Publication: Fortnight in Review Volume: 6 Issue: 16

The fortnight’s Big Event in Russian domestic politics was President Vladimir Putin’s “roundtable” talks with twenty-one leading businessmen, including a number of the key “oligarchs” whom Putin had repeatedly vowed to drive out the corridors of political power. In fact, the June 28 meeting delivered nothing concrete, such as the “pact” that its initiator, Boris Nemtsov, had called for. Nemtsov, who heads the Union of Right-Wing Forces’ faction in the State Duma, had hoped that Putin and the tycoons would together sign a charter in which the head of state would declare his independence from all of them and promise not to use the state’s coercive apparatus against them. The businessmen, in turn, would agree to pay their taxes and obey the law. No such charter materialized, however. Putin, while promising that the controversial privatization process of the previous presidential administration would not be revisited, refused to offer a blanket amnesty to the oligarchs for past misdeeds. Likewise, the tycoons did not formally promise to be good tycoons. What is more, three of the most controversial oligarchs–LogoVAZ founder Boris Berezovsky, Media-Most founder Vladimir Gusinsky and Sibneft supremo Roman Abramovich–were not even invited to the meeting.

On the other hand, on the eve of the meeting, the Prosecutor General’s Office dropped its criminal case against Gusinsky. The media tycoon had been arrested and briefly jailed in June, and remained under investigation for allegedly embezzling more than US$10 million in state funds in 1997. That the case was suddenly and unexpectedly dropped undermined the Kremlin’s claim that it had pursued the case against Gusinsky on its legal merits only, as did the wave of rumors which followed the announcement suggesting that charges had been dropped. The word was that the Kremlin had agreed to drop the charges against Gusinsky after he agreed to sell–or simply hand over–either NTV television or Media-Most as a whole to Gazprom, the natural gas monopoly which had guaranteed US$380 million in loans to the media holding. These rumors were given more credence when Vladislav Surkov, a deputy Kremlin chief of staff, told the New York Times that Media-Most’s transfer to Gazprom was all but a done deal.

The fact that Gusinsky–whose media holdings had been sniping at Putin and the Kremlin inner circle for close to a year–appeared to be on the verge of losing Media-Most gave credence to a report published in Novye Izvestia, one of the newspapers belonging to Berezovsky’s media empire. The newspaper said that the Security Council, the powerful Kremlin advisory body headed by Sergei Ivanov, a long-time Putin associate and fellow KGB veteran, had drawn up a plan to establish “total control” over Russian’s media by next spring. The report that the Kremlin had a media domination plan was given further credence by the news that it had entered into “negotiations” with Berezovsky, with the goal of taking over the 49-percent stake in Russian Public Television (ORT) he reportedly controls. Berezovsky himself confirmed that such negotiations were underway, but said he might reconsider handing over the minority stake in ORT, a 51-percent state-owned channel, if the Kremlin were indeed to take control of Media-Most. The state, Berezovsky intoned, should not control all of Russia’s main TV channels. Berezovsky’s concern for the fate of press freedom, including that exercised by his longtime rival Gusinsky (who, according to former Kremlin security chief Aleksandr Korzhakov, Berezovsky once tried to have murdered) was touching. To paraphrase a Russian political analyst, a winning oligarch is a statist, a losing one is a democrat.

At the same time, more than a few knowledgeable observers remained skeptical that Putin genuinely aimed to keep all the oligarchs at an equal arm’s length, or even to do away with them “as a class,” as he had once promised. Indeed, on the eve of the July 28 Kremlin roundtable, one of the participants, Kakha Bendukidze, head of the Uralmash machine-building factory, told an interviewer that the president had done little to reverse the symbiosis of business and state power that developed under his predecessor, Boris Yeltsin. And while Putin reportedly grumbled during the meeting about the poor tax-paying record of Roman Abramovich’s Sibneft–the Finance Ministry had just reported that Sibneft had been paying eight times less tax than comparable Russian oil giants–another roundtable participant (unnamed) told the New York Times afterwards that “equal distance from all of the oligarchs” had not yet been achieved because Putin had not moved against the Sibneft boss. Still another roundtable participant was Oleg Deripaska, a metals baron who teamed up with Abramovich earlier this year to form Russian Aluminum, which reportedly controls up to 80 percent of Russia’s multi-billion-dollar aluminum industry. So far, apparently, their new holding has been obeying the law scrupulously.