23 July 2003, Volume 3, Number 29
KREMLIN & THE WHITE HOUSE
PUTIN AND YUKOS: ELECTION-SEASON POLITICS OR BUSINESS AS USUAL?By Gregory Feifer
Great expectations have long helped President Vladimir Putin cultivate his image, and this political season is no exception. When British Prime Minister Tony Blair visited Russia in the spring to offer an olive branch after Moscow's opposition to the U.S.-led attack on Iraq, Putin stunned even his own foreign-policy establishment by crudely embarrassing his guest. With Blair standing next to him at a joint news conference, Putin mocked the claim that weapons of mass destruction existed in Iraq -- the main pretext for going to war. He went on to challenge Blair's vision of a U.S.-led global-security framework.
Several months on, the Russian president nonetheless found himself feted during a trip to London. "President Putin is the best Russian leader since Tsar Alexander II," wrote "The Times," which went on to praise Putin for doing "more to consolidate freedom" than any predecessor since the 1860s.
So how to square such superlatives with a recent string of occurrences that seem to show that he has done anything but?
Like almost every other year, Russia this summer has seen fresh sorrow and scandal, including the deaths of Sergei Yushenkov and Yurii Shchekochikhin, two State Duma deputies who were among the most vocal and upstanding defenders of human rights. Causes and motives are still under investigation, but the absence of these two men is a heavy blow to the advancement of individual liberties. Meanwhile, well into the fourth year of the war in Chechnya -- launched ostensibly to crack down on terrorism -- Chechen suicide bombers are increasing their attacks on civilians outside the breakaway region, the result of an increasingly radicalized civilian population suffering at the hands of Russian forces. And in June the Media Ministry shut down TVS, the country's last independent television station.
However, all these troubling events -- which can speak only of a steady erosion of freedom -- have most recently been greatly overshadowed by the start of investigations into Yukos. Led by the once-reviled banker Mikhail Khodorkovskii, the oil giant had become a poster child for Russian progress even before it announced a merger with Sibneft earlier this year to form the world's fourth-largest oil producer.
The probe into Yukos began with the arrest earlier this month of the company's financial strategist, Platon Lebedev, on charges of embezzling state property in a 1994 privatization, and quickly grew to include escalating accusations of murder and tax evasion. Masked police forced their way into the company's archives, taking documents and computers. There is no sign the standoff will abate soon, and indications that other companies may also fall prey.
Speculation about the people and motives behind the Yukos affair has spawned a cottage industry alongside Moscow's already burgeoning political rumor mill. The growing list of suspects includes the president, various factions of his entourage, rival businesspeople, and many others. In general, the scandal has largely been seen as part of the jockeying ahead of parliamentary elections in December. But is this year's record really any different from that of the rest of Putin's presidency?
Most agree the investigations come as a warning to Khodorkovskii -- reportedly Russia's richest man -- to curb his recent public forays into politics. These include financial contributions to liberal parties Yabloko and the Union of Right Forces, as well as rumors that Khodorkovskii wishes to enter the political arena himself, perhaps to run in for president in 2008.
The investigations might also have been sparked, some say, by a think-tank report earlier this year warning that a number of oligarchs led by Khodorkovskii are planning on staging a "coup" by eroding the president's power.
Both reasons are likely significant. More important, however, is that the investigations are also just the latest in a series of attacks against politicians and businesspeople that began with Putin's first days in office.
Soon after Putin's election in 2000, a string of investigations began into Russia's largest companies, including No.1 LUKoil, top automaker AvtoVAZ, metals giant Interros, and others. The pressure against these companies -- which were always at least publicly loyal to the Kremlin -- cast a wider net than the much-lauded campaigns against vocal Kremlin critics Boris Berezovskii and Vladimir Gusinskii, who are both now in exile. The various parts of these men's media empires were one by one taken over by Kremlin-friendly managers in a series of moves culminating in the shutdown of TVS this year.
