POLITICAL RUMORS: CLAN POWER-STRUGGLES INTENSIFY IN RUSSIA THIS SPRING

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The wait for war in Iraq; the impatient determination of the United States to present Saddam Hussein with a final ultimatum; resistance from “old Europe” to the American method of dealing with problems – all this couldn’t fail to have an effect on Russian domestic politics and Russia’s foreign policy alike. The media is discussing the intensification of clan power-struggles in Russia this spring, and yet another possibility of personnel changes at the top, and even of changes in the president’s foreign policy priorities.

As Yevgenia Albats writes in “Novaya Gazeta”, until recently President Putin has aimed to maintain a balance between two influential groups in domestic politics: the author refers to them as “the security group” and “the civilians”. Albats says: “Talking in terms of categories such as chekists, liberals, and oligarchs has lost all meaning: chekists have become oligarchs, the liberals have almost vanished, and some erstwhile oligarchs have been showing signs of wetting the bed in constant fear of losing their business or going to jail – what kind of oligarchs are these, with wet pants?”

According to Albats, the president has recently been forced to make substantial concessions to the security clan, which has long objected to the pro-American policy agenda of the Russian administration.

Albats says that Putin at first tried to alleviate the dissatisfaction of this group by the usual method of “tightening the screws” at home: “He twisted the necks of a number of media outlets; he raised salaries for both military and civilian bureaucrats; he handed out several tasty chunks of the economic pie – oil, gas, vodka, lumber, parties, and the media.”

But the overall problem didn’t go away. Essentially, the president is being invited to make a choice between the civilian oligarchs and the security group. This is a real dilemma for Putin: a conflict with the former would mean problems in the regions during an election year – but angering the latter would be even more dangerous.

It seems there can be no simple solution here.

Albats notes than when internal resources do not suffice, an experienced politician usually brings external resources into play. At present, those resources may be described as “peaceful resolution of the Iraq situation”.

On the one hand, Putin appears to be giving in to the anti-American views of the security group. On the other hand, he is responding to the demands of those in the Russian oil sector who have their own interests in Iraq. Thus, both sides stand to gain something.

However, says Albats, it’s uncertain how long the security group will be content with this bone Putin has thrown them. Very likely, further concessions will be inevitable.

Albats concludes: “One thing is already apparent: President Putin is nervous – he is more and more wary of his colleagues from his previous place of employment.”

Meanwhile, the radical left “Zavtra” newspaper emphasizes that the “Yeltsin’s Family” clan is taking the offensive. “Zavtra” says that during a recent visit to Washington by Alexander Voloshin, head of the presidential administration, the discussion agenda went beyond the problem of Iraq; it also included “the operating concept for Russian government institutions for the entire electoral cycle, including the parliamentary and presidential elections”.

Moreover, according to “Zavtra”, during Voloshin’s “unprecedented reception” by President Bush in Washington, the discussion allegedly covered the possibility of Prime Minister Mikhail Kasianov becoming Putin’s “successor” as president.

According to “Zavtra”, Putin’s obvious increased contacts with European Union leaders “have been viewed by the St. Petersburg security clan in the Kremlin as a signal to step up moves to investigate abuses of power by a number of prominent figures linked to the Yeltsin’s Family clan.”

In a recent issue of the “Versiya” weekly there was an article by Oleg Lurie about a topic which has been around for some time, but still remains relevant: the fate of the infamous IMF loan granted just before the crisis of August 1998.

Everyone knows that the first installment of the unfortunate loan vanished without a trace in 1998. Oleg Lurie notes that “all sorts of Russian agencies, including the Prosecutor General’s Office, the Central Bank, the FSB, and others” were involved in the investigation – but the money was never found. However, the prosecutors of Switzerland were more successful: they managed to reconstruct “an amazing scheme, clearly showing how and where the $4.8 billion loan had disappeared”.

Lurie says: “According to information from the Central Bank and the Finance Ministry, not a single cent of the loan money could have been deposited in any bank account without orders from the person at the Finance Ministry who was responsible for foreign loans.”

And so, says “Versiya”, the first loan installment started out at the Federal Reserve Bank in the United States. But from there it was not transferred to the correspondent accounts of the Russian Central Bank; instead, it went to the Republik National Bank of New York, owned by banker Edmond Safra – suspected by the FBI of involvement in laundering money originating from Russia.

Then, via the Swiss affiliate of the Creditanstalt Bankverrein, the money was distributed to four different destinations.

