Publication: Monitor Volume: 5 Issue: 127

Viktor Chernomyrdin, the former prime minister and, most recently, President Boris Yeltsin’s special representative on the Balkans crisis, was elected yesterday chairman of the board of Gazprom, Russia’s giant natural gas monopoly, which Chernomyrdin founded and once headed. Rem Vyakhirev, Gazprom’s chief executive, held on to his job, despite earlier rumors that he might be removed. Earlier this week, shareholders in United Energy Systems (UES), Russia’s electricity grid, which is headed by Anatoly Chubais, held their annual meeting. While earlier Chubais had also been rumored to be in trouble, the UES board meeting resulted in Chubais’ winning what is essentially a life-long term as the company’s chief (see the Monitor, June 28). Meanwhile, on June 28, Aleksandr Voloshin, head of the Kremlin administration, was elected chairman of UES’s board of directors (Russian agencies, June 28-30).

In the cases of both Gazprom and UES, the Kremlin appears to have cut deals with Chubais and Vyakhirev–two powerful industrial magnates (“oligarchs,” if you like) to make sure that the monopolies’ financial flows are used on behalf of the Kremlin-approved candidates in this year’s parliamentary vote and next year’s presidential contest. Prior to yesterday’s Gazprom board meeting, there was talk that Vyakhirev, who holds the state’s 37.5 percent stake in the gas giant in trust, might be forced to hand it back to the state. There was also talk that Chernomyrdin might replace Vyakhirev, rather than simply join him on Gazprom’s team as board chairman. There were also rumors that Vyakhirev had been flirting with Fatherland, the political movement founded by Moscow Mayor Yuri Luzhkov, whose presidential ambitions are opposed by Yeltsin’s inner circle. Thus in engineering the election of Chernomyrdin, a Kremlin insider, as chairman of Gazprom’s board, Yeltsin’s inner circle–including tycoon Boris Berezovsky and Tatyana Dyachenko, Yeltsin daughter and adviser–has placed a kind of “commissar” in the company to ensure that Gazprom’s resources are used to back approved candidates.

Voloshin’s accession to head UES’s board of directors can be seen in the same light. UES chief Chubais is also one of the founders of Right Cause (Pravoe Delo), a center-right coalition which includes leading lights among the “young reformers” such as Yegor Gaidar and Boris Nemtsov. The Kremlin administration may not see Right Cause as the right vehicle for its political plans, given that the coalition’s leaders do not enjoy high popularity ratings. Thus Voloshin, who is said to be close to Berezovsky, may have been put at the head of UES’s board to make sure that Chubais does not give Right Cause special treatment at the expense of other more promising blocs (Obshchaya gazeta, July 1-7).