Following the abandoned investigations, the shaken recipients, led by Interros chief Vladimir Potanin, said they had learned not to meddle in politics. Putin meanwhile pledged not to revisit the murky privatizations of the 1990s in which the few well-connected gained control of large swaths of Russia's industrial assets for a song. It is not likely a coincidence that Potanin reiterated his position and apologized for past wrongdoing just days ahead of Lebedev's arrest this month.
These combined campaigns were the direct result of the 1999 election campaign. Once in office, Putin lost no time shutting down independent potential rivals and taking control of the media outlets that had helped forge his image as a competent, decisive ruler bent on restoring Russian greatness -- the image he so deftly showed in Britain last month. Knowing firsthand television's power to shape electoral consensus, Putin appears not to have been content until all main outlets were brought under state control.
The ruse seems to have worked: During his recent British trip, when Putin was continuously lauded for "bringing stability" to Russia after a decade of Yeltsin-era chaos, the attacks against the oligarchs in 2000 were often cited as proof. But is he not actually doing the opposite for the country?
Much of the blame for the Yukos affair has been apportioned to certain actors within the administration. Fingers have been pointed at members of Putin's so-called St. Petersburg group, including Federal Security Service Director Nikolai Patrushev and former KGB agents in the top echelons of the presidential administration. While these men might indeed be making a bid for greater influence, few would disagree with the general opinion that none of them could have acted against Yukos without the president's approval. That the Kremlin remains silent on such issues while state agencies do the dirty work is indeed an integral part of its schemes.
By allowing the attack against Yukos, Putin has further exposed himself as an old dog, albeit one whose new tricks show him to be a master of Russian politics. He has worked ceaselessly to restore top-down vertical control, with himself at the top of the pile.
Putin's is not Westernizing reform. It does not strengthen the rule of law. Stability is actually the last thing Putin wants -- hence the breaking of his own promises to the oligarchs. Instead, the president has actively eroded what little rule of law existed in Russia to reinforce a Soviet- and tsarist-era understanding that status within the political and economic systems depends on personal relations and, logically, loyalty. Unpredictability is central to maintaining control.
Putin's policy of staffing various state agencies with his former KGB and police comrades-in-arms -- the so-called chekisty -- has increased his leverage over the government apparatus, as well as the Kremlin's domination over parliament, the judiciary, and indeed much of society.
But Putin's silence also conceals his weaknesses by papering over splits among various clans vying for power within the Kremlin. While Putin has derived a large degree of power for himself at the center of the traditional-style oligarchy he has helped resurrect, he does not control it at will. In part, he serves as arbitrator among those who could undermine his role were they to gain too much influence. Political observers are now warning that the siloviki -- those who run the military and law-enforcement agencies -- are in danger of unseating business interests to Putin's detriment.
The oligarchs have shown some signs of fighting back. Top business lobbyist Arkadii Volskii, the old-boy head of the Union of Industrialists and Entrepreneurs, appealed to Putin to "take measures to stop the reckless campaign unleashed by forces for whom stability is a threat, " noting that these forces have brought Yukos share prices plummeting and have foreign correspondents warning once again that Russia is not the investors' paradise proclaimed just weeks earlier. Yukos has lost at least $8 billion of its value while the stock market in general has hemorrhaged billions.
Khodorkovskii himself, after playing down his own questioning by authorities, warned he would consider cutting off oil supplies to some regions if investigators continue their course, calling their actions the result of "petty internal political intrigues."
But at this late stage in the consolidation of Putin's power, there is little the oligarchs can do. After acquiescing to the rules laid down early in Putin's presidency, Russia's economic elite has been forced to play by them -- hence the relative timidity of their appeals and the absence of direct accusations against the president himself. It also accounts for Potanin's voluntary verbal self-flagellation, which, as opposed to publicly defending oneself, is generally seen as the only realistic way to get ahead these days.
As everyone rightly says, the elections heighten the political jockeying. The main benefactor of 1999's election-season tumult, Putin might not know how to act otherwise.
