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by John Helmer, Moscow
  @bears_with

It was Richard Nixon (lead image, left) who famously connected his election defeat with the notion he had been victimized by other people’s boots, particularly the press.  “You don’t have Nixon to kick around any more, because, gentlemen, this is my last press conference.” Nixon had lost the vote for California governor in November 1962. He was lying then; watch him do it.   He went on lying — sore loser was what Nixon remained after winning the presidency twice and then losing it in mid-1974.

Boris Yeltsin (centre) has kicked the bucket, so he can’t improve on his last official speech when he managed, his incapacitation obvious, to make his resignation in favour of Vladimir Putin appear to be unforced. That lie was issued on December 31, 1999. Twenty years later, his son-in-law, Valentin Yumashev (right), is attempting to step into the old man’s shoes in a public interview  with Vladimir Pozner, a journalist who has tried to show he is in the winning shoes himself by wearing brightly coloured socks. The interview was staged by the Yeltsin Centre, a state and oligarch-financed entity which Yumashev, with the remainder of the Yeltsin family, also runs

By a second 20th anniversary coincidence, Pyotr Aven, a Yeltsin-era minister of trade and Alfa Group banker who has left Russia for the UK, has given an equally long interview in which he publicly admits to mistakes during Yeltsin’s rule – the policy mistakes of others, not the personal ones of himself.  His interviewer wore sneakers without socks. Between them, fewer lies were re-issued than Yumashev and Pozner attempted. The intentions differ.

Yumashev’s message for Russians – also for the regime-changers in Washington to whom his father-in-law was deeply indebted – is that the Yeltsin family and its old factotum,  Anatoly Chubais, aim to run a candidate in the Putin succession race and recover the power they think they deserve.  Aven’s message is that he and the Alfa Group won’t pay for it.  

But Aven is also implying something more subtle than Yumashev and Pozner disclose. It is that he and Mikhail Fridman of the Alfa Group expect the Putin succession will not be friendly towards either the oligarchs close to the Kremlin, or to the dominant privately owned businesses of the country. To them – whether they wear military, security or other uniforms Aven doesn’t hint — Aven is saying the Alfa Group asks either to be bought out, or if the new Kremlin won’t do that, to be allowed to live and let live.

The Yumashev interview ran for just over an hour and a half in front of a vetted audience in Yekaterinburg. The transcript in Russian, as well as the video, were published by Radio Ekho Moskva here. Pozner’s vanity got the better of him at the start: “Really I just want to say before I go into business that it is a huge professional reward for me to get this opportunity.” He omitted to announce this was a paid political broadcast, and that both he and Yumashev were paid to broadcast it.  

Source: https://www.youtube.com/c Pozner’s socks are red – a colour he disdained to wear when Yeltsin was president.

“Why did Boris Nikolayevich [Yeltsin] decide that he should leave?” Pozner asked. “It was the second term,” Yumashev replied. “He had to go.” Pozner: “According to the Constitution.” Yumashev: “According to the Constitution. Everyone believed that Yeltsin would cling to power, and one of the lines of struggle with Yeltsin was exactly this. At that moment, when it became clear that neither [former prime minister Victor] Chernomyrdin, nor [former acting prime minister Yegor] Gaidar, nor [opposition candidate Grigory] Yavlinsky, none of those people who would continue the path of Yeltsin — none of them would be able to resist [Communist Party leader Gennady] Zyuganov.  At that moment [Kremlin polls showed] Zyuganov would win against each of them. So [Yeltsin] decided that he would still leave… at the same time, one of the main tasks that he faced was to prepare by 2000 a person to whom he could entrust the country, which, together with the new President, could move in the direction in which Yeltsin set the direction.”

To match his socks, Pozner displayed the brown colour of his nose. “[Yeltsin] made the decision… In order to make the right decision, you need to surround yourself with people who may be better than you at knowing this or that issue, in any case, not stupider than you. And after listening to them, those who are not afraid to tell you what is, including the words that they say, you are wrong…Is it possible to say that Boris Yeltsin surrounded himself with such people?”

