Chief of Staff Cements His Place in Kremlin's Hierarchy

TIMES STAFF WRITER

He's a shadowy Kremlin figure who rarely speaks in public and has been described as irritating and reptilian. But Alexander S. Voloshin is the second-most-powerful man in Russia, the iron man at the heart of President Vladimir V. Putin's administration.

The 44-year-old Kremlin chief of staff, whom journalists have dubbed a "social allergen," is the latest in a long line of Rasputin-like figures who have influenced Russian rulers.

He got to the top courtesy of his friend and former business associate, the controversial tycoon Boris A. Berezovsky, who helped push Voloshin into the Kremlin in 1997. Now, some analysts say, Voloshin has more clout inside the Kremlin than his old pal.

He reputedly has close ties with two other heavyweight oligarchs, Roman A. Abramovich, who controls the Sibneft oil company, and Alexander L. Mamut of MDM Bank.

Accused of being a zealot who won't tolerate media criticism of the Kremlin, Voloshin is at the center of a storm about press freedom in Russia after the June 13 arrest of media mogul Vladimir A. Gusinsky.

The arrest provoked calls for Voloshin's dismissal, but despite controversy over his role in the affair, most analysts are convinced that Putin is unlikely to remove Voloshin--at least not yet.

Boris Y. Nemtsov, the leader of the pro-market Union of Right Forces parliamentary faction, argues that oligarchs Abramovich and Mamut are more powerful than ever, thanks to Voloshin. "This is a very great danger, not only for Russia's future development but for Putin himself," Nemtsov warned. "The concentration of economic power in one hand is a real political danger. Someday Putin will wake up and find out that the real president is not Putin but Abramovich."

"Voloshin is a strong man. He's tough," said Nemtsov, whose faction supported Putin in the March presidential election. "He is well organized, which is very rare for the Russian bureaucracy."

He is "an iron man with no nerves, completely resolute," said Andrei V. Ryabov, a political analyst with the Carnegie Moscow Center think tank.

Under Putin, Kremlin power is being torn three ways by competing groups. The first includes his former KGB associates, who control the security structures. The second is the Kremlin inner circle known as "The Family," which includes Voloshin and many of the oligarchs and exerts control over prosecutions and law enforcement. The third, and weakest, is a group of pro-market economists in charge of the economy.

Many believe that, at some point, confrontation between the KGB group and the Voloshin group is inevitable.

Voloshin Initially Dismissed as a Nobody

Scoffed at as a nobody when he was first appointed by then-President Boris N. Yeltsin 15 months ago, Voloshin swiftly won the respect, if not the approval, of Russia's political elite.

He masterminded the parliamentary and presidential elections, creating the Unity bloc that defeated a strong challenge to the Kremlin from the Fatherland-All Russia bloc of Moscow Mayor Yuri M. Luzhkov and popular former Prime Minister Yevgeny M. Primakov.

Voloshin is widely perceived as the man who created Putin, pushing him forward for the post of prime minister and maneuvering him into the role of the chosen successor to Yeltsin.

Helping to elbow out two prime ministers last year--Primakov in May and Sergei V. Stepashin in August--Voloshin ensured the continued power of The Family.

Accused of exerting heavy pressure on Russian media outlets over their political coverage, Voloshin is also prone to firing off indignant letters to foreign newspapers over their reporting.

Since last summer, Voloshin has been waging a behind-the-scenes battle with Gusinsky's Media-Most, an independent network that is often critical of the Kremlin. Gusinsky accused him of demanding that the Media-Most outlets toe the Kremlin line, and of offering to pay the tycoon $100 million to leave the country during the elections.

As Gusinsky languished in jail for three days after his detention, Media-Most officials accused Voloshin of plotting the arrest, but Gusinsky last week squarely blamed Putin, announcing that he believed Voloshin did not know about it beforehand.

After the arrest, Nemtsov and others called for Voloshin's dismissal, claiming that a small group of oligarchs exerts huge power in the Kremlin through Voloshin.

Voloshin, who is divorced and reportedly still lives with his mother, has often been described in the Russian media as a proxy in the Kremlin for Berezovsky, with whom he had close business ties in the early 1990s.

Friendship With Tycoon Berezovsky

In Russia, friendship, favors and informal obligations still govern business and government relations, according to the influential Petr O. Aven of Alfa Bank.

