Current snap shot of Siloviki clan Russia

[Magda Hassan]

The Siloviki Downgraded. In Russia's New Configuration of Power

by GORDON HAHN
The personnel changes attending new Russian President Dmitrii Medvedev’s administration and Prime Minister Vladimir Putin’s new government appear to represent another defeat for the ‘siloviki’ clans (powerful Kremlin groupings led by Russia’s various organs of intelligence and law enforcement). These figures have dominated Kremlin politics and policy for the last eight years.


This trend suggests that a new economic and modernizing agenda may well dominate under the Putin-Medvedev duumvirate. At the same time, the overall tenor of the appointments do only very little to substantiate the view that the Putin-Medvedev duumvirate will undertake a ‘thaw’ in Russia’s soft authoritarian politics.
President Putin’s choice of Medvedev as his successor reflects his conscious choice to move away from the harder line fostered by the most reactionary Kremlin forces.
The most important development has been the continuing decline of the so-called Sechin clan of hardline FSB officers and other siloviki. This most powerful siloviki clan is headed by former presidential administration, first deputy head Igor Sechin. The Sechin clan was behind the rise of Sergei Ivanov, the first deputy premier and former Defense Minister. Ivanov emerged with Dmitri Medvedev as the top two contender, to succeed Putin in the presidency.
Ivanov’s defeat in that contest was precipitated by the Sechin clan’s overplaying its hand in fall 2007. They misinterpreted Viktor Zubkov’s appointment as premier to mean the Sechin clan and Ivanov had the upper hand in the struggle to win Putin’s support as the next presidential nominee.
Internal history: the hard-line siloviki faction began to move aggressively against softer-line siloviki and more liberal civilian clans in and around the Kremlin. Immediately after Zubkov’s confirmation, Anti-Narcotics Agency chief Viktor Cherkesov’s right hand man General Alexander Bulbov was arrested on corruption charges instigated by Sechin clan member and the Prosecutor General’s Investigations Committee chief Alexander Bastrykhin. Bulbov had led the investigation into the ‘Tri Kita’ (Three Whales) smuggling operation led by FSB and former FSB officers associated with Sechin. Then weeks later, two Anti-Narcotics Agency officers were killed in St Petersburg, and many in Moscow saw the Sechin clan’s hands in the affair. The Sechin faction also moved against the liberal Petersburg ‘financiers clan’ associated with Zubkov and Finance minister Alexei Kudrin. In December, Kudrin’s deputy minister, Sergei Storchak, was arrested and charged with attempting to embezzle the fantastic sum of $47 million. This was not the sort of behavior that helped ensure a glitch-free managed election campaign and presidential succession.
The untimely and largely one-sided war between the various siloviki clans apparently forced Putin to forego a dangerous interregnum in which a weak Zubkov or other interim leader would have to control the unruly siloviki. Instead, Putin backtracked and developed a transition modality in which he could keep his hands on the helm gradually letting a less hard-line, more practical, if not liberal successor take over. His successor would have to be one who was not tied to either of the siloviki clans, could enlist the support of moderate civilian jurists, economists, and financiers, and like Putin would stand above and balance the interests of Moscow’s competing clans.
Not surprisingly then, Putin decided to anoint his long-time Petersburg associate, the more independent and less conservative Dmitrii Medvedev, as his crowned successor. The pro-Kremlin United Russia party won the State Duma elections with a constitutional majority, Medevdev won the presidential election and appointed Putin as his premier and the rest (and perhaps the Sechin clan’s clout as well) is history.
First, there are two new first vice premiers – Igor Shuvalov and Viktor Zubkov. Neither has a background in the siloviki, but both are clearly Putin men. Igor Shuvalov has not been closely associated with any of the Petersburg clans. He hails from Magadan and graduated Moscow State University’s Law Faculty. Afterwards he held a position in a private law firm, worked and headed the Federal Property Fund and later the government apparatus. Since 2003 he has been Putin’s top economic advisor and deputy presidential apparatus leader charged with leading the negotiations on Russia’s admittance to the WTO. Shuvalov is regarded as a relative economic liberal along the lines of President Medvedev. Putin has appointed Shuvalov as his stand-in to chair cabinet meetings when he is away from Moscow, making this non-silovik the first, first deputy premier and arguably the third most powerful member of the executive branch, if not the country.