“It is difficult for me to speak about myself,” Yumashev replied in case the younger members of the audience failed to understand that Pozner had meant Yumashev.” “Well, not myself,” Yumashev repeated for the hard-of-hearing in the Yekaterinburg audience.  Then he contradicted himself. “No, I will also talk about myself. I think I have surrounded myself with wonderful people. But I believe that Yeltsin’s presidential administration was one of the strongest teams, if  we compare it to the teams of the government institutions. Brilliant Sergei Yastrzhembsky, the brilliant Alexander Voloshin.   Brilliant Sergei Prikhodko   and these names, the Commissioner, the chief of Interfax whom I invited, the deputy head of administration.” Yumashev’s reference without a name is to Alexei  Gromov

Before: left to right: Dmitry Yakushkin, successor to Sergei Yastrzhembsky as Kremlin spokesman; Acting President Putin; chief of the presidential staff Alexander Voloshin;  ex-President Yeltsin – outside photo op following the broadcast of the resignation speech, December 31, 1999.

After: Alexei Gromov with the President in 2000.  For details of Gromov’s career and business connections, read this.   For background on Yumashev’s parallel business connections and the lengths to which Gromov has gone to reduce public exposure of Yumashev’s relationship with Putin, read this

Here are excerpts of Yumashev’s speech, translated from the published transcript, with Pozner’s questions and comments in italicized parentheses.

Putin, the Chubais protégé. “Well, in general, the history of Vladimir Vladimirovich’s emergence in the presidential administration is as follows. In 1997, Viktor Stepanovich Chernomyrdin, the Prime Minister at that time, decided that he needed to re-organize the government. For a long time he had been persuading Boris Nikolaevich that at that moment the head of the presidential administration Chubais Anatoly Borisovich should go to the government and become the first deputy [prime minister]. Chubais wanted it;  he didn’t like working in the Kremlin, so he agreed. … In the end, it ended up as it ended up. I became [Kremlin] chief of staff. But Chubais took with him to the government a few people, his team — Maxim Boyko, Alexei Kudrin, a few more staff.  So half the [Kremlin] administration was absent. And Chubais came to me when we were thinking how to close these gaps.  He said that there is a very good strong man with whom he had worked in St. Petersburg. This is Vladimir Vladimirovich Putin. That is the moment when I first got acquainted with Putin in March of 1997…I presented Putin to the presidential administration… On the one hand,  there was Kudrin leaving;  on the other hand, Vladimir Vladimirovich was arriving.  And in the centre, I as the head of administration…my first acquaintance with Putin, what I understood about him, was that he was the man who had worked with Anatoly Borisovich [Chubais] — this was the first thing.”

Left to right: Prime Minister Victor Chernomyrdin; chief of the Kremlin staff Anatoly Chubais; deputy prime minister Boris Nemtsov; Yumashev and Yeltsin, 1997.  

Yeltsin’s first successor, Boris Nemtsov. “Naturally, when Borya began to work as the first deputy in the government, he got into the lists of the presidential candidate polls.  And, perhaps, by the autumn of 97,   Borya was in first place; his [poll] rating was more 30%. And he was a real presidential candidate. And in principle for Boris Nikolaevich it was at that moment obvious that for him he was the candidate number one. [And?] And then, unfortunately, there were such events as pushed us sideways, but this is an important story. There was a so-called Svyazinvest competition.  When the government tried to hold it, it announced we were holding a fair and transparent privatization auction. And part of business did not like it, and the outcome was there was such a war, or so we will call it, a war between the government and those businessmen [Mikhail Fridman and the Alfa Group]who lost this contest.  And as a result, because of the fact that brilliant journalists, brilliant teams were working against Chubais and Nemtsov. This was  [Sergei] Dorenko, this was NTV, the same NTV of the late 90s, that they, in the end, just destroyed this government, which was forced, in the end, to resign. And it all ended with the default of August  98. And a year later, when we measured the rating of Boris [Nemtsov], he was in the error margin of about 2%-3%.”

