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  •   Chubais Blasts Russian Industrialists

    By David Hoffman
    Washington Post Foreign Service
    Sunday, March 8, 1998; Page A23

    MOSCOW, March 7—Two months ago, Anatoly Chubais, architect of Russia's economic reforms and a first deputy prime minister, was on the skids. He was enmeshed in a controversy over a $90,000 book honorarium and stripped of his post as finance minister, his coterie of aides was fired, and he was under a barrage of attacks in the news media owned by Russia's ruling financial oligarchy.

    This week, Chubais struck back. In a series of revealing newspaper interviews, he offered unrepentant, pungent criticism of the leading bankers and industrialists with whom he has been at odds since last summer. And he warned that unless Russia frees itself from their grip, the country could implode like the Asian economies did last fall.

    "We will have to drag ourselves away" from the businessmen "literally by the hair," he told the newspaper Kommersant.

    Chubais, 42, chief of Russia's post-Soviet privatization program who has held top posts during six years of President Boris Yeltsin's rule, is usually taciturn. But in an extraordinary interview published today in the newspaper Nezavisimaya Gazeta, he attacked the paper and its journalists. The paper agreed in advance to print his remarks in full.

    The newspaper is widely known as a mouthpiece for financier-industrialist Boris Berezovsky, who saved it from bankruptcy and is believed to write his own polemics under a pseudonym. Berezovsky, who argues that the Russian government should heed the major capitalists, has led a campaign against Chubais since a controversial telephone company privatization sale last summer, in which the group with which Berezovsky was associated lost the deal.

    "Lies, all lies," Chubais said of what is written about him in the paper. "It's a sold-out newspaper, sold-out journalists and sold-out chief editor." Chubais said friends cannot hold the paper "without feeling disgust, without feeling dirt and squeamishness." Chubais ridiculed headlines about him in recent months, charged that the newspaper had published phony circulation figures and predicted Berezovsky's business empire would fall apart, taking the journalists with it.

    "It's going to be too bad for you," he said. "It's going to be shameful for you. You will feel shame to look into the eyes of your colleagues. You will feel shame to take interviews in the future. You will not be treated as human beings."

    Chubais and the other first deputy prime minister, Boris Nemtsov, have championed what they call "people's capitalism" and contrasted it with the rule of the bankers and industrialists who backed Yeltsin's 1996 reelection campaign. The bankers, who were close to Chubais then, have demonstrated enormous clout over the last two years in dividing up former state properties among themselves.

    Chubais admitted in the Kommersant interview that he had been mistaken to allow some of the financiers to "cut off" their competitors in the most lucrative auctions of state properties, known as the "loans-for-shares" scheme.

    But Chubais vowed the rule of the oligarchs would never succeed in Russia. "I have always believed . . . that in Russia there will never be any real power for a long time which will be controlled by big business. I have always thought in Russia such a structure will not live for long," he told Nezavisimaya Gazeta.

    The newspaper's editor, Vitaly Tretyakov, replied to Chubais in a separate article, saying the published circulation -- 47,780 -- was true. Tretyakov did not deny that the paper reflects Berezovsky's views, but he recalled that it had also published material leaked by Chubais to hurt the Communists during the 1996 election campaign.

    © Copyright 1998 The Washington Post Company

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