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    Yeltsin Fires Aide in Growing Scandal Over Top Reformer's Book Fee

    By David Hoffman
    Washington Post Foreign Service
    Saturday, November 15 1997; Page A17

    President Boris Yeltsin fired his deputy chief of staff today in the latest twist in a scandal over private book advances accepted by Russia's leading economic reformer, Deputy Prime Minister Anatoly Chubais, and some of his closest aides.

    Alexander Kazakov, 49, a former chief of Russia's privatization program and a Chubais ally, was unceremoniously dumped with a one-sentence Kremlin announcement. The announcement did not say why he was fired, but some officials said it was because of the controversy over a book about privatization of publicly owned companies.

    Kazakov had been first deputy chief of staff for relations between the Kremlin and local governments. He also served as chairman of the board of Gazprom, the natural gas monopoly that is Russia's biggest corporation. Interfax news agency quoted a Gazprom executive as saying Kazakov would not lose the post he has held since 1996.

    Kazakov became the second Chubais aide to be forced out since the state-owned telephone company, Svyazinvest, was sold in July. In August, Alfred Kokh, then the privatization chief, was forced to step down because of questions over a $100,000 payment for rights to a separate book he wrote on privatization. That deal is still under investigation, prosecutors have said. Kokh has denied wrongdoing. The lower house of parliament, the State Duma, voted this week to ask the prosecutor to broaden the probe to include the latest allegations about Chubais.

    Kazakov and Chubais are two of at least five, and possibly seven, co-authors, each of whom received $90,000 for a book on the history of state-owned property sales. Alexander Minkin, a muckraking journalist, revealed the payment this week and called it a disguised bribe.

    Chubais, charging that the allegations are part of an effort to discredit him by several wealthy Russian tycoons, has denied that the payment was intended to influence his decisions as Russia's top economic policy official. Before leaving for Kiev today, Chubais defiantly declared that "as long as we are alive," none of the previous government sell-offs will be canceled.

    "There will be no return to old, unfair rules of the game," he said. "There will never be a situation when the government is forced under pressure . . . to make decisions in favor of this or that businessman."

    The latest disclosures are part of a mudslinging campaign between Chubais and several of Russia's biggest tycoons. The battle has been carried on in a series of damaging leaks and smear campaigns in news media owned by the tycoons.

    The attacks appear to be eroding Chubais's position, and the new charges left many questions unanswered, such as why a publishing house would pay such a large sum -- $450,000 -- for the book. Some press accounts have put the payment even higher. Chubais acknowledged today it is large. "The fee is high . . . and we must admit this," he said.

    Chubais said most of the money is to be donated to a private foundation that he said was formed recently to defend liberal free-market economic policies, including the rights of private property. The foundation is headed by former prime minister Yegor Gaidar, a leading reformer.

    But Gaidar, in a televised interview today, had trouble recalling when Chubais said he would forward the money. "I don't want to recollect now," he said. "I don't remember."

    It is not clear where the royalties came from. Press reports said it was from a publishing company, Sevodnya-Press, partially owned by Vladimir Potanin, the head of Uneximbank. In the sell-off that sparked a bitter feud, Potanin in July won a 25-percent stake in Svyazinvest, defeating another group of bankers headed by media magnate Vladimir Gusinsky.

    One of Gusinsky's allies in that fight, oil and auto tycoon Boris Berezovsky, also was fired recently from Yeltsin's Kremlin security council, which sources called a counterpunch for Berezovsky's campaign against Chubais.

    © Copyright 1997 The Washington Post Company

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