fbpx

Grigory Pasko: The Russian Federation Corporation

sechin121008.jpg

The «Russian Federation» Corporation

Grigory Pasko, journalist

On 10 December at the Marriott Grand Hotel in Moscow, the Association for the Protection of the Rights of Investors held a conference on «Corporate Governance in Russia – The Current State and Prospects in Conditions of Financial Crisis». At its end were named the winners in 16 nominations for «Leaders in the Sphere of Corporate Governance». In the nomination “Best Chairman of a Board of Directors” victory was had by vice-premier of the government of the RF Igor Sechin (NK «Rosneft»).

…I look at the manly, rarely smiling face of Igor Ivanovich Sechin and I think: there he is – the very portrait of that notorious «administrative resource»! There he is – the “human resource”!

The Soviet people have known what the «administrative resource» is since time immemorial. It has existed always and everywhere. For example, in our school, the girl Ira was the most ordinary average student. But in her grade book was written «excellent» in all subjects. And after finishing school, she received a gold medal. This fact was explained simply: Ira’s mother was the director of the school.

For the sake of fairness it must be noted: In Soviet times, wielders of the administrative resource were embarrassed about applying it right and left. They did not hold their millions of dollars in Swiss banks, because they didn’t have millions. They did not travel with prostitutes to vacation in Courchevel and to the Bahamas. By today’s standards, they made very modest use indeed of the administrative resource.

Things are somewhat different nowadays. With average abilities, like the girl Ira, a certain Putin became president. And it was precisely under him that the administrative resource became the equivalent of big money.

The head of the board of directors of the oil company «Rosneft», vice-premier Igor Sechin (the one who’s a friend of Putin’s from when they were both in the Petrine team of governor Sobchak) could not not have been awarded: at the very least because not every company in the epoch of the crisis in the past two months has received credits of more than $4.5 bln from state banks.

«Rosneft» has published a report for nine months using US GAAP standards. In it the company reports that in October-November it «provided for the attraction of short-term credits from Russian banks, controlled by the state», in a sum of up to 104 bln rub. ($3.8 bln) and $774 mln. The ruble credits were attracted at rates of 10-14% per annum, the dollar ones – Libor+5% per annum. Of the funds obtained, 50 bln rub. have already been spent, of the dollar ones – $313 mln. In «Rosneft» they are saying that the funds «will be directed at the restructuring of indebtedness and the financing of current activity».

Which specific banks had issued the credits, they refused to report at the company.

Former military translator, colleague and subordinate of Vladimir Putin in the mayoralty of Saint-Petersburg Igor Sechin in the footsteps of his patron Putin moved up the service ladder until he obtained a level of influence that frightense certain denizens of the Kremlin and the House of Government and extends to the big siloviki. This influence has grown to such sizes that on one of the websites was even drawn up a «Tower of Sechin» (see appendix below–GP).

They say that this infamous «Tower» frightened Medvedev himself back when he was still first vice-premier of the government.

Likewise known is the participation of the “human resource” in the affair of the pillaging of YUKOS.

Furthermore, Sechin is considered one of the initiators of this affair. In the year 2004, the principal asset of the disgraced company, «Yuganskneftegas», was bought at auction for 260.75 billion rubles by the little-known firm «Baikalfinansgrupp». Subsequently, «Yuganskneftegas» went to «Rosneft».

Head of research at the Higher School of Economics Yevgeny Yasin characterizes the system that has evolved under the rule of Putin and his friends like Sechin thus: «What is taking place is a grafting together of business and higher state power, and this for the country is a dead end. The role of public institutions, open for public opinion, is thereby reduced, if not completely eliminated».

Likewise specialists consider that the trio – vice-premier Sechin, FSB director Bortnikov and Security Council secretary Patrushev – will conduct a new economic policy: the gathering of assets under the wing of the state and the development of state corporations, replacing private business in practically all sectors of the economy.

All of Russia in the role of a private corporation – now that’s a resource!

APPENDIX

«The Tower of Sechin»

The composition of Igor Sechin’s administrative-economic grouping (the “siloviki”, Sechin’s “Petrine chekists”)

Igor Sechin – vice-premier of the government of the RF
Mikhail Fradkov – former premier of the government of the RF
Vladimir Ustinov – plenipotentiary envoy of the president in the Southern Federal District, former minister of justice and former Procurator-General
Alexander Bastrykin, chairman of the Investigative Committee (IC);
Sergey Bogdanchikov – director-general of “Rosneft”,
Viktor Khristenko – minister of economics,
Andrey Akimov – chairman of the management board of “Gazprombank”,
Alexander Medvedev – deputy chairman of the management board of OAO “Gazprom”;
Valery Nazarov – head of the Federal Agency for the Management of Federal Property;
Alexander Bortnikov – director of the FSB;
Gennady Timchenko, oil trader and his group (Anatoly Ledovskikh – Federal Agency for Subsoil Use, Nikolay Tokarev – “Zarubezhneft”);
Sergey Pugachev, member of the Federation Council;
the Ananiev brothers, billionaires;

Allies:

Mikhail Fridman – chairman of the board of directors of “Alfa-bank”;
Vladimir Bogdanov – owner of “Surgutneftegaz”;
metropolitan Kirill (Gundyayev)- metropolitan of Smolensk and Kaliningrad, future Patriarch of All the Russias [Remember, you heard it here first!–GP]
Yuri Luzhkov – mayor of Moscow;
Yevgeny Murov – director of the Federal Protection Service (FSO).