The first payment of $2.35 billion went to the Bank of Sydney – which had no connection with Australia, but was registered in an offshore zone; the money safely disappeared a month after being paid out by the IMF. According to some sources, this money turned up in the bank accounts of a certain company in which a 25% stake was owned by Tatiana Diachenko, President Yeltsin’s daughter.

A second payment of $2.115 million went into accounts at the National Westminster Bank in London. The trail of this money has been lost.

A third payment – initially $780 million, followed by another $270 million – went to the Credit Suisse bank in Switzerland. The fate of this part of the loan has been traced by Swiss prosecutors.

But the most interesting story is that of the fourth part of the loan installment: $1.4 billion which went first to the famous Bank of New York, and subsequently to its subsidiary – the Bank of New York-Intermaritime in Geneva – where it was paid into the correspondent account of a Russian bank called the Unified Bank.

The Unified Bank was owned by Boris Berezovsky and Roman Abramovich.

From there, the money was transferred to the account of RUNICOM, a Swiss company owned by Roman Abramovich alone. And then the August 1998 crisis took place in Russia.

Many mysterious tales are told in the West about the Russian loan. One of the most sinister is about the horrible death of Edmond Safra the banker, that very same owner of the Republik National Bank of New York where the intricate chain of events that led to the disappearance of the IMF loan began.

Safra died in December 1999, under circumstances which have not been entirely clarified: in his own home in the south of France, in a specially-equipped and well-protected bunker.

Allegedly, shortly before his death Safra was visited by Boris Berezovsky – who at the time was a fairly influential figure in the Russian administration, and is now a “London exile”. It is said that their conversation lasted three hours, and voices were raised. After the meeting, Edmond Safra was overcome by panic. Apparently, in conversations with FBI agents he even claimed that somebody was trying to kill him.

In any event, after Safra’s death many of those suspected of involvement in the “bank fraud of the century” flatly refused to testify. Nevertheless, the Swiss prosecutors are continuing their investigation; and “Versiya” observes: “It is quite likely that Roman Abramovich and Mikhail Kasianov soon won’t dare go abroad any further the friendly states of China and North Korea – since there are always some spare bunks in the Geneva jail.”

To all appearances, this media attack on Family clan members may be considered the first shot – still a distant shot – heralding the approach of pre-election political battles.

Rumors, media leaks, and various political intrigues have always been part and parcel of such battles.

“Vremya Novostei” observer Andrei Ryabov considers that the public response to political rumors has become muted in recent years; “media outcries” have become routine events which have no consequences.

Back in the Yeltsin era, every rumor caused a sensation – even though if any changes at the top did happen, they happened according to scenarios which were completely different and not revealed to the public.

During his last years in power, Boris Yeltsin had very little public support; but his unpredictability and passion for personnel changes enabled him to maintain the initiative. Political players spent most of their time adapting to ever-changing circumstances.

Everyone admits that President Putin’s main achievement has been social stability; under Putin, the number of political rumors and personnel changes has fallen drastically: “Obviously, personnel changes always carry the risk of disrupting stability.”

Thus, according to Andrei Ryabov, even if some change of priorities is underway in the Kremlin’s policies, it is not altering the existing balance of power at the top – “let alone any changes to the political or socio-economic agenda”.

Therefore, says Ryabov, rumors have mostly become “a useful tool in political power-struggles between rival groups within the elite – used to keep opponents in a constant state of tension, and possibly to force them into making many mistakes.”

Andrei Ryabov says the real personnel and policy changes should be expected after the presidential election, during Putin’s second term in office.

The nature of those changes will depend on various factors: Will Putin win in the first round of voting? How many votes will his challengers get? Who will play the greatest role in facilitating his victory? What will the next Duma look like – and will efforts to ensure a pro-presidential majority succeed?

Participants in the political pageant which is starting now are already trying to answer these questions. And if the answers prove to be unwelcome, some major effort is put into correcting mistakes – up to and including repressive measures.

A clear example is party-building within United Russia.

Right now, the centrists are preparing for their party congress at the end of March – and their personnel circumstances lack any clarity whatsoever.

According to “Gazeta”, Alexander Bespalov, chairman of the United Russia party’s general council – while not been officially dismissed from this post – has essentially stepped down. No replacement for him has yet been found.

