Kremlin Aides Divided on Yukos Takeover

MOSCOW — In an apparent sign of infighting among Kremlin aides, a top economic advisor to President Vladimir V. Putin today harshly criticized the takeover of Yukos Oil’s main production unit by a state-owned company.

“The sell-off of the main oil producing asset of the best Russian oil company to some mystical company Baikalfinansgroup and its purchase by Rossneft company, 100% owned by the state, has undoubtedly become the scam of the year,” Andrei Illarionov told a Moscow news conference just days after Putin praised the deal and called it legal.

“When the Yukos case began, everybody was asking which will be the rules of the game,” he added. “Now it is clear that there are no rules of the game.”

Meanwhile, Mikhail Khodorkovsky, the former head of Yukos, said in a letter published from prison that the destruction of Yukos is “the most senseless and destructive event in the entire reign of President Vladimir Putin.”

“The destruction of Yukos demonstrates that bureaucrats, who were set free from their leash, are not guided by the real interests of the state,” Khodorkovsky wrote. “They simply know that the state machine exists to serve their own interests.”

Some observers believe llarionov’s criticism could be permitted as part of an effort by the Kremlin to appear reasonably open and democratic — even as key decisions are made behind closed doors.

“The Kremlin doesn’t have a unanimity of views, and the mechanism of how the decisions are taken are totally unclear,” said Yevgeny Gavrilenkov, chief economist of Troika Dialog Investment Group in Moscow.

“I share everybody’s surprise that Illarionov, who not for the first time allows himself sharp criticism of government actions and of the policies approved by the president himself, has not been sacked yet.”

He added, “It may be explained only by one logical consideration: that the Kremlin keeps Illarionov and some other liberal advisors on its staff to preserve the democratic facade over its otherwise nontransparent and questionable decisions and policies.”

Holley reported from Kiev, Ukraine, and Loiko from Moscow.