Private-Sector Deals at Risk, Putin Declares

MOSCOW — Armed with a robust new majority in parliament, Russian President Vladimir V. Putin declared Tuesday that the Kremlin will consider seizing business assets acquired illegally by some of the country’s richest men and may impose major new taxes to regain some of the nation’s privatized mineral wealth.

Providing an important window into how he will govern if elected to a second term, the Russian president said only businessmen who followed the law when acquiring their assets “can feel calm and sleep soundly.” He said it was time for Russian business to help reverse the fortunes of the 31 million Russians who live in poverty.

“The business community cannot and must not stand on the sidelines, evading the solution to social problems,” Putin said in an address to the board of the Chamber of Commerce and Industry. “The state has a right to count on the business community’s social activity.”

Putin’s remarks on Tuesday -- and comments made in a national phone-in program last week -- provided an important indication that the Kremlin is preparing to capitalize on the outcome of the Dec. 7 parliamentary elections.

Parties that had helped block earlier attempts by the government to tax “excess” profits and rein in the nation’s powerful private oil, gas and mineral companies -- most of them controlled by a handful of billionaire “oligarchs” -- have little or no voice in the parliament for the first time since the breakup of the Soviet Union a dozen years ago.

“The drive behind all of this is simple: The government believes it needs a higher share of the oil sector profits,” Steven Dashevsky, a Moscow-based analyst with the Aton Capital Group, said. “They’re saying, ‘These guys had it good for a long time.’ Now, the government thinks it’s time for a bit more social justice and equality.”

Putin reassured business leaders that the government had no plans to revise the massive privatizations of the 1990s -- with an important caveat.

“Nothing of this kind is on the agenda,” he said, referring to fears that the state would revoke private property rights. But, he added: “This does not apply to people who did not abide by the law.”

Putin called for new export duties and taxes on the extraction of mineral resources to control “windfall profits.” He has recently suggested such taxes might reach $3 billion a year, though private analysts say they could be 10 times that amount.

At least two of the pro-business parties that opposed Putin’s government were heavily funded by former Yukos Oil Co. Chief Executive Mikhail Khodorkovsky, Russia’s richest businessman, who was arrested in October in what many believe was punishment for his political activism. Khodorkovsky, jailed on fraud and tax evasion charges, lost his bid Tuesday for release pending his trial, scheduled for some time next year.

“I didn’t expect mercies and benevolence, but I hoped the court would at least observe the letter and spirit of the law,” Khodorkovsky said after the hearing, through his lawyer.

Most analysts said Putin fears allowing Khodorkovsky his freedom and access to his $8-billion fortune because of chances the billionaire could influence the March 14 presidential election. So far, Putin is the only major declared candidate, but Khodorkovsky has been mentioned as a potential rival.

In his speech, Putin appeared to single out the handful of wealthy oligarchs like Khodorkovsky who took title to Russia’s massive mineral wealth through allegedly shady privatization deals.

“People are constantly saying that the laws were complex and it was impossible to follow them. Yes, the laws were complex and intricate, but it was definitely possible to abide by them. Everyone who wanted to follow them did so. Just because five to seven people did not follow these laws, it does not mean that everyone did not abide by them,” the president said.

Though Putin repeated there would be “no campaign to revise” privatizations, he did say, “Those who deliberately swindled should not be put in a better position than those who conducted themselves properly and complied with the law.”

In last week’s phone-in program, Putin complained that while most developed nations claim 80% of “super profits” from oil extraction, Russia collects only 50%. He said a proposal last year to increase the state’s share of “super profits” was defeated in parliament, thanks to “the oil companies’ lobby.”

Stanislav Belkovsky of the National Strategy Council, a Moscow think tank, who has warned of the growing political and economic muscle of the oligarchs, said Putin made it clear that the privatization deals of the 1990s have not yet been legitimized.

“It doesn’t mean that all of [the oligarchs] will necessarily go to prison like Khodorkovsky,” Belkovsky said. “But our big business must be ready to make considerable concessions on a number of socially important issues,” including major new taxes to fund social programs.

How far the Kremlin is likely to go in imposing new taxes is not clear. Aton analyst Dashevsky said one proposal to tax oil reserves, as opposed to oil production, could cost Lukoil, Russia’s second-largest energy company, $20 billion a year. Another proposal, he said, would declare the government the owner of all natural resources, with private companies being relegated to the status of operators.

“Both of these ideas sound lunatic,” he said. “But it shows you the direction of the minds of government officials these days.”

Times staff writer Sergei L. Loiko and Alexei V. Kuznetsov of The Times’ Moscow Bureau contributed to this story.