Russia’s government: “a department in the Kremlin Corporation”

The Kassandra Project


Do you know which is the most powerful holding in Russia?

You could think it’s Gazprom, which wikipedia describes as follows:

JSC Gazprom (RTS: GAZP MICEX: GAZP LSE: OGZD; Russian: ОАО Газпром, sometimes transcribed as Gasprom[1]) is the largest Russian company and the biggest extractor of natural gas in the world. With sales of US$31 billion in 2004, it accounts for about 93 percent of Russian natural gas production; with reserves of 28,800 km³, it controls 16 percent of the world’s gas reserves (as of 2004[2], including the Shtokman field.) After acquisition of the oil company Sibneft, Gazprom, with 119 billion barrels of reserves, ranks behind only Saudi Arabia, with 263 billion barrels, and Iran, with 133 billion barrels, as the world’s biggest owner of oil and oil equivalent in natural gas.[3]

By the end of 2004 Gazprom was the sole gas supplier to at least Bosnia-Herzegovina, Estonia, Finland, Macedonia, Latvia, Lithuania, Moldova and Slovakia, and provided 97 percent of Bulgaria’s gas, 89 percent of Hungary’s, 86 percent of Poland’s, nearly three-quarters of the Czech Republic‘s, 67 percent of Turkey‘s, 65 percent of Austria‘s, about 40 percent of Romania‘s, 36 percent of Germany’s, 27 percent of Italy’s, and 25 percent of France’s. [2] [3] The European Union as a whole gets about 25 percent of its gas supplies from this company. [4] [5]

Apart from its gas reserves and the world’s longest pipeline network (150,000 km), it also controls assets in banking, insurance, media, construction and agriculture.

You could think it’s Severstal, which wikipedia describes as follows:

Severstal (RTS: CHMF MICEX: CHMF) Russian: Северсталь, “Northern Steel”) is a Russian company mainly operating in the steelmining industry, centred in the northern city of Cherepovets. Severstal is listed in the RTS and LSE. As such it is the second largest steel company in Russia, behind Evraz Group. The majority of the company’s stock belongs to Alexei Mordashov. As “White Knight” Severstal was to merge with Arcelor, thus preventing a takeover of Arcelor by Mittal, but the Arcelor deal with Severstal was called off following criticism within the Arcelor board. Arcelor finally merged with Mittal Steel on 25 June 2006 to create Arcelor Mittal.

You could think it’s Norilsk Nickel, which we described in “Corporation-city: the hidden truth” and which Wikipedia describes as follows:

MMC Norilsk Nickel (RTS: GMKN MICEX: GMKN) (Russian: ГМК «Норильский Никель») is a nickel and palladium mining and smelting operator in the Norilsk–Talnakh area, in northern Russia. Norilsk is headquartered in Moscow and is also active in gold, platinum, copper and cobalt. The company is the world’s leading producer of nickel and palladium and is Russia’s leading gold producer. It is ranked among the top four world platinum producers, in association with subsidiary Stillwater Mining Company of Billings, Montana Denver, Colorado. It is ranked among the top ten copper producers.

July 6, 2007 Norils Nickel announced it has acquired about 90 per cent of Canada’s LionOre Mining International Ltd. LionOre is the world’s 10th-largest nickel producer. This takeover (valued in $6.4 billion US) is the biggest acquisition by a Russian company abroad so far.

The company is listed on NASDAQ and the RTS Stock Exchange. According to the company’s English-language website its activity accounts for up to 1.5% of Russia’s current gross domestic product. MMC stands for “Mining and Metallurgical Company”.

On October 2007 we could see the article “Inside The Corporation: Russia’s Power Elitewhere Whitmore spoke about “power elite”:

In his mission to restore Russia’s pride and prestige, President Vladimir Putin has repackaged the Soviet national anthem, reinvented patriotic pro-Kremlin youth groups, and revived the cult of the suave KGB officer.

But despite bringing back these old archetypes, Putin isn’t interested in a Soviet restoration. This time around, Russia’s path to greatness lies in a modern authoritarian corporate state. Some Kremlin-watchers have even dubbed the country’s Putin-era ruling elite “Korporatsiya,” or “The Corporation.”

“I like using the term ‘Kremlin, Inc.,'” says Russia analyst Nikolas Gvosdev, a senior fellow at the Nixon Center. “I think there are a number of boardroom strategies that apply to how policy in Russia is developed.”…

But in reality, Russia is run by a collective leadership — the Kremlin Corporation’s board of directors, so to speak. Putin is the front man and public face for an elite group of seasoned bureaucrats, most of whom are veterans of the KGB and hail from the president’s native St. Petersburg. Together, they run Russia and control the crown jewels of the country’s economy. All key political decisions in Russia, including Putin’s most recent bombshells, are the result of deliberation and consensus among members of a tight-knit inner sanctum many analysts have dubbed “the collective Putin.”

