April 10, 2019

Grudges Before Politics: Arrests in Russia Are Increasingly Random

Commentary for Carnegie Moscow center 

By Tatiana Stanovaya

Abyzov’s arrest demonstrates that the prosecution of economic crimes is becoming chaotic, and that politics, which previously loomed large behind high-profile arrests, now appears only after the fact, as a secondary, albeit important, consequence.

Abyzov’s arrest demonstrates that the prosecution of economic crimes is becoming chaotic, and that politics, which previously loomed large behind high-profile arrests, now appears only after the fact, as a secondary, albeit important, consequence.

A fascinating tale is unfolding following the high-profile arrest of the once influential Russian politician and businessman Mikhail Abyzov. Abyzov is known for two things. First of all, he was in Prime Minister Dmitry Medvedev’s team, where he headed the somewhat inconspicuous Ministry for Open Government Affairs. He also played a notable role in the electricity sector, working for its reformer Anatoly Chubais and running his own business in the 1990s. Abyzov had moved to Italy, but was arrested by the Federal Security Service (FSB) on a visit to Moscow.

When Medvedev was keeping the presidential seat warm for Vladimir Putin in 2008–2012, Abyzov staked a lot on Medvedev staying on for a second term as president, and in 2011, he contributed a lot to that scenario, including organizing a public committee in support of Medvedev’s reelection.

Medvedev ultimately served just one presidential term before resuming his role as prime minister under Putin, but he did not forget Abyzov’s support, and created a position especially for him. The Ministry for Open Government Affairs was to serve as a platform providing expertise to the cabinet, but after Putin’s return to the presidency, the cabinet lost virtually all its opportunities to display independent initiative. So the Ministry for Open Government Affairs, just like the rest of the cabinet, was essentially paralyzed.

Abyzov had come under fire from various quarters over the years, including from Sberbank head German Gref, who criticized Abyzov in 2013 for his subpar performance, and from Abyzov’s former boss Chubais. In 2018, the Ministry for Open Government Affairs was liquidated, and the former minister settled outside the country.

Medvedev’s former cabinet minister hasn’t attracted much sympathy from the in-system liberals who were outraged by the arrests of former Kirov region governor Nikita Belykh, former economic development minister Alexei Ulyukayev, and the American investor Michael Calvey. Nor is the liberal opposition crying foul: in fact, Abyzov’s arrest is a rare case of FSB actions finding some understanding among Putin’s critics. Anti-corruption crusader and opposition figurehead Alexei Navalny, who published a report into Abyzov’s abuses of power two years ago, says that the government copied its investigation from him.

Since Abyzov clearly generates little sympathy from any corner of the Russian elite, it’s hard to detect political intrigue in his case.

Nor did he fare much better as a businessman. In 2015, he sold his virtually bankrupt engineering company E4 Group to its creditors, who had demanded the repayment of its debt and threatened criminal prosecution. Alfa Bank accused Abyzov of using his public service position to run his business. In March this year, Alfa Bank again asked Abyzov and his partners to pay 33 billion rubles ($500 million).

The current charges publicized by the Investigative Committee relate to the sale of four energy companies. According to Kommersant newspaper, Abyzov’s businesses sold them for 4 billion rubles, while their real value was only 186 million. So there was no shortage of people in the business community who had a gripe with him.

On the surface, Abyzov’s case reveals purely corporate conflicts, wrangling over debts, and using the powerful security services to settle old scores. This may seem like standard practice for Russia, but this time we are talking about a member of the political elite, a former minister, who is likely to know a lot about the shady dealings of some still very powerful figures.

All the differences aside, there is some similarity with the Calvey case: in both cases, the security services have got involved in corporate disputes that have no clear political underpinnings, and have done so without a signal from the president or one of his friends. Only later have these cases taken on a political aspect. Attempts have been made to accuse Calvey of financing the opposition, and a similar accusation may surface in the Abyzov case. Social media and Telegram channels are already rife with detailed stories of Abyzov’s opposition to Putin in 2011, his financial support of the Dozhd opposition television channel, and U.S. citizenship he obtained for his children while living a life of luxury in decadent Europe. All of the above make him an ideal enemy of Putin’s state.

Injecting politics into private disputes may be attributed to the fact that the FSB still has to align itself with Putin, regardless of the personal conflicts it’s called on to resolve—especially if they involve a former minister and a conspicuous representative of the Medvedev government.

The case could be politicized using the well-known template of “patriots against the sellout liberals”: national conservatives detest the in-system liberals and see them as a fifth column and the weakest link in Putin’s system. Suffice to say that Abyzov is accused of creating a criminal enterprise whose members “jeopardized the sustainable economic development and energy security of several regions of the country,” which is punishable by up to twenty years in prison.

The accusations date back to the time when Abyzov served in Medvedev’s cabinet, which inevitably casts a pall over the prime minister himself. The same goes for the circumstances of Abyzov’s arrest. It’s possible that the former minister was invited to return to Moscow by people he believed to be his political protectors. Abyzov was likely in the Russian capital to attend the birthday celebrations of former deputy prime minister Arkady Dvorkovich, who used to supervise Abyzov’s work in the cabinet.

Dvorkovich is one of the weakest figures in Medvedev’s entourage, but also one of the closest to the prime minister. He makes Medvedev extremely vulnerable, which many in the security services have been trying to exploit.

Medvedev’s circle has suffered so many other blows recently—such as the arrest last year of the wealthy Magomedov brothers, who were close to both the prime minister and Dvorkovich—that they are starting to resemble another stage of Medvedev’s decline. The first was in 2011–2013, when the revanche-minded elite managed to undo almost all of Medvedev’s presidential initiatives. That wave had begun to die down by the end of 2013, when Putin was forced to choose between getting rid of Medvedev or stopping the nationwide humiliation of his former heir by taking him under his wing. He chose the latter, and from 2014, criticism of the Medvedev cabinet waned, and Putin more or less aligned himself with the cabinet.

The current wave targets those working for Medvedev, rather than Medvedev himself. It seems that the security services realize that only the former heir is off limits, and everything around him is fertile ground for asserting ambition and instilling order. While the Magomedov case involved conflicts connected to the security services, Abyzov owed too much to those who are not prepared to forgive debt to those enjoying life abroad while they’re forced to live in a “besieged fortress.”

But Abyzov’s arrest is also important because it demonstrates that the security structures are gradually switching from selective to random persecution. And everyone knows that they collect compromising material on any government official and influential businessman. Prosecution for economic crimes is becoming chaotic, and politics, which previously loomed large behind high-profile arrests, now appears only after the fact, as a secondary, albeit important, consequence.