Issue #13/68, July 1 - 15, 1999  

By Matt Taibbi

First week in July... the All-Star break. Time to step back a little and assess things. If you're more than a few games back of first, maybe you need to make another deal for a starting pitcher. Maybe, if your team is losing badly, it's time to give up on this season and trade away your big contract stars for minor-league prospects. And if you're a Moscow-based hack, it's time to think--are you going to go the rest of the journalistic season with the same cast of metaphors? Or will you toss out half the team, and cast around for new acquisitions in time to make a run at the year 2000 elections?

Here at the eXile, we think it's time to deal. We're keeping Boris Berezovsky and Anatoly Chubais in our five-man rotation, but we've been noticing lately that some of the other oligarchs are playing with tired arms. Vladimir Potanin, Mikhail Khodorkovsky, and Alexander Smolensky are hanging a lot of sliders lately. Viktor Chernomyrdin has lost a lot of range at first. You get what we're saying: Russia needs a new metaphor. The whole banker-oligarchy thing is old news. Time for a rebuilding phase. Time to start thinking--as so many baseball teams in the States are these days--about what rhetorical team you're going to field when you move into the new stadium. And with the Belarus Union deal looming on the horizon, a new ballpark probably isn't far off.

A couple of years ago, the eXile gave its readers a broad layout of the Russian political scene with a piece called "Baldfellas." The oligarchy was in full swing then, and bios of the bankers made sense. Now we've got a different scene unfolding. President Yeltsin, insane and barely alive, is clinging to power, and has surrounded himself with a tight squad of evil henchmen determined to keep him in the Kremlin at all costs. Almost all the former insiders (i.e., most of the '90s new rich) have been at least partially shut out of the Kremlin and are now conspiring in scattered groups, like packs of wolves or sharks, for a way back in.

No more Chicago of the '30s, like in '96; no more commies vs. mobsters storylines. This is Nero's Rome: addled, absolutist Caesar vs. the scheming, wealthy Senate. Or, to put it another way, it's the Loyalists vs. the Traitors, just like in the Ishmaelia of Evelyn Waugh's Scoop. Come year 2000, one or the other team is going to win out--and it'll be winner take all. Here's how the teams line up:

THE LOYALISTS
The thing to remember about the Loyalists is that it is both correct and incorrect to assume that the team dynamic revolves entirely around Boris Yeltsin's pathological desire to remain in power at all costs. On its face, this is true; the team around Yeltsin is indeed attempting to pull off a thoroughly illegal, unconstitutional power play on the rest of the country, and they've been forced to take the extralegal path primarily because Yeltsin can't legally stay in office after next year. However, make no mistake about it: this group would be going the illegal route anyway. The ideological makeup of the Yeltsin squad is firmly monarchist, absolutist, and non-republican: its actions of late, particularly its response to the Yuri Luzhkov "threat," suggest a deep philosophical commitment to the establishment of an unrestrained dictatorial state.

Now, here's the interesting thing about the Yeltsin camp, whose principals are daughter Tatyana Dyachenko, Nikolai Aksyonenko, Sergei Stepashin, Boris Berezovsky, Viktor Khristenko, Roman Abramovich, Viktor Chernomyrdin, and (separately) Anatoly Chubais and Alexander Voloshin: unlike the Yeltsin camp in '96, this one is overtly statist and aligned against the "private" sector. Of course, the big 7 bankers in 1996 had also won their fortunes through state favors, but this time around, the effort will be to seize industry under direct state control, and suck out funds directly, rather than extort campaign funding kickbacks from private bankers made rich through privatization.

The effort to place Yeltsin henchmen at the reigns of the nation's industries is moving on several different fronts. The first and most successful move to shore up state support of industrial money came just last week, when an effort to unseat Anatoly Chubais as the CEO of RAO-UES failed, and Yeltsin chief of staff Voloshin was elected chairman of the UES board. Those commentators who were on the Chubais "reform" bandwagon in the mid-90s should take note that this "hero of privatization" is now staying close to power through his rule over a massive, corrupt, and hugely inefficient state enterprise, whose coffers will no doubt be raided between now and next June in an effort to keep Yeltsin or his camp's chosen successor in the Kremlin. The placement of Voloshin on the board was widely seen as an assurance that Chubais is safe there, and that the Kremlin will have access to UES money when it commences its next great political battle.

