Publication: Monitor Volume: 6 Issue: 122

Most observers believe it is no coincidence that the suit contesting Norilsk’s privatization came just weeks after the arrest and release of Media-Most founder Vladimir Gusinsky. They are split, however, over the exactly who is behind the move and what motivated it. Some, including ultranationalist leader Vladimir Zhirinovsky, saw it as the start of an overall push to overturn the results of Russia’s controversial privatization program, particularly the 1995 loans-for-shares scheme, which was hatched by Potanin and approved by then economics tsar Anatoly Chubais and then Prime Minister Viktor Chernomyrdin. Others, however, including Arkady Volsky, head of the Russian Union of Industrialists and Entrepreneurs, said that the move against Norilsk was probably motivated by competitors (Russian agencies, June 21). Likewise, a newspaper reported that a majority of businessmen and officials were of the view that competitors of Norilsk or of Potanin were behind the suit (Vedomosti, June 21).

The split over who was behind the moves against Gusinsky and Potanin corresponds to the split over who is in charge–or, at any rate, ascendant–in the Kremlin. According to one view, a group of KGB veterans and long-time associates of Putin–including such people as Security Council Secretary Sergei Ivanov–are behind this push against the oligarchs and the Kremlin’s overall drive to re-centralize authority and power in Russia. According to another view, the moves against Gusinsky and Potanin are perfectly consistent with the interests of the “Family,” the group of Yeltsin-era Kremlin insiders which includes LogoVAZ founder Boris Berezovsky, Sibneft chief Roman Abramovich and Kremlin administration chief Aleksandr Voloshin. It is worth noting here that Berezovsky and Potanin clashed bitterly in 1997 both over the final auctioning of Sibneft, which had temporarily been handed over to companies linked to Berezovsky and Aleksandr Smolensky in 1995, and over the 1997 auction for a quarter of Svyazinvest, Russia’s telecommunications holding company, which a Potanin-led consortium won. It is also worth noting that earlier this year, Sibneft and LogoVAZ, along with Siberian Aluminum, gained control of 60-70 percent of Russia’s multibillion-dollar aluminum industry. These companies may now be interested in extending their metals holdings–or at least undermining the positions of other major players in the metals market.

Finally, it is important to note that while Gusinsky was struggling to stay out of jail and Potanin was struggling to retain control of Norilsk, Berezovsky strengthened his control over Russian Public Television (ORT), the country’s 51-percent state-controlled main television channel. During a June 20 shareholders’ meeting, Berezovsky’s daughter, Yekaterina Berezovskya, and Sergei Dorenko, the ORT anchor who has consistently and effectively led media campaigns against the Kremlin’s enemies, were made members of ORT’s board of directors. This means that seven out of eleven members of ORT’s board are now Berezovsky loyalists. Others include ORT general director Konstantin Ernst; Ruslan Fomichyov, chairman of the board of Berezovsky’s Obyedinyonny Kredit bank; former ORT general director Igor Shabdurasulov; LogoVAZ general director Yuli Dubov; Badri Patarkatsishvili, widely seen as Berezovsky’s right-hand man. In addition, Ernst said the new board would demand that the state either begin funding the station or sell the state’s controlling share to private investors. The ultimatum is particularly audacious given that the state-controlled Vneshekonombank gave ORT a US$100 million loan back in 1998, on then President Boris Yeltsin’s orders. In a uniquely Russian twist, ORT put up 13 percent of its shares as collateral, but half of those shares came from the state’s stake. Few observers believe the loan will ever be repaid or the collateral forfeited.

The behavior of ORT’s Berezovsky-controlled board of directors suggests that the oligarch himself, unlike some of his less-fortunate counterparts, is not in the authorities’ line of fire. Indeed, rumors of Berezovsky’s imminent demise have consistently turned out to be exaggerated. Earlier this year, for example, many observers predicted that ORT would lose its license to broadcast on Channel One, the state’s main channel. In fact, ORT easily won the ostensibly “competitive” tender to have its license renewed for five years. Mikhail Lesin, Russia’s press minister, said the renewal of ORT’s license was justified because of the company’s “social significance” (see the Monitor, May 24).