Unfortunately for others, the deck is stacked too much in the Kremlin's favor. As in Soviet days, the leadership is once again bludgeoning society with denials -- not least about the war in Chechnya -- and manipulation to a point that has become all too evident for even the most insistent of optimists to explain away.
Those who hailed Putin's trip to Britain as a display of Westernizing normalcy have only bought into the president's arrogance of power. Putin's showmanship actually belies a state of artificially prolonged political crisis still going a dozen years into the post-Soviet era.
Gregory Feifer is a freelance writer living in Paris. He was based in Moscow from 1998-2003.
CONSTITUTIONAL COURT DECISION OPENS WAY FOR QUIET REVOLUTION...An 18 July decision by the Constitutional Court ruling that only that court can consider lawsuits contesting whether local legislation complies with federal laws "will open a new page in the relationship between the federal center and the regions," "Vremya-MN" wrote on 22 July (see "RFE/RL Newsline," 21 July 2003). And "Kommersant-Daily" concluded on 19 July that this decision will hinder -- or at least slow -- the federal center's effort to create a uniform legal space. The court's ruling was made in answer to a lawsuit brought by legislators in Tatarstan and Bashkortostan, who questioned specific provisions of the law on prosecutors that allowed any prosecutor to protest contradictions of legal acts in courts of general or arbitration jurisdiction. JAC
...AND FOR ELECTIONS ACCORDING TO REGIONAL TRADITIONS.According to "Vremya-MN" on 22 July, regional elections will -- as before -- have to be held in conformity with standards outlined in the Russian Constitution. However, some regional peculiarities may now be preserved. For example, the election of the vice mayor of Moscow should now be allowed, the daily reported, citing "the opinions of many experts" who were not identified (see "RFE/RL Newsline," 31 March 2003). Elections to regional legislatures will also be affected. According to the daily, those regions that have not already introduced changes to their constitutions and charters requiring that one-half of the seats in legislatures be elected according to party lists will no longer have to do so. JAC
DAILY ALLEGES THAT ENVOYS' RESOURCES BEING USED FOR UNIFIED RUSSIA'S CAMPAIGN..."Nezavisimaya gazeta" alleged on 18 July that the presidential envoys to the seven federal districts have been instructed to support the State Duma campaign of the pro-Kremlin Unified Russia party, and as a result, the envoys' reception offices are being made available for the campaign. However, an analytical report prepared last year by the Regional Applied Policy Agency and the Regional Issues Institute concluded that the envoys would not likely be much help in this task since they have proven incompetent in most areas. For example, they still have not completed their main task of bringing regional laws into compliance with federal law. JAC
...AND THAT KREMLIN WILL STILL NEED GOVERNORS' SUPPORT TO WIN DUMA ELECTIONS.Regional governors still have significant administrative resources at their disposal, despite attempts by Moscow to curb their power, "Nezavisimaya gazeta" reported on 18 July. The daily argues that the Kremlin's main goal is to secure a pro-Kremlin majority in the Duma. Therefore, Kremlin officials will likely have to bypass the presidential envoys and deal with regional leaders directly. JAC
DISSATISFACTION WITH NEW AUTOMOBILE REGULATIONS CONTINUES IN FAR EAST.Residents of the Far Eastern port city of Nakhodka on 15 July held a second protest action against a new increase in the duty paid on imported secondhand automobiles and against the introduction of mandatory car insurance, polit.ru reported on 15 July (see "RFE/RL Newsline," 3 July 2003). Protestors used bulldozers to mangle a Zhiguli, a Moskvich, and a Zaporozhets -- "three symbols of the Soviet automobile industry." During the last protest, a Zhiguli was set on fire. In Birobidzhan in the Jewish Autonomous Oblast, residents are collecting signatures for an appeal to President Putin to cancel the new law requiring car insurance, according to the website. JAC
