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Russia: Berezovsky's Sacking May Be A Temporary Victory For Adversaries

Moscow, 7 November 1997 (RFE/RL) - The sacking of Boris Berezovsky as Deputy Secretary of Russia's Security Council can surely be interpreted as a political success for the two First Deputy Prime Ministers, Anatoly Chubais and Boris Nemtsov. However, Berezovsky's influence remains considerable, and he is expected to continue to play a role on Russia's economic and political scene.

President Boris Yeltsin's decree, dismissing the controversial business magnate, was made public Wednesday. Moscow's main newspapers, representing conflicting business and political interests, yesterday said the decree came as a surprise for most, including top officials in the presidential administration. But, unlike previous dismissals of top associates, Yeltsin himself did not make any negative comment about Berezovsky, indicating, according to the daily "Izvestiya," Yeltsin's intention "to distance himself," from Chubais and Nemtsov.

Berezovsky said Chubais and Nemtsov conspired against him. And he noted that neither Prime Minister Viktor Chernomyrdin, nor Berezovsky's direct superior, Security Council Secretary Ivan Rybkin, had been informed of his dismissal, until after Yeltsin signed the decree. Neither Chernomyrdin, nor Rybkin has made any comment, so far. Chernomyrdin is on vacation this week. And, several observers have speculated that his sudden absence may have been prompted by his desire to be absent when Berezovsky was sacked.

Nemtsov, who had declined to comment immediately following the decree, later said Yeltsin made "absolutely the right decision," He noted that officials "had been repeatedly warned" about not combining government activities with private business interests. Nemtsov also said that removing Berezovsky was an important step "toward leaving 'oligarchy capitalism' behind in Russia."

Observers agree that Berezovsky is a symbol of the union of power and money in Russia's new capitalism, and most believe he will remain a highly influential figure in Russia's politics, even after his dismissal, especially through the media he controls.

After he was sacked, the first channel of Russian Public Television (ORT) depicted Berezovsky as a key figure in reaching a peace settlement with Chechnya. ORT is 51 percent state-owned, but Berezovsky has considerable influence on the channel, and is reported to pay the salaries of some of its top executives.

The private network NTV, owned by Vladimir Gusinsky's Media Most, also praised Berezovsky's role in Chechnya, and both networks devoted substantial coverage to Berezovsky's criticisms of Chubais. NTV has repeatedly criticized Chubais and Nemtsov in recent months.

Fully state-owned Russian Television (RTR), whose top managers are seen as close to Chubais and Nemtsov, reported on Berezovsky's career in more neutral terms, and said he had accumulated substantial wealth and influence through his business, including during his tenure as Security Council Deputy Secretary.

Berezovsky has repeatedly denied charges that he used his state post to promote personal business interests.

Both ORT and NTV reminded viewers that Yeltsin's leadership style involves maintaining a balance between opposing groups in the government, implying that more changes may follow.

During the press-conference, Berezovsky had words of admiration and support for Yeltsin, but concentrated his attacks on the first deputy Prime Ministers, particularly on Chubais, and accused him of being a "Bolshevik," who "is convinced that the end justifies the means." As for Nemtsov, Berezovsky dismissed him as "uninteresting," and said Nemtsov "does not have the slightest chance of being elected" president in the next presidential election. Berezovsky said Nemtsov is "incapable of carrying out serious tasks."

Mocking the government's efforts to end sweetheart deals with certain financial groups, Berezovsky slammed Chubais for being, a "hypocrite," and repeated accusations Chubais supports Uneximbank. Berezovsky's LogoVAZ and Uneximbank have clashed publicly, following the privatization in Summer of one quarter of Russia's telecommunications giant Svyazinvest, won by an Uneximbank-led consortium. Berezovsky said, during a recent visit to London, Chubais expressed support for a joint venture between Uneksimbank and British Petroleum, and said Chubais was "lobbying on Uneximbank's behalf."

Following the same line, the daily "Nezavisimaya Gazeta," partly financed by Berezovskiy's LogoVAZ group, described Berezovsky's dismissal as a "temporary victory" for Chubais, whose departure from the government it described as "inevitable." Ridiculing Chubais's pledge to rid Russia of "bandit capitalism," the newspaper charged that Chubais is himself the "father of bandit capitalism."

Yeltsin this week signed another decree, that economic experts and foreign investors had been waiting for a long time. The decree lifts restrictions on foreign ownership of shares in Russian oil companies. Previously, foreign investors could own no more than 15 percent of shares in such companies. The new decree is expected to help the government attract higher bids in upcoming sales of stakes in Rosneft, LUKoil, Norsi-Oil, the Eastern Oil Company, and the Tyumen Oil Company. Commenting on the decree, Nemtsov, who favors greater foreign participation in the energy sector, said that now "foreign investor's 100 participation is guaranteed."

The decree represented another blow to Berezovsky, who has substantial interests in the oil industry. "Nezavisimaya gazeta" has warned in the past that foreigners should not be allowed to acquire controlling stakes in Russian oil companies. An oil company reported controlled by Berezovsky, Sibneft, is expected to take part in the Rosneft bid and so is Sidanko, an oil company controlled by Uneximbank. The privatization of Rosneft is expected to be one of the main business deals of the next months, and some observers say it is the deal to watch to determine if Berezovsky can still influence the Kremlin.