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18 Sep 2007

Siloviki take reins in post-oligarchy era

Russia's "siloviki" - the network of former and current state-security officers - maintain an unprecedented level of control over political and economic life, and are likely to consolidate that power in the upcoming elections. From RFE/RL.

By Victor Yasmann for Radio Free Europe/Radio Liberty (RFE/RL)

The hubbub surrounding Russia's upcoming Duma elections in December and the March 2008 presidential election swung into high gear this month, but the key question is not whether the country will take a new direction but rather how will the status quo, the existing arrangement of political forces, be maintained.

Virtually all key positions in Russian political life - in government and the economy - are controlled by the so-called "siloviki," a blanket term to describe the network of former and current state-security officers with personal ties to the Soviet-era KGB and its successor agencies.

The unexpected replacement of former Prime Minister Mikhail Fradkov by former Federal Financial Monitoring Service Director Viktor Zubkov is the latest consolidation of this group's grip on power in Russia. Although Zubkov is not an intelligence officer by background, he has become one de facto during his years at the Financial Monitoring Service, and he has intimate knowledge of where the country's legal and illegal assets are to be found.

The core of the siloviki group, led by former KGB officer and Federal Security Service (FSB) Director Vladimir Putin himself, comprises about 6,000 security-service alumni who entered the corridors of power during Putin's first term. Now, as Putin's second term winds down, their clout is virtually unassailable. Their locus of power is in the presidential administration: deputy chief of staff Igor Sechin cut his teeth in the KGB's First Main Directorate, which oversaw foreign intelligence operations and has since been transformed into the Foreign Intelligence Service (SVR). Fellow deputy chief of staff Viktor Ivanov worked for the KGB's main successor organization, the FSB, which is responsible for counterintelligence operations.

First Deputy Prime Minister and former Defense Minister Sergei Ivanov is a retired SVR colonel general, and he currently oversees the military-industrial sector and the high-tech sectors of the economy. He also supervises the Defense Ministry, which is nominally run by a civilian, Anatoly Serdyukov.

As might be expected (although not always the case), an FSB colonel general, Nikolai Patrushev, heads the FSB. In addition, FSB Army General Rashid Nurgaliyev heads the Interior Ministry, which controls both ordinary police and some 180,000 internal troops. Andrei Belyaninov, a colleague of Putin's from his days as a KGB agent in Germany in the 1980s, heads the Federal Customs Service, while FSB Lieutenant General Konstantin Romodanovsky is the director of the Federal Migration Service. In their current roles, Belyaninov and Romodanovsky are able to monitor the movement of goods and people to and from Russia. Former FSB Director Colonel General Valentin Sobolev is acting secretary of the Russian Security Council.

Siloviki figures also dominate Russia's relations with neighboring countries. FSB Army General Nikolai Bordyuzha chairs the Collective Security Treaty Organization (CSTO), a pro-Russian alliance comprising Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan. SVR Lieutenant General Grigory Rapota presides over the Eurasian Economic Community, which unites the same countries except Armenia.

Other key siloviki are Rosoboroneksport head Sergei Chemezov, who also served in Germany with Putin, and Boris Boyarskov, who heads the Culture and Mass Communications Ministry agency that supervises the mass media, telecommunications, and cultural heritage.

Presidential successors

Never in Russian or Soviet history has the political and economic influence of the security organs been as widespread as it is now. And as the March 2008 presidential election approaches, three of the four most commonly named potential successors are siloviki.

Sergei Ivanov is widely viewed as the current front-runner. A close confidante of Putin's, he, like the president, began his career in the Leningrad KGB's Main Directorate. Ivanov made his debut with international business and financial elites at the St Petersburg Economic Forum, where he delivered a forward-looking address laying out Russia's course through the year 2020. Ivanov sounded both liberal and presidential, beginning his speech with a promise that Russia in 15 years will be a democratic state "based on the rule of law and respecting the rights of the individual."

