Publication: Eurasia Daily Monitor Volume: 5 Issue: 16

Last week’s arrest in Moscow of Semyon Mogilevich was a surprise not because he was so elusive, but because he had apparently been living unmolested in the Russian capital for some time (even, reportedly, maintaining an office in the Ukraina Hotel). The Ukrainian-born reputed organized crime boss is wanted by the Federal Bureau of Investigation for alleged fraud and racketeering and has been probed by Ukraine’s security service for alleged involvement with RosUkrEnergo, the shadowy Swiss-registered gas trading company that is half-owned by Gazprom and acts as a middleman in Russian gas exports to Ukraine. The question, then, is why Mogilevich was arrested now. According to some leading analysts, the answer may be found in the power struggle between influential Kremlin clans that has been sparked by the impending end of Vladimir Putin’s presidency and his decision to back First Deputy Prime Minister Dmitry Medvedev as his successor.

According to the commentator Vitaly Portnikov, Mogilevich’s arrest (he was detained together with Vladimir Nekrasov, the majority owner of Arbat Prestige, a chain of cosmetic shops, on suspicion of large-scale tax fraud), was “aimed against highly authoritative and serious people connected with the group that, with the advancement of Dmitry Medvedev to the post of Russian president, gained an undoubted but not an unqualified victory over other groups in the Russian power [structure].” Portnikov was apparently referring to the group of siloviki that includes deputy Kremlin chief of staff Igor Sechin and Federal Security Service (FSB) Chairman Nikolai Patrushev, which reportedly opposed Medvedev’s accession as Putin’s successor. “I would like to repeat that Dmitry Medvedev is the chairman of the board of directors of Gazprom; his figure suits not only Vladimir Putin and not only the inner circle of [the late] Russian president Boris Yeltsin, but also the Gazprom leadership of the new kind, which appeared with Vladimir Putin’s coming to power,” Portnikov wrote. “And Semyon Mogilevich is one of the most authoritative and influential gas traders in the post-Soviet space.”

Portnikov added: “It needs to be understood that RosUkrEnergo is not simply an accidental private structure that suddenly became a monopolist in such an operation as the export of Central Asian gas to Ukraine.” (In 2005, RosUkrEnergo took over the sale of gas from Turkmenistan to Ukraine, a multi-billion-dollar business.) “It is in fact one of the elements in the corporatization of the gas economy in Russia. And those groups that are not in agreement with the possible monopolization of power by the groups that are now bringing Dmitry Medvedev into the presidential post are simply letting their competitors know that they still have quite a number of serious levers of influence” (, January 25).

Others, however, believe Mogilevich’s arrest was not an action undertaken by the siloviki to harm Medvedev, but one taken by Putin to protect him. Mogilevich and Nekrasov were reportedly detained by officers of the Interior Ministry’s economic security department, not by the FSB or the Investigative Committee. (The Investigative Committee, which is headed by Alexander Bastrykin and also associated with the Sechin camp, is conducting the criminal case against Deputy Finance Minister Sergei Storchak, who was arrested late last year for alleged embezzlement and whose boss, Finance Minister Alexei Kudrin, is associated with the Kremlin faction that includes Medvedev.) The Interior Ministry’s economic security department is headed by Yevgeny Shkolov, a trusted associate of the president who served together with Putin in the KGB in Dresden.

Thus, according to Vladimir Milov, president of the Moscow-based Institute of Energy Policy and a former deputy energy minister, the arrest of Mogilevich was – like the arrest last August of Vladimir Barsukov (aka Vladimir Kumarin), the former St. Petersburg Fuel Company vice president who allegedly led the Tambov criminal gang – “an attempt to hide these people with questionable reputations behind bars so that … they, God forbid, wouldn’t damage someone’s reputation in a period of such a sensitive situation [as] the transfer of power” (“Vlast,” RTVi television, Ekho Moskvy, January 25). As National Strategy Institute head Stanislav Belkovsky noted, RosUkrEnergo’s executive director, Konstantin Chuichenko, is not only also a member of Gazprom’s board of directors and head of its legal department, but was a classmate and close associate of Medvedev (APN Severo-Zapad, January 25).

During her weekly radio program commentator Yulia Latynina said that Mogilevich’s arrest was actually a blow by the pro-Medvedev forces against his siloviki opponents. Noting that she had never heard Semyon Mogilevich’s name associated with that of Dmitry Medvedev, Latynina also said that “in Gazprom there are many groups, and Mogilevich was connected to one specific group which represented not so much Gazprom as the siloviki.” Latynina called Mogilevich’s arrest the “most powerful blow against the siloviki group” in recent months. She added, however, that it may not be the last word and speculated that the FSB or Investigative Committee may try to pull rank and take custody of Mogilevich (“Kod Dostupa,” Ekho Moskvy, January 26).