Yumashev on Putin: “I worked with him for a year and a half, when, as I said, we were having  meetings in the administration there about 2-3 times a week in different formats, where we discussed current problems, political problems, international problems. And I invited my deputies to these meetings. Because it was important to me that there was a look of different people. And just after a few 2-3 months of working with this team, I noticed that Putin is brilliant. That is, he really formulates [issues] perfectly… for me it was a joy that I have such a wonderful deputy. I can rely on him. Smart, precise, brilliantly articulate…The fact is that everyone in Putin saw something different. That is, the liberals saw in him the successor of Boris Nikolaevich’s ideas. The conservatives and the security services – by the way, the military, the security officers — they saw a  former security officer. People who believed that he would restore something to Russia that needed to be restored — that’s what they saw in him. And so on. Because he was an unknown, it was a huge plus that helped him win the election.”

Boris Berezovsky’s role. “Boris Abramovich Berezovsky [right] rushed to Putin in France, where Vladimir Vladimirovich was resting with his family at that moment. When I felt these rumours that [then Prime Minister Sergei] Stepashin’s resignation could happen, and [Berezovsky] flew to Vladimir Vladimirovich and told him — Vladimir Vladimirovich, there’s such-and-so story, perhaps you will become prime minister. But Putin said he knew nothing, had heard nothing. So good-bye. That is, he was in principle, morally somehow  ready for this conversation, for sure…  [You know, there were rumours very persistently and still they exist with the point of view that Boris Abramovich played a crucial role in Putin’s appointment as President. You can probably answer that yes or no?] No, of course it isn’t so. I will add that the [Yeltsin] Family played a huge role in the fact — the Family with a capital letter — that Vladimir Vladimirovich became president. Even now there are several publications that not even the Family, namely Yumashev,  played the most important role in Putin becoming president of the country. Of course, this is complete nonsense. This was the complex, difficult analysis of the person who is responsible for decisions. That was the President, not any Yumashev, not any member of the Family, and especially not Boris Abramovich Berezovsky who over ten years met Boris Nikolaevich only twice.”

Primakov requests Putin to put FSB surveillance on Grigory Yavlinsky. “I am sure that Boris Nikolaevich, when he made the [succession] decision, he remembered this. There was a telephone call. I am the head of the administration and Putin calls: ‘Valentin Borisovich, I need to come to you urgently.’ He drives up and says that  he had just talked to [then prime minister] Yevgeny Maksimovich Primakov — it’s 1999, 1998, the autumn — and Yevgeny Maksimovich asked me to follow [put under surveillance], for me as the Director of the FSB to give the order to follow Yavlinsky…because he is an agent of imperialism, of the [US] State Department…. And I as the Director of the FSB believe that this is absolutely unacceptable. If Boris Yeltsin has the same position, I am now writing a resignation letter, because I believe that we will destroy the FSB if it does such things. The KGB was once engaged in this…Therefore, I believe that it is absolutely unacceptable to let the FSB into politics. Therefore, I repeat once again, I am ready to resign if the President of the country has the same position. I said: ‘Vladimir Vladimirovich, I am one hundred percent sure that Boris Nikolaevich does not have such a position, Primakov proposed it on his own behalf, and not from the position of the authorities. Therefore, of course, I will talk with Boris Nikolaevich, but I assure you that Yeltsin could not give such a command under any circumstances.’”

Left:  Yeltsin firing Primakov on US request,  May 1999. For the contemporary White House records of the episode, read this. The US-UK records reveal the degree to which Yumashev supported the eastward expansion of NATO and the plan of war against Serbia. By the time that began in March 1999, Yeltsin was facing impeachment by the State Duma and Yumashev had been removed by Primakov from the chief of staff's post in December. Right: Putin celebrates Primakov’s 75th birthday, October 2004.