Another often-mentioned possible successor is Deputy Prime Minister Sergei Naryshkin. According to some reports (including Kommersant in February), Naryshkin studied in the same group as Putin at the KGB's foreign intelligence training center. In the 1980s, he served at the Soviet Embassy in Brussels, possibly as a KGB agent. In February, Putin placed Naryshkin in charge of foreign trade and relations with the CIS. He also heads the board of directors of the Channel One state television network. Because of his last name - the Naryshkins are an old noble family that included the mother of Peter the Great - he is often associated with the growing cachet of monarchist sentiment in Russia.

The third silovik-connected potential presidential successor is Russian Railways President Vladimir Yakunin. During the Soviet era, Yakunin worked abroad for the Committee on Foreign Trade Relations and the Soviet mission to the United Nations, both of which were fronts for KGB foreign intelligence operations. Interestingly, during this period he was awarded a state order of military merit, which is normally awarded only for combat service.

Yakunin heads the board of trustees of the St Andrews Foundation, a powerful patriotic organization set up in 1992 to promote the restoration of national values. Under Yakunin, the foundation has launched several high-profile projects, including the repatriation and reburial of two anticommunist heroes - White Guard General Anton Denikin and philosopher Ivan Ilin. Yakunin also heads the Center of National Military Glory. The media often refer to this body as "the order of Russian Orthodox Chekists" because its boards also include Ivanov, FSB Colonel General Viktor Cherkesov (who heads the Federal Antinarcotics Committee), and FSB Major General Georgy Poltavchenko (who is Putin's envoy to the Central Federal District).

Economic power

The true extent of the siloviki community is difficult to know for certain because many people cooperated with the KGB covertly during Soviet times and lustration in Russia has been staunchly resisted. The media occasionally reported, for instance, that former Prime Minister Mikhail Fradkov, who worked abroad for Soviet foreign-trade organizations in the 1980s, had links to the KGB. At least one of his sons is known to be an FSB officer. Likewise, there have been persistent media reports that Russian Orthodox Patriarch Aleksy II cooperated with the KGB while a priest in Estonia. The Orthodox Church denies these reports.

As the siloviki clan has tightened its grip politically, it has also made vast inroads into the Russian economy, spearheading the accelerating expansion of the state sector and the formation of new state corporations. They have played key roles in the renationalization of the Russian oil industry; since 2001, about 44 percent of the oil sector has returned to state ownership. Much of the process has been quiet, but it came to international attention with the crackdown and destruction of oil major Yukos beginning in 2004. The primary beneficiary of the dismantling of Yukos was Rosneft - whose board is headed by deputy presidential chief of staff and silovik clan leader Igor Sechin. Rosneft is now Russia's biggest oil company, with a capitalization of US$78 billion and annual production of about 100 million tonnes.

Renationalization in the oil sector continues apace, with former Russneft head Mikhail Gutseriyev becoming the latest victim. He has been forced to flee the country to avoid arrest, and the assets of Russneft, Russia's seventh-largest oil company, have been frozen by a court order. A poll of leading political and economic experts by the Moscow Institute of Situation Analysis in April concluded that the political influence of the richest businesspeople is "negligibly small" compared to that of the siloviki.

The next, more ambitious step in the silovik concentration of economic power is the creation of state-controlled megacorporations that would dominate key sectors of the economy by combining the major companies within them. The goal seems to be a form of authoritarian capitalism such as can be found in some Southeast Asian countries.

In May, the Kremlin created the United Aviation Corporation, which combines leading civilian and military aircraft producers such as MiG, Sukhoi and Tupolev. United Aviation is headed by Sergei Ivanov. Two months later, the Kremlin followed up with the United Shipbuilding Company that combines all Russia's civilian and naval shipbuilders. United Shipbuilding is headed by Naryshkin.

Similar state-driven consolidation is afoot in the banking sector as well. After a series of merging acquisitions, state-controlled Vneshtorgbank (VTB) has emerged as the first major Russian player on global financial markets. Two of the bank's vice presidents - former FSB Economics Department head Yury Zaostrovtsev and Dmitry Patrushev, son of the current FSB director - tie this financial giant firmly to the silovik group.

Such megacorporations are expected to swallow up Russia's defense, nuclear, and automaking sectors in the near future, and it is a safe bet siloviki will be found to head all of them.

Publisher

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