Publication: Fortnight in Review Volume: 6 Issue: 15

…Back at home, meanwhile, Putin finally began making good on his promise of earlier this year to end Russia’s notorious and unloved oligarchs “as a class.” The head of state continued to insist that he had no intention of overturning the results of the controversial (meaning corrupt and collusive) privatization program carried out in the 1990s under his predecessor, Boris Yeltsin. Yet the actions of the state’s law enforcement bodies suggested otherwise. The Prosecutor General’s Office turned the screws tighter on Vladimir Gusinsky, arresting the Media-Most chief’s aide and life-long friend, Mikhail Aleksandrov, searching Media-Most’s headquarters once again and later impounding Gusinsky’s personal property, including a home outside Moscow. Prosecutors also searched the offices of Gazprom, which owns shares in Media-Most and its television station, NTV, and sent a letter to Vladimir Potanin, head of the Interros holding. It charged that he conspired to lower the starting price for a controlling share in Norilsk Nickel in 1995 and demanding that he pay the state US$140 million in compensation.

The tax authorities, for their part, charged the giant company LUKoil and AvtoVAZ, Russia’s biggest car producer, with large-scale tax evasion. Even the Alfa Group, run by Pyotr Aven and Mikhail Fridman, two oligarchs once thought to be favored by Putin, complained that they had been under surveillance since July. While they refrained from saying who was watching them, it is perhaps no coincidence that the Prosecutor General’s Office last month ordered raids on offices belonging to the Tyumen Oil Company (TNK) as part of an investigation into whether Alfa illegally acquired a 40 percent stake in the oil company in 1997. In addition, the Audit Chamber, the state agency authorized to monitor the use of federal budget funds, claimed that it had found violations in the sale of shares in United Energy Systems (UES), Russia’s electricity grid, to foreigners from 1992-1998, and urged a criminal investigation. Anatoly Chubais, the architect of Russia’s privatization program, now heads UES.