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Russia Intelligence N°70 - January 31 2008 Published every two weeks / International Edition CONTENTS SPOTLIGHT P. 1-3 Politics & Government c Medvedev’s Last Battle Before Kremlin Debut SPOTLIGHT c Medvedev’s Last Battle The arrest of Semyon Mogilevich in Moscow on Jan. 23 is a considerable development on Russia’s cur- Before Kremlin Debut rent political landscape. His profile is altogether singular: linked to a crime gang known as “solntsevo” and PRESIDENTIAL ELECTIONS sought in the United States for money-laundering and fraud, Mogilevich lived an apparently peaceful exis- c Final Stretch for tence in Moscow in the renowned Rublyovka road residential neighborhood in which government figures « Operation Succession » and businessmen rub shoulders. In truth, however, he was involved in at least two types of business. One c Kirillov, Shestakov, was the sale of perfume and cosmetic goods through the firm Arbat Prestige, whose manager and leading Potekhin: the New St. “official” shareholder is Vladimir Nekrasov who was arrested at the same time as Mogilevich as the two left Petersburg Crew in Moscow a restaurant at which they had lunched. The charge that led to their incarceration was evading taxes worth DIPLOMACY around 1.5 million euros and involving companies linked to Arbat Prestige. c Balkans : Putin’s Gets His Revenge The other business to which Mogilevich’s name has been linked since at least 2003 concerns trading in P. 4-7 Business & Networks gas. As Russia Intelligence regularly reported in previous issues, Mogilevich was reportedly the driving force behind the creation of two commercial entities that played a leading role in gas relations between Russia, BEHIND THE SCENE Turkmenistan and Ukraine: EuralTransGaz first and then RosUkrEnergo later. The first was officially set c Azerbaijan : Gazprom Eyes Shakh Deniz Field up in December, 2002, the second in July, 2004.Their aims were identical: to ensure the sale of Turkmen and Russian gas to Ukraine and insinuate themselves as middle-men between Gazprom, its Turkmen supplier FOCUS c Yakunin Shines as Travelling and the Ukrainian customer, raking in the money resulting from the transactions in the process. The stake- Salesman holders in the two companies are virtually the same even though the offshore entities that hold their shares NUCLEAR ENERGY are numerous and the owners mere frontmen. Since 2006 it has been known that, apart from Gazprom, c Gazprombank Holds Out which owns 50% of RosUlkrEnergo, the other stakeholders are Dmitry Firtash and Ivan Fursin.Firtash was Against OMZ, Vekselberg also the mainstay of EuralTransGaz. And links between Firtash and Mogilevich have been proven even if Seeks Bigger Stake in Mogilevich denies being involved in the companies (regarding Firtash, read Ukraine Intelligence No. 13). EMAlliance-Atom c When Chemezov Steps on But how can Mogilevich’s arrest be tied to the succession process currently unfolding in Russia? Eural- Yakunin’s Turf TransGaz was set up at a time when Dmitry Medvedev was chairman of Gazprom but the venture was re- FOCUS ally under the authority of Alexandre Ryazanov who was deputy chairman and didn’t exactly form part of c Potanin’s Counter-Offensive, the Medvedev clan. Indeed, it was only when RosUkrEnergo was set up that Gazprom (through the inter- Deripaska Lies in Ambush mediary of entitles linked to Gazprombank) “officially” came into the picture. Medvedev and Alexey Miller OIL took matters in hand only gradually. Ryazanov was discreetly shown the door at Gazprom in November, 2006 c Transneft : Tokarev Drops (RI 44). One of Gazprom’s representatives in RosUkrEnergo is none other than Konstantin Chuychenko, a Vaynshtok’s Old class-mate of Medvedev at the law faculty at the University of St. Petersburg (RI No. 68). Up to then, Mogile- c Gazprom neft and Sibir vich had lain low. But with Firtash serving as a smokescreen he began handing out some of the money man- Energy Bury the Hatchet aged by RosUkrEnergo to certain hard-line security figures in Moscow. It can now easily be imagined the P. 8 Regions & CIS alarm his arrest has triggered in Moscow but also, naturally, in Kiev. (Ukraine Intelligence No. 49). FOCUS c Fresh Unrest in Northern It can also be noted that the police who collared Mogilevich belonged to neither the Investigation Com- Caucasus mittee of the prosecutor’s office nor the FSB, two organizations controlled by men linked to Igor Sechin c The Russian-Moldavian but came from the interior ministry. The number two man at the ministry is the recently-appointed Yevgeny Love-Fest Shkolov, a former colleague of Vladimir Putin at the KGB outpost in Dresden and adviser to Medvedev at SUBSCRIPTION the presidential administration (RI No. 67).Shkolov has authority over the criminal police in his capacity Print Edition as deputy interior minister under Rachid Nurgaliev. In addition, limiting