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Russia: Zubkov Could Well Be Putin's Man

(RFE/RL) October 1, 2007 (RFE/RL) -- Russian President Vladimir Putin said today that he will run for a seat in the State Duma as the top candidate for the pro-Kremlin Unified Russia party. In comments made to a Unified Russia conference, he also said that suggestions that he could serve as Russia's prime minister in a future government were realistic. The statements were the strongest indication yet of Putin's plans after he steps down as president at the end of his second term in 2008.

The president has already indicated that he could leave in office a loyal successor who can initiate the adoption of a new constitution that would lay the groundwork for early elections, allowing him to return to the Kremlin "legitimately" in 2010.

In fact, the key significance of his recent government reshuffle is the replacement of the prime minister, rather than the cabinet changes as many commentators have suggested.

Prime Minister Vitkor Zubkov is not only loyal to Putin, but as the director of the Federal Financial Monitoring Service (FSFM), he possesses a unique political weapon: an unprecedented amount of information about the legal and illegal movement of capital in and out of Russia.

Created by Zubkov four yeas ago, the FSFM operates almost like an intelligence service, with its own network of agents and communications channels with dozens of foreign counterparts. This year, the FSFM presented a 500-page report about corruption in Russia to a leading international money-laundering watchdog, the Financial Action Task Force.

In the report, FSFM noted that, in 2006, it had initiated 140 money-laundering criminal cases for a total sum of 289 billion rubles ($11.6 billion). In its most recent index, graft watchdog Transparency International put Russia in 143rd place, between Togo and Gambia.

Money Flows

Other government changes are also about money, or, to be precise, about the control of money flows

Take, for example, former Deputy Finance Minister Tatyana Golikova, who replaces unpopular Health and Social Development Minister Mikhail Zurabov. Golikova is considered to be a skilled financial manager and is reputed to have a phenomenal memory. That may be helpful when looking into the large amount of social funds that were allegedly siphoned off during Zurabov's term.

Long-standing Economic Development and Trade Minister German Gref has been replaced by his former deputy Elvira Nabiullina. She, however, will lose control over a 1 trillion ruble defense contracts budget, which has been transferred to a commission headed by First Deputy Prime Minister Sergei Ivanov. Furthermore, Putin's reshuffle means the ministry will lose control over the state Investment Fund and federal development projects, including those for the Sochi and Vladivostok areas.

The total amount of budgetary funds removed from the control of the Economic Development and Trade Ministry is 2 trillion rubles. That will be taken over by the Regional Development Ministry, which is now headed by the former envoy to the Southern Federal District and a close ally of Putin, Dmitry Kozak. By controlling federal funds for the regions, Kozak will gain tighter political control of the regional elites, which is crucial in the run-up to elections.

In the same vein, Putin rejected the resignation of Defense Minister Anatoly Serdyukov, who was appointed in February to fight corruption and prevent $200 billion allotted for rearming the Russian military in the next decade from hemorrhaging away.

Serdyukov, who is Zubkov's son-in-law, came from the office of the chief of the Federal Tax Service. In 2004, the tax service collected and presented to the court evidence about tax evasion carried out by the oil major Yukos. In the Kremlin's eyes, that was an invaluable service.

Serdyukov has had no military experience and took a two-month introduction course at the General Staff Academy to learn more about the army he heads.

But already Serdyukov has probed the army finance system and replaced several top generals, including the chiefs of the Russian Air Force and the Navy. His proposed resignation, because of his family ties to Zubkov, was likely just a PR trick. By law, Serdyukov is subordinate directly to Putin, not Zubkov.

Most interesting, perhaps, is the case of Finance Minister Aleksei Kudrin, who is perhaps one of the last liberals in the Russian government and highly respected in the West as a professional. In Fradkov's government, Kudrin was Zubkov's boss, with the Federal Financial Monitoring Service subordinate to the Finance Ministry.

According to a Putin decree published after the reshuffle, the Federal Financial Monitoring Service is now subordinate directly to Zubkov. But to compensate that, Putin has promoted Kudrin to the position of deputy prime minister and asked him to supervise both the Finance and Economic Development and Trade ministries.

Succession Speculation

The reshuffle is clearly meant to show the Kremlin is serious about fighting graft -- invaluable before parliamentary and presidential elections. And Zubkov could be a likely successor to Putin, as his "anticorruption drive" would appeal to almost all segments of the Russian electorate. Zubkov has already called for the adoption of an anticorruption law that has languished in the Russian Duma since 1992. so that Russian Criminal code even has not definition of corruption. He has also called for the creation of a special anticorruption service modeled on his FSFM.

But what about "siloviki," who were seemingly untouched by Putin's reshuffle? Many analysts have suggested that a candidate from their ranks would have a better chance of becoming president Of those potential candidates, First Deputy Prime Minister Ivanov looks like the frontrunner as he is the only candidate to have solid international experience.

But Zubkov, seen widely as a technocrat or a caretaker prime minister, can not be discounted for several reasons.

Zubkov does not belong to any Kremlin clan. That's in contrast to Ivanov, who reportedly is allied with the deputy head of the presidential administration, Igor Sechin.

If Putin does plan to return to the presidency, the installment of Zubkov's cabinet could well be part of this strategy. Speaking on TV-Tsentr on September 22, Aleksei Pushkov, a pro-Kremlin moderator of the political show, "Postscriptum," suggested that Zubkov, with the help of Putin, could become Russia's president in 2008, with Ivanov as his prime minister.

According to this plan, the new administration would undertake some unpopular reforms and initiate the adoption of a new constitution that would change the terms of the presidency and facilitate Putin's return to the Kremlin. Pushkov said that could happen as soon by 2010.

Speculation aside, there are perhaps some more concrete signs. The state budget has been adopted until 2010, instead of 2008. And, despite a plethora of rumors, no "siloviki" candidates have even hinted about the possibility of running -- unlike Zubkov. In under two weeks in office, Zubkov has already visited the regions and has promised to raise pensions and salaries.

During Putin's meeting with Kremlinologists in Sochi on September 14, he was asked to name five possible candidates for president. He mentioned no one from the "siloviki," but instead Liberal Democratic Party of Russia head Vladimir Zhirinovsky and Communist Party head Gennady Zyuganov.

It is quite possible that Putin has not yet made his decision, but Zubkov could be a likely choice. Or as the latest Russian joke goes: "It's up to Putin to make his choice and our business to guess it on election day."

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