Saturday, October 25, 2014

The Power Vertical

A 'Kompromat' War Of All Against All

President Vladimir Putin (left) and Prime Minister Dmitry Medvedev meet in the Kremlin in May.
President Vladimir Putin (left) and Prime Minister Dmitry Medvedev meet in the Kremlin in May.
Is it an anti-graft campaign? A purge of the elite? Or the start of a clan war?
When police raided and searched the home of Rostelekom CEO Aleksandr Provotorov last week, it marked yet another chapter in what the Russian media has been describing as a Kremlin-backed war on corruption.

The search was part of a probe into Marshall Capital, where Provotorov was a partner before becoming head of the state-run telecommunications giant in July 2010.
Investigators are looking into whether Russagroprom, a now bankrupt subsidiary of Marshall Capital, fraudulently received -- and then defaulted on -- a $225 million loan from the investment bank VTB Capital in 2007.
The home of Konstantin Malofeyev, current head of Marshall Capital, was also searched. For the time being, prosecutors are describing Provotorov and Malofeyev as "witnesses" in the case.
With all the other corruption probes out there -- from the procurement scandal that brought down former Defense Minister Anatoly Serdyukov to the probes into financial malfeasance in the Regional Development Ministry and the Global Navigation Satellite System (Glonass) -- what makes the Rostelekom case so noteworthy?
Well, for one thing, Provotorov is considered a close Putin ally. He served as his protocol chief, he was made head of Rostelekom with Putin's support, and in July the Kremlin leader awarded him a Medal of Honor.
"This is in fact an attempt to replace the manager of one of Russia's largest companies, who is under the Kremlin's political patronage," Tatyana Stanovaya, head of the analytical department for the Moscow-based Center for Political Technologies wrote in
Moreover, Russian media has reported that Prime Minister Dmitry Medvedev has been trying to remove Provotorov at Rostelekom and replace him with Vadim Semyonov, the head of state telecoms holding company Svyazinvest and an old law-school classmate of the premier's.
"The conflict is reaching the very top, splitting the vertical. The battle line is passing between the government and the Kremlin," Stanovaya wrote.
Additionally, the assault on Provotorov comes on the heels of the dismissal of Serdyukov, which some commentators interpreted, at least in part, as retribution against the former defense minister for cozying up to Medvedev late in his presidency.
"In the last two years of Dmitry Medvedev's presidency, Serdyukov increasingly sought and found support specifically in the Kremlin rather than the White House, where Putin was installed at the time," Yevgenia Albats recently wrote in "Novoye vremya."

Most notably, Albats wrote, Serdyukov used Medvedev's backing -- over Putin's objections -- to increase spending on armaments from 2011-20 from 13 trillion rubles to 20 trillion rubles ($409 billion to $630 billion).
So is it that neat and clean? Simple tit-for-tat?
I'd be very cautious of interpreting the Rostelekom case as Medvedev's answer to Serdyukov's dismissal.
First of all, with his political obituary being written almost daily in the Russian press Medvedev is politically very weak right now and I doubt he would be able to launch such a frontal assault on a close Putin ally.
Moreover, although Serdyukov did in fact use Medvedev to get his defense budget hike back in 2011, it would be a bit of a stretch to call him an ally of the prime minister. He simply played one side of the tandem against the other to get what he wanted -- and probably paid the price for it with the famously vindictive Putin. He also had many enemies within the military. (It also probably didn't help Serdyukov that he lost an important political patron when his marriage to the daughter of Putin crony and Gazprom Chairman Viktor Zubkov broke up.)

