Schroeder Accepts Russian Pipeline Job

Russian Prime Minister Mikhail Fradkov signs segment of pipe at groundbreaking in Vologda for pipeline to Germany.
Russian Prime Minister Mikhail Fradkov signs segment of pipe at groundbreaking in Vologda for pipeline to Germany. (By Alexander Natruskin -- Reuters)

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By Craig Whitlock and Peter Finn
Washington Post Foreign Service
Saturday, December 10, 2005

BERLIN, Dec. 9 -- Former German chancellor Gerhard Schroeder landed a job Friday as board chairman for a Russian-German gas pipeline that he championed while in office, a post that deepens his already close relationship with the Russian government and President Vladimir Putin.

At a groundbreaking ceremony about 250 miles north of Moscow, Alexei Miller, the chief executive of Gazprom, the Russian energy giant that holds a majority stake in the pipeline partnership, said the Schroeder-led board would be involved in "reaching all strategic decisions on all areas of the company's activity."

In September, Schroeder and Putin signed an agreement on behalf of their countries to build the $4.7 billion pipeline. Ten days later the German leader and his party lost an election, leading to his resignation last month. He resigned his seat in Parliament as well, and the German political world has been speculating about his future ever since.

Schroeder did not attend the groundbreaking ceremony, held in the Vologda region. His office in Berlin confirmed the announcement and said he was "very pleased" to take the job. It offered no other comment.

Opposition politicians denounced the appointment as a conflict of interest. "It stinks," said Reinhard Buetikofer, co-chairman of Germany's Greens, who were a coalition partner in Schroeder's Social Democrat-led government, the Associated Press reported.

Rainer Bruederle, a leading member of Germany's pro-business Free Democrats party, said that if Schroeder's responsibilities were more than ceremonial, the deal could call into question whether he can distinguish between public and private affairs.

Schroeder and the German-speaking Putin built a strong political and personal alliance during the chancellor's seven-year tenure, putting relations between Berlin and Moscow on the friendliest terms since Nazi Germany fought the Soviet Union on the battlefields of World War II. They have frequently conferred in person; in 2004, Schroeder and his wife adopted a 3-year-old Russian girl.

While other European governments have criticized Putin for squashing democratic institutions and freedoms in Russia, Schroeder did not dwell on such concerns and focused instead on building German-Russian business and political ties.

A Gazprom official, who spoke on condition of anonymity, said the job was not a quid pro quo. "This position is not related to any kind of favor on our part," the official said, saying that Schroeder was such an important figure that he was never going to have trouble finding a job.

Gazprom is the world's largest natural gas concern and is controlled by the Russian government. Its chairman is Russian Deputy Prime Minister Dmitri Medvedev, who until recently was Putin's chief of staff.

The chief executive of the pipeline consortium is Matthias Warnig, a German who heads Dresdner Bank's arm in Russia and is a longtime friend of Putin's. The Wall Street Journal reported this year that Warnig was an officer in the Stasi, the East German secret police, and met Putin during the late 1980s when the Russian president was based in East Germany as a Soviet KGB officer.

Gazprom declined to reveal how much Schroeder would be paid. Gazprom holds a 51 percent stake in the pipeline, with two German firms -- BASF and E.ON -- splitting the remainder.

The plan provides for the 745-mile-long pipeline to deliver Russian gas directly to Germany, the largest consumer of Russian gas in Europe. The proposed route goes under the Baltic Sea, bypassing Poland and other Eastern European countries that have complained bitterly of being shut out of the project.

Alexander Rahr, a Russian-affairs analyst with the German Council on Foreign Relations, said he was surprised Schroeder took the job because of its political sensitivity. "Right now, we have a gas war in Eastern Europe," he said. "A politician like him would have to be in the middle of all these quarrels."

He said Schroeder brokered closer business ties between Germany and Russia while in office because he thought it was the best way to integrate Russia into Europe, despite concerns over Putin's commitment to democracy and human rights.

"The business community will applaud this step and consider it highly courageous," Rahr said. "The broader public will criticize it, at least parts of the public. There is part of the German elite that is uncomfortable with how he has gotten so close to Russia, and they don't understand why."

Schroeder recently struck a deal to serve as a political consultant to Ringier, a Swiss publishing house, and is keeping a law office in Berlin. German press reports that he recently spent 12 days at a language academy in Wales to improve his English skills fueled new speculation about his future.

Finn reported from Moscow.


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