The Oligarchs (71 page)

What made this choice of a successor more urgent was Yeltsin's unsteadiness. He frequently appeared confused and remote in the early months of 1998. I heard constant rumors that he suffered periods of disorientation or blackouts. The oligarchs began to wonder, seriously, how long he would last as president. They knew that under Russian law, if Yeltsin stepped down for health reasons, the prime minister would automatically become the acting Russian president and would have a good chance to win the job permanently.

Thus choosing the next prime minister quite likely meant selecting Russia's next president. “I realized that the prime minister was going to be the next president,” Berezovsky told me later. “This I understood well. That's why I was saying, the first criteria we had to evaluate was that this is the next president of Russia.”
¹⁶

Berezovsky thought it was imperative to replace the sitting prime minister, Viktor Chernomyrdin, who was tired and drifting. “Chernomyrdin had exhausted his potential,” Berezovsky said later. “He was the prime minister for five years, in the most difficult time. Yeltsin was often out of shape, and Chernomyrdin was bearing a huge load. He was making promises to everybody—to the right, to the left, and over five years he gave so many promises that he became completely immobilized, like chains on his feet. I could see it was hard for him to move forward.” Gusinsky, who participated in these discussions, told me he held a similar view.
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That Chernomyrdin was adrift was widely evident at the time. But Berezovsky may have had another motive. He wanted to install his own man. Berezovsky was always thinking about setting the bar as high as possible—and the idea that he would like to be kingmaker for the Russian presidency was not too high. Many politicians at the time speculated that Berezovsky's favorite was Ivan Rybkin, a former speaker of the Duma who had been chief of the Kremlin Security Council while Berezovsky was the deputy. Rybkin was an unassuming, quiet figure, completely uncharismatic, someone whom Berezovsky could trust. Rybkin could be manipulated too. However, when I spoke to Berezovsky about this several years later, he insisted that he had lobbied for a candidate who “would not be manipulated by anybody; these are my words.” He said he wanted someone who would be independent from the oligarchs, or at least from any one of them. “I never named a candidate,” he said. Gusinsky recalled that Berezovsky in fact advocated Rybkin.

What is not disputed is that the oligarchs were quietly working as a “board of directors” in the Kremlin. This included the same cast of characters that had come to the Yuksi announcement: Gusinsky, Khodorkovsky, Smolensky, and Berezovsky. It also included Yeltsin's daughter Tatyana Dyachenko and chief of staff Valentin Yumashev, who succeeded Chubais in the post. Yet another player was a quiet oil trader, Roman Abramovich, who was Berezovsky's partner in Sibneft and had become influential in Yeltsin's inner circle as well.

“We all spoke about this topic,” Berezovsky acknowledged of the plotting to dump Chernomyrdin. “All the oligarchs when we would meet, Yumashev, Tatyana, Khodorkovsky—there was a club, and there was a conversation. About what? That Chernomyrdin had exhausted his potential.”
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The group, Berezovsky claimed in a newspaper interview, was “more consolidated” than it had been before the 1996 election. Chubais and Potanin were absolutely excluded, however. Uneximbank was “beyond the pale” because of the bankers' war, and Chubais “should know his place—I hate to be that vulgar.”
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The evidence suggests that Berezovsky and his allies in the Kremlin—chiefly Dyachenko and Yumashev—hatched the idea of dumping Chernomyrdin in February or March 1998. Berezovsky told me that although he did not speak to Yeltsin about it directly, “the question” of dumping Chernomyrdin “was debated for several months.” Gusinsky
recalled that the tycoons discussed it at a boardroom meeting at Khodorkovsky's oil company, Yukos.

One day in late February, Sergei Karaganov got a call to come to the Kremlin. The dapper, bald Karaganov was deputy director of the Institute of Europe, one of dozens of think tanks in the Russian Academy of Science. Karaganov was also chairman of a prestigious foreign policy council. Always tailored in elegant suits and bright ties, Karaganov had written the 1996 letter to Yeltsin warning of grave consequences if Yeltsin canceled the elections. Yeltsin read the letter and did not cancel the election. Karaganov was someone whom Yeltsin had listened to in the past.

Now Karaganov slipped into the Kremlin. In Yumashev's small Kremlin study, Karaganov also found Dyachenko and some of the oligarchs. They presented Karaganov with a plan. He would go to Yeltsin and urge him to dump the prime minister. They already had several possible candidates to replace Chernomyrdin. It was unspoken but immediately clear to Karaganov that this was no ordinary political maneuver.