FAR EASTERN LEGISLATORS PLAYING HOOKY."Amurskaya pravda" has published a list of absentees from the oblast's legislature, presscenter.ru reported on 16 July. Legislator Igor Gorevoi, who was involved in making the list public, said he hopes to shame fellow lawmakers into showing up more regularly. Only three of the legislature's 29 members have attended every legislative session, while three others attended only about half of them. The regular attendees say that truancy discredits the body's authority and disrupts its work, since voting cannot take place without a quorum. JAC
REPUBLIC TO PUSH FORWARD IN BATTLE FOR ITS CONSTITUTION...Bashkir legislature speaker Konstantin Tolkachev told reporters in Ufa on 21 July that the republican parliament will likely appeal some verdicts by courts issued against the Bashkir Constitution in light of an 18 July Constitutional Court ruling that bars courts other than the Constitutional Court from ruling on the compatibility of local legislation with federal laws, RFE/RL's Tatar-Bashkir Service reported (see "RFE/RL Newsline," 21 and 22 July 2003). According to Tolkachev, the ruling will open up new discussions about a number of concepts, including sovereignty. JAC
...AS OUTSIDE IMAGE OF REPUBLIC'S POLITICAL STABILITY CALLED DECEPTIVE.In an interview with "Moskovskie novosti," No. 29, Tatar National Front Chairman Zagir Khakimov said Bashkortostan is "far from being as politically stable as the republican media frequently indicate." According to Khakimov, "police arbitrariness, particularly with regard to relations with the [political] opposition, has created more difficult conditions for the alternative press." He added that freedom of movement is under threat in the republic, noting that a group of representatives from Tatar public organizations in Naberezhnye Chelny in Tatarstan who wanted to attend a recent congress of Tatars of Bashkortostan were thrown out of the republic. Khakimov also claimed that ethnic Bashkirs do not support Bashkir President Murtaza Rakhimov and that Rakhimov's chances of winning the 7 December presidential election are "not great." According to Khakimov, ethnic Bashkirs understand that the privileges Rakhimov promises will be available only to the republic's ruling elite. He also suggested that at age 69, Rakhimov might not want to seek a third term, adding, however, that "it's not only up to him." "Rakhimov stands for the clan," Khakimov said. JAC
BULGARIAN NUCLEAR WASTE TO BE STORED IN URALS INDEFINITELY, BUT NOT PERMANENTLY.A trainload of spent nuclear fuel from a Bulgarian nuclear-power plant has arrived at the Mayak facility near Chelyabinsk, ITAR-TASS reported on 21 July. Facility spokesman Yevgenii Ryzhkov told the agency that the fuel will now undergo recycling, during which 90 percent of its valuable components will be extracted for future use. The leftover radioactive waste will be sent to special storage. In an interview with Ekho Moskvy earlier this month, Ryzhkov said the waste "will remain at the facility for an undetermined period." "We are talking not about burying, but about temporary storage," Ryzhkov said. "Such a procedure is perfectly legal." Local environmentalists maintain that according to an earlier agreement between Russia and Bulgaria, Russia agreed to recycle the fuel, but not to store it, the radio station reported on 11 July. JAC
GOVERNOR IS FORCED TO ECONOMIZE ON SERVICE CAR."Komsomolskaya pravda" on 21 July reported on the recent scandal in Kostroma Oblast surrounding the governor's purchase of a Mercedes with budget money. A local prosecutor forced Governor Vladimir Shershunov to sell his service automobile and return the 4.2 million rubles ($138,000) to the oblast budget. Shershunov told the newspaper that he is sure the scandal was "ordered up," but he declined to say by whom. Shershunov argued that in order for the oblast to attract foreign investment, the governor needs a high-class car. However, he admitted that he managed to attract approximately 60 million euros ($68 million) in investment some 18 months ago -- before he owned the Mercedes. The daily noted that Shershunov is not the first regional leader to have expensive tastes when it comes to service vehicles. Governor Anatolii Lisitsyn of neighboring Yaroslavl Oblast reportedly has a service airplane at his disposal. JAC
