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. Last Updated: 07/27/2016

Caught by the Inner Circle

Arkady Yevstafyev resigned earlier this month as the head of Mosenergo, the capital's main supplier of heat and electricity, after the release of a report prepared by the Federal Service for Ecological, Technological and Atomic Supervision on the blackout that struck Moscow in late May.

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The report soon landed on the desk of President Vladimir Putin, and the president was outraged. Mosenergo's top executives were selling property in the center of Moscow to offshore companies rather than taking care of business. "And all they had to do was repair four transformers at a cost of 180,000 rubles each," Putin said.

Energy industry professionals are still coming to grips with the depth of the government's probe into the Moscow blackout, which, as it turns out, was caused by multiple factors: four transformers. At $6,400 a pop.

But the real story here is Putin, not the electric grid. At no time since that memorable press conference last December, when he declared that the acquisition of Yuganskneftegaz by a shell company, Baikal Finance Group, was an example of the state "pursuing its interests" using "absolutely legal market mechanisms," has the president looked more like a puppet caught up in the schemes of his own inner circle.

Igor Sechin, Putin's deputy chief of staff and chairman of Rosneft, is viewed as the driving force behind the Yukos affair. Sechin -- and not Gazprom CEO Alexei Miller -- is also considered the patron of Gazprombank, which has been buying up shares in Mosenergo in recent months and now owns about 25 percent of the company. It had long been rumored that Yevstafyev was on the way out, and Gazprombank head Andrei Akimov was thought to be a leading candidate to replace him. Now Vedomosti has reported that the report on the Moscow blackout was drafted under Sechin's watchful eye.

I understand perfectly well that Yukos will not be the last, that the process of redistributing property to Putin's friends can no more be halted now that it is underway than the repressions of the late 1930s could have been.

But all those friends who are openly using Putin should think about how it looks to the outside observer. When the president of the country secretly acquires a $50 million yacht, he looks ridiculous. The same can be said when the president says he is very well acquainted with the owners of Baikal Finance Group and when the people who spent billions of rubles and failed to deliver the desired outcome in Ukraine's recent presidential election blame the cock-up on a CIA plot -- and the president accepts this explanation.

The report on the Moscow blackout seems to have been drafted in advance. You can't help but notice some curious parallels. Someone drafted the Mosenergo report while at the same time someone else attempted to assassinate Unified Energy Systems chief Anatoly Chubais. The attempt on his life forced Chubais to bow down to the Kremlin and revealed his vulnerability.

So were the same people responsible for both the report and the assassination attempt? Maybe it was all the work of retired special forces Colonel Vladimir Kvachkov and his green Saab. Maybe he figured out whom the 8,000-square-meter business center on Raushskaya Naberezhnaya was sold to and, using his connections in the prosecutor's office, got through to Sechin himself and, though sitting in prison, reached out and touched Chubais by putting the compromising information he had uncovered in the president's in-box.

It seems to me the president of Russia would do well to avoid putting himself in a situation where he simultaneously condemns the sale of a business center to an offshore company and condones the acquisition of Yuganskneftegaz by his buddies. And Putin would do even better to avoid giving the impression that the people who ordered the hit on Chubais can manipulate him with the help of a report.

Yulia Latynina hosts a talk show on Ekho Moskvy radio.