The second first deputy premier, Zubkov, also is not a silovik, but he is unlikely to be a long-term appointment. At 66, Zubkov is of pension age and has been given the thankless portfolio of agriculture and the low status fishing and forestry industries. Like a declining number of Russia’s elite, he has his roots in the old Soviet party-state apparatus, and the St. Petersburg clans brought to Moscow by Putin. Trained as an agronomist, Zubkov ran a branch of an association of state collective farms, then the association itself, an innovative and reportedly successful perestroika-era cooperative farm, and then the Priozersk city government in Leningrad Oblast.
During the perestroika era Zubkov entered the Party apparatus as head of Leningrad Oblast’s Communist Party Agricultural and Food Industry Department. Like Putin and many others, he jumped safely from the sinking communist ship of state, becoming in 1992 first deputy of the Leningrad city (St. Petersburg) government’s Foreign Relations Committee Chairman Vladimir Putin. In 1993-1999 he was head of the State Tax Inspectorate for St. Petersburg serving as deputy head of Russia’s State Tax Service (from 1999 the Taxes and Collections Ministry and from 2004 the Federal Tax Service), where he pressured reluctant tax payers like the Leningrad Gas Transportation company (LenTransGas) to cough up revenues. In 1999 Zubkov ran for the governorship of Leningrad Oblast, taking 8 percent of the vote. The present chairman of the pro-Putin United Russia party and the State Duma Boris Gryzlov served as his campaign manager. Zubkov himself ran the pro-Putin Unity party’s Petersburg branch in the Duma elections in 2000.
In November 2001 he became simultaneously Finance Minister Aleksei Kudrin’s first deputy and acting chairman of the ministry’s new Financial Monitoring Committee. With the government reorganization during Putin’s second term, Zubkov came to head the new Federal Service for Financial Monitoring, charged with reducing illegal capital flight and fighting money laundering and official corruption. Zubkov’s tenure as chief financial intelligence officer saw a thirty-fold increase in convictions for money laundering from 2003-2005 and Russia’s removal from the FATF’s money laundering black list. His proposal to monitor state officials’ banking accounts suggests that he may have be on the rise for his ability to support an anti-corruption campaign.
Zubkov is best considered the leading patron (after Putin) of a weak financiers’ clan loyal personally to Putin and loosely associated with the still influential Petersburg lawyers clan, nominally headed by President Medvedev, and the now embattled siloviki clans. Finance Minister Alexei Kudrin, who along with United Electricity Systems (YeES) chairman and former first deputy premier Anatolii Chubais led the liberal Petersburg clan, became patron of the financiers’ network after Chubais’ decline. Kudrin now is been superceded by Zubkov. Zubkov was once a ‘Kudrin man’, serving as Kudrin’s first deputy in the Finance Ministry. But more than Kudrin’s man, Zubkov is Putin’s man. In 2000 he was one of only twenty-one people invited to Putin’s birthday party at the restaurant ‘Podvore’ in Pavlovsk. Since then he has been repeatedly promoted and assigned strategically important tasks. Zubkov is the patron of another Petersburger, his son-in-law amd present Defense Minister Anatolii Serdyukov, who succeeded Zubkov at the Petersburg Tax Inspectorate upon Zubkov’s promotion to Moscow. Serdyukov remains Defense Minister tasked with reducing corruption and waste in the Defense Ministry and military, which are offering resistance. While because of age Zubkov’s star is likely fading, Serdyukov’s may be on the rise if he can rein in the corrupt generals and facilitate military reforms.
Serdyukov’s own successor for Petersburg tax inspection, Mikhail Mokretsov, was appointed head of the Federal Tax Service in the February 2007 reshuffling that saw top presidential contender and then Defense Minster Sergei Ivanov promoted to First Deputy Prime Minister and Serdyukov appointed as Defense Minister. This suggests the rise of a small financiers’ patron-client network, the apex of which consists of Zubkov. Serdyukov also managed to appoint a reportedly close associate, Deputy Defense Minister Gen. Nikloai Makarov, as Chief of the General Staff of Russia’s armed forces, replacing Yurii Baluevskii shortly after the government and administration appointments.