AUTHORITIES WANT TO CLOSE DOWN ADVOCACY GROUP FOR MESKHETIANS.Krasnodar Krai authorities are reportedly seeking to close down a local human rights foundation based in Novorossiisk, polit.ru reported on 15 July. The organization, Shkola Mira, has defended the interests of immigrants and ethnic groups such as the Meskhetians. However, the group is reportedly not in compliance with a law that requires that all public organizations have three founders. It has only one. When the group queried Irina Kovaleva, a leading specialist at the department for public associations at the krai's Justice Ministry directorate, about introducing changes into their organizational charter, they were told that the Justice Ministry "is not interested in the continuation of the activities of the organization." According to the website, the directors of the foundation were told indirectly that if they bring pressure to bear on the international community to compel Georgia to agree to allow the Meskhetians to immigrate to that country, then they can count on the full support of the krai authorities. However, the foundation does not want to comply with this suggestion. JAC
JAILED LEGISLATOR AIMS FOR ANOTHER VICTORY AT BALLOT BOX...Yurii Shutov, a St. Petersburg legislator who has been incarcerated since November 1999 on suspicion of organizing a contract murder, has notified the city's election commission that he intends to participate in the 21 September gubernatorial election, RIA-Novosti reported on 21 July. In December 2002, Shutov won re-election to the city's Legislative Assembly, receiving almost 33 percent of the vote compared to 21 percent for his closest rival (see "RFE/RL Newsline," 10 December 2002). So far, more than 25 people have declared their intention to run, according to newsru.com. All of the potential candidates have until 31 July either to gather enough signatures to register or to pay an election tax of 7.5 million rubles ($247,000). Meanwhile, the Union of Rightist Forces (SPS) in St. Petersburg has decided to support the Kremlin-backed candidate, presidential envoy to the Northwest Federal District Valentina Matvienko, RosBalt reported on 21 July. Last week, the Communist Party announced that it will not nominate a candidate or support anyone else. JAC
...AS TOP COP DECLARES CRIME CAPITAL THE CENTER OF NEW 'DECRIMINALIZED ZONE.'Interior Minister Boris Gryzlov has declared St. Petersburg a "decriminalized" zone, RIA-Novosti reported on 16 July. A special detachment of the ministry has been working in the city and in Leningrad Oblast since the beginning of the year, and as a result of their work, "many crimes have been solved, prophylactic measures have been taken, and a serious reduction in the level of crime in the region has been noted," he said. The number of registered crimes dropped almost 13 percent during the first half of the year compared with the same period last year, according to Gryzlov. At the same time, Gryzlov announced that two employees of the ministry's directorate for the Northwest Federal District were arrested in St. Petersburg on 15 July, ORT reported. They are suspected of belonging to a criminal group and of committing murders. Meanwhile, the Yabloko party has decided to back city legislator Mikhail Amosov in the city's 21 September gubernatorial election, RosBalt reported on 15 July. JAC
SARATOV RESIDENT LOOKS TO COURTS FOR SOLUTION TO FLAT'S WATER PROBLEM.Saratov resident Lev Volfman has filed a lawsuit seeking damages for routine disruptions in the supply of cold water to his apartment and won, "Novaya gazeta," No. 51, reported. Volfman filed the suit in April and on 11 July a raion-level court found in his favor and awarded him 3,000 rubles ($99). Volfman believes that this is one of the largest such compensation awards granted by the raion court. He also believes that if other consumers file similar lawsuits in every city, then residents will finally have their right to water assured. Currently, Volfman's apartment has no hot water, but a water heater costs around 3,000 rubles. In the fall, he plans to file another lawsuit. JAC
COMINGS & GOINGSDECEASED: Leader and founder of the ultranationalist Pamyat movement Dmitrii Vasilev died on 17 July after a long illness, Russian media reported.