Secondarily, there is the issue of Gazprom. It's no secret that Gazprom is now and will remain the mightiest, richest conglomerate in Russia, and that its support--and its money--will be needed by anyone who wants to occupy the Kremlin. The Yeltsin camp realizes this and has, accordingly, taken plenty of steps already to ensure that it will have Gazprom in its pocket in time for the 2000 showdown. The first move in that direction comes this week. By the time this issue hits the newsstands--after a meeting of the Gazprom board on June 30--Viktor Chernomyrdin will probably have retaken a seat on the board of directors. If that happens, and it probably will, this will be a clear sign that Rem Vyakhirev is a marked man, and that Viktor Stepanovich, who has consistently demonstrated his fealty to the Czar, will soon be trying to take his place. Vyakhirev, no fool and a canny operator himself, actually met with Stepashin this past week, probably in an attempt to talk the PM out of the plan. But the eXile's bet is that Chernomyrdin retakes control of Gazprom and uses company money to push through whatever evil plan for Total Power Seizure the Yeltsin camp dreams up. Yeltsin certainly remembers what a cozy relationship Vyakhirev had with Yevgeny Primakov, who helped the Remster avoid paying taxes last year, and experience has proven that Yeltsin has no tolerance for anyone still bearing the Primakov scent. That's particularly true given the rumored upcoming announcement of an alliance between Luzhkov and Primakov. The mere possibility that Vyakhirev would consider tossing Gazprom's weight behind a Luzhkov candidacy should be enough to ensure Yeltsin's permanent enmity.

There have been other murmurs of Yeltsin-camp clamoring at Gazprom. For instance, Versiya this week reported that Boris Berezovsky is pushing the candidacy of former Yeltsin deputy administration chief Ruslan Orekhov for the post of deputy director of Gazprom. We'll see how that plays out, but if it comes off, that's another definite sign that Vyakharev is out.

Another interesting Gazprom-2000 factoid: one of the leading candidates so far for the St. Petersburg gubernatorial elections next year is one Vitaly Mutko, formerly deputy mayor under Anatoly Sobchak and currently president of the "Zenit" soccer team. Mutko's financial backing for the campaign is Zenit's sponsor--Gazprom. If Mutko stays a candidate after Vyakhirev is axed, mark him as a Yeltsin team player.

Now, for the real kicker, state-industry-financing-wise: according to several Moscow newspapers, a plan is underfoot to create a massive state oil monopoly called "Gosneft." Novaya Gazeta this week speculated that the Aksyonenko-Abramovich axis was thrust into Yeltsin's inner circle precisely with this goal in mind--specifically, the Kremlin hopes to lump together Rosneft, Slavneft, and ONAKO, plus the state's stakes in Tyumen Oil and LUKOil, and create a true petroleum death star. NG claims the idea was first born late last year, when then-Energy Minister Sergei Generalov lobbied for a form of the plan, which wouldn't have included LUKOil or Tyumen Oil. Now, with Abramovich crony Aksyonenko keeping close watch over the Energy Ministry, the idea seems--although insane on its face--not entirely outside the realm of possibility. The names of KomiTEK chief Grigory Beryozkin and Abramovich buddy Andrei Gorodilov have been bandied around as possible candidates to take charge of the new state holding, which would put a giant share of the country's oil-based cash in direct control of the Yeltsin camp (monies augmented, no doubt, by Abramovich's Sibneft). The Gosneft story has been popping up enough lately to suggest it may actually be true; look for someone in the Kremlin administration to "deny" it publicly soon, or for a low-level Kremlin aide to put forward the idea in a Kremlin-friendly newspaper.

Gas, electricity, oil: if the Yeltsin camp manages to get all three under its control, its opponents will have a tough time mounting any serious opposition to whatever plans the Kremlin cooks up. As far as those plans go, there appear to be two main political schemes emanating from the President's inner circle: the Belarus Union plan, and the lesser, more legal, Stepashin-based "Rossiya" political party plan.

The Belarus plan looks like the real deal. Segodnya made a big fuss this past week about the planned merger of the Russian and Belarussian armies, which sources (including bureaucrats from various "Belarus Union Council" organizations--apparently already in existence and having offices somewhere) say will come off in the fall. The basic idea is simple, based on the Milosevic model: declare a new state and a new constitution, and simply nominate a President (Yeltsin) who will not have to run for election in the year 2000. If Yeltsin stays alive into next year, we may find out then that this deal will already have long ago been a fait accompli. The legal machinations--as even The Moscow Times has noted already--are probably silently going on as we speak; the only "announcement" will be a formal cancellation of the Presidential elections for the old Russian state.