Moreover, the battle for control of Rostelekom is a complex game with numerous powerful players and many moving parts -- and not a straightforward battle between "Putin's people" and "Medvedev's people."
What the case does indicate, however, is that the campaign against corruption -- which Putin may have intended to be a public relations trick, a purge of the ruling elite of disloyal elements, or both -- is perilously close to spinning out of control with unpredictable consequences.
"What happened largely indicates the beginning of ferment within Russia's ruling class, an escalation of the fight for resources and of uncontrollable conflicts that the Kremlin is unable to regulate without damaging its own reputation," Stanovaya wrote in
"Wars of all against all are being waged and their causes have absolutely nothing to do with the Kremlin's intentions and are most likely developing in spite of the regime's priorities."
-- Brian Whitmore

NOTE TO READERS: Be sure to tune in to the Power Vertical podcast on Friday November 30, when I will discuss the issues raised in this post with co-hosts Kirill Kobrin of RFE/RL's Russian Service and NYU professor Mark Galeotti, author of the blog "In Moscow's Shadows."


Tags: Vladimir Putin,Russia corruption,Dmitry Medvedev,Rostelekom,Aleksandr Provotorov,Russian clan warfare

This forum has been closed.
Comment Sorting
by: Russian Defense Policy from: USA
November 29, 2012 20:15
Some food for thought...don't know about the Albats argument re Putin getting back at Serdyukov. The 13 trillion which turned into 20 (22 actually, 19 for MOD and 3 for other power ministries) was for the State Armaments Program (GPV) 2011-2020, not for the defense budget. The 13 trillion was what Kudrin wanted. Otherwise, the White House and Kremlin seemed happy to have it higher. About this time, Putin became a real champion of domestic arms makers (over foreign suppliers), and of the GPV. Awaiting his return to the Kremlin, Putin played this hand very hard. Now, ensconced there again, perhaps he's tacking back against an expensive weapons procurement effort. Fighting corruption is popular. Russia might save money. Serdyukov takes the blame. Serdyukov and Medvedev can also take the blame for military reform (that Putin himself recognized was necessary when he appointed Anatoliy Eduardovich in February 2007 to come to grips with the MOD's "financial flows" -- he and his team did that, didn't they!). You are right, the game is definitely complex and anything but straightforward. Thanks for what you write, keep at it.
In Response

by: Brian Whitmore from: Prague
November 30, 2012 11:08
Thanks for the input. That is all indeed good food for thought, and possibly fodder for a future post (especially the bit about Putin and the GVP). Serdyukov clearly got sacked for a variety of reasons. The officer corps hated him b/c of defense reform;,he annoyed Putin by playing politics with the Tandem; and he lost Zubkov as a 'krysha' when his marriage to his daughter broke up. Should be an interesting discussion on all this in today's podcast.

by: Mark from: Victoria
November 30, 2012 06:42
When you have to cite Yevgenia Albats as a source for your conclusions, you're on shaky ground indeed.

In fact, Serdyukov was appointed by Putin. I would have said he, also, was a close Putin ally. This makes it sound as if he was Medvedev's man, and Putin took advantage of an opportunity to sack him, just to spite Medvedev. Do you think that's what happened, really?

In fact, there were a host of reasons for firing Serdyukov, not least of them being that the military hated him. But Putin not only installed him as Defense Minister, he said nothing when Serdyukov sacked a third of the military leadership in the Central Military Administration. I'd have thought that suggested not only that Putin trusted Serdyukov's judgment, but that Serdyukov felt free to do as he thought best without being second-guessed by the boss.

But by all means go ahead constructing yet another scenario which forecasts a dramatic split in the tandem. I'm just a little worried about the long-term effects of repeated disappointment; but if you're not, press on.

What time is it? Let's all say it together - Sunset for Putin!!
In Response

by: Brian Whitmore from: Prague
November 30, 2012 10:06
Probably a good idea to read the piece before commenting. Like this paragraph, for example:

"Moreover, although Serdyukov did in fact use Medvedev to get his defense budget hike back in 2011, it would be a bit of a stretch to call him an ally of the prime minister. He simply played one side of the tandem against the other to get what he wanted -- and probably paid the price for it with the famously vindictive Putin."
In Response

by: Mark from: Victoria
November 30, 2012 17:54
Probably be a good idea to read what you wrote before rebutting. Like that paragraph, for example.

