Mogilevich the Spoiler

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Semyon Mogilevich was arrested in Moscow on Jan. 23. He is a reported crime boss who enjoys a spot on the most-wanted list in many countries -- much like Osama bin Laden. But this did not stop Mogilevich from living a comfortable life in a luxurious villa in the elite Rublyovka neighborhood of Moscow for many years.

Two years ago, I had the opportunity to meet a trusted partner of Mogilevich who praised President Vladimir Putin for strengthening the power vertical. Although Mogilevich's colleague expressed support for the arrest of former Yukos CEO Mikhail Khodorkovsky, he also criticized the United States for its misdirected harassment of what he claimed were honest Russian businessmen. In short, it was a standard potpourri of pro-Kremlin sentiments, as if it were taken verbatim from the script of a typical news broadcast on government-controlled Channel One.

Gas is one of the Kremlin's most important commercial interests, and it was in this connection that Mogilevich's name originally surfaced.

EuralTransGas, a gas-trading company with $12,000 in share capital, is registered under the names of four individuals in the Hungarian village of Chabdy. It January 2003, this company received an unprecedented contract to delivery gas from Turkmenistan, and Western authorities suspect that Mogilevich is a co-owner of the company.

At the same time that EuralTransGas was formed, Putin signed a huge gas contract with the president of Turkmenistan. In return, Putin agreed to Turkmenistan's decision to cancel the dual citizenship that Russians living in the country previously had. In effect, Putin sold the 140,000 Russians living there into slavery to a medieval khan in exchange for EuralTransGas' right to trade Turkmen gas.

EuralTransGas raised so many questions from Western authorities that it became impossible for the Kremlin to ignore the issue. Thus, the company was replaced by RosUkrEnergo, with 50 percent owned by Gazprombank and the other 50 percent held by Dmitry Firtash and Ivan Fursin. Prior to becoming a co-owner of RosUkrEnergo, Firtash had worked as a representative of EuralTransGas.

Even though Gazprom is considered Putin's alter ego, the same interclan battles within the Kremlin are also ruthlessly being fought within Gazprom. The siloviki most likely consider Gazprombank and RosUkrEnergo -- the "small Gazprom" -- to be their territory, while the rival Kremlin faction led by First Deputy Prime Minister Dmitry Medvedev considers Gazprom itself to be their territory.

Another point of contention centered on the sale of an Astrakhan gas field. Sources close to the deal believe that Gazprom had wanted to buy the field but Mogilevich played the spoiler by demanding too high of a price. In the end, a company owned by Firtash got the prize and Gazprom took strong offense at Mogilevich.

One of the most striking aspects of the Mogilevich arrest was that it was carried out by police from the Central Federal District and not by agents of either the Federal Security Service or the Investigative Committee -- the two most powerful organizations controlled by the siloviki.

Moreover, the actual arrest was poorly organized. Mogilevich was detained after his meeting with Vladimir Nekrasov, the owner of Arbat Prestige. The pretext for Mogilevich's arrest was developed afterward, and it was based on whatever allegations against Nekrasov that the authorities threw together in the few hours immediately following his detention. Another reason that the arrest was executed at the last minute was to keep the police from leaking the information beforehand, which could have foiled the entire operation.

It appears that Mogilevich's arrest is the most powerful blow that Putin's preferred successor could strike against his rival siloviki. Whether or not the authorities were too quick to deliver this blow will become evident sometime this week.

Yulia Latynina hosts a political talk show on Ekho Moskvy radio.