Zubkov’s one-time patron and superior, Finance Minister Aleksei Kudrin, has retained his post, weathering at least for now the attack by the Sechin clan on his first deputy Sergei Storchak, who remains under arrest. However, within days of Medvedev’s designation by Putin as his heir apparent, the General Prosecutor’s announced an inspection of the Investigation Committee conducting the cases against Bulbov and Storchak. After the elections were completed corruption charges were being leveled against the chief investigator in both these cases, Dmitrii Dovgii, and Investigations Committee chief Bastrykhin was forced to fire him in April. According to the daily newspaper Vremya novostei, the Investigative Committee found that Dovgy had exceeded his authority, misused official information, and generally failed to carry out his responsibilities.
It has also reported that President Medvedev supports the proposal to separate the Investigations Committee from the prosecutor’s office and set up a super-investigative, FBI-like investigative organ; a move that would weaken the General Prosecutor’s office and, if Bastrykhin was to be passed over to head it, the Sechin clan as well (Vremya novostei, 22 April 2008 and RFERL Newsline, Vol. 12, No. 76, 22 April 2008).
At least a co-equal of the two first vice premiers is former Tyumen Governor Sergei Sobyanin, who has been transferred from the post of presidential administration head to the position of government apparatus chief with the rank of vice premier. Sobyanin has no siloviki background and is regarded as a lobbyist for the oil and gas sector if any, having been governor of the oil and gas region Tyumen Oblast.
Therefore, no one from the siloviki is at the apex of the government, except for Putin himself. The transfer of Sobyanin cannot be regarded as a clear demotion, since it appears that the presidency is no longer the paramount office in the land, counterbalanced now by an increasingly powerful premiership under Putin’s command.
For the same reason, government vice premier Sergei Naryshkin’s appointment to replace Sobyanin as presidential administration chief is not quite the promotion it might have been. Naryshkin, a Petersburger from the KGB’s First Directorate for Foreign Intelligence (now the separate institution of the Service for Foreign Intelligence or SVR), was regarded by some as a contender to succeed Putin, and Sobyanin himself was thought to be a dark horse candidate.
The logic of the Sobyanin and Naryshkin appointments is surely in part technocratic. Sobyanin as an oil and gas veteran from Tyumen is better suited for the government’s economic management tasks, given the key role oil and gas play in the Russian economy. Naryshkin’s security background better suits the presidency’s control over the siloviki departments. In addition, as head of the Russian Swimming Federation, Naryshkin has been able to develop a closer personal relationship with President Medvedev who is also an avid swimmer.
However, despite Naryshkin’s relatively smooth transition, the Peterburg siloviki clans have suffered a series of significant albeit limited demotions or ‘golden parachutes’. This substantially but not drastically reduces their influence within the power configurations in and between the Kremlin and the White House. Most importantly, the chief of the more hardline siloviki clan, Igor Sechin was demoted from his position as first deputy head of the presidential administration and appointed first deputy premier in charge of industrial policy and energy minus the defense industry, natural resources and environmental issues, and technology and nuclear energy oversight. Thus, Sechin’s energy portfolio may not include oil and gas. New government apparatus chief and deputy premier, the former presidential administration chief Sergei Sobyanin is a gas and oil man, having been Tyumen ‘s Governor. Also, a separate Energy Ministry has been set up from the Natural Resources and Ecology Ministry which is run by Yurii Trutnev, former governor of the oil region Perm Oblast, and it is unclear whether the former will be under Sechin’s jurisdiction. This may mean he will be removed from the board of RosNeft, which would be consistent with Medvedev’s desire and Putin’s claim that government officials on state company boards are not ‘state oligarchs’ but temporary representatives of the state on state enterprises’ boards. A sign that Sechin may be forced togiveuphis chairmanship of RosNeft’s board of directors is his simultaneous new appointment as chairman of the board of directors of the Russian state’s United Shipbuilding Corporation, replacing new presidential administration chief Alexander Naryshkin. The heavy industry sector that Sechin now seems tied to is less prestigious than the oil, gas, defense, and high technology sectors.
That Sechin’s new post is a demotion, because he was passed over for an appointment as a first vice premier. That post would have been more commensurate with his former status as first deputy head of the all-powerful presidential administration. On the other hand, non-silovik deputy presidential administration head Igor Shuvalov was appointed as one of two first deputy premiers along with another non-silovik, former premier Vitkor Zubkov. Moreover, with Sechin’s demotion it has been leaked that as first deputy presidential administration head he stalled Putin's decisions and attempted to convince him to reconsider key appointments (Russian Newsweek 12 May 2008). This leak may be an attempt by Putin to further distance himself from the Sechin clan.
