From Insider to Fighting the Machine

MTKasyanov speaking at a rally in Moscow on Oct. 7, the anniversary of the murder of journalist Anna Politkovskaya.
Mikhail Kasyanov says he is the target of a vast, pro-Kremlin conspiracy to undermine his goal of shaking up an authoritarian political system. Alternatively, the former prime minister might just be the unluckiest presidential candidate on Earth.

The last meeting of Kasyanov's political movement, the Russian People's Democratic Union, was disrupted earlier this month when delegates were told that the venue, a trade-union hall in Tver, had been shut down for fire-safety reasons. Two weeks earlier, a similar gathering was forced to leave a cultural center in Ufa because of a telephone bomb threat. Delegates trooped over to a nearby hotel, and minutes later someone phoned in a bomb threat there, too.

Kasyanov's supporters say these incidents fit into a long-running pattern of harassment in which the former prime minister has been hounded by politically motivated investigations and rowdy protests by pro-Kremlin youth activists. Kasyanov's troubles date back to 2005, when he first hinted that he might run for president in 2008, they say.

"He made his announcement in February 2005 believing there was a basic level of cultural decency, a framework for civilized political discourse," said Oleg Buklemishev, a longtime aide who now heads the analytical department of Kasyanov's consulting company, MK_Analytica.















Resume
Mikhail Mikhailovich Kasyanov


Born: Dec. 8, 1957


Place of Birth: Solntsevo, Moscow region (now part of Moscow proper)


Education: Moscow Automobile and Road University (MADI), undergraduate degree in highway construction, 1983; higher economics training with State Planning Committee (Gosplan) and foreign language training with Soviet Foreign Trade Ministry.


Advantages: Strong name recognition and extensive government experience; liked in business community; seen as more handsome than other politicians.


Disadvantages: Perceived links to oligarchs and the Family; persistent rumors of corruption; hostility from the political establishment has purportedly led to a blackout in the national media and harassment by pro-Kremlin youth activists.


Notable Quotes: "I know a lot of businessmen and well-known entrepreneurs. But I don't have any concrete ties to any particular financial-industrial group. I maintain contacts with everybody. I meet with [Boris] Berezovsky very rarely -- perhaps once every six months." News conference, April 2000.


"Today we should all admit that we already live in a different country. The unification of democratic forces is no longer a question of political ambitions, it is a vital necessity for the country." Response to the nine-year prison sentence for former Yukos CEO Mikhail Khodorkovsky, reported by Interfax, May 2005.


"I have no doubts that the systematic, slanderous campaign aiming to discredit me, based on lies and misrepresenting the facts, is part of the authorities' general plan to purge the political landscape." Response to a criminal probe into his acquisition of a luxury villa, July 2005.




"I think it was a big surprise for him when this machine -- the propaganda machine, the law-enforcement machine, the machine of hooligan youth movements -- was turned against him with all of its strength," Buklemishev said.

In an e-mail interview, Kasyanov declined to discuss his personal feelings about the purported harassment campaign, instead noting how it reflected broader developments in Russia.

"Look around you," he said. "Just a few years ago, did anyone expect that there would be no independent media left in Russia? That authorities would be fighting 'non-native inhabitants'? That the main enemies would become Estonia and Georgia? That political killings and wars between the secret services would become customary?"

Kasyanov's allies say he has the name recognition and government experience needed to be a credible successor to President Vladimir Putin, whose second term ends in May. The Constitution limits presidents to two consecutive terms.

But Kasyanov's detractors argue that his presidential ambitions were always a long shot, and even some of his colleagues in the liberal camp seem uncomfortable with him.

The position Kasyanov finds himself in today is all the more remarkable given that he was once the ultimate insider. Just four years ago, he held the second-highest job in the government -- the same government he now spends much of his time criticizing.

Rising to the Top

Kasyanov was born Dec. 8, 1957, in the Moscow suburb of Solntsevo, which was then a separate town but has since been incorporated into Moscow proper. His mother was an economist in Glavmosstroi, the organization in charge of building housing in Moscow, and his father was the principal and a math teacher at a local school.

As a teenager Kasyanov liked cars and music, and he was even the drummer in a rock band for a few years, according the biography on his web site. "I grew up on the music of the Beatles, Deep Purple, Led Zeppelin and Pink Floyd," he writes.

In 1974, Kasyanov began his studies at the Moscow Automobile and Road Institute. When his father died two years later, he switched to the institute's night division and took a day job as a construction worker. He laid concrete for several months and was then drafted into the army, where he served in an honor guard, whose duties included greeting official delegations at airports.

Kasyanov's professional career began in 1978, when he became a senior technician and engineer at the Soviet Institute of Industrial Transport, building highways and railroads. In 1981, he joined the State Planning Committee -- better known by its nickname, Gosplan -- of the Russian republic inside the Soviet Union.


