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. Last Updated: 07/27/2016

Pundits Warn of Oligarch Conspiracy

In a warning starkly reminiscent of the prelude to the Yukos crackdown, a group of political scientists published a report last week about an "oligarch conspiracy" to seize power.

The pundits, working under the auspices of the Council for National Strategy, the private think tank that warned about "a creeping oligarchic coup" in 2003, are pointing the finger this time at Alfa Group, the financial-industrial empire run by Mikhail Fridman and Pyotr Aven.

"The government's task is to form a powerful anti-oligarchic coalition and not to allow a coup," said Sergei Markov, a Kremlin loyalist who co-authored the report.

Markov said by telephone Friday that oligarchs were actively seeking to place their people in the government and to clinch alliances with the siloviki -- military and security officials close to President Vladimir Putin -- in order to regain the political influence they enjoyed in the 1990s.

Valery Khomyakov, another co-author and co-chairman of the Council for National Strategy, said some of the country's business leaders would probably back a political confrontation with the Kremlin if living standards plummeted ahead of the 2008 presidential election or if Putin picked a successor whom they perceived as weak.

"This would open a window of opportunity for the oligarchs' revenge," he said.

Khomyakov said the imprisonment of Yukos founder Mikhail Khodorkovsky and the state's dismantlement of his once-leading oil company -- widely seen as the Kremlin's check on his political and economic ambitions -- have not had a lasting effect on other oligarchs.

"They are no longer scared and are ready to participate in 'Operation Successor,'" he said.

Maxim Dianov, the report's third co-author and the head of the Institute of Regional Problems, said Putin had stepped into the fray by saying he would not tolerate the use of foreign money in politics and by announcing a drastic increase in social spending last week.

"The latter decision is a real political turn to the left and will hardly please the oligarchs," he said.

Khomyakov and Dianov said Alfa Group, the country's largest private financial corporation, was the leading force in the "oligarch conspiracy."

They justified the allegation largely by pointing out that Alfa Group's sheer size and its aggressive style of doing business had put it at the forefront of a battle over big business interests.

Dianov also noted that Oleg Sysuyev, the first deputy board chairman of Alfa Bank, was a member of Committee- 2008: Free Choice, a group of liberal politicians and activists critical of Putin. Sysuyev has criticized Putin in several recent interviews.

An Alfa Group spokesman declined to comment on the report Friday.

But Stanislav Belkovsky, whose 2003 report was followed by the legal assault on Khodorkovsky and Yukos, criticized the new report as "lacking strong information, good sources and any political forecast."

"I'm not saying that my colleagues are on someone's payroll, but their report is, in my opinion, politically unproductive," he said Sunday. "There are no sources backing their theories. I'm very skeptical about it."

Belkovsky said the Kremlin was not worried about Alfa Group and "on the contrary, Alfa Bank president Pyotr Aven is a close friend of Putin."

He said the only enemy Alfa had was IT and Communications Minister Leonid Reiman. The two are mired in a dispute over Alfa's purchase of a 25 percent stake in cell phone operator MegaFon.

"But Putin is not siding with anyone -- either Reiman or Alfa," Belkovsky said.

Belkovsky, a former Kremlin consultant who has become critical of the Kremlin in recent months, is still a co-chairman of the Council for National Strategy. He said he did not take part in writing the latest report.

Markov, Khomyakov and Dianov said the first public volley was made by Alfa Group in July, when Alfa Bank chief strategist Chris Weafer wrote in a report that Putin's remaining in office past 2008 would be the most favorable scenario for business.

The report, which was intended for the bank's clients, was published on the front page of Vedomosti.

Weafer was out of Moscow over the weekend and could not be reached for comment.

The three analysts also said Weafer had predicted in several interviews to Russian media over the past month that the Constitution would be amended to let Putin stay in office for a third term.

"With Putin clearly stating that he will not change the Constitution, such moves by Alfa cast him in a bad light," Dianov said.

"The whole world will see him as another Lukashenko," Khomyakov said, referring to Belarussian President Alexander Lukashenko, whose time in office has been extended by a constitutional amendment.

Putin reiterated to a group of visiting foreign policy experts last week that he would not seek to change the Constitution to remain in office. He said at a news conference in Finland in August, however, that he would like to stay on if the Constitution allowed it.

Dianov also claimed that Alfa Group was a sponsor of the new pro-Kremlin youth organization Nashi and said that "two-thirds of its members will do what they are told for money."

Nashi has not identified its sources of funding, saying only that the money comes from private and corporate sponsors.

Incidentally, Fridman was recently interviewed by the Prosecutor General's Office in connection with its investigation into the acquisition of a former state-owned villa by former Prime Minister Mikhail Kasyanov. The investigation is widely seen as a warning to Kasyanov, who has hinted that he might run for president in 2008, to stay out of politics.

Asked to identify activities by oligarchs that indicated they were mobilizing for a confrontation with the Kremlin, Dianov and Khomyakov named several recent major media sell-offs -- Ren-TV, Izvestia and Nezavisimaya Gazeta.

It was unclear how those deals might correspond with the notion of an oligarch conspiracy, given that Izvestia was bought by state-owned Gazprom; Nezavisimaya Gazeta was sold by Putin critic Boris Berezovsky to the wife of Deputy Economic Development and Trade Minister Konstantin Remchukov; and Ren-TV went to a Kremlin-friendly oligarch, Severstal's Alexei Mordashov.

Khomyakov also said oligarchs were actively hiring Moscow political consultants to lobby for the appointment of regional leaders and for candidates in regional legislative elections. He declined to elaborate, citing his personal relations with some of the consultants.

Both Khomyakov and Dianov denied acting on the Kremlin's behalf.

Khomyakov added: "It would a big mistake by the Kremlin if it cracked down on Alfa Group as it did in the Yukos case after our warnings."

Analysts not connected to the report expressed doubt about any oligarch conspiracy. "These warnings by the pundits look like a pre-emptive Kremlin maneuver to lay the foundation for a future crackdown on oligarchs. Any move by them from now on will be treated as part of the plot," said Alexei Makarkin of the Center for Political Technologies.

The release of the report suggests that the siloviki have decided against picking a successor liked by the oligarchs and in favor of standing by their choice, even if it means a conflict with the oligarchs, Makarkin said.

Vladimir Pribylovsky, the head of the Panorama think tank, went one step further. "There is no anti-Putin oligarch conspiracy here, just a fight between two administrative and business clans," he said, referring to the fight between Reiman and Fridman. "The pundits merely want to reap some dividends by predicting the outcome, just as one their colleagues did with Khodorkovsky."