Wednesday, June 15, 2005

Caught by the Inner Circle

Here's one view of what is happening in the Kremlin. It would suggest that the Yukos affair was not simply a matter of Khordokovsky's political ambitions. Caught by the Inner Circle. It also offers some more background on the blackout that happened in Moscow last month.

Arkady Yevstafyev resigned earlier this month as the head of Mosenergo, the capital's main supplier of heat and electricity, after the release of a report prepared by the Federal Service for Ecological, Technological and Atomic Supervision on the blackout that struck Moscow in late May.

The report soon landed on the desk of President Vladimir Putin, and the president was outraged. Mosenergo's top executives were selling property in the center of Moscow to offshore companies rather than taking care of business. "And all they
had to do was repair four transformers at a cost of 180,000 rubles each," Putin said.

Energy industry professionals are still coming to grips with the depth of the government's probe into the Moscow blackout, which, as it turns out, was caused by multiple factors: four transformers. At $6,400 a pop.

But the real story here is Putin, not the electric grid. At no time since that memorable press conference last December, when he declared that the acquisition of Yuganskneftegaz by a shell company, Baikal Finance Group, was an example of the state "pursuing its interests" using "absolutely legal market mechanisms," has the president looked more like a puppet caught up in the schemes of his own inner circle...

There's more of course.

I think there's a lot to this. Why would Putin say he wasn't going to dismantle Yukos and then go about doing that very thing? Some would say its his old KGB ways, disinformation in the face of his real objective. That seems just to pat to me. The other argument is that he is simply going retrograde, taking Russia back to the good old Soviet days. That is too simplistic for me too. Both of these depend too much on an underlying ideology to be of any use today to explain things. But the machinations of staff seems to me to reflect more what has been going on in Russia (and to a large extent here) for some time. Work your own interests through the power you wield as a part of the state or through your own contacts.

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