"...although Serdyukov did in fact use Medvedev to get his defense budget hike back in 2011, it would be a bit of a stretch to call him an ally of the prime minister." Oh, I'm sorry - was Medvedev Prime Minister in 2011? I thought that was Putin. Are you talking about the Prime Minister then, or the Prime Minster now? I didn't say anything about Serdyukov being an ally of Medvedev, I said he was an ally of Putin, since he more or less owes his political career to Putin.

You don't think that "He simply played one side of the tandem against the other to get what he wanted" implies yet another split in the tandem?

Are you talking about the famously vindictive Putin who made time to offer to get Masha Gessen, one of his mouthiest critics, her job back although he really had nothing to do with her getting fired from it, she was fired for disobeying a directive to cover a story featuring Putin, and refused because she despises him? That Putin? Yes, he certainly does sound a vindictive bastard, I must say.
In Response

by: Sergio Meira from: the Netherlands
December 02, 2012 13:24
Mark, there you go again with your anti-sunset style. Sigh.

If political pundits and socio-political forecasts were really a science, we wouldn't have such a poor success rate in this area. It's not simply Brian here: it's a systemic problem. Nobody knows the future; we all have opinoins and wishes.

You have a problem with Brian's, clearly, since you spend so much time here doing something that will never, ever influence anything: trying to tell someone that the world may indeed evolve differently than s/he thinks.

But we all know that already. There are no news in that.

Brian likes sunset for Putin, and you don't. You think you're giving a better account of the situation than Brian, but frankly I'm willing to bet that your own personal success rate has not been any better than the typical average for the whole class of political analysts, be they professional ones, like Brian, or archair ones, like you.

So here's my advice: don't keep repeating the same message. We get it already: the world will maybe evolve differently than Brian thinks. That's on the record. Now why don't you start your own blog? You can leave a link here if you want. I'm sure Brian wouldn't mind.

by: Mark from: Victoria
December 03, 2012 01:49
Okay, Sergio. Sorry for boring you. You're probably right; I spend too much time here. See you around.
In Response

by: Andrew from: Auckland
December 04, 2012 07:11
Good riddance if you are leaving Mark. Nobody needs your one eyed defence of an authoritarian, repressive KGB thug who crushes dissent at home eg. killing 45% of the separatist population of a north Caucasus nation, while supporting separatists in neighboring former soviet republics, and conducting ethnic cleansing.
Not to mention his pardon of rapists and murderers from said wars, and his awarding them with medals for their "valor"
His so called economic success was built squarely on the economic reforms, painful as they were, of Yeltsins government, and on the increase in oild prices.
Aside from oil, the Russian economy and industry are a farce.
But hey, if you think his government is so great, why are you living in Victoria? Go to Russia, worship Putin, enjoy the great Russian life!!!
Or are you a hypocrite or useful idiot?

The Power Vertical Feed

In this space, I will regularly comment on events in Russia, repost content and tweets I find interesting and informative, and shamelessly promote myself (and others, whose work I like). The traditional Power Vertical Blog remains for larger and more developed items. The Podcast, of course, will continue to appear every Friday. I hope you find the new Power Vertical Feed to be a useful resource and welcome your feedback. More

17:49 October 24, 2014


From RFE/RL's News Desk:


Russian President Vladimir Putin has accused the United States of escalating conflicts around the world by imposing what he called a "unilateral diktat."

Putin made the remarks in a combative speech to political experts at the Valdai International Discussion Club, in Russia's Black Sea resort of Sochi.

Putin said the United States has been "fighting against the results of its own policy" in Iraq, Libya and Syria.

He said risks of serious conflicts involving major countries have risen, as well as risks of arms treaties being violated.

He also dismissed international sanctions over Russia's actions in Ukraine as a "mistake," saying they aimed at pushing Russia into isolation and would end up "hurting everyone."

We did not start this," he added, referring to rising tensions between Russia and the West.

(Based on reporting by Reuters, AP, Interfax, TASS)


German Chancellor Angela Merkel has urged Russian President Vladimir Putin in a telephone call to push for a quick resolution of the ongoing gas dispute with Ukraine as winter looms.

The call by Merkel to Putin on October 24 comes as representatives of the EU, Russia, and Ukraine are due to meet again next week in EU brokered talks aimed at solving the gas dispute between Kyiv and Moscow.