Similarly, Sechin clan member, first deputy premier and former Defense Minister Sergei Ivanov was demoted from holding one of two first deputy premierships to one of seven deputy premiers, though he remains in charge of the defense and high technology industries. Since Ivanov was the Sechin clan’s favorite to succeed Putin, his receiving a demotion rather than the highest promotion is a clear defeat for the clan. However, Ivanov remains a key player given that he is responsible for sectors that Putin and Medvedev have promised will be key foci for investment and development under the modernization program.
The lone ranking post on the presidential side the Sechin clan now holds is of dubious gravitas. Nikolai Patrushev, a top member of the clan, was removed from his post as Director of the FSB and appointed by President Dmitrii Medvedev to be secretary of the Security Council chaired by the president. This is a demotion for Patrushev and another defeat for the hardline siloviki since the Security Council has not been a key decision-making body for national security and is chaired by the president. Indeed, the post of council secretary has remained vacant for nearly a year.
It cannot be ruled out that Patrushev’s appointment signals that it is more important than it appears, especially as it is one venue through which new premier Putin can keep his hand on the lever of foreign and security policies. The prime minister is by law an ex officio member of the council. More likely, the appointment represents one of many golden parachutes divined for key Petersburg siloviki as they are shown the door out of politics. This appointment also shows clearly the close cooperation between Medvedev and Putin in this reshuffling of personnel, with a close associate of Putin from his Petersburg and FSB days being appointed by Medvedev to the presidential side of Russia’s bifurcated executive branch structure. However, Patrushev’s demotion is unlikely to mean complete loss of the FSB for the hardline Petersburg siloviki.
Patrushev’s successor is his former deputy, Alexander Bortnikov, who headed the FSB’s St. Petersburg and Leningrad Oblast regional office from June 2003 to March 2004 and then the FSB’s Economic Security Service (SEB). When introducing Bortnikov to the FSB as the new chief, President Medvedev stressed the importance of fighting “corruption and criminal pressures, industrial espionage and of enforcing guarantees of the right to enterprise and property." However, as SEB chief, Bortnikov was privy to information on criminality and official corruption. Some of this must have involved the state oligarchic silovikis’ financial machinations surrounding some oil, gas and arms exports, including the Russia mafia figure Semyom Mogilevich’s role as a middle man in the gas sales to Ukraine through the shady company RosUkrGaz and he did not move against the perpetrators. On the other hand, Patrushev or others higher up may have held him backand may still be able to do so.
FSB officials regard Bortnikov as “our” and Patrushev’s “man” (the two having worked together for years in Petersburg’s FSB), so unlike the Defense Ministry, the FSB’s corporate integrity remains intact (See Rossiiskaya gazeta and Izvestia, 12 May 2008). Nevertheless, Patrushev’s transfer from the FSB means the career of an important silovik has peaked, showing that Putin and Medvedev rule the FSB and not visa versa.
The removal of hardline silovik of the Sechin clan, Justice Minister and former Prosecutor General Vladimir Ustinov, from his post and his appointment as President Medvedev’s presidential envoy in charge of the Southern Federal District is another setback for the Sechin clan. Sechin and Ustinov are relatives-in-law through a marriage between their offspring. His removal from the prosecutor’s office in 2006 and his replacement there by Yurii Chaika, the former Justice Minister, marked the first phase of his decline. Ustinov’s removal from Moscow and the Justice Ministry foreshadows the furthering of the anti-corruption campaign at least against the most odious officials among the Kremlin’s leading clans.
Alexander Konovalov, who replaces Ustinov and was formerly Putin’s Volga Federal District presidential envoy, has had a long career in St. Petersburg’s prosecutor’s office that culminated in the position of deputy general prosecutor for St. Petersburg before he was moved to head Bashortostan’s prosecutor’s office in 2005. He is reportedly Medvedev’s long-time friend and former student of the president’s when he taught at Leningrad (S. Petersburg) State University’s Law Faculty, suggesting Medvedev may retain presidential control of the siloviki (Gazeta.ru, 12 May; Nezavisimaya gazeta, 18 March; Russkiy zhurnal, 6 March; and Vedomosti, 29 February 2008).
