Publication: Monitor Volume: 8 Issue: 105

In what may be yet another sign that Russia has the best legislature money can buy, Federation Council Speaker Sergei Mironov confirmed yesterday that Andrei Vavilov, the former deputy finance minister who today controls the Severnaya Neft oil company, will represent Penzensk Oblast in the upper parliamentary chamber. Vavilov, who previously sat on the boards of some of Russia’s largest corporations, including the state-controlled Gazprom natural gas monopoly and Norilsk Nickel, was chosen by the Penzensk Oblast legislative assembly to represent it in the Federation Council (, May 29).

The choice of Vavilov to become a “senator,” as Federation Council members are called, has sparked a scandal similar to the one earlier this year, when Leningrad Oblast picked Alfred Kokh, the former head of Gazprom-Media, who earlier served as the deputy to privatization architect Anatoly Chubais, to represent it in the parliament’s upper house. However, Kokh withdrew his candidacy after a deputy in Leningrad Oblast legislative assembly, along with the oblast prosecutor’s office, went to court to challenge Kokh’s selection by the legislature, claiming that procedures had been violated during the voting (see the Monitor, March 5, 12, April 2).

What made Kokh so controversial a choice was his role in privatization and later in Gazprom’s takeover of Vladimir Gusinsky’s NTV television. Vavilov has similar baggage. In November 1994, when he was the country’s acting finance minister, he received a “stern reprimand” for having allowed the Black Tuesday ruble crash to take place the previous month. He was later questioned by law enforcement authorities as part of a probe into a convoluted case involving the Russian Defense Ministry and Ukraine, in which Ukraine was supposed to pay off debts for Russian gas by delivering construction materials to Russia’s Defense Ministry, but hundreds of millions of dollars in Defense Ministry funds were allegedly embezzled instead. Vavilov was charged in the case last June. The charges were subsequently dropped. Earlier this year, the Defense Ministry’s former financial director, Georgy Oliynyk, was convicted of embezzlement and sentenced to three years’ imprisonment in the same case.

Vavilov figured in other scandals during the previous decade, including 1997’s MiG scandal, involving the disappearance of US$237 million in state funds earmarked for the production and sale of jet fighters to India. In addition, the oil company he now controls, Severnaya Neft, has also attracted unwanted attention. Earlier this year, the Natural Resources Ministry revoked its license to develop an untapped oilfield in the Nenetsk Autonomous District, after which the district’s prosecutors launched a criminal case against the company, claiming it was illegally continuing its prospecting there (, May 29; Moscow Times, May 30).

Federation Council senators, of course, enjoy immunity from criminal prosecution, and some observers say this accounts for the rather significant representation of business tycoons in the parliament’s upper house. Late last year, the Tuva Republic named Sergei Pugachev, chairman of the board of Mezhprombank and reputedly a close associate of President Vladimir Putin, to represent it in the Federation Council (, December 26, 2001). Among the other tycoons who have become regional leaders are Sibneft kingpin Roman Abramovich, governor of Chukotka, and former Norilsk Nickel General Director Aleksandr Khloponin, governor of the Taimyr Autonomous District.