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Saturday, August 29, 1998 Published at 14:39 GMT 15:39 UK


The power behind the throne

Some say Boris Berezovsky (right) is one of Boris Yeltsin's closest advisers

By News Online's Dominic Casciani

Amid the turmoil and chaos of the last few years, the long-suffering Russian people have found time to laugh at a television show that purports to show what really goes on behind the walls of the Kremlin.


The BBC's Alan Little in Moscow: "The state and the Oligarchs are inseparable"
But each episode of Kookli, a satirical puppet show, has the same ending - Boris Berezovsky, the most prominent of Russia's tycoons, gets his own way.

It may be in jest, but for many people Mr Berezovsky and his ilk represent the true power behind the throne. They are the 'Oligarchs', the billionaires who control Russia's economy, the real power brokers.

Not only do they hold individual sway over vast swathes of industry formerly in the hands of the state, their power is such that they can command audiences with leading politicians. Mr Berezovsky himself is said to have been one of President Boris Yeltsin's closest confidantes.


[ image: Sergei Kiriyenko: Tried to force the business elite to pay taxes]
Sergei Kiriyenko: Tried to force the business elite to pay taxes
It is the Oligarchs' role in the current crisis which is now coming under scrutiny as people ask what is actually happening in Moscow.

The rise of these men, numbering no more than perhaps a dozen and all relatively young, began in the aftermath of the collapse of the Soviet Union.

As they bought up newly-privatised industries, in particular the media, their own interests began to move away from those of the Russian people and society.


Konstantin Eggert of Isvestia newspaper: "Chernomyrdin's appointment is good for the Oligarchs"
Early reforms of the economy failed to bring in adequate western-style checks and balances to protect competition and prevent the emergence of monopolies.

Entire industries, which had been in the hands of the state, passed to individuals - accompanied with an unhealthy dose of political clout.

Mr Berezovsky is the most prominent of this new breed. He runs the main Russian television channel and is also Executive Secretary of the Commonwealth of Independent States.

Rivals join forces

Despite being rivals in business, the oligarchs join forces when their own empires are threatened.


[ image: The Oligarchs are rumoured to hold the real power in the Kremlin]
The Oligarchs are rumoured to hold the real power in the Kremlin
When Yeltsin faced a tough re-election fight in 1996, they rallied behind him.

After bankrolling his election campaign, they were seemingly allowed to buy up some of Russia's most lucrative industries cheaply.

But as the government considered introducing more reforms - including forcing large companies to pay their taxes - their aims changed.

Open competition, regulation and an invitation to western business to buy into Russia was a threat to their power.

Despite offering strong support to Boris Yeltsin just six months ago, the country's key business leaders are now thought to be hell-bent on seeing him fall.

The alleged plot

Mr Yeltsin is said to have brought Sergei Kiriyenko into the Kremlin to crack heads and reign in the Oligarchs.


[ image: Ordinary Russians have suffered from the economic crash]
Ordinary Russians have suffered from the economic crash
But he failed in his attempts to force them to pay taxes and open up to western competition - two key planks of reform.

Mr Kiriyenko is said to have totally alienated the powerful financial backers of the president.

At the same time, the ousted Prime Minister, Viktor Chernomyrdin, spent his five months out of office making friends with high business.


Boris Berezovsky backs Viktor Chernomyrdin
While Mr Kiriyenko and his deputy Boris Nemtsov tried to squeeze more cash out of the big companies in a vain attempt to keep the economy functioning, they faced a barrage of opposition from the media - including those controlled by Mr Berezovsky.

Eventually the president came under too much pressure and Mr Kiriyenko had to go.

There is now talk that Mr Berezovsky will enter Viktor Chernomyrdin's cabinet.


[ image: Viktor Chernomyrdin: Built contacts when he was out of power]
Viktor Chernomyrdin: Built contacts when he was out of power
"Berezovsky forms the cabinet" was the headline on an article in Kommersant newspaper reporting that Mr Berezovsky was the first man into Mr Chernomyrdin's office following his reappointment as prime minister.

If the new prime minister wants to become president, he will need a lot of money to finance a campaign - the kind of money the Oligarchs may just be able to offer.

It may sound far-fetched, but for many ordinary Russians the scenario of a dirty deal between monopolistic businesses and a small cabal of politicians has more than a grain of truth to it.

And Mr Berezovsky's own words have done little to quieten down the voices of concern.

Asked who should be the next president he said: "Concerning my understanding of what will be best for Russia if the election was today - I think Chernomyrdin."



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