Putin aide pays for Yukos attack

From Jeremy Page in Moscow

PRESIDENT PUTIN of Russia has dismissed his economic adviser as the country’s representative to the G8 group of nations for publicly criticising the Kremlin’s handling of the Yukos oil affair and the election in Ukraine.
Andrei Illarionov broke ranks last month to call the forced sale of Yukos’s main production unit to Rosneft, the oil giant owned by the State, “the swindle of the year”. His comments came at a time when the Kremlin was attempting to reassert central control over politics, the media and industry.

He also said that the victory of Viktor Yushchenko, Ukraine’s opposition leader, over his Moscow-backed rival, Viktor Yanukovych, in the presidential election should make Russia abandon its “imperial” policies towards former Soviet states.

Mr Illarionov, 43, has clashed with the Kremlin before, especially over its decision to ratify the Kyoto Protocol, but his criticism of the Yukos break-up and the botched attempt to influence voting in Ukraine was especially harsh — and bold.

A brief Kremlin statement yesterday said that Mr Illarionov had been replaced by one of Mr Putin’s most trusted aides, Igor Shuvalov, as Russia’s representative to the G8. Mr Shuvalov, 38, will also organise Russia’s year-long chairmanship of the group next year. “Presidential adviser Andrei Illarionov has been relieved of these responsibilities,” the statement said.

The Kremlin gave no reason for the change, but analysts saw the move as the latest step in a four-year campaign to silence, or at least sideline, Mr Putin’s critics in parlia- ment, government, media and business. Mr Illarionov was generally tolerated as a devil’s advocate within the Kremlin, but had gone too far in directly criticising Mr Putin over two of the most sensitive issues of the past year, analysts said.

“After Illarionov’s last statement, many people expected some action or other from the President,” said Aleksandr Shokhin, a former minister and chief debt negotiator who is now a leading member of the Russian industrialists’ union. “But the President will not take the initiative to remove Illarionov from his post as adviser, partly so as not to give the impression that he is against pluralism of opinions,” he told the radio station, Ekho Moskvy.

President Putin has described the sale of Yukos’s main production unit — Yuganskneftegas — as a legitimate business deal and only one other senior figure, German Gref, the Economic Development and Trade Minister, has dared to contradict him.

Mr Putin also publicly endorsed Mr Yanukovych, Ukraine’s pro-Russian Prime Minister, and was humiliated when his victory was overturned by the Supreme Court because of electoral fraud after widespread opposition protests.

Mr Shuvalov, a lawyer, is expected to be a far more compliant representative at the G8. He was one of the President’s deputy chiefs of staff until the presidential administration was restructured last year and is now Mr Putin’s personal aide responsible for drawing up and implementing domestic policy.

He has defended the crackdown on Yukos, which was once Russia’s best-run company but was dismantled by the State last year to cover a £14 billion back tax claim.

That was seen as an attempt by former KGB officers in the Kremlin to punish the company’s founder and main shareholder, Mikhail Khodorkovsky, for funding opposition parties and hinting at running for the presidency. Mr Khodorkovsky is on trial for tax evasion and fraud and faces up to ten years in prison if convicted. Mr Illarionov said that the legal assault on Yukos was being carried out by “monstrously unqualified and unprofessional people. . . (with) a desire to expropriate private property” and had “inflicted a colossal damage to the country”.

Sergei Lavrov, the Foreign Minister, insisted yesterday that the Yukos case was being handled in compliance with international law.


(The Times, 1.4.2005)