Yumashev’s motive. “[Please tell me why you decided to tell us about this now, suddenly.]  Well, first of all, all these myths that we are talking about, if you open any book about Vladimir Vladimirovich Putin, everything is there of the story about the Family and Berezovsky pushing Putin forward. [Also, the story about] the fact that Yeltsin was concerned about security [immunity from prosecution] and the Family was concerned about security, and therefore Putin got this position, I think it is very important, it can be said for this audience and our friends who are here, to hear all that I have said as an alternative story. To me, this is the real story. I think it is important that the real story now marks the 20 years anniversary of these events. I think it’s important that the real story is recorded. It is possible to disagree with it; it is possible to agree. Some will say that Yumashev is lying… The only thing Yeltsin asked Putin was ‘take care of Russia’. This phrase, which he said, was the only request of Boris Nikolayevich to Vladimir Vladimirovich Putin….Therefore, it seems to me that in 2019, twenty years afterwards, it is correct to recall what happened in 1999.”

A Yekaterinburg press report has added Yumashev’s responses to audience questions. “Will Putin leave after the current term? asked one. Yumashev answered:  “If you ask Putin today, he will say with confidence that he will leave in 2024.” “When you are in front of Putin, what do you say to him?” “Hello, Vladimir Vladimirovich, hi!” joked Yumashev. Then he said that he often meets with the President, because he is his adviser on a voluntary basis.” 

Political analysts in Moscow are speculating on the present significance of Yumashev’s remarks and motives. Some view Yumashev as acting defensively, fearful that Putin’s successor will be much tougher than Putin has been on the Yeltsin family’s wealth, their immunity from prosecution to date, and the Family’s oligarch allies who have kept Yumashev in the offshore style to which he is accustomed. His story-telling against Primakov is indicative, these sources believe. 

A well-connected veteran, speaking in Moscow this week, says Yumashev is signaling a campaign for the presidential succession, and for a new mobilization behind a candidate of the liberals represented by Chubais and Kudrin. Yumashev is “saying that the siloviki, like Primakov, Stepashin and leaders they supported like [former Moscow Mayor Yury] Luzhkov before, can be beaten now. He is saying that even if a liberal but effective person today has only 3% in the polls now, that isn’t a problem.”

“It is true that Chubais first introduced Putin to Yumashev, and that was through Kudrin to Chubais. But this is not relevant. The journey Putin took then is also of less relevance now. What is relevant is that here is a call for the liberal forces to mobilize and think of the future. It is to say you cannot give up — you can take heart that Putin may not nominate a silovik or nationalist. This might be wishful thinking.  Liberal or otherwise is a notion to which everybody can attach himself. So Yumashev is calling on those who own it to position themselves for the future.”

Others in Moscow believe Yumashev is reacting to the suspicion, widespread in the Russian military and security commands, that Putin is capable of what they regard as Yeltsin’s betrayals for the benefit of US strategy. Among these sources there is the view that Russian security strategy is threatened by Putin’s alliance with Turkish President Recep Tayyip Erdogan and Israeli Prime Minister Benjamin Netanyahu; by the concessions to the US and defence budget cuts promoted by Kudrin; and by the “swap deals”  between Venezuela, Syria and Ukraine which Washington officials have disclosed as coming by back channel from Moscow. 

One major oligarch group is signaling differently.

Without referring to the 20th anniversary of Yeltsin’s resignation, Pyotr Aven, the Alfa Group banker who has left Russia for the UK, has given an equally long interview in which he admits to mistakes during Yeltsin’s term in office. His interviewer wears sneakers without socks. Watch the full Russian video.   An English excerpt can be read here

Source: excerpts of the interview in Russian  and for the full film.

Aven has ignored Yumashev except to reveal that in August 1998, when the government treasury default was being prepared by Gaidar, Chubais and Kudrin, Yumashev knew nothing, and telephoned Aven to find out.

Here are excerpts of Aven’s remarks translated from the Russian text published by The Bell;   the questions asked by interviewer Daria Cherkudinova are  in parentheses.

