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#4
Novaya Gazeta
No. 93
December 2001
A MUZZLE FOR THE OLIGARCHS
Equal distance means collecting everyone under the president's heel
Author: Yulia Latynina
[from WPS Monitoring Agency, www.wps.ru/e_index.html]

THE KREMLIN IS NOT AIMING FOR REFORMS OR ANYTHING LIKE THAT. IT IS AIMING FOR CONTROL OVER FINANCES. YELTSIN'S REGIME HAD A LOT OF OPPONENTS, AND THERE WAS A SINGLE TEAM IN POWER. PUTIN'S REGIME HAS NO REAL OPPONENTS, HENCE THE PRESIDENT CANNOT HAVE A UNITED TEAM.

The Putin regime has legitimized a corrupt, flawed system

President Boris Yeltsin named Vladimir Putin as his successor two years ago, on December 31, 1999. The New Year surprise was allegedly accompanied by a tacit agreement that Putin could dismiss half of the Family's proteges in a year's time, and the other half two years later.

Yeltsin's regime had a lot of opponents - communists, independent Duma, governors. As a result, there was a single power team, the Family.

Putin's regime does not have real opponents. Nobody opposes the president, instead everyone is vying for the place under his heel. As a result, there cannot be a single team.

The ruler can rely on one team in an anarchy or in a democracy. Only in this case the parliament, opposition, and the media (independent or, on the contrary, sold-out) will ensure his contacts with society. At least two teams are needed in authoritarian regimes. We do have such teams in Russia. They are the people from St. Petersburg, and the Family.

The people from St. Petersburg scored most of their victories in high places - their people control the major security structures, and not only at the ministerial level. They control these structures even on the medium level. The whole quasi-legal infrastructure on which the oligarchs relied (particularly those associated with the Family) is thus destroyed.

On the other hand, big money is needed for the power struggle, and the people from St. Petersburg are short big money. Their successes in the world of business have been negligible. Take the most significant battles for assets this year - conflicts over Rospan, Ust- Ilim combine, Karabash, Kuzbassugol.

Control over millions of dollars was the issue in every case, and this control could be provided by a relatively slight and smart use of the administrative resource. And yet, the people from St. Petersburg failed in every episode.

It is not surprising therefore that the people from St. Petersburg have solid positions only in the companies they were brought into by the president himself - Aleksei Miller in Gazprom, Sergei Zivenko in Rosspirtprom, and Valery Yashin in Svyazinvest. Over there, the presidential proteges have managed all the successes they could.

In other words, security ministers and people from the secret services are not a noose around the neck of entrepreneurial oligarchs; they are merely a muzzle to prevent biting. The recent saga with the presidential race in Yakutia and Deputy Prosecutor General Kolmogorov shows that security structures and prosecutor's office are wrong to consider themselves independent players. We have only one player in this country.

The regime's economic strategy appears even more dangerous. What is happening should not be described in terms of bribes or corruption. What is meant is that the state and a shadow-state exist across the same territory; and every official, up to those in high places, views his official position as a method of lining his pockets.

The Krasnoyarsk Aluminum Plant makes almost 900,000 tons of aluminum at $1,300 a ton. It reports the volume of sold products at $600 million. It follows that Russian Aluminum must be paying something in cash. Somebody at the Kremlin, not at the level of a district tax inspectorate.

If Miller replaces Rem Vyakhirev at Gazprom instead of making the company transparent, it means that the Kremlin does not object to the principles of the company's opertions. It only objects to seeing money end up in somebody else's pockets.

Needless to say, such a system makes all reforms pointless. Nobody is interested in cutting taxes, because high taxation makes oligarchs hide their profits and gets oligarchs on the Kremlin's hook. Nobody is interested in restoring order at natural monopolies because they are the most convenient tool of centralized milking. Of businesses, of course. Nobody is interested in restoring order in legislation because the ruler's will becomes the only law when all other laws contradict one another.

This system was established by oligarchs to promote their minor interests. Nationalization of the system instead of its destruction is the major success of the regime.

(Translated by A. Ignatkin)

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