Mikhail Metzel / AP
Then-Prime Minister Kasyanov conferring with Putin at the Kremlin in 2003.
He spent the next decade in this republican Gosplan branch, which was an insignificant backwater compared to the mighty Gosplan of the Soviet Union, according to political analyst Alexei Makarkin, who has studied Kasyanov's early career. But the budding bureaucrat did gain some skills there: a knowledge of English and a familiarity with foreign debt issues. He also married his high-school girlfriend, Irina, and had a daughter with her in 1984.

Kasyanov was plucked out of obscurity in 1993 when Boris Fyodorov, then serving as finance minister and deputy prime minister in the post-Soviet government, put him in charge of the Finance Ministry's foreign debt department. Through a spokesman, Fyodorov declined to be interviewed for this report.

As Russia's chief negotiator on Soviet-era debt, Kasyanov became a well-known figure in Western financial circles, and in 1995 he was promoted to deputy finance minister. After the August 1998 default, he broke the news to crisis-stung Western investors that Russia would not pay back billions of dollars worth of frozen debt.

The next two years saw Kasyanov advancing in leaps and bounds. In May 1999 he was appointed finance minister, and in January 2000 he became first deputy prime minister under Putin, who had just become acting president in the wake of Boris Yeltsin's resignation. After Putin won the May 2000 presidential election, he made Kasyanov his prime minister.

Family Man

Many believe Kasyanov got the government's No. 2 job thanks to the influence of the Family, the once-powerful political faction centered around Yeltsin's daughter, Tatyana Dyachenko, and tycoon Boris Berezovsky. "He was one of the political figures caught up in the Family's games," Makarkin said.

Kasyanov has downplayed his links to Berezovsky and the Family. "I meet with Berezovsky very rarely -- perhaps once every six months," he said at a news conference in April 2000.

Whoever may have helped him climb the career ladder, Kasyanov got ahead because of his talents, said Olga Kryshtanovskaya, a sociologist at the Russian Academy of Sciences who studies the country's political elite. "He is knowledgeable, he knows how to deal with people and he is a good speaker," Kryshtanovskaya said.

Kasyanov's career as a debt negotiator climaxed in February 2000, when he clinched a deal to write off $10.6 billion of Soviet-era debt to the London Club of commercial creditors. Although the deal was praised by Putin and other officials, some financiers argued that Kasyanov could have gotten better terms for Russia.

His reputation was also marred by allegations that he had profited from his position within the impenetrable world of government finance. While he was finance minister, the newspaper Versia accused him of taking money from banks in exchange for inside information about upcoming debt-market movements. The paper dubbed him "Misha 2 Percent," a reference to his alleged cut in the deals.

The nickname has dogged him ever since, even though Kasyanov has consistently denied the allegations and no charges have ever been filed in court.

Yelena Dikun, a spokeswoman for Kasyanov, blamed the emergence of the nickname on a smear campaign launched by a "television oligarch" who was angered when Kasyanov refused to help him with a business deal.

Dikun declined to name the oligarch in question, but two sources familiar with the situation identified him as Vladimir Gusinsky, who was feuding with Berezovsky and the Family at the time. The sources asked not to be named because of the sensitivity of the matter. Gusinsky and Berezovsky, both of whom now live in self-imposed exile, could not be reached for comment.

"After some time, the campaign slowed down, and eventually the oligarch apologized for it, though not publicly," she said. "Later, when Kasyanov went into politics, this story was revived. The second wave of 'Misha 2 Percent' stories was instigated by the authorities, by the Kremlin."

Presidential spokesman Dmitry Peskov denied that the Kremlin was behind negative media coverage of Kasyanov. "The presidential administration is not involved with disinformation," he said.

Dikun said Kasyanov would not answer questions about "Misha 2 Percent" and other cases of alleged corruption because Kasyanov had addressed them many times before.

'A Committed Liberal'

Kasyanov became prime minister in 2000 with a reputation as a liberal technocrat. His four years in the White House were marked by steady growth -- helped along by high oil prices -- and a return to currency stability after the inflation of the 1990s. Several structural reform projects had their genesis during Kasyanov's tenure, but the only one to be implemented while he was still in office was a much-praised tax reform that lowered the tax burden on businesses and introduced the 13 percent flat income tax.

Kasyanov was "the best prime minister in all of Russia's postwar history," Boris Nemtsov, a leader of the liberal political party Union of Right Forces, said at an event organized by Kasyanov's political movement earlier this year.

"Kasyanov is a committed liberal in the sense that he believes the free market can solve most problems," said Mikhail Delyagin, who served as an economic advisor to Kasyanov from 2002 to 2003 and now heads the Institute of Globalization Problems.

