organized crime

in Russia, citing unnamed U.S. law enforcement officials.

The newspaper also reported on Friday the entry ban was

tied to the veracity of his statements on the matter to the

Federal Bureau of Investigation.

Stephen Kodak, an FBI spokesman, said he could neither

confirm nor deny any contacts with Deripaska, in accordance

with long-standing FBI policy.

Gonzo Gallegos, a State Department spokesman, said the

department would not be issuing a formal statement on the

matter.

Deripaska received a U.S. multi-entry visa in 2005, the

department official said. Lobbying on his behalf had been done

by former Senate Republican leader and 1996 presidential

candidate Bob Dole and his Alston & Bird law partners, Senate

records show.

Alston & Bird was paid about $260,000 in 2005 for work on

"Department of State visa policies and procedures" tied to

Deripaska, according to disclosure forms.

Jonathan Winer, a Dole colleague who filed the disclosures,

did not reply to repeated requests for comment on the visa

cancellation.

A company controlled by Deripaska, Basic Element, plans to

buy a $1.54 billion stake in Magna International Inc. MGa.TO,

a diversified Canadian auto supplier, Magna said Thursday.

Magna has teamed with Onex Corp. (OCX.TO), a Canadian

buyout firm, to make a bid for Chrysler Group.

Deripaska's pending cash infusion into Magna could help

fund such a bid. Analysts have called Magna the leading

potential buyer.

Chrysler, which once built tanks and tank engines, is no

longer a big U.S. defense contractor. In a research program

partly funded by the Pentagon that was begun in 2001 and is

just wrapping up, Chrysler worked on a diesel-electric hybrid

pickup truck that could supply power to troops in the field,

said David Elshoff, a Chrysler spokesman in Auburn Hills,

Michigan.

Most deals submitted to the inter-agency Committee on

Foreign Investment in the United States are approved without

difficulty. But furors have erupted in recent years over the

proposed acquisition of Unocal by the China National Offshore

Oil Corp. and Dubai Ports World's acquisition of management

rights at a number of U.S. ports from Britain's P&O.

Chrysler, which has 25 plants in the United States,

announced plans on Feb. 14 to cut 13,000 jobs amid industry

projections of a flat or slightly weaker market this year

compared with 2006.

A Deripaska spokesman in Moscow, Konstantin Panin, did not

return a telephone call seeking comment. A call to a spokesman

for the Russian embassy also was not returned.

Deripaska was ranked Russia's second-richest man by Forbes

magazine, behind Roman Abramovich. Deripaska built much of his

estimated $16.8 billion fortune in aluminum, emerging from

Russia's "aluminum wars" of the 1990s with control of some of

the country's biggest smelters.

He also masterminded the consolidation of Russia's aluminum

sector, which was completed in March with the creation of

United Company RUSAL. That new company, in which Deripaska is

the majority owner, produces an eighth of the world's supply of

the metal.

Deripaska -- appointed in 2004 by President Vladimir Putin

to represent Russia at the Asia-Pacific Economic Cooperation

Business Advisory Council -- owns Russia's No. 2 automaker Gaz

(GAZA.RTS), maker of the Volga saloon and the Gazelle minivan.

DaimlerChrysler was created in 1998 through the merger of

Germany's Daimler-Benz AG and U.S.-based Chrysler Corp. Its

divisions include the Mercedes Car Group, Chrysler Group and

the Truck Group.

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