Moscow Times
June 27, 2005
Study: Siloviki's Struggle for Assets Not Over
By Greg Walters
Staff Writer
Top Kremlin officials with links to the military and to intelligence agencies are fighting for control over the choicest pieces of the Russian economy, and the battle looks likely to escalate, according to a new report by the Center for Current Politics in Russia.
However, those officials, commonly known as the siloviki, are facing growing opposition from other Kremlin insiders who are banding together in a tentative "anti-siloviki alliance," the Moscow think tank said in a 76-page report published earlier this month.
President Vladimir Putin himself appears to be growing increasingly wary of the siloviki's advance and is taking steps to stem their influence, the report said.
While analysts at other think tanks agreed that a battle for assets was under way, they cautioned that the report itself might be the product of an individual or political group inside the Kremlin.
A previous director of the Center for Current Politics, Alexei Chesnakov, now works for Vladislav Surkov, deputy head of the presidential administration. Chesnakov's successor, Vasily Fyodorov, was appointed as head of the VTsIOM polling agency after the Kremlin tightened control over it in August 2003.
The center's report says the siloviki aim to turn gas monopoly Gazprom and state-owned oil company Rosneft into vehicles for consolidating the energy sector -- but are struggling first to oust the gas giant's CEO, Alexei Miller.
The siloviki's end goal is to bring top oil companies LUKoil, Sibneft, Surgutneftegaz and Transneft, as well as electricity monopoly Unified Energy Systems, into a single energy behemoth, the report said.
Igor Sechin, deputy head of the presidential administration and chairman of state-owned Rosneft, is a siloviki leader and the most influential person in Putin's inner circle, the report said.
Other key members and allies of the siloviki clan are identified as Federal Security Service chief Nikolai Patrushev, presidential aide Viktor Ivanov, IT and Communications Minister Leonid Reiman, Prosecutor General Vladimir Ustinov and Anatoly Serdyukov, the head of the Federal Tax Service.
Consolidating Russia's energy sector into a state-controlled goliath and channeling financial flows through the hands of the siloviki is their main goal, the report said, but they are also encroaching on other sectors including telecommunications, metals, forestry and aviation. The siloviki aim to limit the role of foreigners in the economy to "junior partner" status, the report said.
However, the siloviki are facing growing opposition from other Kremlin insiders, as well as big business, who are beginning to form a common front to keep the faction in check, according to the report. Yet the alliance is not fully formed, as big business is waiting for signals that its sympathizers in the government will protect its interests.
The center identifies the main opposition to the siloviki as the so-called "St. Petersburg liberals," including Economic Development and Trade Minister German Gref and Finance Minister Alexei Kudrin, and their traditional partners, the "St. Petersburg lawyers," whose leader is presidential administration chief of staff Dmitry Medvedev and Gazprom's Miller.
The liberals are working to rein in the tax service, the report said, while the lawyers have successfully fended off the siloviki's bid to take control of Gazprom.
The center said that Putin was increasingly distancing himself from the siloviki but was interested in preserving a balance of power rather than rolling back the group completely.
If the siloviki end up victorious in their battle for economic supremacy, they will be in a better position to influence the presidential election in 2008, when Putin has said he will step down, the report said.
Analysts from other think tanks said the report might represent the views of individual players within the government.
Political analyst Stanislav Belkovsky called the existence of a monolithic group of siloviki "a myth" perpetuated by the media. The report appears to be a PR move by deputy head of the presidential administration Surkov, who wields influence over the center and is seeking legitimacy in the West, he said.
Surkov is a peripheral figure in the report, which calls him the political leader of the "Old Muscovites," a group vying for influence with the siloviki.
Vladimir Pribylovsky, head of the Panorama think tank, said Surkov might well have been behind the report: "It's not clear whom Surkov is representing these days. He's a political servant."
Pribylovsky also disagreed with the report's grouping of political actors. He said gaps had appeared between Sechin and Ustinov on the one side, and Patryushev and Ivanov on the other.
"There is no St. Petersburg siloviki group," Belkovsky said. "The redistribution of assets is a reality of Russian oligarchic capitalism that has been going on since before Putin's time. There is a limited amount of assets, therefore these people are more like enemies than friends."
Belkovsky himself authored a controversial report in May 2003 that charged that oligarchs were plotting a "creeping coup." Only weeks later, Platon Lebedev, a key business partner of Yukos CEO Mikhail Khodorkovsky, was arrested, heralding the legal crackdown on the oil company.
Alexei Titkov, a political analyst with the Carnegie Moscow Center, agreed the Center for Current Politics likely had close links to Kremlin insiders.
"I suppose this center is closely connected with one of these groups, but it's not clear which," Titkov said.
The center's director, Konstantin Simonov, insisted on the think tank's independence and said the report represented an objective view of the situation within the Kremlin. "This is our analysis; it's not a PR move," he said. "We're not trying to create a scandal."