The next day, Karaganov, brooding, returned to the Kremlin. He had lunch privately with Yumashev and Dyachenko. They offered him a high-level job in the Kremlin. But Karaganov was dubious. The plan to replace Chernomyrdin was an audacious power play by the tycoons. Karaganov nearly choked when he heard the words “corporate government.” He then gave Yeltsin's daughter and his chief of staff a severe, angry soliloquy. Were the oligarchs out of their minds? Were they crazy? Were they trying to take over Russia? Perhaps, Karaganov said, he would simply tell Yeltsin that it was time to retire. Wasn't that really the implication?

“No!” Dyachenko insisted; this was going too far. Karaganov left the Kremlin and never heard about the plan again.
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But the effort to dump Chernomyrdin accelerated.

In his memoirs, Yeltsin claimed that sacking Chernomyrdin was all his idea, that he was looking for a “someone younger and stronger” and had been searching for “three months” before he actually dismissed Chernomyrdin. Yeltsin's style was to be the power balancer, always scrambling and reassembling his court. But it is not known exactly how he came to the decision. It is possible Berezovsky succeeded in manipulating Yeltsin from behind the scenes. But it is also possible that Yeltsin had decided to move, and Berezovsky was trying to exploit the opening to his own ends.

The first specific action Yeltsin took, by his own account, was on Saturday, March 21, just two days before he fired Chernomyrdin. Yeltsin met the prime minister at his Gorky 9 residence outside Moscow. They talked about wage arrears, and Yeltsin told Chernomyrdin he was unhappy with his work. Chernomyrdin “looked at me with the doomed expression of an old, experienced apparatchik who understood everything,” Yeltsin wrote. That evening, Saturday, Yeltsin summoned Yumashev and his press secretary, Sergei Yastrzhembsky, and told them to prepare a decree for Chernomyrdin's firing. Yeltsin recalled that Yumashev asked him to postpone the announcement until Monday, saying it would be a work day, and more businesslike. Yeltsin was reluctant but agreed to wait.

In fact, the brief delay allowed Berezovsky to waltz on stage. On Saturday, just as Yeltsin was telling aides of his plan to fire Chernomyrdin, Berezovsky taped an interview at his spacious country dacha for Yevgeny Kiselyov's television program,
Itogi.
His back was still hurting from the snowmobile accident and he was in discomfort during the taping, perched on a chair, packed all around with pillows. He also posed for the cameras with the snowmobile on which he suffered the accident. In the interview, Berezovsky foreshadowed the changes to come. He said he was focused on preparing for the elections in the year 2000, on ensuring “continuity of power.” Then, with the selfassurance of a real power broker, he criticized virtually all the leading candidates in the polls to succeed Yeltsin, crisply rattling off his verdict on each one—“electable” or “not electable.” It was the performance of a confident kingmaker. Berezovsky said he doubted whether the stodgy Chernomyrdin could be elected, and since there wasn't an obvious favorite, he hinted that there would be time for “new people.” But he did not say who.
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On Sunday evening, Yeltsin told his aide, Yumashev, that his choice for prime minister was Sergei Kiriyenko, the thirty-five-year-old minister of fuel and energy. Kiriyenko was the banker from Nizhny Novgorod who in 1996 had said he wanted to cross the “raging river” to complete economic reforms with Yeltsin. Kiriyenko was progressive, earnest, and independent-minded, with short hair and wire-rim glasses that gave him a youthful, studious look. A protégé of Boris Nemtsov, Kiriyenko headed a bank and oil company in Nizhny, but he had limited experience in government and had served in Moscow less than a year.

Yeltsin arrived at the Kremlin on Monday, March 23, very early, to tape a television address about Chernomyrdin's dismissal. In the tape, however, Yeltsin did not mention Kiriyenko's name. He said that “for the time being, before the appointment of a new prime minister, I will myself perform his duties.” He added, “In the near future I will nominate a candidate for this post.” When he made the tape, Yeltsin clearly did not know who he was going to pick. I think a furious lobbying campaign was still under way that morning.

