Publication: Monitor Volume: 5 Issue: 105

After several weeks of wild rumors about behind-the-scenes political warfare, the Russian government’s cabinet has now been largely formed–only the health minister has not yet been named. And while rumors that “The Family,” as President Boris Yeltsin’s inner circle is now being called in the Russian press, had dictated all the main cabinet choices, turning Prime Minister Sergei Stepashin into almost a figurehead, the cabinet in its final form appears to be more balanced between rival financial-political clans than appeared to be the case only last week.

The rumors of a successful behind-the-scenes power play by the inner circle peaked on May 28, when Mikhail Zadornov, whom Stepashin had picked to be first deputy prime minister in charge of macroeconomics, resigned after being removed from the post of finance minister. Zadornov had argued that he needed to hold both portfolios, as Anatoly Chubais did in 1997, in order to have genuine control over macroeconomic policy. Zadornov was reportedly thwarted in this by First Deputy Prime Minister Nikolai Aksenenko, who last week publicly insisted that Yeltsin had agreed to give him the final say over economic policy.

Following Zadornov’s resignation, some Russian media–in particular NTV television, controlled by MOST bank founder Vladimir Gusinsky, and the daily newspaper “Kommersant”–claimed that a group of insiders including Yeltsin’s daughter Tatyana Dyachenko, the tycoon Boris Berezovsky and Sibneft oil company chief Roman Abramovich, among others, had basically taken over control of the government. This development, “Kommersant” warned, represented a direct threat to Russian democracy (Kommersant, May 29). NTV, in its weekly news analysis program “Itogi,” claimed that this “camarilla” of Kremlin insiders, represented in the cabinet by Aksenenko, was being led not by Berezovsky, as previously thought, but by Sibneft chief Abramovich. The program stressed Abramovich’s “shadowy” nature, stressing the absence of any photographs of the 32-year-old tycoon (the channel did show a profile shot of Abramovich at a ceremony last year marking the merger of Sibneft with the Yukos oil giant, a marriage which quickly failed). NTV even got a street artist on Moscow’s Arbat to do a composite sketch of Abramovich (NTV, May 30). Rumors about Abramovich circulated in other media: One newspaper reported that he is paying a PR firm US$170,000 a month as part of an effort to get Aksenenko in as prime minister (Moskovsky komsomolets, May 31).

On a more serious note, NTV claimed that many in the new government–including Aksenenko, State Customs Committee chief Mikhail Vanin, Pension Fund head Mikhail Zurabov, Fuel and Energy Minister Viktor Kaluzhny and tax chief Aleksandr Pochinok–are directly beholden to Abramovich. According to the channel, these posts represent the largest financial flows outside the finance ministry (NTV, May 30). In addition, the newspaper “Segodnya”–which, it should be noted, is (like NTV) part of Gusinsky’s media empire–reported that the state’s 37.5 percent stake in the Gazprom natural gas monopoly, which has been held by Gazprom chief Rem Vyakhirev, would be taken over by Kaluzhny, the new energy minister (Segodnya, May 31). Aksenenko is rumored to have been given overall control of Russia’s “natural monopolies,” including Gazprom. “Segodnya” also wrote that another Kremlin insider, Aleksei Ogaraev, deputy secretary of the Kremlin’s Security Council and reportedly a friend of Tatyana Dyachenko, will be named to head Rosvooruzhenie, Russia’s state arms exporting company and a major cash source (Segodnya, May 29; Kommersant, June 1).