THE KREMLIN CHANGES THE OLIGARCHS’ DIAPERS … FOR WHICH THEY THANK THE PRESIDENT

By Elena Dikun

As the political season came to an end, Vladimir Putin hosted a meeting with the oligarchs. The official version suggested that the get-together in the Kremlin was a hugely important political event. Yet the impact of this meeting has been minimal; a more likely explanation is that the gathering was held just for form’s sake.

THE OFFENSIVE

The whole of July was marked by an all-out attack on the oligarchs by the Kremlin. Following the broadside directed at Media Most President Vladimir Gusinsky, next in line was Vladimir Potanin, head of Interros. On July 10 he received a letter from Deputy Prosecutor General Yuri Biryukov informing him that in 1995 Oneximbank had underpaid for a 38 percent share in Norilsk Nickel by 140 million dollars. The prosecutor general’s office proposed that this debt should be “reimbursed forthwith”, so that “no legal action would be taken” against Potanin in the future. On the following day, 11 July, Lukoil president Vagit Alekperov was the target. The federal tax police announced the institution of criminal charges against the management of Lukoil for evading tax on some 500 million dollars.

On 12 July a criminal case involving large-scale tax evasion was brought against the bosses of AvtoVaz. And finally, on 13 July, the Audit Chamber sent a letter to the prosecutor’s office outlining its reservations about how the privatization of Unified Energy Systems (UES) had been handled. The authorities were doing this to demonstrate how serious they were about putting the oligarchs in their place. However, after this show of force they decided to do something to pacify the extremely alarmed businessmen.

NEMTSOV’S PROPOSAL

The man behind the meeting between the president and the oligarchs was Union of Right-Wing Forces leader Boris Nemtsov. The great missionary idea he was propounding was to draw a line under the period of initial accumulation of capital, and, as a first step, to decriminalize relations between business and the authorities.

In Nemtsov’s opinion, the authorities should take the initiative in purging themselves of the sins of “primitive capitalism”, because whichever way you look at it their sins are the greater. After all, it is the bureaucrats – not the businessman – who are responsible for the health of the state and for the rules of play which operate in the country. It is no coincidence that in the agreement drafted by Nemtsov “On the principles of relations between the state and entrepreneurs”, which he proposed should be signed by the presidential administration, the government and the oligarchs, the main responsibilities are assumed by the executive. Nemtsov submitted a draft of this document to Alexander Voloshin a year ago, but after reading it Voloshin put it in his long-term pending tray. Last month the leader of the Right finally managed to deliver a copy to the president.

The substance of the responsibilities that the author thinks both sides should assume may be summed up as follows: All applications from entrepreneurs for state credits, licenses or benefits should be reviewed by the authorities openly and publicly, purely on the basis of and in accordance with current legislation. In the final analysis this will help eliminate illegal lobbying, and will put an end to the shady relationship between the state and business.

Clearly, Boris Nemtsov’s prescription for a way out of the current situation was based on his own experiences. He was one of the main protagonists in the first oligarch war which broke out in the summer of 1997. That time the oligarchs defeated the young reformers, not because they were stronger in number but because the judges turned out to be no better and no purer than the accused. By airing a file containing transcripts of the telephone conversations of government officials, the oligarchs demonstrated to the public that the people judging them were no angels themselves. Nemtsov, who fell in that battle, therefore believes that there is only one way to have done with the accursed past: The doctors and the patients must be cured together, at the same time and in the same place.

WHAT THE KREMLIN WANTED

Initially, the Kremlin was categorically opposed to the idea of the president sitting down with the oligarchs at the same “round table”. They were worried that it would be interpreted in a particular way – that the authorities had given some slack and gone back on their word. Then they began some targeted leaking: They didn’t understand what the businessmen could possibly want from the head of state, given that they themselves were to blame for the all the outrages; the businessmen were busy collecting compromising material on each other, “shopping” their rivals to the prosecutor general’s office or the interior ministry – in other words they were involving the authorities in their dirty tricks and then complaining about it. After this the Kremlin tried to pooh-pooh Nemtsov’s efforts at conciliation, saying that the president had been planning a meeting like this for some time and that Nemtsov was trying to worm his way into someone else’s project. Eventually the president’s administration came up with a new formulation: The main aim of the event was to “change the frightened oligarchs’ diapers, wipe their sweaty hands and stop their knees knocking”. And at the same time to hint that if they didn’t understand polite treatment then they would only have themselves to blame: In the words of a senior Kremlin official, “spiked enemas” may have to be brought into play.

