Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Reports: FSB Plans To Control Economy

The Federal Security Service has drafted a plan that would give it enormous powers to control the national economy, two weekly newspapers reported.

The FSB, however, called the reports a "provocation." Analysts said the plan was unrealistic and "rubbish."

The plan was announced by FSB officer Yury Ovshenko, director of the Institute of Problems of Economic Security, at a briefing for a "closed circle of journalists" last week, according to Argumenty i Fakty, the biggest national weekly, and Obshchaya Gazeta.

The purpose is to "cope with the catastrophic results of the so-called reforms of 1992-99" by reversing some "unlawful" privatizations and searching for money that has been spirited out of the country illegally, the reports said.

Further, to prevent future capital flight, control over the Central Bank and State Customs Committee should be given to the FSB. And privatization results should be reviewed by the Security Council, which should be headed by someone from the FSB.

The measures are "absolutely legal" and are likely to be "extremely popular with the population," but even so, implementing them will require establishing state control over the main electronic media, the papers said, citing Ovshenko.

Perhaps in an effort to give the plan more popular appeal, it was presented as an attack on the oligarchs.

The plan includes replacing Prime Minister Mikhail Kasyanov with either Novgorod Governor Mikhail Prusak or former Prime Minister Sergei Kiriyenko, who now heads the Volga Federal District. Both, Ovchenko said, have already effectively "signed up" for the plan.

Spokesmen for both Kiriyenko and Prusak, reached by telephone, said their bosses have nothing to do with the plan.

The plan also calls for liquidating the Property Ministry and stripping the presidential administration, headed by Alexander Voloshin, of its political functions, the reports said.

Ovchenko said the plan was funded by a number of banks and large firms, Argumenti i Fakty reported. It is to be presented to President Vladimir Putin by fall, he said.

FSB spokesman Andrei Laryushin said in a telephone interview that he had read the reports "with great surprise" and called them "a provocation whose purpose could be only speculated upon."

Laryushin said he personally checked staff records and even the archives, but could not find an officer Ovshenko. The FSB also has no links with the institute named in the articles, he added.

Moscow economists also said they had not heard of the institute.

Sergei Nikolayenko, a macroeconomist with Russian European Center for Economic Policy, said, "I know there is some analytical group with the FSB because one of my classmates disappeared there and since then no one knows anything about him.

"However, I don't think we should treat seriously articles in Argumenty i Fakty — it is yellow press and serious people don't read it."

Yevgeny Gavrilenkov, director of the World Bank-funded Bureau of Economic Analysis, said: "If something on such a scale is being prepared, it is normally not publicized in such a way. I haven't heard about such a plan, but I firmly know there is nothing impossible in this world."

Political analyst Yury Korgunyuk called the plan "complete rubbish" and "bureaucratic utopia."

"Look, the FSB is just not able to really control anything. The most they could is to turn off the oxygen for someone who has already lost all support, like [Boris] Berezovsky or [Vladimir] Gusinsky. But should they dare to pressure someone like [Alfa Bank head Pyotr] Aven or [Yukos head Mikhail] Khodorkovsky, everyone will see it as a terrible sign of a worsening of the economic climate in Russia."

Tatyana Netreba, who wrote the article for Argumenti i Fakty, said Ovchenko met with a few journalists at what she called the Kremlin-backed press club Chetyre Storony on Stary Arbat. Netreba said she had a strange impression of the briefing. "It just looked like someone in the Kremlin wanted to consciously make this person known to the public. Probably those who oppose the FSB team [close to Putin.]"

Ovchenko could not be reached on his mobile phone Friday.

Konstantin Preobrazhensky, a retired KGB officer, said in an interview he could believe such a plan exists, although it would be "very bad for the country."

Despite the denial by the FSB, he said, the plan could still have been leaked by the FSB to monitor public reaction.