Russian Tycoon Seen as Power Behind Throne

When acting Prime Minister Viktor S. Chernomyrdin arrived at the Russian White House in triumph last week to claim his office as head of the government, he was not the first to walk through the door. Striding in ahead of Chernomyrdin was the man who many believe put him there: tycoon Boris A. Berezovsky.

A billionaire banker who controls one of Russia’s largest business empires, Berezovsky has emerged as one of the biggest winners in the high-stakes struggle for power in Russia. An advisor to Chernomyrdin and a longtime benefactor of President Boris N. Yeltsin and his family, he is widely regarded as the new power behind the throne.

“He has a very strong relationship with Yeltsin’s circle,” said former Deputy Prime Minister Boris Y. Nemtsov, a leading liberal who was ousted from his post last week along with Prime Minister Sergei V. Kiriyenko. “This pressure was organized by him and a very, very small group around him. Berezovsky is a modern Rasputin.”

Like Rasputin--the mysterious monk who gained vast influence over Czar Nicholas II--Berezovsky seems to be the one capable of making or breaking top government officials. Moreover, the tycoon appears to be spearheading a move to nudge Yeltsin aside and transfer greater authority to Chernomyrdin.

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Berezovsky, 52, who normally is not shy about talking to reporters, declined to discuss his role in the government shake-up. But he did take a moment to take a shot at Nemtsov, a longtime antagonist.

“I can’t treat seriously anything coming from Nemtsov because he is not a serious person himself,” Berezovsky said. “He has certain problems with reaching maturity, a process that has been dragging on for too long, unfortunately.”

Over the past week, Nemtsov has repeatedly charged that a cabal of oligarchs led by Berezovsky orchestrated Kiriyenko’s removal because the government was on the verge of challenging their business empires.

A major problem plaguing Russia--and a factor in the sudden collapse of the economy last week--has been the government’s inability to collect taxes from big companies owned by some of the country’s wealthiest men.

During his five months as prime minister, Kiriyenko had become increasingly aggressive in trying to extract tax payments from the rich. His government had drawn up a list of foundering banks and corporations to be declared bankrupt--including more than one controlled by Berezovsky--and the program was to be announced last Monday, Nemtsov said in an interview. The plan was in line with conditions imposed by the International Monetary Fund and other foreign lenders this summer when they approved a $22.6-billion emergency loan package for Russia.

But on the day before the program was to take effect, Yeltsin suddenly announced he was sacking Kiriyenko and the entire Cabinet.

“The Kiriyenko government prepared a very strong program for restructuring the economy,” said Nemtsov, who was in charge of economic policy in the Cabinet. “This program included bankruptcy of banks, even oligarchs’ banks, and the bankruptcy of big companies, some of them belonging to oligarchs. Of course, the oligarchs understood what we wanted to do and took part in our ouster.”

To replace Kiriyenko, Yeltsin reinstated Chernomyrdin as prime minister. A wealthy businessman, he had served five years in the job before Yeltsin fired him in March. Chernomyrdin was Berezovsky’s choice; the tycoon had already endorsed him as the candidate to succeed Yeltsin as president in the next election.

Last year, Forbes magazine ranked Berezovsky as one of the 100 richest people in the world, with a net worth of about $3 billion. Berezovsky, who had previously filed a government declaration putting his worth at $38,521, acknowledged that the magazine was on target.

This year, the magazine estimated that his worth had dropped to $1.1 billion because of Russia’s economic crisis, but he was listed as one of just five billionaires in Russia.

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With a doctorate in mathematics and physics, Berezovsky made his fortune shortly after the breakup of the Soviet Union by building the company LogoVaz into a nationwide car distributor. He survived two assassination attempts to create a far-flung business empire, reportedly acquiring major interests in banks, newspapers, ORT television, Aeroflot airlines and the Sibneft oil company, among other enterprises.

Insiders say Berezovsky had been pushing for a devaluation of the ruble, which was contrary to Yeltsin’s policy but could have improved Berezovsky’s fortunes.

“Berezovsky argued for devaluation for a long time,” said Vyacheslav A. Nikonov, a former Yeltsin advisor. “Sibneft is an oil exporting company. Aeroflot is dealing mostly with dollars, so it will be doing well. But I don’t know if it was really in his interest to start this great depression.”

Berezovsky is widely believed to have close relations with the president and his family--an idea he does not try to discourage. He was one of Yeltsin’s major financial backers during the president’s 1996 reelection campaign. He published Yeltsin’s memoirs, providing the president with a steady source of income. He often gives jewelry to Yeltsin’s wife and daughters, according to Alexander V. Korzhakov, Yeltsin’s former security chief. Yeltsin’s son-in-law, Valery Okulov, received a job as general director of Aeroflot.

Berezovsky is also no stranger to government infighting, having served as deputy chief of the Russian Security Council under Yeltsin. Last November, when Nemtsov, 38, was at the peak of his power as one of Yeltsin’s “young reformers,” he helped engineer Berezovsky’s ouster from the post on the grounds that the tycoon’s wide-ranging business activities posed a conflict of interest.

“I insisted that Yeltsin fire Berezovsky last year,” Nemtsov recounted. “I explained to him that it was impossible for Russia to combine oligarchs’ business and power. At that time, as far as I understood, he [Yeltsin] recognized the bad role of such influence, but now I don’t know.”

Berezovsky was far from finished. In April, he was appointed secretary of the Commonwealth of Independent States, the loose association of former Soviet republics. While few billionaires would want such a lowly post, it could be an ideal base for building business ties in the developing republics.

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In March, Berezovsky showed his muscle by helping to persuade Yeltsin to dump Chernomyrdin as prime minister--even though Berezovsky and Chernomyrdin were allied at the time. The tycoon’s motive remains murky, but Nemtsov said it was simply about power.

“He wants to manage the country,” Nemtsov said. “If he wants to fire Chernomyrdin, he fires Chernomyrdin. If he wants to fire Kiriyenko, he fires Kiriyenko. If he wants to appoint Chernomyrdin, he appoints Chernomyrdin.”

Berezovsky finally got his revenge against Nemtsov last weekend when he helped force out the Kiriyenko government and the market-oriented officials who might pose a threat to his business empire. But his major goal appears to be to install a successor to the ailing Yeltsin who will be accommodating to the interests of Russia’s oligarchs.

The disintegration of the economy and the rapid turnover of prime ministers have so weakened Yeltsin that the Kremlin is negotiating an agreement that would reduce the powers of the president and give more authority to the prime minister and parliament.

“We have some very powerful businessmen who not only control a big part of the economy but also the Kremlin and the White House [government headquarters],” Nemtsov said. “The period of Yeltsin’s power is over, and now we have another.”