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The powerful reputation of the official said to be Russia’s second most influential man is being challenged. On August 16, 2017, Igor Sechin was personally named and blamed by former Russian economy minister Alexei Ulyukayev at the beginning of his trial on bribery charges.
Up until that point, it seemed as though Ulyukayev’s fate had been decided. He would receive at best a conditional prison sentence and public punishment, and Russians would again be reminded that you should not mess with Igor Sechin, head of the Russian state oil company Rosneft and close associate of President Vladimir Putin.
Ulyukayev is accused of having personally taken a bribe of $2 million in cash last November 14 at a late-night meeting at Rosneft’s offices. He allegedly asked for the money in order not to block a deal in which Rosneft acquired a controlling stake in the Bashneft oil company, which was being sold by the Russian state. Later, Rosneft did acquire the stake.
Prosecutors said the payment was a sting operation, organized in advance by Sechin and the domestic intelligence service, the FSB.
As the trial has got underway, however, a different script is being written. The charges are now increasingly based on much less evidence than was anticipated, and on the personal testimony of Sechin. The court is now dealing with a “his word against mine” scenario involving Ulyukayev and Sechin. And Ulyukayev has raised the stakes by personally blaming Sechin for framing him.
This potentially threatens to make the trial an uncomfortable ordeal for Sechin, and observers are watching closely for signs that this immensely powerful man may not receive the full support of the Russian state apparatus.
In his testimony in court, Ulyukayev, the accused man, gave no impression of having come to a deal to receive a lesser punishment in return for “reasonable behavior.” Instead, he came across as a person who is going for broke to defend his reputation or who has received guarantees that the case would be ruled fairly by the court. The ex-minister directly accused Sechin and FSB general Oleg Feoktistov of committing a federal crime under Article 304 of the Criminal Code—provoking a bribe.
Certain details of the prosecution’s case are quite curious. For example, Ulyukayev and Sechin—two senior officials—are said to have personally carried $2 million in $100 bills, weighing 20 kilos, in two bags or briefcases in the Rosneft offices. But in Russia, important bureaucrats don’t carry their own luggage. Assistants rush to help.
Earlier, the prosecution’s case was bolstered by the prominent mention of the name of Andrei Kostin, the head of the VTB Bank, the second largest in Russia, who had known Ulyukayev for fifteen years. Kostin was said to have been the intermediary between Sechin and Ulyukayev, and to have organized the fateful meeting in the Rosneft office, at which Ulyukayev was arrested by FSB general and Rosneft vice president Oleg Feoktistov.
Now that the trial is underway, an entirely different picture is being painted. Kostin has disappeared from the indictment materials. Instead, Ulyukayev is said to have asked Sechin directly for a bribe during a joint business trip they undertook to Goa in India last October.
The prosecution’s case now rests on three main pieces of evidence. These are: Sechin’s testimony about a conversation in Goa; submissions made in August of last year by Ulyukayev to the government, in which he claims that the absorption of the Bashneft oil company by Rosneft is undesirable; and Ulyukayev’s fingerprints on a bag or suitcase of cash which he allegedly carried from Sechin’s office to his car.
It’s no secret that there is a widespread (though now disappearing) habit in Russia of government employees receiving “encouragement” to approve or reject decisions via cash payments in envelopes. But for Sechin to figure in such a story is highly unusual. Sergei Shokhin, the head of the Russian Union of Industrialists and Entrepreneurs, once said that to extort (ask, demand, suggest) money from Sechin you have to be insane.
Moreover, the timing of the alleged conversation in Goa—October of last year—is strange because by then the deal for Bashneft’s privatization had already been agreed and Ulyukayev had already rescinded his objections to it.
This isn’t the only hidden trap that the Ulyukayev case may reveal. After what has happened to Ulyukayev, any other minister who signs anything will fear that their decision could be disputed not through some negotiated compromise or a conference with the prime minister, but by them being denounced and then arrested.
After Ulyukayev was arrested last November, Russian political analysts agreed that Sechin had opened Pandora’s box and that Russia’s political system had taken a big step toward its own degeneration. Now, it seems like their analysis is right, but not in the way that they meant it at the time.
The flimsiness of the prosecution’s case against the ex-minister now suggests that Sechin—and not the Russian state apparatus—may be pursuing the case, and that he is doing this without the Kremlin’s support.
Russia’s latter-day Kremlinologists have long been debating what it would take for Sechin to break his political neck. “Sechin’s job is to carry the president’s briefcase,” Alexei Kudrin, the minister of finance, supposedly quipped in 2004. Now, that briefcase seems to be dragging him down.
Sechin, a veteran of Putin’s Kremlin, does not fit the profile of the two most common groups who now surround the president: those who say they serve the president out of pure personal devotion and those “hired guns” who strive to achieve results but never overstep the mark, as Dmitry Rogozin did in the 2000s.
Igor Sechin doesn’t fit either of these models. On the one hand, he belongs to the circle of the president’s closest friends, which nowadays puts a premium on flattery, the president’s comfort, and affecting a certain Christian humility, even if it is not genuine. On the other hand, Sechin behaves as if he’s thirty-seven, not fifty-seven, as if life still has something more important to offer him than the comfort and positive emotions of Putin, his elder comrade and friend.
Sechin is too powerful and too near the throne to be a mere hired hand. But he doesn’t make a convincing Kremlin courtier either, being too much in the public eye, too aggressive, and too willing to play for high stakes which no other member of the court would risk to place a bet on.
A story is circulating about Sechin’s behavior this summer, which suggests he may have misjudged the current mores of Putin’s Kremlin. Apparently Sechin suddenly visited Putin in July, during the president’s trip to the Valaam and Konevsky monasteries on Lake Ladoga in northwestern Russia. Sechin apparently came to “get issues resolved” even though the president’s mind was supposed to be on higher things. The oil boss bewildered the churchmen next to the president, saying his piece then and there, holding a leather binder full of documents and dressed for the city (while Putin was dressed simply, with no suit and tie).
This was not the behavior of a courtier but of a man who thinks that his business is more important than the mood of the Caesar. And it’s possible that this businesslike behavior is working against Sechin. The truth of this will be clearer on September 1, when we will learn whether the court summons him to give evidence in the Ulyukayev court case. If so, this will mean that we are no longer talking about Sechin the loyal Kremlin courtier. Instead we will only have Sechin the manager, who is carving his own path through the Kremlin jungle and prepared to take his own risks.
Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.
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