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RUSSIA INTELLIGENCE Politics & Government

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RUSSIA INTELLIGENCE Politics & Government N°74 - March 27 2008 Published every two weeks / International Edition CONTENTS SECURITY P. 1-3 Politics & Government c TNK-BP : the FSB hammers two nails for the price of one... SECURITY c TNK-BP : the FSB hammers The “espionage” case on TNK-BP is a perfect summary of the paradox in which Russian leaders find two nails for the price of themselves and which it was hoped, perhaps a bit too early, that they were leaving behind. While at the one... summit, Dmitry Medvedev is devoting himself to reassuring his world by invoking respect for the law and BEHIND THE SCENE in calling for the withdrawal of senior state representatives from private enterprises, at lower echelons c A brawl in the Defence the battle continues unabated. ministry FOCUS We briefly recall the facts : March 12, Ilya Zaslavksy, employed at TNK-BP, and her brother Alexan- c Medvedev-Putin : the war of the staffs in full swing dre, in charge of an educational project of the British Council, were questioned by agents of the FSB as they were trying to obtain “secret” information from a Russian “contact” in the oil and gas complex. The INTERVIEW c Georgy Engelhardt : two “suspects” were released the same day (which is rare in the FSB spirit), and on March 19 teams from "Between 16 and 17 million the same FSB searched the Moscow headquarters of TNK-BP where they dug into not only the office of ethnic Muslims today live in Ilya Zaslavsky, but also other offices, apparently it seems, following detailed indications. The FSB claims Russia" to have discovered and collected “unquestionable proof of industrial espionage”, in reality notes and memos originating in Russian administrative and ministerial organisations concerning the management P. 4-7 Business & Networks of energy resources in the country. But the information concerning notably the reserves, production and ALERTS consumption of gas and oil are considered as state secrets, according to Russian law, a provision impos- c Dmitry Medvedev plants one of his associates in Rosneft sible to apply to the letter since the evaluations and studies on the level of reserves of one company or another, private or public, are daily in use by analysts of the oil groups. In addition, the FSB opened an- c Mordashov / Finmeccanica other file against TNK-BP, concerning the truthfulness of information communicated to the Russian ad- INDUSTRY ministration relating to the delivery of work visas to its expatriate employees, particularly British, which c The metalworks barons are heating the furnace led the company to send home 148 of its foreign staff based in Moscow. ENERGY c Incertainty about Russian oil In this case, the FSB (or those who “activated” it) seem to be pursuing two objectives : accentuate and gas production pressure on TNK-BP at the time when the Anglo-Russian company is still in the midst of negotiating the MIDDLE-EAST precise terms of its withdrawal from the Kovytka gas deposit (an issue we have long covered in these c Rosatom sets up in Egypt, columns) to the benefit of Gazprom. Without mentioning the supposed discussions surrounding the with- Lukoil rejoins the race in Iraq drawal of the three private Russian shareholders from the capital of the company (Mikhail Fridman, ALERT Viktor Vekselberg and Leonard Blavatnik) for the benefit of a structure more in comformity to the ob- c MTA / Sukhoi Superjet 100 jectives of Russia, meaning Rosneft or Gazprom... The second objective aimed at by the FSB is naturally FOCUS the British government through the British Council, a public organisation whose mission is to dissemi- c Electricity : RWE takes its turn nate British culture and language. Its annual budget is on the order of 700 million euros, of which 237 in entering the Russian market, million are allocated by the British Foreign affairs ministry. The Russian government claims to have in- Veolia lies in ambush formation according to which the British Council would have conducted spying activities in Russia and the fact that the brother of Ilya Zaslavsky was precisely in charge of one of the programmes of the British P. 8 Regions & CIS Council in Moscow is a troubling “coincidence”. BEHIND THE SCENE c Irkutsk : Governor Alexandre Last minute. The strange disappearance of Leonid Rozhetskin. Tishanin in the hot seat Hardly known in public, outside of those who frequented the “Flower Ball” in Monte Carlo, which he so flamboyantly organised each year, Leonid Rozhetskin, of American nationality but born in Leningrad SUBSCRIPTION Print Edition in 1966, was linked very closely to the Russian business world in recent years. He disappeared from his (23 issues, airmailed overseas) beach residence in the region of Riga on March 23 and still had not been found by the time we are writ- €770 TTC ing these lines. Rozhetskin had divided his time between