Publication: Fortnight in Review Volume: 6 Issue: 13

?While few observers bought Putin’s claim to have been in the dark about Gusinsky’s arrest, a more legitimate question was whether the move had been made at the Russian head of state’s behest, or whether it had been initiated by other forces within the Kremlin. Put differently, the Gusinsky case was yet another test of whether Putin was the puppetmaster or the puppet. Segodnya, Media-Most’s influential daily newspaper, suggested that Putin had not known about the exact timing of Gusinsky’s arrest and that the decision had been made by a cabal of insiders, including Kremlin administration chief Voloshin, Security Council Secretary Sergei Ivanov, and a reputed new “Family” member–Mezhprombank chief Sergei Pugachev. “In what way does Putin depend on the Family?” the paper asked. “Is it possible that it has kompromat even on the president?”

According to other observers, including Gusinsky, the decision to arrest him was made by Putin himself. In this case, the arrest was said to be part of a plan launched by the president and other career KGB veterans in the Kremlin–including the Security Council’s Ivanov and Federal Security Service Director Nikolai Patrushev–to eliminate the oligarchs “as a class,” as Putin put it earlier this year. The fear of such a campaign was clearly on the minds of the seventeen tycoons who signed an open letter to Prosecutor General Ustinov protesting Gusinsky’s arrest: after all, they could be next. And, indeed, only a few days after the Media-Most chief was released from prison, the Moscow prosecutor’s office filed suit to overturn the 1997 sale of a controlling stake in Norilsk Nickel, a major world producer of nickel and platinum-group metals, to Interros, the holding company controlled by another leading “oligarch,” Vladimir Potanin.

Yet while some saw this as part of the KGB faction’s crackdown on the oligarchs, it was a somewhat peculiar choice, given that Potanin’s media, including the daily newspaper Izvestia, had been among the most supportive of Putin. In addition, while Gusinsky and Potanin were fighting to stay out of jail and keep their business empires intact, fellow oligarch Boris Berezovsky was blithely strengthening his control over Russian Public Television (ORT), the country’s 51-percent state-controlled main television station. Berezovsky put his daughter on ORT’s board of directors, bringing the number of his allies on the eleven-person board to seven. Konstantin Ernst, the station’s general director, openly demanded that the state either begin funding the station or sell its controlling share to private investors. It was quite an audacious demand, given that the state had already loaned ORT US$100 million, and that the station had used shares from the state’s stake in the company as collateral for the loan. All in all, Berezovsky, unlike his less fortunate colleagues, did not seem like a man headed for history’s ash-heap.