The Yeltsin policy mistakes. “What are the three main claims people have to those who in the 1990s ran the country and created big business?  I have realized there are three: the loans-for-shares auctions, voucher privatization and devaluation of bank deposits…  I believe that the loans-for-shares auctions were a terrible mistake, I was categorically opposed. Alfa did not participate in the loans-for-shares auctions. Although we wanted to — business tries to use any opportunity to grow. But we were not allowed, and I didn ‘t believe until the last that such a criminal act would actually happen. [Why wasn ‘t Alfa allowed?] We weren’t let in because it was decided at the top whom to allow – such was the distribution of property, and we were not close enough to the power at that moment…The loans-for-shares are the discredit of the liberal idea, it’s a bad story…What about voucher privatization?  The problem, I think, is not that it was [a bad idea], but that it was given very high hopes, people were given big promises…Unrealized hopes have given rise to negative attitudes. Technically, much was done incorrectly, but ideologically there was nothing terrible about privatization. As for the devaluation of the bank deposits, I have something to say. The fact is that the deposits were spent, not by the Gaidar government, but by the government of [former Soviet prime minister Valentin] Pavlov. In Soviet times, the budget each year borrowed the money of the population to close the cash gaps. Then this money was returned to the population. Pavlov ‘s government took the money, but it didn ‘t return it. The books remained, but there was no money behind them anymore. The Gaidar government had nothing to do with it…”

“The state could have said we inherited these debts. I believe it was a mistake of our government: we said that there is no money but not that we hadn’t spent it…At the same time we recognized [the Soviet] debts to the West, and in some years they also had nothing to pay. But the [foreign debts] were recognized, and somehow we started to negotiate on them. Of course, debts to the population, even though they were not made by us but under the previous government – we should have recognized them and thought how to repay them. It was possible to pay in property and land, in other assets. The monumental mistake of our Government, my Government, is not that we spent and devalued this money – that was done before us — but that we did not recognize these debts.”

Chubais with Aven, 1993.

“[I wonder what you’ll write about 1996. Then the entire liberal public supported Yeltsin, and he won, but you and your partner Mikhail Fridman doubted that it was the right thing to do. Why?] Of course, I will write about it. Fridman was already one of the few to warn that this was a dangerous situation. I hesitated then. In general, I am not fully sure that then we took the wrong position. Indeed, we supported Yeltsin. Indeed, a large administrative resource was used in the elections. The authorities then learned to use this resource. As good as that is, I have a question for that. But there are different opinions. Chubais is still sure that everything was done correctly and allowing Zyuganov to come to power would have been terrible. I think personally it would probably be bad for me because it would be a lot harder for us to do business and live, given that I was in the Gaidar government. But for the country to live a few years under Zyuganov then would have been, perhaps, not so bad. Although Chubais is sure that if the Communists had come again, it would be very difficult to take power.”

“[It seems to me, you admitted that all of you, including Gaidar, were not really liberals.] Yes, certainly. It’s true. Our democracy should not be overestimated. We were for economic freedom, but the political idea, I believe, we had wrong at the time. We thought it was possible to impose economic liberalism in a rather authoritarian and harsh manner. We had the popular model of Augusto Pinochet in Chile – our understanding of that was gathered by a team that included such a wonderful liberal as Sergei Glazyev. We believed that the main thing was to accelerate economic freedom by any forces. Of course we were wrong. My experience shows that Russia should be the most liberal of all liberal countries, simply because no rules operate in this country. It is necessary to impose them quite harshly. Therefore, any attempt at soft authoritarianism in Russia ends with rigid authoritarianism. The Chilean model is possible only in conditions of an absolutely non-corrupt army, a believing nation, and another mentality, another attitude to rules.”

Yeltsin’s resignation. “What is there to discuss? [Did you know the president would stand up and leave?] “No. I knew absolutely nothing. [Did it shock you?]  No, we understood that Putin sooner or later will be president. He was the official heir, the Prime Minister. There was no way we were involved. Already then we shared exactly the same principles that we share now. We never wanted to do politics. Berezovsky arranged political parties at his club. I went there to listen,  to know what was in their heads to draw my own conclusions. It is wrong to influence political processes, to influence the appointment of a minister. It is terrible, it cannot be done… We’ve always tried to keep out of it.”

