Publication: Monitor Volume: 6 Issue: 220

The St. Petersburg law enforcement authorities’ raids on the city’s major banks continued last week when armed police commandos searched the offices of Baltiisky Bank and Balt-Oneximbank and seized documents. The previous week, armed police carried out a similar operation against Promstroibank-St. Petersburg, and federal Prosecutor General’s Office announced on November 24 that it had opened a criminal case against Promstroibank-St. Petersburg’s management for alleged bribery. A spokesman for the bank said that the raiders had been looking for information concerning a US$100,000 private loan which Vyacheslav Strugov, deputy head of the City Hall maintenance committee, had taken out in May 1999. While the bank spokesman said that the loan had been repaid, a spokesman for the St. Petersburg prosecutor’s office alleged that it had not, and that the US$100,000 may in fact have been a bribe from Promstroibank-St. Petersburg for the right to hold the maintenance committee’s funds. Meanwhile, Baltiisky Bank chairman Oleg Shigayev said that the OMON forces which carried out the raid on his bank were from the city of Belgorod and were seeking information on three Belgorod-based export companies that had accounts with the bank (Moscow Times, November 25; see the Monitor, November 17).

All three banks have been closely connected to the St. Petersburg regional government, thus it is no surprise that the raids elicited a protest from Vladimir Yakovlev, St. Petersburg’s governor. Yakovlev said that the raids had been launched to “frighten” the city administration and the banks (Russian agencies, November 24). Yakovlev has had uneasy relations with the Kremlin and President Vladimir Putin, given that Putin was a deputy to Anatoly Sobchak, whom Yakovlev unseated in 1996, and that Yakovlev headed the All Russia movement, which joined with Moscow Mayor Yuri Luzhkov’s Fatherland movement to challenge the pro-Kremlin Unity party in last year’s parliamentary election. There have been persistent rumors that the Kremlin would like to replace Yakovlev with either United Energy Systems chief Anatoly Chubais or Deputy Prime Minister Aleksei Kudrin.

On the other hand, some observers believe that the raid on Promstroibank-St. Petersburg may have been part of a campaign to discredit Kudrin, who also serves as Russia’s finance minister, given that Kudrin was summoned last week by the city prosecutor’s offices to answer questions in connection with the alleged misuse of city finances. Kudrin headed the city administration’s finance committee under Sobchak. According to one theory, Kudrin’s rivals inside the Kremlin may be trying to remove him as a possible replacement for Prime Minister Mikhail Kasyanov (see the Monitor, November 22).

According to another theory, the Promstroibank raid may have been prompted by some of Russia’s oil companies–including Sibneft, controlled by the powerful “oligarch” Roman Abramovich, and Tyumen oil company, controlled by Pyotr Aven’s and Mikhail Fridman’s Alfa group–who are reportedly unhappy with Kudrin for pressuring the state tax authorities to crack down on tax avoidance (Obshchaya gazeta, November 23). Indeed, Kudrin said late last week that an investigation which the Finance Ministry launched in July and the Tax Ministry and tax police later took over had found evidence of widespread tax evasion by oil companies. Kudrin, however, refused to name the companies being investigated (Bloomberg, November 24). One newspaper last week speculated that whoever was behind the Promstroibank raid may have been trying to get access to information on bank accounts belonging to top government officials, including Kudrin, Deputy Prime Minister Ilya Klebanov, Communications Minister Leonid Reiman, Economic Development and Trade Minister German Gref and Putin himself (Segodnya, November 24).