Merkel also underlined that upcoming elections in areas of eastern Ukraine controlled by Russian-backed separatists must respect Ukrainian national law.

Pro-Russian insurgent leaders are boycotting a parliamentary snap poll on October 26 in Ukraine and are holding their own election in the Lugansk and Donetsk regions, home to nearly three million people, on the same day instead.

(Based on reporting by AFP and Reuters)



The United Nations says the conflict in Ukraine has forced more than 800,000 people from their homes.

Around 95 percent of displaced people come from eastern Ukraine, where government troops have been battling pro-Russian separatists.

UNHCR, the UN refugee agency, told a briefing in Geneva that an estimated 430,000 people were currently displaced within Ukraine -- 170,000 more than at the start of September.

It said at least 387,000 other people have asked for refugee status, temporary asylum, or other forms of residency permits in Russia.

Another 6,600 have applied for asylum in the European Union and 581 in Belarus.

The agency said it was "racing to help some of the most vulnerable displaced people" as winter approaches.

It also said the number of displaced people is expected to rise further due to ongoing fighting in eastern Ukraine.


Three alleged militants have been killed by security forces in Russia's volatile North Caucasus region.

Russia's National Antiterrorism Committee says that two suspects were killed in the village of Charoda in Daghestan on October 24 after they refused to leave an apartment and opened fire at police and security troops.

One police officer was wounded.

Also on October 24, police in another North Caucasus region, Kabardino-Balkaria, killed a suspected militant after he refused to identify himself, threw a grenade towards police, and opened fire with a pistol.

A police officer was wounded in that incident.

Violence is common in Russia's North Caucasus region, which includes the restive republics of Daghestan, Kabardino-Balkaria, Ingushetia, and Chechnya.

Islamic militants and criminal groups routinely target Russian military personnel and local officials.

(Based on reporting by Interfax and TASS)


A lawyer, who represented an alleged victim of the notorious Orekhovo criminal group in Moscow, has been assassinated.

Police in the Russian capital say that Vitaly Moiseyev and his wife were found dead with gunshot wounds in a car near Moscow on October 24.

Moiseyev was representing Sergei Zhurba, an alleged victim of the Orekhovo gang and a key witness in a case against one of the gang's leaders Dmitry Belkin.

Belkin was sentenced to life in prison on October 23 for multiple murders and extortion.

Last month, another of Zhurba's lawyers, Tatyana Akimtseva (eds: a woman), was shot dead by unknown individuals.

The Orekhovo group was one of the most powerful crime gangs of the Moscow region and in Russia in the 1990s. Its members are believed to be responsible for dozens of murders.

(Based on reporting by TASS and Interfax)

17:27 October 24, 2014


17:26 October 24, 2014


17:00 October 24, 2014
08:29 October 24, 2014


From RFE/RL's News Desk:


Ukrainian Prime Minister Arseniy Yatsenyuk is warning that Russia could attempt to disrupt Ukraine's parliamentary elections scheduled for October 26.

Yatsenyuk told a meeting of top security officials and election monitors on October 23 that "It is absolutely clear that attempts to destabilize the situation will continue and will be provoked by Russia."

Yatsenyuk said "we are in a state of Russian aggression and we have before us one more challenge -- to hold parliamentary elections."

The prime minister said Ukraine needs the "full mobilization of the entire law-enforcement system to prevent violations of the election process and attempts at terrorist acts during the elections."

Interior Minister Arsen Avakov said authorities have ordered some 82,000 policemen on duty for election day.

He said 4,000 members of a special reaction force would be among those maintaining order during polling hours and would be concentrated in "those precincts where there is a risk of some terrorist acts or aggressive actions by some...candidates."

The warning by Yatsenyuk comes on the heels of three violent attacks on parliamentary candidates in the past week.

The latest, against Volodymyr Borysenko, a member of Yatsenyuk's People's Front Party, occurred on October 20 when Borysenko was shot at and had an explosive thrown at him.