Delyagin, a left-leaning economist who often sparred with Kasyanov, was broadly critical of the former prime minister but praised his cautious approach to sensitive reforms in the social sphere. Kasyanov was wise to delay the infamous "monetization of benefits" reform, which replaced free privileges for pensioners with cash payments and sparked angry protests in 2005, Delyagin said. Kasyanov later criticized the implementation of the benefits reform.

"He is a free-marketeer who would not be stopped by any moral concerns," Viktor Ilyukhin, a State Duma deputy from the Communist Party, said of Kasyanov.

Kasyanov had no public rifts with Putin until 2003, when prosecutors began a legal onslaught against the Yukos oil company, culminating in the arrest of its billionaire CEO, Mikhail Khodorkovsky. The prime minister defended Khodorkovsky and darkly warned that the freezing of 44 percent of Yukos shares was a "new phenomenon" with unpredictable consequences.

Buklemishev, the Kasyanov aide, stressed that his boss was reluctant to break with Putin publicly. "As long as I've known him, he's been a very disciplined bureaucrat -- very disciplined," Buklemishev said. "The fact that he took such steps beginning in 2003 shows how much he lost his patience. The forces he was opposing had crossed a threshold."

With the departure of most other figures linked to the Family, such as Kremlin chief of staff Alexander Voloshin, Kasyanov became increasingly isolated. He was finally dismissed in February 2004, shortly before Putin was re-elected in a landslide, and replaced with Mikhail Fradkov.

Kasyanov spent the next year outside the media spotlight. A fundamental change in his thinking, he says, occurred with the Beslan hostage crisis in September 2004. After a brutal standoff between Chechen terrorists and federal authorities ended with the deaths of more than 330 civilians, many of them children, Putin called for an end to gubernatorial elections and accused foreign powers of wanting to tear "a tasty morsel" from Russia.

"Starting in 2003, various political decisions were made that I disagreed with and that I spoke out against," Kasyanov said by e-mail. "The Yukos affair was important, but it was far from the only one. But until the point when the national tragedy in Beslan was used for an unconstitutional takeover, I continued to believe that all these were mistakes, not conscious political choices. Afterward, the masks were torn off and it became clear that the main goal was to turn the country back to the past and to hold onto power, which I could not condone."

Kasyanov broke his silence in February 2005 with a news conference in which he slammed the government's course and suggested that he might seek the presidency.

Dachas and Prostitutes

Some liberals hoped Kasyanov would repeat the success of Viktor Yushchenko, the former Ukrainian prime minister who led an opposition coalition to victory in the Orange Revolution of late 2004 -- an outcome that shocked the Russian leadership, which had backed Yushchenko's pro-Moscow rival, Viktor Yanukovych.

"What distinguishes him from other democrats is that he represents a breakaway part of the political establishment," said former presidential candidate Irina Khakamada. "He is still developing as a politician. His strengths are mainly connected to his time in the bureaucracy, his experience as a big manager. So he is more precise, more careful and more open to compromise."

Khakamada is a leader of Kasyanov's Russian People's Democratic Union.

Others note Kasyanov's photogenic good looks as another asset. In June, he was found to be Russia's most sexually attractive politician in a survey of 1,000 adult Muscovites conducted by Bashkirova & Partners, a polling firm.

But if there was ever any hope that Kasyanov could swing the political establishment to his side, it appeared to be derailed in July 2005 when prosecutors opened a high-profile investigation into whether he had abused his office as prime minister by illegally acquiring a luxury dacha in western Moscow.

The investigation was sparked by a complaint from Alexander Khinshtein, a Duma deputy from the pro-Kremlin United Russia party and a muckraking journalist with extensive connections in the secret services. A lengthy court battle ensued, concluding only in September of this year, when Kasyanov returned the villa to the state.

Kasyanov has denied wrongdoing and called the investigation a smear campaign, while Dikun, his spokeswoman, called Khinshtein a Kremlin puppet.

In a recent telephone interview from Nizhny Novogorod, Khinshtein said he had not been motivated by politics. "Independently of my political views, I believe that stealing is bad," he said. Peskov, the presidential spokesman, denied any Kremlin involvement. "The presidential administration has no connection to the famous dacha scandal," he said.

Khinshtein's cause has been taken up by the pro-Kremlin youth movement Nashi, whose activists have repeatedly heckled Kasyanov events and attempted to disrupt them by dropping rakes in his path. The garden tools are a reference to Kasyanov's career as a dacha owner, Nashi says.

Nashi, created in the wake of the Orange Revolution to prevent a similar change of power in Russia, views Kasyanov as one of its main enemies. At Nashi's annual camp at Lake Seliger this summer, a giant poster showed Kasyanov's face on the body of a scantily clad prostitute.

The dislike appears to be mutual. "They don't even understand what's written on the posters they're holding," Dikun said of Nashi's foot soldiers. "They are robots who have had some program installed, and they do whatever it says."

