Trouble brews between the Kremlin and the oligarchs
Executives at a major oil firm were targeted last week in what experts say are 'showcase' prosecutions.
Was it a just a painful personal warning, intended to dissuade Russia's richest man from pursuing his political ambitions? Or was it the opening shot in a Kremlin power struggle that could reshape the country's political landscape as it heads into election season?Skip to next paragraph
Subscribe Today to the Monitor
Conflicting theories abound as to why Russian prosecutors pounced last week on Yukos, Russia's most profitable oil firm. Two of the company's chief executives were arrested and its CEO, multibillionaire Mikhail Khodorkovsky, was summoned for questioning about a decade-old privatization scandal.
Many experts agree that, whatever triggered it, the sudden storm ruptures a three-year-old peace pact between the Kremlin and the baker's dozen of super-wealthy oligarchs who control an estimated 70 percent of Russia's economic output.
"These prosecutions are a typical showcase, using prosecutors to carry out political tasks," says Sergei Kolmakov, vice-president of the independent Foundation for the Development of Parliamentarism in Moscow. "It's a pity, because three years of stabilization in this country have been shattered with a single blow."
A week ago, police arrested Platon Lebedev, a co-owner of Russia's $30 billion Yukos empire, and charged him with defrauding the state of $283 million in the 1994 privatization of Apatit, a large fertilizer producer.
The next day Yukos's security chief, Alexei Pichugin, was picked up and charged as an accomplice in a five-year-old unsolved murder case.
But prosecutors' real quarry appeared to be Yukos's ambitious and energetic chief, Mr. Khodorkovsky, who was grilled for two hours Friday about the Apatit affair.
Khodorkovsky's own explanation merely fanned the flames of speculation. "What we are seeing here is the beginning of a power struggle between various factions surrounding Vladimir Vladimirovich [Putin]," he told the independent Ekho Moskvy radio station. One of those jockeying factions, which he declined to identify, was trying to blackmail him into providing financial support by arresting his chief lieutenants, Khodorkovsky said.
"It's obvious to me, though I'm no professional political scientist, that Putin will get a second term," Khodorkovsky said. "The question is, who is going to form the second echelon of his team." He added: "We are not the subjects in this battle. We are the objects; here's a chair, here's a table, here's Yukos."
Stability is widely regarded as the key achievement by President Putin, who came to power in 2000 pledging to install a "dictatorship of law" in place of the economic anarchy, Kremlin cronyism and ubiquitous official corruption that reigned in the wild 1990s. In the relatively calm and predictable business environment supervised by Mr. Putin, Russia has seen about 5 percent annual economic growth and a markedly improved image among international investors.
Putin's message to Russia's oligarchs was stark: If they halted their trademark political meddling, authorities would refrain from scrutinizing the murky origins of their business empires.
"Putin made himself very clear," says Liliya Shevtsova, a senior expert with the Carnegie Center in Moscow. "The oligarchs may play their economic role, and even dabble in local politics if they want, but they must not get involved in the Kremlin game. If they break this rule, prosecutors will start to remember things that happened in the last decade."