N°66 - November 22 2007 Published every two weeks / International Edition CONTENTS KREMLIN P. 1-4 Politics & Government c KREMLIN The highly-orchestrated launching into orbit cThe highly-orchestrated launching into orbit of of the «national leader» the «national leader» Only a few days away from the legislative elections, the political climate in Russia grew particu- STORCHAK AFFAIR larly heavy with the announcement of the arrest of the assistant to the Finance minister Alexey Ku- c Kudrin in the line of fire of drin (read page 2). Sergey Storchak is accused of attempting to divert several dozen million dol- the Patrushev-Sechin clan lars in connection with the settlement of the Algerian debt to Russia. The clan wars in the close DUMA guard of Vladimir Putin which confront the Igor Sechin/Nikolay Patrushev duo against a compet- cUnited Russia, electoral ing «Petersburg» group based around Viktor Cherkesov, overflows the limits of the «power struc- home for Russia’s big ture» where it was contained up until now to affect the entire Russian political power complex. business WAR OF THE SERVICES The electoral campaign itself is unfolding without too much tension, involving men, parties, fac- cThe KGB old guard appeals for calm tions that support President Putin. They are no longer legislative elections but a sort of plebicite campaign, to which the Russian president lends himself without excessive good humour. The objec- PROFILE cValentina Matvienko, the tive is not even to know if the presidential party United Russia will be victorious, but if the final score “czarina” of Saint Petersburg passes the 60% threshhold. To the extent that the United Russia programme has blended with the record of the President, these elections serve two objectives : to allow businessmen who have duly P. 5-8 Business & Networks paid their way on to the list to sit in the Duma; to serve as a basis for a political-constitutional ed- BEHIND THE SCENE ifice that permits Vladimir Putin to remain in power, in a form to be determined. c Middle east : Primakov resumes his service A fairly revealing document circulated these days on Russian internet sites. It concerned a letter FOCUS signed by a certain Dyudyaev, secretary of the political council of the United Russia branch in Ke- c Russia-India : accord on merovo addressed to the director general of the Siberian coal and energy company (the SUEK group, the MTA, nuclear cooperation whose owners are the young bankers Melnichenko and Popov) which stipulates that «I interpret on stand-by your refusal to extend financial aid to United Russia as a refusal to support Vladimir Putin and FOCUS his constructive line. I find myself obliged to inform the presidential administration and the gov- c De Beers close to an accord ernor of the region of Kemerovo». United Russia immediately claimed a fake and provocation, but on the Arkhangelsk diamonds? not very convincingly. At the large electoral rally of the party that took place November 21 in Moscow, ALERTS the programme was raised only in passing, but speakers of all shades paraded to the rostrum (in- c Shell c Lukoil cluding the indestructible Mikhail Kalashnikov, inventor of the eponymous weapon) to sing the SHIP BUILDING praise of the «national leader» Vladimir Vladimirovich Putin. c Moscow gives its green light to foreign investors ALERTS This stage-setting of a «call to the people» is in fact classic and in addition has served elsewhere c Chemezov c Pakistan as well as in Russia. But in Moscow it is the symbol of an major illness in the executive body. If the c Tupolev legislative elections are transformed into presidential elections, what will happen in March, when ELECTRICITY it will be time to elect a president of the federation? It is not certain that the Kremlin holds an an- c Gaz de France ready to swer to this question. invest in Siberia OIL, INSURANCE One thing is certain : the partisans of the continuation of Vladimir Putin in power are putting at c Oleg Deripaska upset work enormous means. In the background, they finance an American-style campaign by United Rus- SUBSCRIPTION sia at the same time that they use their influence to erase from the media the liberal opposition lead- Print Edition ers against who the Kremlin zealots have been unleashed. On the touchline, they have triggered a (23 issues, airmailed overseas) clan war destined to combat all attempt to put into orbit a successor, even from within the entourage €770 TTC of President. Does Vladimir Putin dispose of the margin of manoeuvre and the necessary authority The Web Pack to extricate himself from the twin pressures of an opinion heated to a boil and of clans ready to de- (Print Edition stroy themselves in case of a power void ? No-one knows. + PDF + archives acess) € 880 TTC Basically, there