#5 - JRL 7303
New York Times
August 27, 2003
LETTER FROM EUROPE
Old Kremlin, New Kremlin: It's Still a Big Secret
By STEVEN LEE MYERS
MOSCOW, Aug. 26 — This summer's biggest scandal — the prosecution swirling around Russia's richest and most powerful company, Yukos Oil — has spawned endless speculation about who really wields power under President Vladimir V. Putin.
Everybody has a theory, but no one outside the Kremlin really knows, and no one inside will say.
In the old days, observers of the Kremlin — Kremlinologists, they were called then — knew so little about the inner workings of the Supreme Soviet that they would scrutinize any public assemblage of Soviet leaders for signs of waxing or waning influence.
For all the progress Russia has made since the Soviet Union collapsed in 1991 — elections, stock markets, a putatively free press and the vast expansion of personal liberties — the exercise remains more or less the same. Kremlinology is back.
If anything, the clues are even skimpier than before. Those who surround Mr. Putin rarely even appear in public with him. And what public statements Mr. Putin makes are carefully scripted for state television. He holds a news conference annually. The next one is expected in June. His few public remarks on the Yukos affair have been oblique to the point of obfuscation.
The prosecutorial assault, which erupted publicly on July 2 with the hospital-bed arrest of one of Yukos's major stockholders, has raised fundamental questions here not only about the nature of business, politics and the rule of law in Russia, but also about Mr. Putin himself.
The Kremlinologists of today speculate that the prosecution was a favor to one of the company's competitors, which is not as shocking here as it sounds.
One competitor said the real sin of the company's chief executive, Mikhail B. Khodorkovsky, was daring to contribute money to two political parties opposed to Mr. Putin. Others say the underlying motive of the prosecution is personal.
The fact is that nearly two months after it began, no more is known about the motives of the investigation — and Mr. Putin's role in it — than when it started.
None of those closest to him have granted interviews about the case, deepening the confusion and letting the conspiracy theories sprout like mushrooms after the summer rains.
The official Russian Information Agency, evidently eager to calm investors, did arrange a briefing for foreign journalists last month with someone who, after considerable negotiation, agreed to be identified only as "a senior Russian official."
The prosecution was "clearly part of an organized campaign," but the official could not or would not say by whom. Mr. Putin, the official said, had not initiated the investigation but could not stop it either, since that would create the appearance of interfering in a judicial process.
The problem for Mr. Putin is that virtually no one — not even some within the Kremlin itself — believes that an investigation against one of the country's most prominent businesses could even begin without Mr. Putin's assent.
Ever since he took over from a withered Boris N. Yelstin, Mr. Putin has carefully cultivated an image as a strong leader who has brought stability to a newly democratic Russia. At the same time, he has consolidated power in the center and weakened the independence of the media, especially television.
As a result, the Yukos affair — with all its intrigues — has brought back disconcerting memories of what came before, when one rose or fell on fear and favor of the man on top. And there are few voices from the Kremlin to counter the accusations of Mr. Khodorkovsky and others that malevolent forces are at work.
"Yeltsin's people at least sometimes explained what they were doing," said Liliya Shevtsova, author of "Putin's Russia" and a senior associate at the Carnegie Moscow Center. "Now what we see is a different regime. It doesn't feel any connection to the society. It doesn't feel any accountability."
The Yukos affair has been widely cast as a struggle between the two factions vying for political control under Mr. Putin and, some say, for the future of Russia itself.
On one side are his economic advisers, including Prime Minister Mikhail M. Kasyanov, who favor greater reforms to stimulate the Russian economy.
On the other are his security advisers. Many of them, like Mr. Putin, are veterans of the K.G.B. or other security services and are said to advocate strong state control over business and politics. The most prominent among these are two deputies, Viktor P. Ivanov and Igor I. Sechin.
Olga V. Kryshtanovskaya, a scholar at the Institute of Sociology of the Russian Academy of Sciences, recently completed a study showing that one in four officials in Mr. Putin's government came from the ranks of the military or the secret services — and not just in the security ministries, but increasingly in economic and trade ministries, as well.
She calls it "the Sovietization of power."
Mr. Putin is, if anything, pragmatic. Most believe he plays one side off the other — to what end is not clear — while trying to remain above the fray as a sort of benevolent czar. Mr. Putin remains popular, and his re-election next year is considered a given.
Increasingly, though, Mr. Putin's detachment has prompted questions that would have been unthinkable not long ago. "Is the president biding his time?" Boris Kagarlitsky, director of the Institute of Globalization Studies in Moscow, wrote in Rodnaya Gazeta on Monday. "Does he simply have nothing to say? Or, even worse, doesn't anything really depend on him?"
There is reason to suspect that the security advisers — known alternately as the siloviki because of their security backgrounds or the St. Petersburgers because of their connections with Mr. Putin's hometown — have gained the upper hand.
After Mr. Kasyanov criticized prosecutors' actions last month, warning that the scandal was harming investor confidence, he was rebuked by a low-ranking spokeswoman for the prosecutor general's office. The financial markets were soon awash with rumors that Mr. Kasyanov would resign, along with another official in his camp, Mr. Putin's chief of staff, Aleksandr S. Voloshin.
But in today's Kremlinology, who would know? Mr. Putin said nothing.
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