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Credit: Reuters By Timothy Heritage and Gabriela Baczynska MOSCOW | Wed Sep 19, 2012 9:20am EDT MOSCOW (Reuters) - Russia accused the United States on Wednesday of using its aid mission in Moscow to influence Russian elections, a charge likely to push relations between the former Cold War foes to a new low after Vladimir Putin's return to the Kremlin. The Russian Foreign Ministry issued a tough statement explaining Moscow's decision, announced by Washington on Tuesday, to give the U.S. Agency for International Development (USAID) until October 1 to cease operations in Russia. The action appears intended to cut funding to organizations that Putin sees as a threat following his return as president in May after four years as prime minister, and extends what the opposition sees as a crackdown on pro-democracy groups. "It's about attempts to influence political processes, including elections of various types, and institutions of civil society though the distribution of grants," the Foreign Ministry statement said. It said Russia had also been worried about USAID's work in regions including the North Caucasus, where Moscow faces an Islamist insurgency, but did not elaborate. Washington has dismissed accusations that its funding of human rights and pro-democracy organizations is intended to influence domestic politics in Russia. USAID has worked for two decades in Russia since the collapse of the Soviet Union, spending more than $2.6 billion on programs intended to combat disease, protect the environment, strengthen civil society and modernize the economy. PUTIN SEES RUSSIA AS RESURGENT POWER In announcing the forced closure of the USAID operation in Russia, the U.S. State Department suggested the Moscow, which is earning copious oil revenue, felt it did not need foreign aid. The Foreign Ministry made clear that was one of its motives, saying Russia was now a donor nation and "rejects the status of a recipient of development aid". It said Russia was open to cooperating with USAID in third countries that need help. It also indicated that Moscow was eager to reduce foreign support for Russian groups which promote democracy and the rule of law but which are viewed with deep suspicion by the Kremlin. "Russia's civil society has become fully mature and does not need 'external guidance'," it said. Putin won nearly two thirds of the vote in a March election which international monitors said was skewed in his favor. The former KGB spy has pushed through new laws to raise fines for protesters, stiffen punishments for defamation and put new controls on foreign-funded campaign groups. The notion of Russian organizations receiving foreign aid grates with Putin's prized image of Russia as a resurgent power. "Add to that tension over the pre- and post-election protests...plus the deep disagreement over U.S. democracy-promotion activities in the Middle East, and you can see why Russia may have taken this decision now," said Matthew Rojansky of the Carnegie Endowment for International Peace. RESET UNDER THREAT? U.S. President Barack Obama came into office seeking a "reset" in ties with Russia that bore some fruit, including a 2010 arms-control treaty. But the two nations disagree on issues from Arab revolts, especially the one in Syria, to Iran's nuclear program and U.S. plans for a missile defense shield. The State Department said USAID would promote democracy and civil society even after its Russian office closed. A U.S. official said 13 U.S. diplomats and 60 local Russian employees would be affected. Annual aid to Russian groups totals only about $50 million, but for them its absence could be damaging. Russian groups most affected include GOLOS, which monitors the conduct of elections, and Memorial, a human rights watchdog. Another group that could be hurt is Transparency International, which monitors perceptions of corruption. "For our organization it will really be a big problem," said Liliya Shibanova, the executive director of GOLOS, which she said receives about 80 percent of its funding from USAID. Shibanova said it was unclear whether GOLOS would be able to monitor regional elections on October 14, describing the Kremlin's decision as part of "the whole repressive machine that has been aimed against NGOs since Putin's return" to the presidency. "It is part of the policy of control. The entire policy of those in power is to control all processes that occur in Russia from above, and NGOs that receive financing from abroad ... hinder this policy - so they must be strangled." GOLOS came under pressure before December's parliamentary election, which Putin's party won, but which ignited the biggest protests of his 12-year-rule over widespread fraud allegations. In December, Putin accused U.S. Secretary of State Hillary Clinton of encouraging the protests. Government moves since then include a law requiring any organization that receives funding from abroad to register as a "foreign agent", a tag that evokes memories of the Cold War. Republican U.S. Senator John McCain described Moscow's closure of the USAID mission as "an insult to the United States and a finger in the eye of the Obama Administration... "An increasingly autocratic government in Russia wants to limit the ability of its own citizens to freely and willingly work with American partners on the promotion of human rights, democracy, and the rule of law in Russia," he said. (Additional reporting by Steve Gutterman and Arshad Mohammed; Writing by Timothy Heritage; Editing by Thomas Grove and Alistair Lyon) World Russia Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (10) justinolcb wrote: Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Back to top Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index Legal Bankruptcy Law California Legal New York Legal Securities Law Support & Contact Support Corrections Connect with Reuters Twitter Facebook LinkedIn RSS Podcast Newsletters Mobile About Privacy Policy Terms of Use AdChoices Copyright Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Thomsonreuters.com About Thomson Reuters Investor Relations Careers Contact Us Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. 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