VOLOSHIN, VAVILOV REPORTEDLY TARGETED IN NEW FRAUD PROBE.

The new probe by the Prosecutor General’s Office into the Sibneft oil company may also involve Kremlin administration chief Aleksandr Voloshin, who reportedly played a role in some of the mid-1990s’ controversial privatization deals (Novaya Gazeta, May 28). Novaya Gazeta investigative journalist Oleg Lurye reported earlier this year that during the period 1995-1997 Voloshin headed a company called the Federal Fund Corporation (FFK), which was set up under the Russian Federal Property Fund (RFFI), one of the Russian government’s privatization agencies. Lurye claimed also that the company acted as the RFFI’s authorized agent in carrying out special privatization auctions. Citing investigations carried out by the Audit Chamber and other agencies, Lurye alleged that Voloshin and his team deliberately understated the price of shares in state enterprises in at least ten auctions (see the Monitor, March 26).

Voloshin, Boris Berezovsky and Roman Abramovich have in the past all been identified as key members of the “Family,” the inner circle of former President Boris Yeltsin, whose holdovers are reportedly locked in a power struggle with the “Chekists,” the group of KGB veterans who were brought into top posts by President Vladimir Putin. Voloshin has of late been the target of an apparent campaign of “kompromat” (compromising materials) accompanied by a spate of rumors in the press that he may soon be removed as Kremlin chief of staff (see the Monitor, May 23). Indeed, over the weekend, the Moscow Times, citing an unnamed government source, reported that a reshuffle was in the offing that could end up with Voloshin being replaced by Georgy Poltavchenko, the KGB veteran who is currently Putin’s envoy to the Central federal district (themoscowtimes.com, May 19). Likewise, Vladimir Zhirinovsky, the head of the Liberal Democratic Party of Russia, whom many observers believe was often used by the Yeltsin-era Kremlin to launch trial balloons of various kinds, said yesterday that “fundamental changes” in the government were imminent. He gave no further details (Radio Ekho Moskvy, May 28). Meanwhile, Voloshin was unanimously re-elected as chairman of the board of United Energy Systems (UES), Russia’s 51-percent state-owned electricity power grid (Russian agencies, May 28). Whether that was a vote of confidence in Voloshin by President Vladimir Putin or the final preparation of Voloshin’s golden parachute is hard to say.

Yet another figure reportedly enmeshed in the Sibneft probe is Andrei Vavilov, the controversial former deputy finance minister. Now the chairman of the board of the Severnaya Neft oil company, Vavilov was reportedly taken by ambulance yesterday to a Moscow hospital from the Prosecutor General’s Office, where he had been questioned concerning his work as deputy finance minister, a post he held from 1992 to 1997. A newspaper today cited unnamed sources in Vavilov’s oil company as saying that investigators were particularly interested in Vavilov’s role in the Sibneft privatization auction. They reportedly suspect that on the eve of that auction, Vavilov placed a large amount of federal funds in the bank accounts of the entities that ended up winning the auction (Kommersant, May 29). Following the loans-for-shares auctions, the federal Audit Chamber claimed that on the eve of the auctions the government had transferred to the would-be winners federal funds equal to the amounts that they would bid. Most of the major players in the loans-for-shares auctions have subsequently said that the winners were picked in advance.

HIZB UT TAHRIR UPSTAGING UZBEK ISLAMIC MOVEMENT.