Publication: Fortnight in Review Volume: 8 Issue: 2

…The fortnight in Russian politics was dominated by several events that President Vladimir Putin’s admirers held up as proof of his sincerity in fighting corruption. The first, the firing of Railways Minister Nikolai Aksenenko, was not much of a surprise. Indeed, his ouster–Aksenenko being a Boris Berezovsky protege and Yeltsin crony who came within a hair of being made prime minister in 1999 and was even briefly talked up as Yeltsin’s possible successor–had been expected since last autumn. At that time the Prosecutor General’s Office began investigating Aksenenko for various alleged abuses, including having authorized the purchase of expensive apartments for high-level ministry officials and of having made millions of dollars in salary payments to persons who were not legally part of the ministry’s staff.

But these charges were just the tip of the iceberg: In an earlier probe, the Audit Chamber, the independent federal watchdog agency, had discovered, among other things, that the Railways Ministry illegally spent billions of dollars from the government’s program to supply necessities to the remote regions of Russia’s Far North in 1997. At the same time, the government was interested in finding out why the ministry had failed to pay some 11 billion rubles (US$370 million) of its tax bill for 2000, while the Federal Security Service (FSB) was reportedly focusing on TransRail, a Swiss-based company 50-percent owned by the Railways Ministry that reportedly acquired a monopoly in Russia’s freight business as well as discount tariffs–all thanks to its “close relations” with top ministry officials.

But if the Aksenenko’s firing was not a surprise, it was nonetheless welcomed by many observers as a blow against one of the handful of “natural monopolies” that, with the Soviet Union’s collapse, had mutated into opaque parastatals–or, to use the less technocratic but pithier Russian characterization, “black holes,” which had swallowed up billions of dollars in state funds.

The fortnight’s second anticorruption event involved another “natural monopoly”–Gazprom, the natural gas giant. Apparently as part of the housecleaning efforts of Aleksei Miller, the long-time Putin associate who replaced Rem Vyakhirev as Gazprom’s CEO last year, prosecutors raided the offices of Sibur, the giant petrochemical company 51-percent owned by Gazprom. Three top Sibur executives were detained and questioned. The raids were part of a probe reportedly launched after Miller’s team took the helm and discovered that top Sibur executives had illegally sold off several of its main enterprises, including the Surgut Gas Processing Plant. The Sibur executives included board chairman, Vyacheslav Sheremet, who is a close associate of Gazprom’s powerful ex-chief, Rem Vyakhirev, and remains a top Gazprom official.