Accessibility links

Breaking News

Russia: Conflict Increases Among Berezovsky, Nemtsov And Chubais

Moscow, 21 August 1997 (RFE/RL) -- The war of words between some members of the Russian government and the country's financial and media tycoons has taken a new turn with President Boris Yeltsin's criticism yesterday of Security Council Deputy secretary Boris Berezovsky and the president of NTV commercial television station Igor Malashenko for having offended Chechen politicians.

The two men have publicly alleged that top Chechen officials might have been involved in the recent wave of kidnapping of Russian journalists. Yeltsin was apparently upset that these allegations were made only one day after he had met Chechen President Aslan Mashkhadov for talks about future relations between Moscow and Grozny. Yeltsin's remarks fueled speculation that Berezovsky may be politically sidelined and could even be ousted.

Yeltsin's outburst came soon after First Deputy Prime Minister Boris Nemtsov told RFE/RL that Berezovsky "is not a person in the right job" in the Security Council and hinted that the government might soon act to restrict the influence of that businessman-turned-politician.

But the presidential office said no such move was in the offing. And Berezovsky himself told the press immediately after Yeltsin's pronouncements that he did "not think the president aimed at criticizing" him. Berezovsky then added that he "would comply with any decision made by the President."

Asked to comment on Nemtsov's criticism, Berezovsky responded by complaining about Nemtsov and Anatoly Chubais, both First Deputy Prime Ministers, for "making a strategic mistake" in ignoring opinions of Russia's business community.

Berezovsky went on to say that "businessmen are the backbone of the economy and the foundation of reforms," and the government "should certainly listen to their voice."

He said that Chubais and Nemtsov, "after they have risen to positions of power, decided to snub the opinion of the business community." He added that he and other businessmen have been unsuccessfully trying to convince Chubais and Nemtsov that they were wrong.

Berezovsky said that Chubais and Nemtsov and the financial community have "different understandings of what kind of relations the authorities and businessmen should have."

Berezovsky belongs to a group of financial and media tycoons who last year combined forces in support of Yeltsin's reelection and successfully bankrolled him into a second term in office.

They have received handsome business dividends for their support. Yeltsin brought Berezovsky, who has vast business interests and holds a minority share in the partially state-owned ORT television network, to the Security Council last October .

Chubais has said recently that members of the financial community tried to influence the government's policies on such issues as the conduct of privatization. He added that the state would "carry out its functions with increasing toughness, whether certain people like it or not."

Nemtsov told RFE/RL that the government might have "lost in recent years its ability and possibility to control its own assets...but is starting to regain control." He went on to say that he put aside his business interests when he joined the government. But he also charged that, although formally Berezovsky is not involved in business activities, "de facto this is all he does."

Prime Minister Viktor Chernomyrdin may not share Nemtsov's views, however. Chernomyrdin appears often opposed to his first deputies over the pace of reform, and has reportedly become recently closer to Berezovsky. The Prime Minister has not taken any public stance in the controversy so far, but his position is considered crucial for a decision on whether Berezovsky will maintain his post.

Both Chernomyrdin and Nemtsov are seen as contenders for the future presidential race, scheduled for the year 2000. And support of the wealthy financial community is expected again to be crucially important.

Observers say the sale of a substantial stake of shares in the telecommunications monopoly Svyazinvest set off a financial and media war last month, dividing Russia's previously allied financial elite.

Nikolay Petrov, a political analyst at the Carnegie Endowment for International Peace in Moscow, says relations between Berezovsky and the two ministers soured as "it became evident that reformists in the government were feeling strong enough to make clear their intention to stop acting under rules set by the financial community."

Petrov said that the public row "could not be avoided," as "the government gave a clear sign to the media tycoons that it would not allow them to start creating their own communication monopoly." He also said that control over Svyazinvest "does not simply mean control over telephone lines. It means control over the future of communications in Russia."

Nemtsov and financial analysts alike have hailed the Svyazinvest deal as Russia's most fair and transparent auctions ever. But Russia's biggest media magnate, Vladimir Gusinsky, who led the consortium that lost the bid, charged that the government officials had rigged the auction.

Gusinsky and Berezovsky, who was also involved in the losing group, launched a campaign of criticism of the auction through their media holdings.