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. Last Updated: 07/27/2016

NEWS ANALYSIS: Luzhkov Casts About for a Role

A little over a year ago, he was seen as a likely future president. Today, Moscow Mayor Yury Luzhkov has been banished to second-tier status as a purely regional leader.

"Luzhkov didn't lose everything, however," said Sergei Markov, director of the Center for Political Studies. "He's still the mayor, and that's something."

But being just the mayor is a far cry from where Luzhkov seemed headed a year ago. After the August 1998 ruble devaluation, the Kremlin was reviled for having allowed a handful of technocrats to crash the economy. Luzhkov, who had long and loudly criticized those technocrats, stood out as a rising star, particularly after a high-profile alliance with then-popular Prime Minister Yevgeny Primakov.

Then came Shamil Basayev's invasion of Dagestan, the September 1999 terrorist attacks and the war f and parallel to all that a vicious trading of insults and corruption allegations between the Primakov-Luzhkov camp and the Kremlin.

Boris Berezovsky-controlled ORT television targeted Luzhkov in particular for a weekly basting over corruption in his administration, prompting Luzhkov to snap in October, "Berezovsky is Satan!"

By the December 1999 elections, Luzhkov's political vehicle Fatherland had been abandoned by fairweather friends as regional leaders flocked to join the pro-Kremlin Unity. Fatherland's regional structure crumbled, and it eventually joined Unity in endorsing Vladimir Putin for president.

Luzhkov did win re-election as mayor in December, with 70 percent of the vote. But given his 96 percent in the 1996 elections, even that was seen as a comedown.

Since then, City Hall and the Kremlin have been making up, albeit grudgingly. In June, for example, Luzhkov joined Putin for a trip to Italy, prompting Kommersant to quip the mayor had been "rehabilitated."

This month, Putin extended another olive branch: A decree reinstating Moscow police chief Nikolai Kulikov, a Luzhkov loyalist ousted by then-President Boris Yeltsin. Luzhkov has also been granted a five-year broadcast license extension for his pet television station, TV Center.

But Luzhkov has been a lukewarm ally. He has cautiously criticized President Putin's drive to curb the powers of the governors, and has attacked the draft budget for 2001 for its plans to take more tax revenues out of the regions for federal government needs.

"This is unlawful and deeply wrong," Luzhkov said this month on TV Center. "The government wants to concentrate all financial resources in its hands and give the regions no opportunity to manage themselves."

Luzhkov has also been harsh in condemning the investigation of his old ally Vladimir Gusinsky, who built his MOST banking and media empire last decade on close cooperation with the Luzhkov administration. The mayor likened the campaign to the Stalinist terror of the 1930s.

Perhaps because of such criticism, sailing has not been entirely smooth for Luzhkov. Early this month, Kommersant published an unsourced front-page article predicting the mayor and his deputies would soon be pushed out of office. Luzhkov dismissed the publication as "ordered by Berezovsky," who owns Kommersant.

Meanwhile, the Luzhkov coterie still controls the city's business interests. The administration owns shares in more than 500 companies and controls media, oil, real estate and telecommunications enterprises.

And that may be enough, for now, said Vyacheslav Nikonov, president of the Politika research institute and a former top strategist with Fatherland.

"Luzhkov no longer has ambitions to move to the federal level," Nikonov said. "[His] influence will ultimately depend on how much the power of the governors will be cut."

Markov added that the eclipse of Luzhkov's political star has taught him lessons. "He knows he has to do something," he said, "although I don't know if he understands what."

Yevgeny Bunimovic, a deputy in the Moscow City Duma, agreed, saying the wave of criticism directed at Luzhkov during the election season had sunk in. "Luzhkov saw that he can be hurt by criticism," he said, "and that has made him more careful."

Bunimovic said dealing with the city administration has become noticeably smoother since last December's elections. "It's much easier to talk to Luzhkov," Bunimovic said. "He acknowledges he doesn't understand everything and relies more on the independent judgment of others."