Kremlin criticizes U.S. blacklist ahead of Obama adviser visit

By Steve Gutterman

MOSCOW (Reuters) - President Vladimir Putin's spokesman on Sunday called a U.S. law barring Russians from the country over alleged rights abuses unacceptable interference in Russia's affairs, setting a tough tone before a visit by a senior White House adviser.

Dmitry Peskov's remarks were the first comment from Putin's office after the U.S. administration named 18 Russians subject to visa bans and asset freezes over the Magnitsky Act legislation passed by Congress late last year.

Most of the 18 were blacklisted for alleged links to the prosecution of whistleblowing lawyer Sergei Magnitsky, whose death in a Moscow jail in 2009 has set off a chain of events that has damaged Russian-U.S. ties.

"This is direct interference in Russian affairs. The so-called 'Magnitsky case' should not be discussed outside Russia at all," state news agency Itar-Tass quoted Peskov as saying. "This is unacceptable to us, and we will never agree with it."

President Barack Obama had been obliged to release the U.S. list by Saturday under the Magnitsky Act, which drew attention to concerns about rights and the rule of law in Russia, which Putin has led since 2000 as president or prime minister.

Moscow responded on Saturday by naming 18 Americans barred from Russia under retaliatory legislation Putin signed in December, most of them accused of violating the rights of Russians prosecuted in the United States.

Peskov blamed the United States for the exchange and said it could draw the attention of the two nuclear-armed countries away from issues of global security that are more important.

"At a time when international and regional conflicts dictate rapprochement between Russia and the United States, because the two countries are in many ways responsible for the situation in the world, actions are being taken that not only cast a shadow but inflict harm on relations between these countries," he said.

The blacklists added to tension before a visit by Obama's national security adviser Tom Donilon, whose talks with senior Russian officials on Monday will be the highest-level face-to-face contacts between the Kremlin and the White House since Obama started his second term in January.

But despite the rhetoric, both governments kept high-level current officials off their lists in an apparent effort to contain the political damage.

Peskov made clear on Friday that the relationship would not be ruined, saying ties were multifaceted and there remained "many prospects for development and growth".

Donilon's talks are expected to include discussion of U.S. plans for a European anti-missile shield, which have strained relations because Russia says the system could eventually shoot down its nuclear missiles and threaten its security.

A U.S. decision to scale down its plans could ease those concerns, but Moscow's response so far has been cautious.

(Editing by Sonya Hepinstall)

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HBOS's demise, the young star, government adviser and Lord

By Steve Slater

LONDON (Reuters) - Andy Hornby was heralded as a "star successor" when he became the youngest boss of a British bank in July 2006, arriving as an outsider from retailing to liven up the stodgy world of banking.

But less than three years later HBOS needed rescuing by the British taxpayer and rival Lloyds, and Hornby is one of three people whom parliamentarians are blaming in a scathing report released on Friday.

Hornby turned away from banking after HBOS's collapse and is now CEO of bookmaker Coral, his second job running a firm owned by private equity and allowing him to keep a low profile.

It is a far cry from the fanfare when HBOS announced in early 2006 he would become CEO.

"Think about moving on when there's a star successor alongside you ready to take over," said James Crosby, his predecessor as HBOS CEO, when asked why he was making way.

Crosby said Hornby brought a retailer's sense of pace and eye for detail, after entering banking in 1999 from supermarket chain Asda. He started as head of UK retail for Halifax, which merged with Bank of Scotland to form HBOS in 2001.

The mistake by Hornby, 39 when he took the reins, was to not change the strategy inherited from Crosby, UK politicians said.

The Parliamentary Commission on Banking Standards (PCBS) report said Crosby was the "architect of the strategy that set the course for disaster", Hornby proved unable or unwilling to change course, and Dennis Stevenson, chairman, presided over the bank's board "from its birth to its death".

Hornby declined to comment. Crosby and Stevenson could not be reached for comment.

"KNOWLEDGEABLE AND WELL BRIEFED"

Hornby's return to corporate life was helped by his quick rejection of a payoff and a contrite appearance before parliamentarians in early 2009 - unlike the anger directed at RBS CEO Fred Goodwin for his lucrative pension.

Educated at Oxford and Harvard, Hornby was clearly earmarked as a future CEO and the Bristol City football team fan was granted a multi-million pound share award in 2004 to stop him leaving to take over at retailer Boots. He became CEO of Alliance Boots, as it by then was known, before joining Coral.

Crosby has also kept a low profile. Now 57, he was chief executive of Halifax from 1999 and took the same role when HBOS was formed and was knighted by the Queen in 2006 for services to the financial sector.

"I was horrified and deeply upset by what happened," Crosby told the PCBS in December. "I am apologising. I played a major part in building a business that subsequently failed."

After leaving HBOS, Crosby advised former Prime Minister Gordon Brown and became deputy chairman of the Financial Services Authority (FSA), stepping down from that role in February 2009 after criticism of his part in HBOS's collapse and that he ignored risk warnings.

He is currently a director of catering company Compass and an adviser for private equity firm Bridgepoint.

Stevenson, the son of an Edinburgh sheriff, was made a life peer in 1999 and sits in the House of Lords.

He was not the type of non-executive chairman "sailing above the battle, not concerned with the detailed day to day realities", according to a letter he sent to the FSA in 2008.

"I am legally responsible for the business and with the modesty for which I am not famous regard myself as being knowledgeable and well briefed," the Cambridge classics and economics graduate said in the letter of January that year.

A March 2008 letter to Callum McCarthy, chairman of the FSA, said his bank was setting out to be "boringly boring" for the next year or two.

(Editing by Mark Potter)

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