Publication: Monitor Volume: 6 Issue: 136

The Russian authorities continued their campaign against the country’s “oligarchs” yesterday. In announcing that a criminal case had been launched against the giant AvtoVAZ automaker, Vyacheslav Soltaganov, head of the tax police, also said that another criminal investigation into yet another company would be announced today. The tax authorities claim that AvtoVAZ evaded US$600 million in taxes in 1996 by producing 280,000 cars with the same identification number. AvtoVAZ officials, including Vladimir Kadannikov, chairman of its board of directors, categorically denied the charges (Russian agencies, ORT July 12). The AvtoVAZ case is potentially interesting in that company, at one time, was close to Boris Berezovsky. Several years ago, various Russian media reported that Berezovsky’s LogoVAZ car dealership had received cars from AvtoVAZ for export prices (because of their lack of competitiveness, a Lada for export is several thousand dollars cheaper than one to be sold inside Russia) but sold them domestically, making a profit of several thousand dollars on each car. This scheme would not have been possible, a newspaper reported, without the consent of AvtoVAZ’s top officials (see the Monitor, February 22, 1999). On the other hand, Berezovsky apparently subsequently shifted his focus away from the auto business and into media, oil and, eventually, politics. Thus it is not clear whether the new case against AvtoVAZ could or will be used against him (see the Monitor, July 12).

In recent days and weeks, the Prosecutor General’s Office and tax authorities have launched cases against Media-Most chief Vladimir Gusinsky, Oneksimbank chief Vladimir Potanin and LUKoil chief Vaget Alekperov. Last month, the Prosecutor General’s Office ordered the Interior Ministry’s organized crime unit to raid offices belonging to the Tyumen Oil Company (TNK), in connection with an investigation into whether the Alfa Group illegally acquired a 40 percent stake in the oil company back in 1997 (Moscow Times, June 29). The Alfa Group is headed by Pyotr Aven and Mikhail Fridman, two oligarchs whom many observers previously believed enjoyed President Vladimir Putin’s favor (see the Monitor, January 7). Ironically, Aven earlier this year called for extra-judicial, Pinochet-like measures to crack down on corruption and limit the influence of the oligarchs (see the Monitor, March 31). He did not indicate whether he included himself among those whose influence needed limiting.

In an interview with domestic and foreign press earlier this week, Putin himself ruled out a full-scale campaign against the oligarchs, but warned those who “feel comfortable in conditions of disorder” not to count on being able to continue to “fish in muddy waters” (ORT, Reuters, July 11). Putin previously promised that none of Russia’s controversial post-Soviet privatizations would be overturned. Some of the recent actions against the oligarchs, however, would suggest otherwise, particularly the demand from the Prosecutor General’s Office that Potanin cough up US$140 million to compensate the state for his bank’s 1995 purchase of Norilsk Nickel (see the Monitor, June 22, July 12). Meanwhile, deputy Kremlin chief of staff Vladislav Surkov called for, in essence, an amnesty for the oligarchs, saying that their past sins should be forgiven (Kommersant, July 12). Whatever the case, First Deputy Finance Minister Aleksandr Ulyukaev said yesterday that “representatives of international financial organizations” were “positively impressed” by the government’s “struggle against tax evasion”–an obvious reference to the LUKoil and AvtoVAZ cases (AP, July 12). For his part, Prime Minister Mikhail Kasyanov played the role of bad cop, telling The Wall Street Journal Europe that the wave of criminal investigations showed that the oligarchs “have no immunity” and defending the law enforcement agencies’ actions (Moscow Times, July 13). Kasyanov’s comments were rather ironic, given that Russian media in the past have connected him to various oligarchs. Last year, for example, the weekly newspaper Versiya claimed that when he was in the Finance Ministry, Kasyanov colluded with Moscow banker Aleksandr Mamut and oil baron Roman Abramovich to manipulate Russia’s foreign debt market, thereby winning handsome commissions and the nickname “Misha Two-Percent” (see the Monitor, October 5, 1999). Kasyanov has denied all of these charges.