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Russia: Sackings Follow Scandals

By Stephanie Baker and Floriana Fossato

Moscow, 18 November 1997 (RFE/RL) -- A political scandal has left Russian First Deputy Prime Minister Anatoly Chubais nearly devoid of allies in the government, his political future uncertain, and his program of economic reform in doubt.

President Boris Yeltsin over the weekend sacked two top members of Chubais' reform team -- Maxim Boiko, deputy prime minister for privatization, and Pyotr Mostovoi, chairman of the Federal Bankruptcy Agency. Yeltsin rejected an offer by Chubais to resign.

Although Yeltsin's dismissal decrees did not mention the scandal, the actions followed disclosures that Chubais, Boiko, Mostovoi and two other former officials will receive the equivalent of $450,000 for a book on the history of Russian privatization. A company controlled by Uneximbank, which won several hotly-contested auctions of state property over the summer, is the publisher. Yeltsin's spokesman, Sergei Yastrzhembski, said yesterday that no replacements for the sacked officials have been found yet.

The scandal undermines Chubais, who is considered the mastermind of Russia's economic reforms. And his continued presence in the government is regarded widely as needed to continue his economic policies. Anthony Thomas, emerging markets economist at the investment house Keinwort Benson in London, put it this way: "The key is Chubais. As long as he stays, we expect like-minded people to fill the empty spots." Statements from the Kremlin have suggested that Chubais was spared to maintain stability on Russia's wobbly financial markets.

Chubais' shaky position could delay important fiscal decisions. The communist faction in the State Duma, parliament's lower house, said yesterday, for example, that it would block debate on the 1998 budget as long as Chubais remains in his post. Debate had been scheduled for tomorrow. Duma speaker Gennday Seleznyov told reporters today that deputies now plan to debate the bill on Friday. Opposition lawmakers, however, have maintained their demand that Chubais resign and statements today indicated a deal may have been made. The budget is central to Chubais' efforts to sort out the government's messy finances.

It remains unclear who will replace Boiko as head of the Privatization Ministry. There's speculation that Prime Minister Viktor Chernomyrdin may be pushing to fill the post with an ally of his own. Chernomyrdin's associates, including government spokesman Igor Shabdurasulov and Alexander Shokhin, who heads Chernomyrdin's "Our Home Is Russia" faction in the Duma, have predicted that more reformers will be dismissed. Shokhin, who has been mentioned as a potential Chubais successor, said yesterday that it would logical for representatives of the pro-government faction in the Duma to fill the vacant posts.

Even if Yeltsin should decide not to give in to the demands of Chernomyrdin and the Duma, the impact of the scandal could alter Russia's privatization plans. Investors are likely to be concerned over Chubais' discredited reputation. The Moscow Times, an English-language daily, wrote in an editorial that Chubais' recent performance seems to be, in the editorial's words, "turning him into a liability for the reform process."