OUT: Aleksei Volin, deputy head of the government apparatus, confirmed on 17 July that he will leave government service, Russian media reported (see "RFE/RL Newsline," 17 July 2003). Volin has been responsible for the government's information policy.
CONVICTED: The Moscow Municipal Court on 18 July found two 1990s-era Economic Development and Trade Ministry officials guilty of accepting bribes, Russian media reported. Andrei Lifanchikov, former head of the department for the agro-industrial sector, and his deputy, Vladimir Korneev, were given suspended sentences of 8 1/2 and seven years, respectively, ITAR-TASS reported.
DECEASED: State Duma Deputy Yurii Ten died on 21 July after a long illness, Russian media reported. Ten, 51, was a member of the People's Deputy group and had been elected from a single-mandate district in Irkutsk Oblast.
POLITICAL CALENDAR24 July: Prime Minister Mikhail Kasyanov will visit Novosibirsk for a two-day trip to the Siberian Federal District
24 July: The Vyborg Municipal Court will consider the legality of the election of Damir Shadaev as a senator to the Federation Council representing Leningrad Oblast
26 July: New constitution of Daghestan will come into effect
26 July: A celebration of the 450th anniversary of the establishment of diplomatic relations between Russia and England will take place in Arkhangelsk
26 July: A new federal law simplifying the bureaucratic procedure for merging private banks will come into force, according to "Politburo," No. 28
1 August: Deadline for Russian peacekeeping troops to be withdrawn from Kosova
6 August: Finance Ministry will place 5 billion rubles ($1.7 billion) in six-month GKOs up for auction
12 August: Third anniversary of the sinking of the "Kursk" nuclear submarine
13 August: Air-traffic controllers will hold a national protest
15 August: Date by which Duma should approve new map of single-mandate districts. If it fails to do so, the Central Election Commission will have the right to confirm the map
17 August: Karachaevo-Cherkessia will hold presidential elections
Late August: Campaign for 7 December State Duma elections officially begins
September: President Putin will visit the presidential retreat Camp David in the United States for talks with U.S. President George W. Bush
September: Second Russian-U.S. Commercial Energy Summit will take place in Moscow
1 September: Date by which government commission is expected to have drafted 2004 budget
6 September: State Duma Speaker Gennadii Seleznev's Party of Russia's Rebirth will hold a congress in Moscow
7 September: Sverdlovsk, Novgorod, and Omsk oblasts will hold gubernatorial elections
7 September: Murmansk will hold mayoral elections
7 September: Moscow-based exhibition of Federal Security Service archival materials relating to the 1922 expulsion of the intelligentsia will close
10 September: Special party congress for Communist Party of Russia
14 September: Volgograd will hold mayoral elections
21 September: St. Petersburg and Leningrad and Tomsk oblasts will hold gubernatorial elections
23 September: The first European-Pacific Ocean Conference will take place in Vladivostok devoted to improving dialogue among intellectuals in European countries and the Pacific region, regions.ru reported on 6 March
24 September: Federation Council will hold its opening session after summer recess
29 September-3 October: The Third World Conference on Climate Change will take place in Moscow
30 September-2 October: The Second All-Russian Sociological Congress will take place at Moscow State University
1 October: Thirty-three percent salary hike for budget-sector workers will go into effect, pending the passage of legislation being revised by a conciliation commission
October: President Putin and German Chancellor Gerhard Schroeder will meet in Yekaterinburg, Novyi region reported on 14 April
5 October: Presidential election to be held in Chechnya
6 October: British court to consider Russia's request to extradite tycoon Boris Berezovskii
12 October: President Putin will visit Italy
23-26 October: First anniversary of the Moscow-theater hostage crisis
25-26 October: Russian Forum on the development of civil society will be held in Nizhnii Novgorod
29 October: 85th anniversary of the founding of the Komsomol
7 December: Bashkortostan will hold presidential elections
7 December: State Duma elections will be held.