Yeltsin Ousts Wealthy Aide at Center of ‘Bankers’ War’

President Boris N. Yeltsin fired controversial billionaire Boris A. Berezovsky as deputy chief of his Security Council on Wednesday in a move designed to silence a conflict within the Kremlin but likely to worsen it outside.

The latest and most serious casualty of the months-long drama dubbed the “bankers’ war,” Berezovsky’s sacking was orchestrated by Yeltsin’s brash and increasingly influential duo of first deputy prime ministers, Anatoly B. Chubais and Boris Y. Nemtsov. They claimed that Berezovsky was violating ethics regulations for government service by mixing personal dealings with state business.

“The president took this decision in compliance with his convictions. He repeatedly warned all officials that it is impossible to combine such activities,” said Nemtsov, a charismatic 38-year-old former physicist whom Yeltsin has been openly grooming as his successor. Nemtsov said the ouster of the outspoken tycoon will deal a necessary blow to the “oligarchic capitalism” suffocating Russia’s fledgling free markets.

But Berezovsky immediately accused Nemtsov and Chubais of hypocrisy, claiming that they were really trying to muzzle his accusations that the sell-off of state assets was benefiting those more in favor in the Kremlin--first and foremost, banking magnate Vladimir O. Potanin, a rival of Berezovsky.

Berezovsky ran afoul of Yeltsin and his stridently reformist deputies over the summer when he blamed the failure of his tenders for stakes in the lucrative Svyazinvest telecommunications empire and Norilsk Nickel enterprise on interference by Chubais on behalf of Potanin’s Uneximbank. Potanin won the bidding for shares in the valuable enterprises.

Potanin, another former first deputy prime minister sidelined in a Cabinet shuffle in March, also was suspected of having taken advantage of his government position to make business deals for personal profit. But he remains a close friend of Chubais, spurring Berezovsky’s accusations that his rival continues to be the beneficiary of a corrupt leadership engaged in insider trading.

With an arsenal of print and broadcast media within his own financial-industrial group, Berezovsky has been firing excoriating shots at Chubais for the past two months. The billionaire has been the most trigger-happy combatant in the bankers’ war over the bidding process for state enterprises and, as such, a thorn in the side of the Kremlin.

Yeltsin personally appealed for peace among the squabbling magnates at a September meeting in the Kremlin that pointedly omitted Berezovsky, ostensibly because he was still serving in government and was supposed to have put his business holdings in trust. But Berezovsky--who along with Potanin and five other industrialists threw his media and financial resources behind Yeltsin’s reelection campaign last year--continued to lash out at Chubais.

Berezovsky’s departure after a year from the military-related Security Council post--for which critics note he had no expertise or experience--is likely to remove a source of conflict within the administration. But the 51-year-old tycoon is not expected to quietly withdraw from the political stage.