Mikhail Fridman

Report: Putin Plans War on Oligarchs

By Simon Ostrovsky

A LITTLE-KNOWN think tank said President Vladimir Putin will announce a "de-oligarchization campaign" as part of an anti-monopoly drive in his state of the nation address Wednesday. It singled out Mikhail Fridman's Alfa Group and its partners, which monopolize the telecoms, alcohol and cement sectors, as the Kremlin's first target.

The claims were made in a report released Monday by Russian Axis, which has a London address and is headed by Vadim Malkin, a former information director of the pro-Kremlin news web site Strana.ru. One analyst said Malkin appeared to have close ties to the liberal reformers of the early 1990s.

Political scientists and market analysts alike speculated Monday whether the think tank's report was perhaps backed by an Alfa Group competitor or the Kremlin.

David Irving comments: I AM more than a little confused that so many of these oligarchs and other economic malfeasors have German-sounding names. Kraus? Wechselberg? Friedman? What can this mean? Can this be an international German conspiracy?

The report contains a list of financial-industrial groups that Russian Axis said are likeliest to draw the Kremlin's wrath this summer. Topping the list are Alfa Group and Access Industries/Renova's Fridman, Viktor Vekselberg and Leonard Blavatnik, followed by Interros and Norilsk Nickel's Vladimir Potanin and Mikhail Prokhorov. Using a World Bank report on the high concentration of capital in Russia to support its argument, Russian Axis said, "From the Kremlin's point of view, evidence has been mounting that oligarchic capitalism is a severe threat to Russia's economic and political future.

"The state is likely to use a combination of broad systematic measures including amendments to tax and anti-monopoly legislation accompanied by forceful, targeted actions against the more recalcitrant oligarchic groups perceived as a threat to state power."

Analysts polled Monday said Putin was unlikely to use his state of the nation address to launch a sweeping "de-oligarchization campaign," as the report claims, because this would expose the motivation behind the Yukos case as blatantly political, something Putin has denied. "We don't think the Kremlin will attack individuals and companies," said Chris Weafer, chief strategist for Fridman-controlled Alfa Bank.

While he could not comment on who might have been behind the report, Weafer said Alfa believes the attack on Yukos was a one-off affair. "Although Putin will swing the Damocles in the background, he will accept policies of persuasion instead of using force."

A Renova representative also shrugged off any suggestions that the Kremlin might have its sights on the company. "If big business was afraid of an attack by the Kremlin, people would be leaving the country or making attempts to win the authorities over," said Vasily Verbin, corporate communications director for Renova.

The recent multimillion-dollar purchase of nine Faberge eggs for public display in the Kremlin by Renova's principal shareholder, Vekselberg, was not an attempt to win the authorities over, Verbin said.

However, one political analyst drew parallels between the new report and one last summer that is widely credited with helping trigger the case against Yukos. "It has the same quality and same content" as a report by Stanislav Belkovsky, a political analyst seen as a front man for the interests of the Kremlin siloviki, political commentator Yulia Latynina said. That report warned that a "creeping coup" was being mounted by Yukos head Mikhail Khodorkovsky, right.

The siloviki have opposed Alfa in the past and could be behind both campaigns, Latynina said. "They're the same ones who used Belkovsky to sort things out with Khodorkovsky," she said.

Many analysts cast the new report aside as merely a hypothesis. "It's speculation by a group no one has heard of," said Eric Kraus, chief strategist of Sovlink, an investment bank with some wealthy clients who are named as possible targets on the Russian Axis list.

Any of Alfa's business rivals could have been behind the report, he said.

 ... on the, ahem, oligarchs

 

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