Publication: Monitor Volume: 6 Issue: 7

Perhaps the most significant step which Acting President Vladimir Putin took yesterday was to remove Pavel Borodin, the head of the Kremlin’s “property management” department. Borodin, a long-time Yeltsin associate, has been the focus of allegations that top Kremlin officials received kickbacks from the Swiss company Mabetex in return for lucrative Russian government contracts. Borodin’s name was the only one mentioned in Russian and Western media reports last year that Swiss investigators had found and frozen bank accounts belonging to a number of top Russian government officials. Mabetex, which won contracts to refurbish Kremlin offices and other government buildings, allegedly provided credit cards to Yeltsin and his two daughters. On December 24, the Russian Prosecutor General’s Office investigator in charge of the probe into the Mabetex fair announced that the investigation would be extended for six months to allow for a detailed audit of the presidential administration’s finances (see the Monitor, January 3).

In removing Borodin, Putin is obviously trying to distance himself from the Kremlin corruption scandals of last year. It will be interesting to see whom Putin names to replace Borodin, or, if he names no one, who gains direct management control over the vast property empire which Borodin managed. It would not be surprising to see that empire come under the control of a close Putin ally–or be put directly under the acting president himself. Of course, a reform-minded head of state might ask whether it is proper for the state to retain ownership of property previously controlled by the Soviet Communist Party and worth, according to Borodin’s own estimate, US$600 billion. Borodin, it should be noted, was given a soft landing: Putin said yesterday that Russia will nominate Borodin as its candidate for the post of state secretary of the Union of Russia and Belarus. Earlier in his career, Putin served as Borodin’s deputy.

Meanwhile, Russian media cited unnamed sources in the Executive Council of the Commonwealth of Independent States as saying “it cannot be ruled out” that Boris Yeltsin will be offered the post of honorary chairman of the CIS council of heads of state (Russian agencies, January 10).