Divided Democrats

While it may be natural for militant Putin backers to detest Kasyanov, the former prime minister is also viewed skeptically in some circles of the opposition.

"He participated in the creation of the authoritarian regime," said City Duma Deputy Sergei Mitrokhin, head of the Moscow branch of the liberal Yabloko party. "He only joined the opposition after Putin fired him. Before that he showed no sign of having democratic values. There is something opportunistic about his political stance. It stems from a grievance against Putin, and not from his values."

Kasyanov's links to oligarchs and the Family would make him unelectable even in a fair vote, said Delyagin, his former economic adviser, who worked for the nationalist Rodina party after leaving the White House.

"Kasyanov conveys an impression of plumpness, satisfaction and good fortune," Delyagin said. "While that may go down well in a country like Denmark, it doesn't work so well in Russia, where 84 percent of the population lives in poverty."

Ever since his return to politics, Kasyanov has argued that the fractured opposition must unite around one person -- not necessarily himself -- to spearhead a return to democracy.

Many analysts say Kasyanov himself is unlikely to be that unifying figure. "From the beginning, he had no chance to become the leader of the democratic opposition," said Yury Korgunyuk, a political analyst with the Indem think tank.

Still, Korgunyuk said, the Kremlin was concerned enough about Kasyanov to thwart his first attempt to revive the opposition: a bid to take over the Democratic Party in December 2005.

Kasyanov had tried to assume leadership of the venerable but long-dormant liberal party as a springboard for his political ambitions. But his supporters say they were blocked from entering the congress where the party was set to elect a new leader. The delegates there elected Andrei Bogdanov instead.

Dikun said the Kremlin bribed delegates to support Bogdanov. "The authorities sensed a threat and conducted a sort of special operation to stop it," she said.

Peskov, the Kremlin spokesman, called the allegation "slander," and Yekaterina Vinokurova, a spokeswoman for the Democratic Party, denied it too.

Some sources, including Korgunyuk, say Kasyanov bribed the delegates himself and was simply outbid by the Kremlin. Dikun denied that Kasyanov bribed any delegates.

In July 2006, Kasyanov became a founding member of The Other Russia, the eclectic opposition coalition that also included former chess champion Garry Kasparov and writer-turned-political activist Eduard Limonov, founder of the banned National Bolshevik Party.

Differences in style were clear from the beginning, with the cautious ex-bureaucrat Kasyanov cutting an unusual figure next to the more radical Kasparov and Limonov. "[Kasyanov] is more level-headed than Kasparov," Khakamada said. "They are like fire and ice: If Kasparov is fire, Kasyanov is ice."

"He didn't fit in at all," Korgunyuk said. "It's as if some wealthy bourgeois went to a cafe for a cup of coffee, and a bunch of hippies were sitting there."

Over the next year, The Other Russia organized a series of street protests throughout the country, some of which were violently dispersed by police. Kasyanov left the coalition in July after a dispute over how to select a single opposition presidential candidate. The Other Russia went on to hold a series of regional "primaries," culminating in a September congress where Kasparov was chosen as the coalition's candidate.

Kasparov said in e-mailed comments that the former prime minister pulled out because he wanted to cut a deal determining the outcome of the selection process. "Unfortunately, Kasyanov wanted the result to be guaranteed," Kasparov said. "But we couldn't have agreed to such a deal, because then we would have looked like the Kremlin."

Some analysts say Kasyanov left The Other Russia because he expected to lose the vote. Dikun denied that, however, arguing that the coalition's approach was flawed. The single candidate should be "the representative of a specific political force," she said, whereas the coalition's primaries were haphazard and disorganized.

Kasyanov has been nominated as a presidential candidate by his own movement. Its central council set to make its final decision Wednesday about whether he should run.

Tactical disagreements have caused friction between Kasyanov and other liberals as well. Most recently, he called for a boycott of the Dec. 2 Duma elections, prompting criticism from Yabloko and the Union of Right Forces, both of which are on the ballot.

"This is nothing but a double standard," said Mitrokhin of Yabloko, pointing out that Kasyanov was not calling for a boycott of the presidential election.

Kasyanov justified his stance by saying authorities had raised the barriers to the Duma elections so high that the opposition had no chance of getting in, while the presidential vote posed just one barrier: a rule requiring 2 million signatures to get an independent candidate on the ballot. Getting the signatures will be difficult but not impossible, he said by e-mail.

Kasyanov declined to say what he would do if he failed to get on the ballot. "Let's not go that far ahead," he said. "I am sure that in the near future there will be many unexpected developments."

Editor's note: This is the 10th in a series of profiles of possible presidential candidates. Previous profiles can be read on The Moscow Times web site, themoscowtimes.com/doc/special_reports.html.