Rumors that Bespalov might be replaced by Dmitrii Rogozin, who recently switched from the People’s Party to United Russia, remain unconfirmed. A “senior United Russia activist” told “Gazeta”: “Rumors of Rogozin’s appointment are being deliberately spread by the presidential administration, in order to unnerve other general council members – the faction leaders who want this job themselves.”

In fact, according to this sources, nobody is taking Rogozin’s candidacy seriously: “He is still dogged by a history of extravagant – to put it mildly – proposals made by the People’s Party, concerning capital punishment and campaigns against homosexuality.”

Duma faction leaders are categorically opposed to Rogozin being appointed chairman of the United Russia general council. However, the presidential administration considers it would be just as unwise to appoint any of the faction leaders. Even though Unity and Fatherland no longer exist independently (de jure), their leaders are quite active in intra-party power struggles; and elevating any one of them would disrupt what is already a fragile balance of power.

All this has led to the idea of amending the United Russia charter to state that the general council chairman is elected for a period of no longer than one year.

In any case, says “Gazeta”, the supreme council is gradually becoming the governing body of United Russia.

According to rumors which remain unconfirmed, the supreme council may soon have a new member: Governor Alexander Khloponin of the Krasnoyarsk territory, whose relationship with United Russia has been troubled until only recently. At the gubernatorial election in Krasnoyarsk, United Russia supported Khloponin’s rival, Alexander Uss.

Despite this, according to “Gazeta”, Khloponin – who continues to refuse to join the party – has found a compromise truce with United Russia: it involves becoming a member of the party’s supreme council without being a member of the party as such. The same has already been done by athlete Alina Kabaeva, President Mintimer Shaimiev of Tatarstan, Moscow Mayor Yuri Luzhkov, Emergencies Minister Sergei Shoigu – and the present head of the supreme council, Interior Minister Boris Gryzlov.

The supreme council is presently considered to have an observer function; thus, it can include athletes, performing artists, state officials, or regional leaders who are not party members.

Overall, United Russia remains intent on swelling its ranks as much as possible. According to “Gazeta”, the party’s lack of any ideology – a criticism often levelled at United Russia – is a result of this “wholesale expansion in all directions”.

“The party declares that it is defending the interests of practically all social groups: rural workers, the intelligentsia, state-sector workers, entrepreneurs. It forgets one political axiom: a party is only part of society, and it cannot please everyone, by definition.”

United Russia cannot please everyone – but it’s trying to do so; and “Gazeta” says that this, during the inevitable pre-election upswing in populism, is why United Russia is shifting to the left.

An example of this shift: Vyacheslav Volodin, leader of the Fatherland – All Russia faction in the Duma, has supported demands from the agrarian lobby for the government to write off 170 billion rubles of agricultural sector debts and raise tariffs on imported food products.

These demands would be better suited to the Communists; however, unlike the Communists, the leaders of United Russia are sure that they can achieve their goal. Oleg Morozov, leader of the Russia’s Regions group, said: “If anyone is capable of delivering real benefits for the people, we are. It’s no good turning to a political organization which can do no more than stand at your side and helplessly howl at the moon.”

The “Izvestia” newspaper says that if Vyacheslav Volodin and Duma agrarian committee chairman Gennady Kulik succeed with their plans, even in part, United Russia will gain millions of votes from rural Russia. At present, rural residents make up 37% of the population: this represents around 40 million voters.

According to “Izvestia”, United Russia means to do more than “make agriculture healthy” and pass a resolution on regulating fuel prices before spring sowing begins; it also intends to come to the defense of small farmers – who produce over half of Russia’s food. Gennady Kulik cites the example of the United States, which spends $35 billion a year on farm subsidies. Russia plans to spend 28 billion rubles for this purpose in 2003.

“Izvestia” says: “United Russia’s agricultural policy platform will be the main rival to the Communist Party’s agrarian slogans – other parties don’t count.” Gennady Kulik told “Izvestia” that the Union of Right Forces and Yabloko don’t even have any policies on agriculture.

Meanwhile, the Communists themselves, who held a plenum in Moscow recently, admit that the situation on the left isn’t looking too good at the moment.

Duma member Viktor Ilyukhin, a member of the Communist Party central committee, told the “Kommersant” newspaper that “new left-wing centers of force are appearing, which will apparently go into the elections independently.” Ilyukhin said that the Communist Party has found itself “in a very odd quadrangle made up of three Gennadys (Zyuganov, Semigin, and Seleznev) and one Sergei (Glaziev)” – and differences between them have yet to be sorted out.

