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September 13, 2007 (RFE/RL) By Victor Yasmann - The surprise replacement of Russian Prime Minister Mikhail Fradkov by the obscure figure of Federal Financial Monitoring Service Director Viktor Zubkov has prompted a lot of questions, mainly boiling down to: Why did President Vladimir Putin take this step and what will come next? The first question is easier to answer. It is an open secret that Fradkov's government -- like other Russian state institutions -- is riddled with pervasive corruption and that several cabinet ministers have become millionaires during their time in office. Charges of nepotism have reached to Fradkov himself. In June, gazeta.ru reported that Fradkov's son, Peter, had been named to the board of directors of the state-owned Bank Razvitiya (Development Bank). Fradkov himself is on the bank's Advisory Council and Fradkov's other son, a Federal Security Service office, works for the state Vneshtorgbank, which controls Bank Razvitiya. In such an environment, Putin could not be sure that some cabinet members might not back their own economic interests over Putin's during the upcoming Duma and presidential election campaigns.
Controlling The Money
In addition, some key cabinet members control huge monetary flows that Putin himself likely wants to control during the election period through his own, entrusted person. Among these key members are Health and Social Development Minister Mikhail Zurabov and Economic Development and Trade Minister German Gref, both of whom have been the subject of heavy criticism, including from Putin personally. Zurabov is wildly unpopular -- especially among left-oriented constituencies -- for his botched social reforms, while Gref has come under fire for his pro-Western, pro-market orientation. In addition to gaining control over government funds -- including the Pension Fund -- removing these two ministers from the government could give a boost to the left-oriented pro-Kremlin A Just Russia party as it struggles to woo voters away from the Communist Party. Putin's decision to replace the cabinet also has a pragmatic aspect. He does not want the government to become an election headquarters as was the case during the elections of the 1990s. Since the Kremlin's plans clearly involve a smooth handoff of power based on the premise that the Russian people are overwhelmingly satisfied with the current state of affairs, it is important that the government continue to function normally through the election season and that it not become overly politicized. More likely, though, given Zubkov's age (he turns 66 on September 15) and low profile, Putin wants to give his anointed successor (yet to be revealed) a ready government headed by a Putin loyalist. Doing so creates two centers of power that Putin could balance against one another.The prime minister is, under the constitution, the second most powerful person in Russia, seemingly implying that Zubkov could put himself in a position to run for the presidency himself next year. Speaking today, Zubkov refused to rule out a possible run for the presidency "if I achieve something as prime minister." More likely, though, given Zubkov's age (he turns 66 on September 15) and low profile, Putin wants to give his anointed successor (yet to be revealed) a ready government headed by a Putin loyalist. Doing so creates two centers of power that Putin could balance against one another. Zubkov seems a perfect choice for achieving the goals described above. He met Putin around 1992 when he worked as Putin's deputy in the St. Petersburg mayoral administration. A former midlevel Soviet Communist Party functionary, Zubkov impressed Putin as an able manager devoid of political ambitions.
Movement Of Legal, Illegal Assets
The president's confidence has grown since Zubkov was tapped in 2004 to head the newly created Financial Monitoring Service. Although Zubkov is an economist and was never a professional intelligence officer, he de facto turned into one during his years heading this agency. His main task -- successfully executed -- was to improve Russia's reputation in the eyes of the international Financial Action Task Force, which monitors global money laundering. Under Zubkov, Russia was able to improve relations with the task force while not actually doing anything serious about corruption. But Zubkov's main value for Putin may well be that he probably knows more than any other person about the location and movements of legal and illegal assets in Russia. The appointment of Zubkov does not seem to have had any impact on the presidential prospects of First Deputy Prime Ministers Sergei Ivanov and Dmitry Medvedev. Ivanov still seems positioned as the No. 1 candidate. He commented favorably on Zubkov's nomination on September 12 while speaking to members of the Valdai Club, an organization of leading world Kremlinologists that has been patronized by Putin in the past. Looking to the future, and as a new government structure takes shape, it is safe to say Putin will continue the process of putting devoted loyalists into power at both the federal and local levels. In recent months, dozens of governors and mayors have been replaced. As part of this effort, Interior Minister Rashid Nurgaliev last month set up special regional police teams that will be reopening old corruption probes dating back to the 1990s. Also, earlier this month, a new Investigative Committee was created that has taken over all politically sensitive investigations, including those into government officials and Duma deputies. The committee, which is touted as a rough analogue to the U.S. Federal Bureau of Investigation, is headed by a longtime Putin friend, Aleksandr Bastrykin. Perhaps giving an indication of which way the wind is blowing in Russia, Liberal Democratic Party of Russia leader Vladimir Zhirinovsky told RTR on August 27 that officials from the era of former President Boris Yeltsin should leave office before the presidential election. "If they don't," he said, "after March they will go to Chita (the Far Eastern region where former Yukos CEO Mikhail Khodorkovsky is serving out a prison term on tax-evasion charges)."