. Last Updated: 07/27/2016

Yeltsin Appoints Chubais to Head Staff

President Boris Yeltsin on Monday sacked his hawkish chief of staff Nikolai Yegorov and replaced him with pro-Western economist Anatoly Chubais in a shock reshuffle that appeared to swing Russia back on the road of liberal reforms.

Itar-Tass reported that Chubais, who led Yeltsin's election campaign and masterminded the key free market reforms of the past four years, would replace Yegorov as chief of staff and would also take on the powers of Yeltsin's top aide and long-time confidante, Viktor Ilyushin.

Chubais, who barely a week ago said he was retiring from politics, said he had taken the job after a personal request from Yeltsin. "To my mind, a new stage of the construction of Russian statehood is coming," he said.

The combined powers of the new post, which remains vague, would apparently grant Chubais control of all access to Yeltsin -- exactly the sort of influence once enjoyed by Yeltsin's chief bodyguard and friend, Alexander Korzhakov.

However, if Korzhakov was a hardliner who jealously restricted access to Yeltsin and lobbied him to cancel elections rather than risk defeat, Chubais is a liberal free-market economist who says he wants Russia to become a flourishing democracy.

"This is a sensational piece of news," said Andrei Piontkowsky of the Center for Strategic Studies. "This gives Chubais an enormous amount of influence over the president. It's a great success for reforms."

Chubais said his first tasks would be ensuring pro-Yeltsin Chubais was the architect of Russia's privatization program and of the ruble corridor that has kept the currency stable since mid-1995. But Chubais' aggressive approach to privatization was so unpopular with voters that Yeltsin kicked Chubais from his post as deputy prime minister in January as a political liability.

Chubais returned quietly to work for Yeltsin's re-election. He, Ilyushin, Yeltsin's daughter Tatyana Dyachenko and NTV Independent Television chief Igor Malashenko marshalled a successful campaign that lifted Yeltsin in the polls and deflated calls for canceling elections from Korzhakov.

Tension between the Chubais and Korzhakov camps blew up less than two weeks before election day, when Korzhakov's men detained some key Chubais aides as they left the White House, allegedly because they were carrying $500,000 in cash for campaign events.

That incident remains under investigation, but the Chubais camp quickly and successfully put their own spin on events. Malashenko's NTV went on the air at 2 a.m. to call the detentions the beginning of a Korzhakov-led coup d'?tat. Teaming up with Prime Minister Viktor Chernomyrdin and new security tsar Alexander Lebed, Chubais met with Yeltsin the next morning, and Yeltsin agreed Korzhakov had to be sacked.

In the flush of victory, Chubais spent the day making triumphant television appearances, surprising voters who thought the unpopular mastermind of voucher privatization had been canned.

Yeltsin, apparently agreeing, soon after issued a statement to voters that Chubais was not a member of the government and would not become one. Chubais echoed that sentiment at a news conference 10 days ago, where he said he planned to enter the private sector.

Analysts said Monday that Chubais' new appointment strengthened the hand of Chernomyrdin in his public tug-of-war with Lebed.

"Chubais is close to Chernomyrdin, and Chernomyrdin has already become strong," said Sergei Markov, a senior associate with the Carnegie Endowment for International Peace. "This is a sharp turn in favor of Chernomyrdin's power."

Lebed has tried to interpret his brief as secretary of the Security Council widely enough to include economic policy but Chernomyrdin has hotly warned Lebed that economic policy is the prime minister's turf.

With Chubais brought in as Yeltsin's right-hand man, Lebed is even less likely to get his way.

"He won't be making any new shocking statements about Mormons or economics," Piontkowsky said. "Many people have demonstrated to him his ignorance and the excessiveness of his ambitions, and Chubais will never let Lebed get into economics."

Piontkowsky said that Chubais' promotion already made somewhat irrelevant the announcement by another free market-minded economist and darling of the West, Yabloko leader Grigory Yavlinsky, that he, too, may be joining Yeltsin's new government.

Yavlinsky told NTV's "Itogi" program Sunday that he would consider joining the government if continuing steps were taken to fight high-level government corruption and end the war in Chechnya.

"If Chubais can determine the economic policy of the government, then there will be no particular need for Yavlinsky," Piontkowsky said. "This new position is very close to Yeltsin, and Chubais will use this position ... to become an economic tsar in the same way that Lebed has become a security tsar of sorts."

Yegorov was the last prominent member of the so-called Party of War, a label Russia's news media pasted to those Kremlin officials who vocally backed Yeltsin's attack on Chechnya in 1994.

As the then-nationalities minister, Yegorov was particularly outspoken in favor of using force. Monday the Kremlin announced Yegorov would be demoted to organizing Yeltsin's inauguration ceremony, scheduled for Aug. 9.

Interfax reported that Yeltsin had appointed Yegorov head of the Krasnodar territory administration, a return to the position from which was promoted in 1993 to become nationalities minister and deputy prime minister. Yegorov was sacked in 1995, taking the blame for the hostage crisis in Budyonnovsk but reinstated as the head of Yeltsin's chief of staff in January this year.

Other members of the Party of War who have already been sacked include former defense minister Pavel Grachev, former first deputy prime minister Oleg Soskovets, former federal security service minister Mikhail Barsukov, and Korzhakov.

Ironically, the routing of the Party of War has done nothing to quiet the war in Chechnya itself, which flared up anew this summer and shows no sign of abating.