"I would say Berezovsky could not come to Voloshin and give him an order. But they're close friends. That's what matters in this country," Aven said.

Voloshin's political instincts, Nemtsov said, are for crony capitalism and byzantine manipulations.

"It would be much better for Putin to appoint somebody maybe not so strong, but with a new view for Russia," Nemtsov said, "a view of Russia not as a byzantine country but a European one,"

At the time of Voloshin's appointment, in March 1999, The Family's campaign to hold on to power was listing desperately. The incumbent president, Yeltsin, was deeply unpopular.

Yeltsin's choice of an obscure economic advisor, Voloshin, to fill the crucial post of chief of staff at that moment seemed as erratic as his many sudden dismissals of prime ministers and governments. The reaction from the media and analysts was scathing. The choice was seen as a sign that Yeltsin was desperate and running out of talent.

But now people look back on that choice as evidence of how wily and astute Yeltsin could be, even at the end of his rule.

"It seems to me the choice Yeltsin made at the time demonstrated that he understood the potential of the people around him very well," said Ryabov, the analyst.

Voloshin's first public performance as administration chief was a humiliation. He addressed the Federation Council, Russia's upper chamber of parliament, trying to persuade lawmakers to dismiss suspended Prosecutor General Yuri I. Skuratov, who, after years of inactivity, had become a threat to Berezovsky and even the Yeltsin family with his criminal investigations into high-level corruption.

But Voloshin's performance was weak, and the council defied him.

Voloshin's preoccupation with the prosecutor general signals how crucial the post is to The Family because of fear of future prosecutions.

Skuratov, who finally was ousted after Putin took office in March, says that if he hadn't been suspended last year, he would have acted against Voloshin, whom he describes as a criminal.

There is a string of allegations of controversial or improper business dealings by Voloshin. A presidential administration spokeswoman said it is Voloshin's policy not to comment on these allegations. Voloshin refused an interview request by The Times.

In 1993, Voloshin took over Esta Korp, which allegedly acted as middleman in a deal that year involving a near-bankrupt bank, Chara. On the eve of its collapse, the bank bought $5.5 million in stock in AVVA, a Berezovsky concern.

Skuratov maintained that the shares the bank bought were clearly worthless. "It was clear that the papers were really a way of siphoning the money from Chara to Berezovsky," Skuratov declared. After the bankruptcy, Chara was investigated by the Interior Ministry and Skuratov called for a full examination of the AVVA deal.

"But this episode was never scrutinized because Voloshin controlled the activities of the Interior Ministry of Russia," Skuratov claimed.

Involvement in Privatization Deal

Voloshin was also vice president of the Federal Stock Corp., or FFK, from 1995 to 1996 and its president from 1996 to 1997 when the corporation organized the partial privatization of Sibneft, the oil company. Tycoons Berezovsky and Abramovich emerged as victors in the privatization auctions, paying a low price for their shares.

In its report, the state Auditing Chamber found that the FFK was "clearly acting on behalf of the participants in the competition, firms controlled by B. Berezovsky and R. Abramovich." It said Voloshin and others "helped Berezovsky and Abramovich illegally obtain 85% of Sibneft's stock, which did serious damage to the federal budget."

Skuratov was preparing to go to court to invalidate the deal when he was suspended.

One of three Russian journalists who interviewed Putin for a book, "From the First Person," in several sessions before his March election suggested that Voloshin should be dismissed from office, describing him as a "social allergen" disliked by the public.

"It is not so much the public as a part of the establishment that does not like Voloshin," Putin responded, arguing that the Kremlin administration chief was caught in a war between opposing oligarch clans. "I don't regard this as grounds for firing anyone. I am more than satisfied with him as of today.

"I will rely on my opinion of whether a person fits the post he holds or not. Because that is what matters," he said.

Many, like analyst Sergei A. Markov of the Institute of Political Studies in Moscow, believe that Putin feels some discomfort with Voloshin, given the latter's loyalty to The Family, and wants to put his own man in as administration chief.

The problem for Putin is that among his own loyalists, there is no one to match Voloshin's abilities.

"Voloshin cannot be effectively replaced by anyone," said Vyacheslav A. Nikonov, a former campaign analyst for Yeltsin. "There is no one among Putin's new team who possesses anywhere near the administrative skills of Voloshin.

"Therefore, it is unlikely that there is a threat to Voloshin's position. And no such threat is likely to appear any time soon."

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