Los Angeles, London (where three years ago he had launched a free newspaper, City AM) and his villa Jurmala 30 kilometres from Riga. He was im- The Web Pack (Print Edition plicated in at least two sensitive operations in Russia. The first concerns the sale of 25% of the capital of + PDF + archives acess) the mobile telephone operator Megafon to an offshore organisation linked to the Alfa group, which led € 880 TTC to legal action by close associates of Leonid Reiman, linked to Megafon, accusing him of having “diverted” these shares. The second affair is the acquisition of 20% of Gold Fields by Norilsk Nickel in March 2004 The Premium for more than 1 billion dollars, without the approval of the Russian authorities. At the time, Rozhetskin Subscription (Print Edition + PDF + access was the director general of Norilsk before being dismissed abruptly in early 2005 for reasons which have to all the website contents) never really been clarified. The disappearance of Rozhetskin is intriguing the authorities in Latvia, who € 1200 TTC have apparently noticed traces of struggle and blood in his residence. d www.russia-intelligence.fr RUSSIA INTELLIGENCE Politics & Government BEHIND THE SCENE cc FOCUS A brawl in the Defence Medvedev-Putin : ministry The reforms launched by Anatoly Serdyu- the war of the staffs in full swing kov since his surprise nomination last year If the President-elect and his future Prime minister take pains to display their are oviously not to the liking of some senior unity, the atmosphere is rather more heavy in the wings in Moscow. “Everyone is ranking officials of the Defence ministry. If spying on everyone and no-one uses their mobile phones anymore” confided last week certain information circulating in Moscow in to Russia Intelligence the adviser to a rare oligarch that is as close to Vladimir Pu- recent days can be believed, Yuri Ba- tin as to Dmitry Medvedev. In fact the war of the staffs is developing on several fronts : luevsky, the chief of the general staff, would have presented his resignation to the Krem- Within United Russia and the State Duma, which Vladimir Putin intends to conti- lin. His deputy, General Vasily Smirnov, nue to control after the entry into office of Dmitry Medvedev on May 7. Boris Gryz- would have followed in step. Just a few days lov, the president of the parliament and Vyacheslav Volodin, the secretary of the before committing suicide, General Viktor presidium of the majority party, want to advance the United Russia congress — ini- Vlasov — who was notably charged with tially planned in May — to April 14-15. A slight manoeuvre to prevent Dmitry Med- housing in the Defence ministry — would vedev and his associates from being present in a position of strength. According to also have decided to leave his post. our information, one of the most difficult matters involves the Moscow mayorality. Close associates of the president-elect have been lobbying intensively to push Yuri This rebellion, revealed in the Russian daily Luzhkov toward the exit and to replace him with Vladimir Kozhin, the “superinten- press by certain correspondents close to the dent” of the Kremlin. military, would be the result of a number of decisions taken by Anatoly Serdyukov in re- In the “power structures”. The war of the services which has torn apart the first cent months. Among others should be men- circle of Poutinian power this autumn (Russia Intelligence n°63 of October 11 2007, tioned the nomination of a close associate, n°64 of October 25 2007 and n°66 of November 22 2007) is less visible but remain in- Oleg Eskin, a general from the FSB and not tense. A Moscow court confirmed March 17 the seizure of the property of Galina Bul- the armed forces, to the post of vice minister bova, the spouse of General Alexandre Bulbov, the right-hand man of Viktor Cher- in charge of communications systems, a sen- kesov, whose interrogation on October 1 had opened hostilities. General Bulbov, just sitive command held up until then by the 8th like Sergey Storchak, the ex-deputy of Finance minister Alexey Kudrin, are in fact direction of the general staff. The decision to still being held in detention. transfer the headquarters of the navy from Moscow to Saint Petersburg — announced It is now necessary to follow closely the developments that take place concerning last autumn against the advice of the admi- the project for the Federal investigation service, a sort of Russian FBI that would rals, who underlined the absence of ade- have the authority over all such services (prosecution, Interior, FSB). The idea was quate infrastructure in the “northern capital” originally backed by Alexandre Bastyrkin, who already inherited in September 2007 — also played a role, as did important cut- the Investigating committee within the general prosecutor’s office and whose zeal backs in personnel at the ministry headquar- Russia Intelligence described in the Storchak and Bulbov affairs.
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