The financial default of August 1998.  “In the spring of 1998, talk of a possible default began. The economist Andrei Illarionov proved quite conclusively, based on the difference between the dynamics of the monetary base and the reserves, that there would be a default. But people did not believe in the bad news, so few banks were prepared. We didn’t expect a default either — we thought there would be a devaluation. I had gone to rest with my family in Italy. On Saturday, August 15, I received a call from Vladislav Surkov who said there are some rumours that are not good. Then Valentin Yumashev called, complaining that no one was telling him anything. I didn’t really react to it somehow; I didn ‘t want to go to Moscow. On Sunday morning, Berezovsky called me and asked me to come immediately. He said…Chubais and Gaidar have locked themselves in the White House and  no one is allowed to join them. They are going to announce on Monday that — nobody knows what. He wanted me to rush to them so I could figure it out. I refused to go. So again, he calls in another hour – he screams. I called Fridman and I say, it seems that really something can happen there. We, as a bank, were more prepared than everyone else; still we assumed devaluation, but still we were ill-prepared.”

“At the time, I was still flying on commercial planes, not private ones. I told Berezovsky how can I fly if there are no tickets. He then gave orders to Aeroflot and says: go from Sardinia to Nice – there we have the flight to Moscow.  I ordered a helicopter, flew to Nice by helicopter. Fridman got to Nice somehow, too. He and I came [to Nice], we were really put into Aeroflot’s first class. We flew in at night, so already it was August 17, the day of the default. We decided to go straight to the White House. And there we found in the White House,  in the waiting-room of  Chubais a crowd of businessmen – Berezovsky, [Mikhail] Khodorkovsky, [Vladimir] Potanin, all sitting in the corridor and waiting, because Chubais and Gaidar refused to admit them.  I went in to meet Chubais and Gaidar then – I was allowed because we were close friends. They let me read what they were preparing to roll out, and I was horrified.”

“The first thing I said to them: why do you announce that the exchange rate of the dollar will be 9 rubles? At that time it was 6 rubles, and it was clear that at the point of devaluation it will grow by several times. Yegor [Gaidar] told me: Boris Nikolayevich very much asked that there be no more [higher rate] than 10 rubles. It was a ridiculous mistake, no such commitment could be made. Naturally, in a few days the exchange rate was already 20 rubles.”

Then there was a recommendation to our banks not to repay to the West. With us right then  asking the West for money,this was absolutely immoral. I went out, told it all to the general oligarchic public. Potanin offered to find miners, take the helmets from them, and go beat helmets on the ground.”

We were the 22nd bank at that point, but three days later we became the 6th because the banks in the middle just disappeared. I am sure that Alfa Bank has become a really serious bank since the 1998 crisis.”

Left, Sergei Kirienko was the nominal prime minister on August 17, 1998, but he had no say in the decision to default. Yeltsin dismissed him on August 23. Kirienko became Putin’s deputy chief of staff on October 5, 2016.

Sale of Alfa Bank. [Are there any circumstances under which you will sell Alfa Bank?] It’s business – if you give us good money, of course we will sell. But no one in his life has addressed us about it. This is the first point. Second, I think that the Central Bank will be very opposed to us selling our bank. They very much want to have a big private bank in Russia. The state banks won ‘t be allowed to buy us. That’s firm.”

Money in Russian politics. “The other day I spoke to one person off the record. He made an important point about business which I’ve heard from other people. The idea is: in principle business cannot be in opposition. Because business is responsible for people, business has a lot to lose. Yes, it’s also my point of view. Business just can’t be in politics. We employ hundreds of thousands of people — not tens, but hundreds of thousands of people. If I start playing politics, it affects the lives of these hundreds of thousands of people; also, it affects our clients. We have 10% of the population’s deposits in the bank’s accounts at this minute. So I just have no moral right to engage in politics. If I want it a lot, I’ll have to leave [the bank], become a private person.”

“On the other hand, it is immoral to use your money to influence politics. It ‘s totally impossible, too. [Why isn’t it immoral in America?] It’s completely immoral. A voter can donate a strictly limited amount of money to a political campaign or give it to a political party. These contributions are completely transparent and limited to two to three thousand dollars. No one will let you give a candidate millions — never in life. [You can lobby for the right decisions through lobbying organizations, giving them money.] No. There is no lobbying for decisions, officially being a lobbyist is not a political process. Specific business decisions can probably be lobbied. It is impossible to really participate, bribe a deputy, organize a campaign.”

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