the charge against Mogilevich to (23 issues, airmailed overseas) tax evasion enables the ministry to keep him out of the hands of FSB or the prosecutor’s office and there- €770 TTC fore “protected” and under Medvedev’s control, at least for a time. The Web Pack (Print Edition Medvedev has thus responded to the intrigues by the Sechin clan that Russia Intelligence has largely + PDF + archives acess) analysed in previous issues. The final battle has been engaged and the future Russia president has chosen € 880 TTC the terms and can be counted upon to fight it as long as Putin remains in the Kremlin. The outcome of the The Premium battle depends largely on the amount of authority Medvedev will wield as president over those who opposed Subscription him so bitterly over the years within the walls of the Kremlin. d (Print Edition + PDF + access to all the website contents) Full reports on EuralTransGaz, RosUkrEnergo, Mogilevich and Firtash can be found on our site www. Russia-intelligence.fr € 1200 TTC (free of charge to subscribers) www.russia-intelligence.fr RUSSIA INTELLIGENCE Politics & Government PRESIDENTIAL ELECTIONS c Final Stretch for « Operation Succession » Dmitry Medvedev’s road to the Kremlin seems straight and litical leanings. A speech he made before the Civic Forum on clear of obstacles. A series of polls conducted around Jan. 20 by Jan. 22 didn’t make that clear and nor did another before the As- the Levada Center indicated that over 80% of the electorate sociation of Russian Jurists on Jan. 29. The future president would vote for him in the first round of the presidential ballot on confined himself to vague and even rather trivial language. (“On March 2. Medvedev’s arrangements for the campaign have been the whole, civilization is advancing in optimistic fashion. Our made: the director will be Sergey Sobyanin, head of the presi- chances in Russia are good”) dential administration. Assisting him will be Oleg Govorun, who is in charge of domestic policy in the Kremlin; Natalya Timakova, Tasked with deploying the “Putin Plan,” the famous slogan of director of the president’s press service; and Garry Minkh, chief the last legislative election, he identifies himself completely with of the legal department in the government’s secretary-general the outgoing president. Hence, for example, the pictures of service. Medvedev aboard an aircraft (civil) in Voronezh. Behind his claim to Putin’s heritage, however, a tiny note seems out of key: it’s not The order of the day is to spare Medvedev from the least chance strong as yet but neither does it fit in entirely with the main- of slipping up. He won’t take part in live television debates. The stream Putin philosophy. The tribute he paid to Boris Yeltsin, Kremlin has also seen to it that former prime minister Mikhail whom he praised for saving the country from collapse, runs counter Kasyanov was disqualified from running. The central electoral to the line of the Kremlin and media concerning the 1990s. The committee refused to register his candidacy on grounds that too plan to disband the “Nashi” movement of pro-Putin youth is also many of the 2,000,067 names on his petition to register were an important symbol. There’s every reason to keep an eye on the forged. That could, indeed, be the case - certain liberals in Moscow new regional program concocted by Dmitry Kozak, one of privately admit it – but the Kremlin wouldn’t have let Kasyanov Medvedev’s trusted associates who returned last autumn to Moscow stand in any event. Not that he had any chance of winning, but and could challenge the “top to bottom” power concept that has his stature and political stance might have thrown the scenario prevailed since 2000. of “Medvedev, the liberal successor” out of kilter. Other mysteries remain. Is Russia destined for dual-power Elsewhere, it’s interesting to note that a new agreement on a rule, with a prime minister enjoying more power than the pres- price freeze for “socially sensitive” staple foods (bread, milk, but- ident? Nobody knows the true intentions of Putin who is appar- ter, table oil) was scheduled to be signed on Jan. 31 between the ently weary of power. That makes it difficult to imagine him as government and the leading players in the food and drink indus- superintendent of Russia Inc. Nor can it be excluded that the try and retail sector. The freeze will prevail until the new presi- clans opposed to Medvedev view the Mogilevich affair (see Page dent takes office. A first agreement of the type was signed on Oct. 1) as confirmation of the threats weighing upon them and seek 24. to derail the presidential election by prompting, for example, Gennady Zyuganov, to withdraw from the race. Such a develop- With just a month to go before the ballot a number of ques- ment would certainly undermine the legitimacy of the new pres- tions still beg answers.
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