“These are people who have been with Putin from the very beginning,” says Olga Kryshtanovskaya, director of the Center for Elite Studies at the Russian Academy of Sciences Institute of Sociology. “Together they thought up this model of the state and government that is in place now.”…

Most Kremlin-watchers place four people with Putin at the epicenter of power: two deputy Kremlin chiefs of staff, Igor Sechin and Viktor Ivanov; First Deputy Prime Minister Sergei Ivanov; and FSB Director Nikolai Patrushev

…They want an authoritarian modernization. They want a strong authoritarian state of the Soviet type without the Soviet idiocy,” says Kryshtanovskaya. “The idiotic Soviet economy and the idiotic Soviet ideology were minuses. All the rest they want to bring back and preserve: a state system without a separation of powers.”If they succeed, the West and the world will be dealing with an even more undemocratic, assertive, and aggressive Russia for a long time to come…

We can now answer to our question posted at the end of “Russia’s elections: Putin gets over 60%“: Putin needs to be the President of Russia probabily for economic reasons. Infact, in October Whitmore wrote:

…As his presidency winds down, Putin isn’t acting like somebody who is preparing to go quietly into retirement.

Speaking to a group of Western academics in September, Putin said he planned to remain influential in Russian politics after his presidency ends next year. And in a speech to the pro-Kremlin Unified Russia party on October 1, he gave the clearest indication yet about how he plans to do so.

In addition to wielding near-absolute political power, Putin’s inner circle, or board of directors, also controls the commanding heights of the Russian economy…

…Just below the top tier of the Putin elite is a group of leading officials who, while not enjoying the same influence and access as the president’s inner sanctum, are nevertheless considered key players in the system whose interests must be taken into account.

Among them are Vladimir Yakunin, the chairman of Russian Railways; Viktor Cherkesov, the head of the Federal Antinarcotics Agency; Sergei Chemezov, general director of the arms export monopoly Rosoboroneksport; and First Deputy Prime Minister Dmitry Medvedev, who is also chairman of Gazprom’s board of directors.

Deputy Prime Minister Dmitry Medvedev is among Putin’s key players (ITAR-TASS)Other key figures include Yury Kovalchyuk, chairman of the board of directors of Bank Rossiya; Aleksandr Grigoryev, director of Gosrezerv, the state reserve agency; Dmitry Kozak, the regional development minister (and former presidential envoy to the Southern Federal District, which includes Chechnya and the remaining North Caucasus republics); and Deputy Prime Minister Sergei Naryshkin, who is chairman of the board of the Channel One television station and deputy chairman of Rosneft.

Such a concentration of commercial and political might has led to conflicts, despite the group’s ideological homogeneity. This has been most visible recently in Cherkesov’s long-standing and bitter feud with Patrushev and Sechin, which went public in early October. Cherkesov has long coveted Patrushev’s post as FSB chief. Patrushev and Sechin are wary of Cherkesov’s rising clout and Sechin and Sergei Ivanov are also fierce rivals for Putin’s ear and influence in the Kremlin.

…Putin’s Moscow-based team sits atop what Russians call the power vertical, a sprawling pyramid of political and economic might that stretches deep into the country’s far-flung regions and republics.

Provincial governors are appointed by the president, and confirmed by elected local legislatures — which in turn are dominated by Unified Russia. Presidential representatives with sweeping authority keep governors and local officials loyal to the Kremlin line.

Those who cross “The Corporation” can expect to feel the full weight of Russia’s heavily politicized law-enforcement bodies. For those who are ready to play ball with the Kremlin, however, there are spoils.

Through the governors and presidential prefects, the Kremlin controls a vast network of patronage that Kryshtanovskaya calls “a hierarchy that resembles the Soviet state nomenklatura,” in which the Communist Party would dole out coveted posts, privileges, and favors to loyal members.

…Andropov, who led the KGB from 1967 until 1982 when he became Soviet leader, sought to modernize the Soviet economy to make it more competitive with the West, while at the same time preserving an authoritarian political system in which the KGB would have a leading role. The authoritarian modernization he envisioned, Kryshtanovskaya says, resemble the one that carried out by China’s Communist leaders.“Andropov thought that the Communist Party had to keep power in its hands and to conduct an economic liberalization. This was the path China followed,” Kryshtanovskaya says. “For people in the security services, China is the ideal model. They see this as the correct course. They think that Yeltsin went along the wrong path, as did Gorbachev.”

Andropov died in 1984, less than 15 months after becoming Soviet leader, and was never able to implement his modernization plan. But two decades after his death, the group of fresh-faced KGB rookies he once inspired are poised to implement it for him.

Beyond 2008, analysts say Putin and his team are considering major changes in Russia’s political system to minimize the risk of succession crises in the future.

“The dilemma of the succession of power is one of the main problems facing the authorities since it always causes a crisis,” says Kryshtanovskaya. “They find troublesome direct elections in which all the people vote. They need either indirect elections through some kind of electors or assembly, or a change in the character of the power structures.”

This, of course, would require a major constitutional overhaul. But Dmitry Oreshkin notes that, given the dominant position Putin’s board of directors enjoys, that would not be much of an obstacle.

“Right now this group of people can do anything,” he says. “In this situation, who has the resources to oppose them or to disrupt their plans?

This article is quite worrying, because it proofs that Putin implemented in Russia the basis of the economic and political (and also of information?) power described by Orwell in “1984” and in movies as “V for Vendetta“. Are you thinking yet that Kassandra is fool?

Already on March 2004, BBC wrote some words about Kremlin Corporation in “Press views “cabinet of bureaucrats”“:

Nezavisimaya Gazeta, the heavyweight broadsheet controlled by businessman-in-exile Boris Berezovsky, says that now, the government is “no more than a department in the “Kremlin corporation”.

People must know what is the truth. In the silence, Russia had successfully implemented what USA aren’t able to do already (but they will succeed soon…)!

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