is only consensus on one point : if a decision must be taken concerning the con- The Premium tinuation in power of Vladimir Putin, it must come rapidly after the legislative elections. And it will Subscription probaly not concern the post of Prime minister, since, as we have already said in this column, it as- (Print Edition + PDF + access sures its occupant neither a guarantee of longevity nor direct control over the power structures that to all the website contents) continue finally to play a key role in the political life of the country. d € 1200 TTC www.russia-intelligence.fr RUSSIA INTELLIGENCE Politics & Government STORCHAK AFFAIR c Alexey Kudrin in the line of fire of the Patrushev-Sechin clan Despite the appeal for reason made in late October by the KGB idential guard) and Yevgeny Murov, the director of the old guard (read article page 2), the clan war that is shaking the en- FSO (service for the protection of senior personalities). tourage of President Poutine has shown no respite. The tempo has Patrushev and Sechin in fact hardly appreciated that Ku- even increased a notch with the opening of a new front. October 16, drin was re-instated in rank as vice Prime minister in the Sergey Storchak – vice minister of finance – was arrested at the «true-false» ministerial reshuffle in September. The restora- same time as two businessmen, Vladimir Volkov, the boss of the tion of influence for Kudrin is, in their MiB bank, and Viktor Zakharov, the director general of the Moscow eyes, disruptive since the Finance min- firm Sodexim. The objective of the remotely-guided manoeuvre by ister holds an intransigent position on the director of the FSB, Nikolay Patrushev, and carried out by a sensitive question – the management Alexandre Bastyrkin, the boss of the Investigations committee of of the stabilisaton funds, which amount the Prosecutor’s office (a team which had already displayed its skills to some 147 billion dollars on Novem- during the Kumarin and Bulbov affairs – Russia Intelligence n°61, ber 1. 63 and 64) is to weaken the vice Prime minister in charge of finance, Alexey Kudrin. Alexey Kudrin For several months, lobbyists of all types have agitated in the wings to losen Sergey Storchak and the Algerian debt. the pursestrings. The last example, a round table which was held November 15 in the Budgetary commitee of the According to the Investigations commitee of the Prosecutor’s federal council. Its president, Yevgeny Bushmin, and his office, Storchak, Volkov and Zakharov were preparing to divert 43.4 assistant, Vladimir Petrov (ex-Finance minister under million dollars from public funds. The affair is said to be linked to Yeltsin, emprisoned in 1999 for illegal transfers), made a the settling of the Algerian debts to Moscow, a matter that Stor- lengthy appeal in favour of investing a part of the Stabili- chak was charged with at the Finance ministry. In 1996, Sodexim sation fund into shares of Russian state companies. was authorised by the Russian government to resell the Algerian products delivered to Moscow in a barter agree- A few days earlier, another senator, also a former Fi- ment. As a guarantee, the Russian Finance min- nance minister, Andrey Vavilov (read his portrait in Rus- istry required that the amount involved – 26 mil- sia Intelligence n°46-47 of January 19 2007), had published lion dollars – be transferred by Sodexim to the a long article in the same sense in the magazine Profil. In Treasury, which had been done. But in late 1996, view of the debt of Rosneft and its deadlines in 2008 (about the Algerian side ceased to fulfill the contract, 9 billion dollars to reimburse), as well as some mammoth with the result that Sodexim could not deliver investment projects by the Railways (Russia Intelligence to the international markets the products it n°63 of October 11) we can imagine that the oil nest-egg Sergey Storchak should have received. Sodexim at first tried to arouses considerable attention. settle the problem with Algiers, but without suc- cess. Following the signature, in March 2006, of the Russo-Alger- Who sill stop the Sechin-Patrushev clan? ian intergovernmental accord settling the debt (converted into arms deliveries – Russia Intelligence n°37 of July 13 2006), The boss of the FSB and the leader of the Rosneft had Sodexim addressed itself to the Russian Finance ministry demand- therefore decided to broaden the field of battle. We note ing that the 26 million dollars in guarantees transferred in 1996 in passing that a first warning shot had been fired in Feb- be restituted, along with interest. Or 43.4 million dollars. The ruary in the direction of another Kudrin associate, Sergey Finance ministry, but also the Economic development ministry, Ignatev, the boss of the Central bank of Russia.