…BUT THE EARTH FAILS TO MOVE.

Despite the good intentions which the tycoons and the Kremlin declared during and after their July 28 meeting, and the various optimistic assessments of the meeting, it is not clear that the meeting changed anything significantly. Afterward, one of the participants from the business side, Kakha Bendukidze, head of the Uralmash machine-manufacturing factory, said Putin himself had stated during the meeting that the tycoons were not ready to stop trying to put their representatives into the government. Bendukidze also said that the “institutional basis” for the tycoons’ fear of the authorities had not disappeared, given the persistence of “excessive” taxation (Agence France Presse, Russian agencies, July 29).—Indeed, Putin apparently gave no assurances that law enforcement authorities would call off any investigations into various alleged violations–including tax evasion and embezzlement–by the tycoons. In an interview given on the eve of the Kremlin meeting, he said that Putin’s accession as Russia’s head of state had done little to reverse the symbiosis of business and state power which developed under his predecessor Boris Yeltsin. “Groups which developed thanks to the fact that they had a powerful official ‘roof’ are continuing to develop that way,” Bendukidze said. “Those who took advantage of privileges paid for by the government continue to do so” (Profil, July 31). During the meeting, Putin apparently did point a figure specifically at the Sibneft oil company, which, according to the Finance Ministry, has been paying many times less taxes than other Russia oil companies. Putin reportedly asked why Sibneft shows such small profits and pays so little in taxes (Russian agencies, July 29). Sibneft is said to be under the control of Roman Abramovich, the Yeltsin-era Kremlin insider who now sits in the State Duma. Neither Abramovich, his erstwhile mentor and ally Boris Berezovsky, nor Media-Most head Vladimir Gusinsky were invited to the roundtable.

And while Putin apparently agreed to schedule regular similar meetings with the tycoons by setting up a special government-business council under the government’s auspices, it should be noted that this same idea was repeatedly floated during the Yeltsin period, but never materialized.

AUTHORITIES MAY INVESTIGATE ALLEGED DIVERSION OF IMF FUNDS.