He allegedly survived the attack only because he was wearing body armor due to numerous death threats he had recently received.

Elections to the Verkhovna Rada, the parliament, will be held despite continued fighting in the eastern part of the country between Ukrainian government forces and pro-Russian separatists.

Voting will not take place in 14 districts of eastern Ukraine currently under the control of the separatists.

Those separatist-held areas -- in the Donetsk and Luhansk regions -- are planning on holding their own elections in November.

Additionally, Russia's illegal annexation of Crimea in March means the loss of 12 seats from the 450-seat parliament.

Polls show President Petro Poroshenko's party leading with some 30 percent of respondents saying they would cast their vote for the Petro Poroshenko Bloc.

It that percentage holds on election day it would mean Poroshenko's bloc would have to form a coalition government, likely with nationalist groups who oppose conducting peace talks over fighting in the east.

(Based on reporting by Reuters and Interfax)



Moscow has denied claims of an incursion by a Russian military plane into Estonia's airspace.

A Russian Defense Ministry spokesman told Interfax news agency on October 23 that the Ilyushin-20 took off from Khrabrovo airfield in the Russian enclave of Kaliningrad on October 21.

The spokesman said the reconnaissance plane flew "over neutral waters of the Baltic Sea" while on a training flight.

On October 22, Estonia’s Foreign Ministry summoned the Russian ambassador in Tallinn, Yury Merzlakov, after the Estonian military said the Russian plane had entered its air space.

In a statement, NATO said the Ilyushin-20 was first intercepted by Danish jets when it approached Denmark, before flying toward non-NATO member Sweden.

Intercepted by Swedish planes, the alliance said the Ilyushin entered Estonian airspace for “less than one minute” and was escorted out by Portuguese jets.

NATO has stepped up its Baltic air patrols and Moscow has been accused of several recent border violations in the region amid heightened tensions between Russia and the West over the Ukraine conflict.

Last month, Estonia accused Russia of abducting one of its police officers on the border.

Russia claims Eston Kohver was seized inside Russia on September 5, while Estonian officials say he was captured at gunpoint in Estonia near the border and taken to Russia.

The European Union and United States have called for the immediate release of the Estonian security official, who is facing espionage charges in Russia.

Meanwhile, the Swedish Navy has been searching for a suspected submarine sighted six days ago some 50 kilometers from the capital, Stockholm, although it said on October 22 it was pulling back some of its ships.

Swedish officials have not linked any particular country to the suspected intrusion and Moscow has denied involvement.

(With reporting by Interfax, TASS, and the BBC)


A Moscow court postponed to next week a ruling on a move to take control of Bashneft, an oil company from tycoon Vladimir Yevtushenkov.

The judge said on October 23 that the next hearing will take place on October 30 after the prosecution requested more time to prepare its case.

Prosecutors filed the suit in September to regain state ownership of Bashneft, citing alleged violations in the privatization and subsequent sale of the company to AFK Sistema investment group.

Yevtushenkov, the main shareholder of the conglomerate, is under house arrest on suspicion of money laundering during the firm's acquisition in 2009.

Yevtushenkov, 66, was arrested on September 16.

He is ranked Russia's 15th richest man by U.S. magazine Forbes, with an estimated fortune of $9 billion.

(Based on reporting by Reuters and TASS)

11:11 October 23, 2014


According to a report in the pro-Kremlin daily "Izvestia," deputy Kremlin chief of staff Vyacheslav Volodin told a meeting of the Valdai Discussion Club in Sochi that Western politicians "do not understand the essence of Russia."

"Volodin stated the key thesis about the current state of our country: As long as there is Putin there is Russia. If there is no Putin, there is no Russia," Konstantin Kostin, head of the Foundation for the Development of Civil Society, told "Izvestia."

Latest Podcasts

About This Blog

The Power Vertical is a blog written especially for Russia wonks and obsessive Kremlin watchers by Brian Whitmore. It covers emerging and developing trends in Russian politics, shining a spotlight on the high-stakes power struggles, machinations, and clashing interests that shape Kremlin policy today. Check out The Power Vertical Facebook page or