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February 25, 2005

Analysis: The Oligarchs Strike Back?

by Julie A. Corwin

Mikhail Kasyanov

Former Russian Prime Minister Mikhail Kasyanov told reporters in Moscow on 24 February that he is not ruling out running for the presidency in 2008. Kasyanov's remarks follow a series of recent talks he has given in New York and Washington, D.C., where he reportedly said similar things off the record. In Moscow, Kasyanov said that after reviewing the situation in the country last year, "one can draw the conclusion that the country is moving in the wrong direction," RIA-Novosti reported. He declared himself "ready to facilitate and help consolidate democratic forces" and called for the creation of a unified democratic party. When asked if he would be ready to head such a project, he declared such talk "premature since there are no unified democrats yet."
Some analysts in Moscow were impressed less by the prospect of Kasyanov as a presidential candidate than by the timing of his announcement -- during the Bratislava summit. National Strategy Institute Director Stanislav Belkovskii told apn.ru that Kasyanov has no chance of being elected, but the fact that he "openly declared his personal ambitions and criticized [Russian President Vladimir] Putin means that there is no more fear of the Kremlin." He also said that "the erosion of the Putin regime has become obvious for everyone -- or almost everyone."

Kasyanov held the office of prime minister for the longest period in post-Soviet Russian history, starting in May 2000 and ending on 24 February 2004. Kasyanov was born in Moscow Oblast in the city of Solnetsvo. He speaks fluent English and studied at the Moscow Automobile and Road Institute and also trained at Gosplan, where he worked for 10 years after leaving the army. In 1991, he switched to the Economy Ministry where he remained until 1995. From 1993, he was director of the department for foreign credits and external debts. In 1995, he switched to the Finance Ministry, where he was deputy finance minister.

Oligarchs Mobilize

In an interview with RFE/RL, Peter Reddaway, professor emeritus of political science and international affairs at George Washington University, suggested that certain oligarchic groups have apparently decided to challenge Putin directly. He told RFE/RL that "Kasyanov is clearly the political candidate of some of the oligarchs, i.e., those who are prepared to go behind the scenes and engage in political warfare against Putin."

In a recent article in "Moskovskii komsomolets," Mikhail Rostovskii explored this theme, writing that Russia's oligarchic groups bend over backwards to show their loyalty to Putin in Russia. However, when they are abroad, they behave completely differently. He wrote that one government official, dismissed by Putin last year, caused a furor in Washington by giving an off-the-record talk "pouring dirt over Putin," but in Russia this "potential candidate for president avoids journalists like fire and [making] any incautious remarks."


Reddaway believes that it's possible that "[Unified Energy System (EES) head] Anatolii Chubais might be one of the movers behind [Kasyanov's candidacy], because he is one of the few members of the old Yeltsin leadership who have, on occasion, taken a political stand. When, for example, [former Yukos head Mikhail] Khodorkovskii was arrested, Chubais tried to rally the oligarchs in protest, but found that he got very little support. So he gave up, at least openly."

Certainly, members of Chubais's party, the Union of Rightist Forces, have spoken highly of Kasyanov. In an interview with "Politicheskii zhurnal" on 5 April 2004, Boris Nemtsov noted that, while prime minister, Kasyanov "demonstrated his independence on a series of issues starting with the Nord Ost [Moscow theater hostage crisis] and ending with Yukos." The last time Kasyanov appeared in public was at a launch for former Prime Minister Yegor Gaidar's book, an appearance which sparked speculation that Kasyanov was ready to announce an alliance with the Union of Rightist Forces. However, in comments to Ren TV on 18 January, Kasyanov refused to confirm or deny that he even shared common political views with Gaidar. When asked whether Kasyanov has good relations with Gaidar, Anders Aslund of the Carnegie Endowment for International Peace, told RFE/RL that Kasyanov "has good relations with very many people, [but] he is rather trying to build a broad base than a narrow base." According to Aslund, Kasyanov "does not have a particular party alliance.... Probably he would like to start building a new party from the top rather than using one of the old parties."

Skillful Negotiator

Regardless of his true political affiliations, Kasyanov, 47, has a least one quality that would stand him in good stead as the head of Russia, a position requiring the ability to act as arbiter among competing clans. According to "Kommersant-Dengi" on 17 May 2000, even Kasyanov's enemies consider him a world class negotiator. After the August 1998 financial crisis, it was Kasyanov who headed the months-long negotiations with holders of Russian treasury bonds. According to "Nezavisimaya gazeta -- figury i litsa" on 26 November 1999, it was Kasyanov's success in those negotiations that led to his promotion to first deputy finance minister in February 1999. In that job, Kasyanov was in the right place at the right time when then Prime Minister Sergei Stepashin was looking for a finance minister. After the State Duma rejected his first two choices, Stepashin tapped Kasyanov. A year later, Putin selected Kasyanov to be his prime minister.

It was Kasyanov's work in the area of foreign credits that earned him not only promotions up the ranks of the Finance Ministry, but also scrutiny resulting in articles impugning his character. According to Reddaway, "Some years ago there were dozens of articles in the Russian press about Kasyanov's corruption. He was called 'Misha Dva Protsenta,' because his charge for his services as an official in the Finance Ministry was allegedly 2 percent of the value of what he was facilitating." He continued: "You could probably fill a book with these articles. Today, to challenge Putin openly, he must have some sort of protection that we don't know about." In Kasyanov's defense, Aslund noted that "there are many people who have some corruption allegations behind them and [Kasyanov] has never been convicted of anything."

Guilty or innocent, the moniker is likely to haunt Kasyanov at election time, but some analysts believe that the former prime minister has qualities not unlike another former prime minister, the newly elected Ukrainian President Viktor Yushchenko. For one thing, he's fairly photogenic. And for another, he compares favorably with his political successors. As Aleksandr Ryklin wrote on ej.ru, "compared with the current government of Prime Minister Mikhail Fradkov, Kasyanov's cabinet was an influential and independent government institution."
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