Yeltsin fires deputy over privatization scandal But another keeps his job despite common taint

November 15, 1997|By LOS ANGELES TIMES

MOSCOW -- It's known in the former Communist world as "the sausage principle" of self-preservation: Each time a leadership comes under scrutiny for corruption, it slices off the rotten ends and claims there's still something worth saving in the middle.

As the Kremlin leadership maneuvered around yet another bribery accusation yesterday, President Boris N. Yeltsin fired a deputy chief of staff while leaving in place his most senior and valued aides -- despite their having been touched by the same privatization scandal.

But the allegations against reformist First Deputy Prime Minister Anatoly B. Chubais, Privatization Minister Maxim V. Boiko and three others have given Russia's Communist and nationalist opposition ammunition in their battle against economic reforms.

The State Duma, the Commu- nist-dominated lower house of Parliament, passed a resolution late yesterday calling for a freeze on further sell-offs of state property.

The latest scandal to rock the Kremlin involves $450,000 in honorariums that a small publishing house paid to Chubais -- the most powerful person in Russia after Yeltsin -- and the others for a book recounting Russia's privatization of state property since the breakup of the Soviet Union six years ago. The publishing house is a subsidiary of the financial empire of millionaire banker Vladimir O. Potanin, a close friend of Chubais' and head of the Uneximbank consortium that won several controversial state property auctions this year.

Investigative journalist Alexander Minkin of the Novaya Gazeta weekly called the book deal a thinly veiled bribery scheme by Uneximbank to secure continued favors from the government and an attempt to launder the Kremlin's dirty money.

Officials in the publishing industry contend that the planned book would gross no more than $10,000, said Minkin, suggesting that the $90,000 advances to each of the five authors were offered with strings attached.

Yeltsin fired his deputy chief of staff, Alexander I. Kazakov, one of the five would-be authors of "The History of Russian Privatization." Last week, the president sacked billionaire banker Boris A. Berezovsky as deputy national security chief for allegedly mixing his government and personal interests and creating an unseemly image of the leadership with his charges that Chubais was rigging state share sell-offs to favor Potanin.

A little more than a month ago, Russian prosecutors opened a criminal case against Boiko's predecessor as privatization chief, Alfred Kokh, after he was found to have accepted $100,000 in a sepa rate book contract with another publisher with connections to Uneximbank.

The firing of Kazakov, the least visible and likely the most expendable of the five officials, was directly related to the book scandal and intended to show the president's displeasure with aides involved in questionable dealings, said Alexander N. Shokhin, a parliamentary leader.

Shokhin noted that further dismissals might be forthcoming because of the scandal, but he appealed to Yeltsin to keep in mind that those involved make up the brain trust of Russia's economic transition.

Such appeals have done little to lower the heat under Chubais, who was already one of the most unpopular figures in the Kremlin.

Pub Date: 11/15/97

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