The list of round table participants was known to have been drawn up by the president’s deputy chief of staff Vladislav Surkov. The Kremlin says that Vladimir Putin did not personally add any names to the list or cross any out. However, the names of three of the best known oligarchs were removed from the version proposed by Boris Nemtsov: Gusinsky, Boris Berezovsky and Roman Abramovich. The first two were charged with being “overly politicized”, while the third was removed without explanation. His detractors say that Abramovich – who continues to enjoys a special position in the Kremlin – is simply so successful in resolving his problems on a one-to-one basis with the heads of the presidential administration that he has no other questions that need discussing at the round table.

WHAT WAS NEW FROM THE HOST?

The president delighted the oligarchs by saying that he was not planning to pursue a policy of reviewing the results of privatization and the redistribution of property – although this does not mean that no privatization deals will be disputed in court. If the inquiry committees were to find concrete violations they would pursue them. In addition to this Vladimir Putin announced that the policy of keeping the oligarchs equidistant from power will be continued. However, the president has said all of this before, and on more than one occasion, literally from his first day in office as the “successor”.

But on the other hand, it was immediately indicated to the oligarchs what their place in history was. “You created this state yourselves,” said the president instructively. Not “we”, but “you”. In other words it was these capitalists who gave state officials the idea of taking bribes, corrupted the tax inspectors, customs officials and policemen and got the law enforcement authorities working for them. It transpired that the authorities did not see themselves as having any sin, and were not planning to purge themselves together with the frightened capitalists.

WHAT DID THE GUESTS BRING TO THE TABLE?

Frankly speaking, the businessmen were not expecting anything different. They came more to listen than to say anything themselves. Amusingly, when Gazprom chief Rem Viakhirev was asked by the president to say a few words, he was clearly very reluctant to say anything at all – particularly for the whole wide world to hear. Basically Viakhirev conveyed the general mood of the meeting. As a result there was nobody to support Nemtsov’s project, and he had to stand up for it himself. Nemtsov reminded the president that the authorities did not have the moral right to “regiment” the businessmen; first they had to get rid of corrupt officials and departmental bosses who had compromised themselves. It was necessary to learn together how to live honestly.

There was some timid support for Nemtsov from the president of the board of Impexbank Oleg Kisilev and the director of Vimpelkom Dmitry Zimin. But on the whole the oligarchs did not show any impatience to get on with overhauling past experience and refashioning their relationship with the authorities into a public, open arrangement. It was more important for the visitors to hear that they were not all going to be put behind bars, and just to say thank you for that. As one Kremlin official who had been present put it, the businessmen “did not complain, but said thank you for their present and for their future.” Basically both sides agreed to carry on with business as usual. If they had really wanted to bring their relations out of the shade and into the light, they would have given maximum exposure to the gathering in the Kremlin. By definition, events like this cannot be closed: On the contrary, they require the presence of journalists, party observers and representatives of voluntary organizations. But the host was geared up to carry out some educational work, and the guests were willing to submit to anything, so they locked themselves away from everybody.

It should not be forgotten that in 1997 President Yeltsin held two similar meetings with the oligarchs. In content and style they basically differed very little from this one. Then as now, there were some stock phrases about how it was necessary to get on better and that business and the authorities were not enemies. Upon which they shook hands and left. However, Putin’s meeting with the oligarchs soon had a practical result – all the criminal cases that had been opened were closed again without explanation.

NEMTSOV’S SUMMING-UP

For well-known reasons Boris Nemtsov is quite cautious in his assessment of the meeting between the president and the businessmen, because it might not have taken place at all. So Nemtsov is happy to make do with small returns. In a conversation with the Obshchaya Gazeta correspondent he noted that “we’re certainly no worse off after this meeting – after all, there was a threat that it might not go ahead at all. Everyone let off steam at the round table, and that alone is a positive result.” Given that “letting off steam” and “changing diapers” amount to pretty much one and the same thing, it may be concluded that the event followed the Kremlin’s script rather than Boris Nemtsov’s.

Elena Dikun is a political columnist for Obshchaya gazeta.