Secondarily, the Kremlin is preparing to deal once and for all with the problem of the "obstinate" Duma. A new Kremlin-based political party with Stepashin as its head, called "Rossiya," is under way and will put forward candidates for the upcoming parliamentary elections. "Rossiya" will run as a blok of Yeltsin-friendly parties: Our Home is Russia, All Russia, New Force, Right Cause, and the Aman Tuleyev party. The latter group will be a major factor in the elections, with Alfa-Group money backing it. If the group gets in and assumes a dominant place in the Duma--not unlikely given the funding and media support it will get (don't forget that ORT and RTR have recently announced a program of formal political censorship, and one belligerent show, Sovershenno Sekretno, has already been yanked), its main role will probably be to sit by quietly as obedient patsies while the Kremlin subverts the Presidential election process and welcomes Alexander Lukashenko and the rest of Belarus to the table. And--to steal a line from Goodfellas--that will be that, and there will be nothing anybody could have done about it. Not even:

THE TRAITORS
This group is easy to identify. Just look at the above list, exclude them from the general population, take the remainder, and you've basically got "the other side" in the upcoming political struggle. The central figure here right now is Yuri Luzhkov, who's had to endure no end of humiliations from a Yeltsin camp that has been feeling its oats in a big way ever since it disposed of Yevgeny Primakov. The Kremlin fired a nasty shot across da mayor's bow last week when it refused to let him take a helicopter ride over Moscow oblast territory; there's no way to interpret that incident except to see it as a demonstration that the military is on board with the Kremlin and whatever its future plans may be. The mayor has furthermore had to endure the irritating harangues of diminutive mayoral opponent Sergei Kiriyenko, who despite his recent call for Yeltsin's ouster is clearly playing possum for the Kremlin, and doing its bidding by slinging mud at Luzhkov. Yevgeny Kiselyov a little while back coyly suggested that the Duma would look a lot better in its original home in St. Petersburg, a clear message that even the notion that Luzhkov is boss in the seat of Russian power can be altered at any moment.

Luzhkov is fighting back: this past week, in a clear announcement of potential kompromat hostilities, he hired, through his TV station TV-Center, the much-loathed Sergei Lisovsky. Lisovsky immediately made a series of cryptic public statements about his presumably thorough knowledge of Yeltsin's 1996 campaign irregularities. He hinted, among other things, that much of Yeltsin's '96 campaign money was "Western"--a subject that will be of interest to the people, who of course don't matter, and to Western journalists, who in Russian domestic politics matter even less. Herein lies a central problem for the Traitor forces: an international uproar over Yeltsin corruption has been rendered a virtual impossibility by NATO's blundering in Yugoslavia. It is almost certain that Yeltsin made Western political and financial support for his plans to remain in office a condition for Russian support of the Yugoslav "peace" plan. The Yugoslav war was really manna from heaven for Boris Nikolayevich. Bill Clinton will still be in office when the 2000 deal goes down here in Russia, and you can bet the United States will do everything in its power to make sure its buddy Yeltsin--who was just given a permanent place at the G-8 table for his efforts in Yugoslavia--stays put.

Money will decide this whole affair, and the simple truth is that the Traitors may not have enough of it to get over next year. Yeltsin will still be getting his IMF money for the next year, anyway, and as for other sources, well... times have changed. The crisis impoverished Russia, and there are fewer and fewer barons out there capable of influencing state politics. Not a single Russian made the Forbes billionaires list this year; the banks are insolvent. And if the Kremlin gets its hands on Gazprom, the deck will be firmly stacked.

The polls, of course, favor the traitors right now: if one were to combine the public support for potential anti-Yeltsin candidates like Alexander Lebed, Luzhkov, Grigory Yavlinsky, Gennady Zyuganov, and Yevgeny Primakov, and unite them against the President, it would be a blowout. But even in the unlikely case that all those people settle their differences and get together, their victory will only be an abstraction. There either won't be an election, or it will be fixed in some way, like the '96 ordeal. The only question is whether or not Yeltsin will get away with his end run. A few months ago, it looked unlikely. Now, it looks like the Traitors will have to make a move, and a drastic one, to put a halt to the inevitable--a "family" dictatorship.

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