Kremlin shake-up fixed in secret at Cannes
Russia: Billionaire car dealer and media boss Berezovsky acted as the go-between for Yeltsin and Chernomyrdin
Wednesday 26 August 1998
Boris Berezovsky, the country's most prominent oligarch, is the principal broker in a deal that restored the sacked Viktor Chernomyrdin as Prime Minister and established himself as the power behind the throne.
Reports in Moscow say the billionaire businessman recently secretly met the new premier and a senior Kremlin official - the deputy chief of staff, Igor Shabdurasalov - in the French resort of Cannes, thousands of miles from the economic maelstrom that was engulfing Russia, shaking the empires of its new oligarchs to their foundations.
The resulting proposal to replace the 36-year-old Sergei Kiriyenko, after only four months in office, was relayed to President Yeltsin by his younger daughter, Tatyana Dyachenko, and chief of staff, Valentin Yumashev, both friends of Mr Berezovsky.
The key question now taxing the minds of Russia's political supporters and creditors in the West is the nature of the influence that Mr Berezovsky, and a coterie of other tycoons, will undoubtedly wield in the new government.
Although, Mr Chernomyrdin's past record suggests he broadly favours market economics, he is also a former chief executive of the gas giant Gazprom, and tends to protect the interests of his chums in business and the energy sector.
It says much about the entwined nature of power and cronyism in Russia that Gazprom shares yesterday rocketed by 20 per cent.
The signs so far are ominous. Mr Chernomyrdin has told a newspaper that he wants to concentrate on "industrial policy, since purely monetary measures have not pulled Russia out of crisis". He has also been carefully courting the main parliamentary groups (who have yet to confirm him in post) and has talked about creating a "broad-based government of accord", raising the possibility of a coalition government, including the Communists.
To the ears of advocates of market reforms, such words are anathema, and spell a rise in government interventionism and spending. One of their camp, Anders Asland, a former adviser to Russia, has described Mr Chernomyrdin's return as "a total disaster".
Certainly, tasks regarded as crucial by the International Monetary Fund - such as raising Russia's lamentable tax revenues and cutting the state's huge subsidies to energy and housing - can be expected to lose what little momentum they have.
This may well be one of the reasons why Mr Berezovsky has anointed Mr Chernomyrdin both as the premier and, it is safe to assume, the man whom he sees as heir to Mr Yeltsin's throne.
Tsar-making is a role that he has long cultivated. In 1996, fearful of a Communist victory, he and six other magnates paid $3m towards the Yeltsin re-election campaign. He was rewarded with a government job - deputy secretary of the Security Council, from which he was later removed. But he fought his way back. His success was yesterday acknowledged, bitterly, by Russki Telegraf, a hostile newspaper. "Berezovsky Is Now Our President," said the headline.
His rise owes much to ruthlessness, wheeler-dealing skills and opportunism honed in the lethal new world of Russian business. A former maths professor, he was shrewd enough to seize the money-making chances that arose in the lawless aftermath of Soviet collapse, parleying a car dealership into an empire that include oil, industrial and property interests.
By 1994, he was deeply enough immersed in the business world to become the target of an assassination attempt; a car bomb blew off the head of his driver.
Undeterred (and protected by a 150-strong security contingent, many ex- KGB), he rose steadily upwards, becoming the most prominent member of a group of oligarchs who have long sought to control the Kremlin from behind the scenes.
No one knows exactly how wealthy he is (his own assessment, last year, of $23,000 was greeted with mirth in Russia), but he has all the "new Russian" accoutrements: apartments abroad, at least three properties in Russia and Cambridge-educated children.
He has had occasional spats with the authorities - rows, for instance, with the government's so-called "young reformers", Anatoly Chubais and Boris Nemtsov, over the spoils of privatisation. One of these, over the sale of the state telecommunications giant Svyazinvest became so serious that Mr Yeltsin personally had to intervene. But the tycoon assiduously mended his fences.
For now, Mr Berezovsky, a small, balding man with a penchant for check jackets, is calling the shots in Russia. The clues were there, before the crisis began.
Like any player with serious ambitions to wield power in Russia, Mr Berezovsky has sizeable media holdings, which he brazenly uses to his ends. These include a controlling stake in the national TV network ORT, and proprietorship of the newspaper Nezavisimaya Gazeta (the Independent - no relation).
On Friday, the newspaper all but predicted Mr Chernomyrdin's return to the top. It was not a coincidence.
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