In the meantime, the chief Gennady – Gennady Zyuganov – is refusing to discuss inter-party differences, claiming that the Communist Party is still engaged in consultations with over twenty parties and political movements on forming an electoral bloc.

According to Zyuganov, the candidate lists of this proposed bloc would be headed by “a communist, an agrarian, and a patriot”.

The first of these is likely to be the Communist Party leader himself – the first of the Gennadys.

According to “Kommersant”, the role of the agrarian would best be filled by Nikolai Kharitonov, head of the agricultural group in the Duma, or Governor Vasily Starodubtsev of the Tula region.

And the place of a “real patriot” is likely to be offered to “Sergei Glaziev, who is a member of the Communist faction in the Duma, but not a member of any party”.

According to “Kommersant”, this would mean that the remaining two Gennadys – Seleznev and Semigin – would be forced to compile and head their own electoral lists. Thus, there’s no point in talking about a broad left coalition at present; especially since the center-left party are displaying a clear distaste for the Communists.

On the day that Zyuganov’s Communists held their plenum, an open letter was published in the media. This was a declaration “on the leadership situation in the People’s Patriotic Union of Russia and the Communist Party of the Russian Federation”; it was signed by the leaders of the New Communists party, the National-Patriotic Foces of Russia, the Eurasian party (Union of Russian Patriots), the United Socialist Party of Russia (Spiritual Heritage), the Russia’s Renaissance party, the Russian Party of Peace and Unity, and the Russian Workers’ Government Party.

The declaration states that the Russian leftist and patriotic movement is corrupted by contacts between Communist Party leaders and Boris Berezovsky.

From the declaration: “The leadership of the Communist Party, tempted by temporary gains from cooperation with financial oligarchs, is losing political substance before our eyes. It is bitter to realize that the luster of money has so quickly made them forget that most of our victories have been due to the efforts of the patriotic movement as a whole, and we have never divided them between the Communist Party and other parties. The striking contrast between efforts to obstruct their loyal fellow fighters and the search for alliance with erstwhile sworn enemies reveals the true face of certain Communist Party leaders, who are working against the interests of the common people.”

But even with their “true face revealed”, the Communists still retain their lead in popularity over the other parties.

According to the latest poll results from the National Public Opinion Research Center (VTsIOM), published in “Nezavisimaya Gazeta”, if the elections had been held last Sunday 24% of voters would have supported the Communist Party.

United Russia is in second place, with 23%. This is a substantial achievement, since it only had 14% support in January polls: so the heroic efforts of the centrists to recruit performing artists, athletes, and others from the beau monde into the party haven’t been wasted – voter attitudes to United Russia have improved significantly.

Yabloko is in third place, with 7%. It is followed by the Union of Right Forces and the LDPR, with 6% each. The remaining parties would have failed to surmount the 5% barrier if the elections had been held last week.

What’s more, “Nezavisimaya Gazeta” reports that VTsIOM has recorded a rise in public dissatisfaction with the performance of the prime minister. In January, the numbers of Mikhail Kasianov’s supporters and opponents were about equal. In February, the situation changed: 42% of respondents approved of his policies, while 49% disapproved.

“Nezavisimaya Gazeta” impartially reports that President Putin’s position remains steady: 72% of respondents approve of his performance, while 22% disapprove. Exactly the same figures as in the January polls.

The president is also leading in the confidence ranking: 49% of respondents trust Putin. Mikhail Kasianov is only in fourth place, with 10% of respondents trusting him.

Gennady Zyuganov is ahead of Kasianov by 4% – he holds third place in the confidence ranking, after Sergei Shoigu, who is trusted by 18% of respondents.

So the emergencies minister is trusted by twice as many people as the prime minister: that seems to present a fairly comprehensive summary of the situation in Russia.

Further significant figures: apart from Gennady Zyuganov, two other party leaders have a place in the confidence ranking – Vladimir Zhirinovsky and Grigory Yavlinsky.

Despite all his recent eccentric escapades (or thanks to them?) – including his crude abuse of the president of the United States – Zhirinovsky is trusted by 8% of respondents. Yavlinsky is trusted by only 6%.

In other words, Zhirinovsky – desribed by highbrow analysts as a political clown – appeals to significantly more people than his party does. The reverse is the case for Yavlinsky the intellectual.

There’s some material to reflect on as the elections approach.

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