Interpreting the Kremlin probe into Rostelekom and its CEO
Is it an anti-graft campaign? A purge of the elite? Or the start of a clan war? When police raided and searched the home of Rostelekom CEO Aleksandr Provotorov last week, it marked yet another chapter in what the Russian media has been describing as a Kremlin-backed war on corruption.
The search was part of a probe into Marshall Capital, where Provotorov was a partner before becoming head of the state-run telecommunications giant in July 2010. Investigators are looking into whether Russagroprom, a now bankrupt
subsidiary of Marshall Capital, fraudulently received -- and then
defaulted on -- a $225 million loan from the investment bank VTB Capital
in 2007. The home of Konstantin Malofeyev, current head of Marshall Capital, was
also searched. For the time being, prosecutors are describing Provotorov
and Malofeyev as "witnesses" in the case.
With all the other corruption probes out there -- from the procurement scandal that brought down former Defense Minister Anatoly Serdyukov to the probes into financial malfeasance in the Regional Development Ministry and the Global Navigation Satellite System (Glonass) -- what makes the Rostelekom case so noteworthy?
Well, for one thing, Provotorov is considered a close Putin ally. He served as his protocol chief, he was made head of Rostelekom with Putin's support, and in July the Kremlin leader awarded him a Medal of Honor. "This is in fact an attempt to replace one of Russia's largest companies' managers, who is under the Kremlin's political patronage," Tatyana Stanovaya, head of the analytical department for the Moscow-based Center for Political Technologies wrote in Politcom.ru.
Moreover, Russian media has reported that Prime Minister Dmitry Medvedev has been trying to remove Provotorov at Rostelekom and replace him with Vadim Semyonov, the head of state telecoms holding company Svyazinvest and an old law school classmate of the premier's. "The conflict is reaching the very top, splitting the vertical. The battle line is passing between the government and the Kremlin," Stanovaya wrote.
Additionally, the assault on Provotorov comes on the heels of the dismissal of Serdyukov, which some commentators interpreted, at least in part, as retribution against the former defense minister for cozying up to Medvedev late in his presidency. "In the last two years of Dmitry Medvedev's presidency, Serdyukov increasingly sought and found support specifically in the Kremlin rather than the White House, where Putin was installed at the time," Yevgenia Albats recently wrote in "Novoye vremya."
Most notably, Albats wrote, Serdyukov used Medvedev's backing -- over
Putin's objections -- to increase the 2011 defense budget from 13
trillion rubles to 20 trillion rubles ($409 billion to $630 billion).
So is it that neat and clean? Simple tit-for-tat? I'd be very cautious of interpreting the Rostelekom case as Medvedev's answer to Serdyukov's dismissal. First of all, with his political obituary being written almost daily in the Russian press Medvedev is politically very weak right now and I doubt he would be able to launch such a frontal assault on a close Putin ally.
Moreover, although Serdyukov did in fact use Medvedev to get his defense budget hike back in 2011, it would be a bit of a stretch to call him an ally of the prime minister. He simply played one side of the tandem against the other to get what he wanted -- and probably paid the price for it with the famously vindictive Putin. He also had many enemies within the military. (It also probably didn't help Serdyukov that he lost an important political patron when his marriage to the daughter of Putin-crony and Gazprom chairman Viktor Zubkov broke up.)
The battle for control of Rostelekom is a complex game with
numerous powerful players and many moving parts, too -- and not a
straightforward battle between "Putin's people" and "Medvedev's people."
What the case does indicate, however, is that the campaign against corruption -- which Putin may have intended to be a public relations trick, a purge of the ruling elite of disloyal elements, or both -- is perilously close to spinning out of control with unpredictable consequences. "What happened largely indicates the beginning of ferment within Russia's ruling class, an escalation of the fight for resources and of uncontrollable conflicts that the Kremlin is unable to regulate without damaging its own reputation," Stanovaya wrote in Politcom.ru. "Wars of all against all are being waged and their causes have absolutely nothing to do with the Kremlin's intentions and are most likely developing in spite of the regime's priorities."
This post appears courtesy of Radio Free Europe/Radio Liberty.
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