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(This version of the December 6 story corrects paragraph 3 and adds new paragraph 4 to clarify the nature of U.S. sanctions)
By Patricia Zengerle
WASHINGTON (Reuters) - Erik Prince, founder of military contractor Blackwater and a supporter of President Donald Trump, told U.S. lawmakers he had discussed U.S.-Russia relations during a meeting in the Seychelles with a Russian business executive with ties to the Kremlin, but insisted they did not discuss sanctions.
In a transcript released on Wednesday of Prince's testimony last week to the U.S. House of Representatives Intelligence Committee, Prince said he and Kirill Dmitriev, chief executive of the Russian Direct Investment Fund, or RDIF, met for about half an hour in a bar at the suggestion of officials from the United Arab Emirates.
The RDIF was put on a U.S. sanctions list in 2015 because at the time it was a subsidiary of VEB, the Russian state development bank. While it no is longer owned by the bank, it remains subject to limited sanctions.
Americans are prohibited from providing extended debt and equity financing to sanctioned entities and their subsidiaries, such as RDIF. However, the fund does not raise debt or equity financing from third parties, according to a lawyer who represents the fund.
The House intelligence panel is one of three congressional committees and a special counsel investigating U.S. allegations of Russian interference in the 2016 U.S. election, and the possibility of collusion between Trump associates and Moscow.
Russia denies attempting to influence the U.S. campaign. Trump denies any collusion.
Prince was called to testify because of the Seychelles meeting on Jan. 11, 2017, which The Washington Post later described as an effort to connect the incoming Trump administration with Moscow.
He met with the committee voluntarily, and did not have an attorney with him.
Prince said he had traveled to the Seychelles for a business meeting with UAE officials, who included Crown Prince Mohammed bin Zayed, and they suggested he talk to Dmitriev.
"After the meeting, they mentioned a guy I should meet who was also in town to see them, a Kirill Dmitriev from Russia," Prince told members of the House committee, according to the transcript.
"I didn't fly there to meet any Russian guy," Prince said.
Prince told reporters after his interview that the panel had wasted time and taxpayer money on a "fishing expedition."
Prince donated to Trump's campaign, made multiple visits to Trump Tower in New York and said he wrote some foreign policy memos for the Republican candidate, which he delivered to Trump campaign manager Steve Bannon.
Democratic committee members noted that Prince said Bannon had told him about a secret meeting at Trump Tower in December 2016 with UAE officials, shortly before the January Seychelles meeting.
Prince said he had met Trump just once, at a fundraiser, before he was elected president in November 2016.
Prince's sister, Betsy DeVos, is Trump's Secretary of Education.
Prince said he had discussed U.S.-Russia relations with Dmitriev, but only in the broadest terms.
"If Franklin Roosevelt can work with Joseph Stalin after the Ukraine terror famine, after killing tens of millions of his own citizens, we can certainly at least cooperate with the Russians in a productive way to defeat the Islamic State," Prince said he told Dmitriev.
Representative Adam Schiff, the top Democrat on the committee, said after the testimony was released that Prince had been less than forthcoming and sought to represent his meeting with Dmitriev as coincidental.
"Prince also could not adequately explain why he traveled halfway around the world to meet with UAE officials and, ultimately, the head of the Russian fund," Schiff said in a statement.
(Reporting by Patricia Zengerle; editing by Grant McCool)