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Kudrin Besieged, Ivanov On Rise

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NEWS ANALYSIS Finance Minister Alexei Kudrin has been summoned to the St. Petersburg prosecutors office for interrogation about the citys finances from 1992 to 1996 years when Kudrin and Vladimir Putin were two top deputy mayors in a case that many observers saw as politically motivated.

It is hard to know what to make of the Friday summons to Kudrin, who did not respond to it because he was in Novosibirsk traveling with President Putin on Friday.

But one likely explanation is that Sergei Ivanov, head of the Kremlin Security Council, is headed for the prime ministers chair and Kudrin is in the way. "Kudrin has been bitten by the siloviki [power ministry officials], who are clearing the way for their man [Ivanov]," speculated Yury Korgunyuk, a political analyst with the INDEM think tank.

Kudrin, a liberal St. Petersburg economist, and Ivanov, a career KGB man, are widely seen as likely replacements for Prime Minister Mikhail Kasyanov who has for weeks reportedly been on the verge of being fired.

But it seems Putin is less than enchanted with Kudrin these days.

On Friday, during the visit to Novosibirsk, President Putin threatened to sack the entire government unless it sorted out an incident involving the theft of nonferrous metals from a nuclear physics institute there. Putin then specifically charged Kudrin with bringing in improvements.

On Monday, Kudrin and his Finance Ministry were again berated by President Putin this time for being slow organizing social welfare payments for servicemen.

"[Servicemen] are being thrown out of trams, trolleybuses, buses and trains," Putin stormed at a Defense Ministry meeting. "We have turned them into beggars. Federal organizations must pay everything on time but they either dont pay, or cash is being spent on other goals."

Speaking to the finance minister, Putin warned, "We are going to improve you."

Ivanovs star, meanwhile, seems to be rising.

This month the Russian media have carried several favorable profiles of the little-known former espionage agent.

Ivanov himself also asked Putin to dismiss him from his rank of lieutenant general in the SVR foreign intelligence service, prompting some observers to suggest he was donning civilian clothes in preparation for the premiership.

And then there is the overnight investigation of St. Petersburg city finances and Kudrin.

The invitation to be questioned last Friday "in connection with possible financial machinations in St. Petersburg at the time of [Anatoly] Sobchaks administration" was faxed last week to the Finance Ministry, said Gennady Yezhov, Kudrins spokesman. Yezhov said Monday his boss has no idea about what he is to be questioned.

The official case number is 31913 and it was opened Nov. 13 just a day before case No. 31914 was opened involving a single bad loan given to a local official, according to Kommersant newspaper.

Case No. 31914 was used as justification for raids last week of St. Petersburgs Promstroibank a bank with close ties to Sobchaks administration, where Putin has even held a small amount of shares.

On Monday, no one in St. Petersburg officialdom seemed to know much about either case. Officials with the St. Petersburg finance committee and the citys Audit Chamber all professed ignorance.

Gennady Ryabov, a spokesman for the St. Petersburg prosecutors office, said he knew nothing about the Kudrin case and had no comment. Natalya Vishnyakova, a spokeswoman for the federal Prosecutor Generals Office, also said she knew nothing about the cases in St. Petersburg.

Boris Vishnevsky, a member of the Yabloko faction in the St. Petersburg Legislative Assembly who also used to work for the finance committee, said in a telephone interview that the Kudrin summons has an obvious political shading.

"Why else would they open now a case into what took place four or six years ago?" he asked rhetorically. "They obviously want to deal a blow to Kudrin. I am absolutely positive that our prosecutors office got an order from power structures in Moscow. They could not have done that by themselves."

Politics-watchers have talked about three separate lobbies fighting for influence in the Putin Kremlin: the liberals, the security services and the so-called "Family" of public figures associated with the Yeltsin regime, including men like financier Boris Berezovsky and privatization tsar Anatoly Chubais.

Putin has ties to all three groups: He is career KGB and proud of it; he was a key figure in the Sobchak administration; and he owes his presidency to Yeltsins blessing.

Upon his election as president eight months ago, Putin mostly kept the same government he had inherited from the Yeltsin team.

But Berezovsky has since declared himself a political emigrant, while Chubais has worried aloud that Putin is too much under the influence of writer Alexander Solzhenitsyn. And Putin has plugged in new officials as head of the Kremlin property department and of arms exporter Rosvooruzheniye organizations once considered "Family" fiefdoms, and which wield enormous revenue potential.

All of which suggests he is feeling his way toward a truly Putin team only what will it be?

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