Kiriyenko said Yumashev called him at home late Sunday and asked him to be at the Kremlin early the next morning. Kiriyenko had no idea why he had been summoned to the Kremlin. He guessed that he had been called to a policy meeting about European Union trade policy. It was his daughter's birthday, and he promised her he would be home early. When the president offered him the job, Kiriyenko was stunned. It was a “total surprise.” The Kremlin had to acknowledge that, contrary to what the president had said in his taped address, he could not serve as the acting prime minister. Kiriyenko got the job.

Kiriyenko was definitely not Berezovsky's cup of tea. Berezovsky later said the choice of Kiriyenko was “unpleasant” for him. Chubais could not conceal his glee that he had outfoxed Berezovsky. “Some oligarchs,” he said, “woke up this morning in a cold sweat.”
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What happened? It is clear that Berezovsky and the other oligarchs started the process of replacing Chernomyrdin, but Berezovsky lost control of it. Kiriyenko zoomed in with the backing of Chubais, Yumashev, Dyachenko, and some of the other oligarchs. Perhaps Berezovsky mistakenly thought he had more time to manipulate Yeltsin. Or perhaps Yeltsin himself decided to bypass the wily oligarch. Who outfoxed whom? It was typical of Berezovsky and even more characteristic of Yeltsin that the answer is not clear. But the outcome was the same: Chernomyrdin was sacked.

Yeltsin said he wanted Chernomyrdin to prepare a presidential campaign—a lame excuse given that he had just removed Chernomyrdin from a high-profile position. The hapless Chernomyrdin went through the motions of starting the campaign, including a meeting with the “board of directors” of oligarchs at Berezovsky's Logovaz Club a few days later. Berezovsky said at the time he saw a different Chernomyrdin, with “tremendous potential.” That was nonsense—Chernomyrdin's political future was actually quite bleak; his pro-Kremlin political party, Our Home Is Russia, was broke. Still, as became apparent later in the year, Berezovsky had not yet given up on him.

What everyone missed was that Yeltsin had just decapitated the government at the absolutely worst time. On March 27, Berezovsky met with a group of journalists over breakfast at the elegant Metropol Hotel in Moscow. His back still aching from the snowmobile injury, Berezovsky stood, immaculately tailored as always, as we listened to his soft, rapid-paced patter over croissants and orange juice. Berezovsky clearly felt that Kiriyenko was a political weakling and that Yeltsin was not in good shape. “I think it is bad because the president's health, his condition does not allow him to engage in active political work every day, which is undoubtedly necessary.” He added, “It will take time to gain experience and strength, and who will fill the vacuum? I have no answer to this question.”

Kiriyenko had no political base in Moscow, no clout in parliament, and he was doomed from the first day. His plight was aggravated by a five-week wait for confirmation in the Duma, the lower house of parliament. He was confirmed on the third and last ballot, having lost the first two votes.
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Berezovsky spent most of April plotting against the Kremlin and trying to undermine Kiriyenko in his newspaper and on television, perhaps hoping Kiriyenko's nomination would fail. Yegor Gaidar told me at the time that Berezovsky was hungry for power, but his reach may have exceeded his grasp. “For Berezovsky, the essence of his business is politics, and intrigue, and that's the game he plays. He thinks he has the right to rule this country,” complained Gaidar, no friend of the tycoon. “He has spoken openly. The government is too weak to rule, he says. Someone has to do it. They [the oligarchs] are strong and clever men, so they can do it, so they say. But I think he has overestimated himself.”

“Berezovsky's biggest mistake was that he talked too much about his importance,” Gaidar continued. “If and when you have a lot of influence, the best thing to do is keep quiet.”

In mid-April, Yeltsin had his fill of Berezovsky's intrigues. He called Berezovsky and sternly demanded that the tycoon stop trying to undermine Kiriyenko in the parliament.
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In a ceremony for Russian cosmonauts, Yeltsin said aloud what he had been thinking: if Berezovsky didn't stop the scheming he would send the tycoon on a long business trip outside of Russia—forever. It was an extraordinary moment, and the newspaper
Kommersant Daily
, which broke the story, said that Yumashev and Yastrzhembsky attempted afterward to hush up Yeltsin's outburst. It leaked anyway.
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Two weeks later, Berezovsky got another appointment, as executive secretary of the Commonwealth
of Independent States, the loose and largely ineffective organization of former Soviet republics except for the Baltics. The position was based in Minsk but gave Berezovsky the most important thing: a fresh power base and access to the Kremlin.