Was its ousted mayor as dirty as Medvedev claims?
What is headline news in one country often is barely covered in another. In Moscow for the past several weeks the news that has energized the tabloids has been the police raid on the offices of Yelena Baturina, the wife of the former mayor of Moscow.
Ms. Baturina, who appears to prefer the use of her maiden name as some modern Russian women do, has been around as a major business operator for quite a while. Originally, however, her husband’s administration was hailed as a well-organized and disciplined change from earlier Moscow city governments. Yuri Luzhkov had brought systematic management to Russia’s capital. This didn’t mean that the traditional corruption that had existed since the Czar’s days had been wiped out. On the contrary, it was that there was now a sense of order to the historic payoffs and privilege that was integral to the Moscow scene.
The advent of Soviet communism with its powerful secret police had not brought with it the vaunted equality and fairness of treatment of which the CPSU propaganda had boasted. What was worse was the fact that the corruption was very disorganized. Luzhkov brought organization and ” justice” to the running of Moscow. One might say that the Chicago system had been introduced, but that would be unfair to Chicago.
Yuri Luzhkov took office in 1992 and swiftly became a mainstay of the Boris Yeltsin special interest governance system. This was the day of the oligarch and Luzhkov knew well how to play this very remunerative post-Soviet game. The Moscow mayor’s office became a clearinghouse for new private ventures and government-related contracts within the extended boundaries of the city. As most all foreign representation and banking activity was headquartered in Moscow, Luzhkov and his team had their fingers in many pies. Yelena Baturina held the reins of the family’s interests in property and building contracts.
The conglomerate, Inteko, acted as the focal point of Ms. Baturina’s business empire and there was no question about her personal dominance. Luzhkov himself for the most part stayed as far as he could from any direct involvement in the business, though everyone in commerce and banking in Moscow knew which way the wind blew. Financial leverage for the Luzhkov affairs came to be obtained through its minority, yet important, position in the Bank of Moscow, a firm run by family friends. The wealth in Baturina’s name had been estimated at one time to be above two billion dollars, but that figure is now reported by the magazine Finans to be down to half that amount.
Apparently Yuri Luzhkov sought to out-muscle President Dmitri Medvedev who had made clear last year that the days of the mayor’s Moscow fiefdom were over. Luzhkov lost the battle and by September 2010 he was out of a job and under heavy legal pressure. The new Moscow mayor, with the help of the Russian equivalent of the Government Accounting Office (GAO), is said to have ordered an audit of tens of thousands of Luzhkov-era contracts. The still feisty ex-mayor insists he will fight to regain his political name. Moscow insiders are not yet willing to write him off completely.
There are two major interrelated elements in what is now referred to as “the Luzhkov affair” that hold broader implications. The initial issue is the extensive outreach of the corruption that is under scrutiny by city and federal authorities. Apparently the Moscow deals stretched out across the country and involved politicians and businessmen, domestic and foreign. The second factor is the leading role that Dmitri Medvedev has played — and is still playing — in the exposure of the corruption. The timing and character of Russia’s presidential racket-busting campaign tends to support the thesis that Medvedev is gearing up for the Spring 2012 elections.
The legal and political attack on Yuri Luzhkov and his wife is being likened to the arrest in 1987 of the corrupt First Deputy Minister of the Interior, Yuri M. Churbanov, the son-in-law of the former Soviet leader Leonid Brezhnev. This was the beginning of a public criticism of the entire Brezhnev era and what it represented in terms of nepotism and generalized corruption.
In today’s Russian political environment, the anti-corruption campaign can easily can conceived as an attack on the years of Vladimir Putin’s ascendancy. On the other hand, some Kremlinologists prefer the more arcane concept of a clever Putin ploy performed by his loyal former aide, Dmitri Medvedev, who is willing to accept the possible political heat involved in taking down the still influential racketeer, Yuri Luzhkov , while leaving Putin unscathed.
In any case, the once all-powerful Yuri Luzhkov, czar of all he surveyed, has lost what in Russian criminal circles is referred to as his ” roof,” , his protection. Without his krysha it’s do svidaniya, Yuri!
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