Konovalov has portrayed himself as tough on corruption. Indeed, in his previous posts he was involved in anti-corruption investigations that forced St. Petersburg Governor Vladimir Yakovlev to resign in 2003 and appeared to target Bashkir President Murtaza Rakhimov for the same or at least for the end of his family’s control over the republic’s oil and chemical complex. Thus, Konovalov could have been doing the Sechin clan’s bidding in attempting to gain control over this tasty morsel and therefore could become another Ustinov. More than Patrushev’s demotion, Ustinov’s fate represents the demise of a key and rather odious Sechin silovik.
Viktor Ivanov, the former deputy presidential administration head for personnel, was not reappointed to his post and there was a two-day delay in his appointment to the Federal Anti-Narcotics Agency, suggesting there was some tension in the process of settling Ivanov’s fate. Ivanov replaces leader of the other Peterburg siloviki clan, the so-called ‘honest chekists’ clan, Viktor Cherkesov. Ivanov’s transfer is another resounding defeat for the Sechin clan, but Cherkesov’s assignment to the post of director of the Russian Federal Agency for the Supply of Armaments and Military and Special Technology and Materiel is a more serious demotion. Cherkesov has no background in this sphere, suggesting that the position is a ‘golden parachute’ for a former close associate. In effect, he has been relegated to the outskirts of the Putin-Medvedev inner circle. This likely is payback for his November 2007 article openly calling for a truce in the battle between the two Petersburg siloviki clans – the Sechin and Cherkesov clans – that exploded into the open during the run-up to the federal election cycle and Putin’s anointment of Medvedev as crowned prince. In going public with the siloviks’ dirty laundry, the long-time Putin protégé violated the informal rule that such intra-siloviki disputes, especially those involving the FSB, be kept out of public view.
Finally with regard to the new government, Premier Putin created a 14-seat government presidium consisting of the seven first deputy and deputy premiers and seven ministers, including the Defense Minister Serdyukov, Interior Minister Rashid Nurgaliev, and Foreign Minister Sergei Lavrov. Although some observers saw this as an attempt by Putin to reassert his control over the siloviki, which are subordinated to the president under the Russian constitution, it is noteworthy that neither the FSB or any other intelligence department’s representative is seated on the presidium. Moreover, all of the siloviki represented on the presidium have functions related to the economy, whether it is defense procurement for the Defense Ministry, the fight against corruption and criminality in the economy for the Interior Ministry, or even foreign trade for the Foreign Ministry.
One other setback for the siloviki was recorded in Chechnya. A few weeks ago a conflict broke out between local forces loyal to Chechyna President Ramzan Kadyrov and the notorious ‘Vostok’ (East) Battalion headed by Sulim Yamadaev. Long-time tensions between the Kadyrov and Yamadaev clans exploded into violence in late April when corteges of Kadyrov and the Vostok Battalion confronted each other on a Chechen highway. Reports varied, but the confrontation resulted in the deaths of two Vostok fighters, the encirclement of the battalion’s base by Kadyrov’s forces, and a standoff brokered by Moscow and the Russian military. The Vostok Battalion is subordinated the Russian army’s Main Military Intelligence Administration (GRU) and gave it leverage over the autonomy-minded Kadyrov, limiting his status as the undisputed leader of the formerly war-torn but still jihadi-plagued region. In the wake of the confrontation, Kadyrov and Yamadaev accused each other’s forces of atrocities, and a warrant was issued for the arrest of Yamadaev’s brother Badrudi. After Medvedev’s inauguration Kadyrov announced Yamadaev’s removal as Vostok’s commander. Although a replacement has not been named, it appears that the GRU has suffered a serious setback; yet another for the siloviki.
In sum, the siloviki clans, most importantly the powerful chekist clans such as the hardline Sechin clan, have experienced a serious setback during the transition to the Putin-Medvedev duumvirate. It has taken none of the first deputy premierships and two of the five deputy premierships in the government and lost nearly all of its clout within the presidential administration. In sum, even if more power now resides with Putin than Medvedev by virtue of his control of both the government and the ruling party, the Sechin clan failed to convert its former weight within the presidential administration in full to the White House, while being deprived of all but one ranking post in the Kremlin.
It should not be excluded that the siloviks’ decline has been authorized by more than Putin’s desire to distance himself from an element which proved itself to be a destabilizing one during ‘operation successor’. It may also be related to the Putin-Medvedev duumvirate’s desire to have more technocratic and less corrupt and politicized administration as it endeavors to finalize and implement a long-term modernization program. More optimistically still, it could set the stage for a political ‘thaw’ later on in the Medvedev administration.