There may be a new boss in the Kremlin, but the Byzantine politics that rage behind its walls continue. Recent moves against two of Russia’s most prominent businessmen — the “oligarchs” — have kindled speculation about who is making policy and to what end. Is President Vladimir Putin cleaning up the corruption that is a dead weight on Russia’s economy or is he going after his enemies? Is Mr. Putin even in charge? There are no clear answers, but the evidence leads to troubling conclusions about the new president’s tolerance of and support for a free press and other vital elements of democracy.
Alarm bells started ringing last week when Mr. Vladimir Gusinsky, head of the Media-Most group, Russia’s only independent national media conglomerate, was arrested and jailed for three days on charges of fraud and embezzlement. After protests from businessmen both within and outside Russia, he was released. Then, earlier this week, the Moscow prosecutor’s office filed suit to reverse the privatization of Russia’s largest metal company, which was sold to another oligarch, Mr. Vladimir Potanin.
While there have been complaints about the economic power exercised by the oligarchs and the way in which they acquired their vast holdings, these moves are not as simple as they seem. There are three possible explanations.
The first is intimidation and revenge. Mr. Gusinsky’s media group has been at the forefront of criticism of the government’s handling of the war in Chechnya. Media-Most’s offices were raided by the tax police only days before Mr. Putin’s inauguration in May. That seemed to have no impact, so the arrest could be the next step in a campaign to change Mr. Gusinsky’s views. Mr. Potanin’s name topped the list of Russian businessmen who protested his arrest in an open letter to the prosecutor general. If this theory is correct, the next target could be Mr. Boris Berezovsky, another oligarch who was very close to former President Boris Yeltsin, but who has fallen out with the new president. (A more sinister explanation ties Mr. Gusinsky’s harassment to anti-Semitism. He is the only oligarch who is Jewish, and he has assumed a high profile in Russia’s Jewish community.)
The second theory is that this is the first stage in a campaign against all the oligarchs. This is the most charitable explanation, and the one best calculated to win support. By most reckonings, Mr. Potanin acquired Norilsk Nickel at an incredibly low price during the looting of the Russian economy that was passed off as privatization during the mid-1990s. Most of the other oligarchs are similarly vulnerable to an investigation of their dealings.
The third theory posits the existence of a group of Kremlin officials happy to see the entire privatization process undone. They yearn for the old days of the state-led economy and prefer that their hands guide the economy — and skim the cream off the top. A variant on this theme suggests that there is a power struggle going on in the Kremlin between the president’s advisers. The businessmen who helped propel Mr. Putin into office are now a liability. The president has turned to the old-style politicians to free himself from their grip.
Yet another twist suggests that Mr. Putin himself may not be involved in these machinations. Mr. Gusinsky was arrested while the president was on a high-profile foreign trip, and his apparent surprise when he was informed makes it seem as though he was out of the loop. That is as disturbing as if Mr. Putin had ordered the raids himself.
No one disputes the damage the oligarchs have done to the Russian economy. But the cure cannot be worse than the disease. Trying to reverse the process of privatization would cause an upheaval throughout the entire economy and would shatter business confidence. More than anything else, Russia needs foreign investment to try to generate growth and modernize the economy. No one is going to put money into Russia if they fear that future governments will seize those investments or undo deals. The way the Gusinsky arrest overshadowed Mr. Putin’s entire visit to Europe is all the warning the president needs about the risks involved.
Mr. Putin has made it abundantly clear that he prefers a “strong-man solution” to most of Russia’s problems. He has been attempting to centralize power since he took office in May. But a strong man is one thing; one who thinks himself above the law is another. Russia needs a strong leader, but one who supports the rule of law. Waging a war against those who oppose his policies undermines both.
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