THE EXILE - The Man Behind The Man - By Alexander Makarkin

Feature Story

May 29, 2003

The Man Behind The Man
By Alexander Makarkin Browse author

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They Came From Vnesheconombank

After graduating from an institute specializing in roads and highways, Kasyanov worked for a long time in the Gosplan (State Planning Committee) of the Russian Socialist Republic -- an insignificant place compared to the Soviet Union-wide Gosplan department. Kasyanov played no real part in the collapse of the Soviet Union or the setting up of new federal structures in the new Russian state (unless you consider the fact that he was never forced to find new work during that period). He was already 35 years old and had worked for 12 years in Gosplan when it was transformed into the Ministry of Economics, where Kasyanov was given an unimportant post as head of a sub-department.

For comparison's sake, Egor Gaidar, who was one year older than Kasyanov, had already reached the post of acting Prime Minister. And Boris Fyodorov, who was younger than Kasyanov by a few months, had twice been named Finance Minister.

It was Fyodorov who would later become Kasyanov's Godfather. In 1993, while serving as both Finance Minister and Deputy Prime Minister, Fyodorov first noticed that Kasyanov spoke fluent English, a rarity among former Gosplan workers. Moreover Kasyanov had been abroad more than once and understood the ins and outs of the debt problems of both the former Soviet Union and the new Russia. And he didn't pack up for the private sector like most young and talented bureaucrats did at that time.

Kasyanov left the Ministry of Economics without any particular regrets. In the first place, then-Minister of Economics Oleg Lobov [see eXile glossary] had surrounded himself with a group of powerful middle-aged bosses who were utterly alien to Kasyanov. Besides, Fyodorov offered Kasyanov the opportunity to head the department of foreign credits and external debts -- an independent subdivision within the Ministry of Finance. In other words, he'd become a serious player.

Kasyanov's immediate superior, 32-year-old Andrei Vavilov, was a member of the Gaidar team and Fyodorov's first deputy. After Fyodorov was fired, it was Vavilov who persuaded the new Finance Minister, Vladimir Panskov, to name Kasyanov to the post of deputy minister in 1995. After that the future Prime Minister's career rise came to a four-year halt.

With Kasyanov in charge of handing out government-backed loans and credits, rumors started to swirl. Supposedly, in order to get a loan the recipient had to kick back two percent of the gross to Kasyanov, earning him the nickname "Misha Two-Percent" which has stuck with him ever since. However there has never been any incriminating evidence of dirty dealing by Kasyanov, despite the anti-Kasyanov PR his enemies have given the press.

Gradually Kasyanov's influence began to reach into the folds of Vnesheconombank USSR, the bank which oversees and manages Soviet-era foreign debts. Kasyanov has always looked at Vnesheconobank as a good source of personnel for his team. So for example Vladimir Chernukhin, who worked for four years at Vnesheconombank as everything from deputy head of the credit department to deputy chairman of the board, was named deputy Finance Minister on May 1, 2000, just days before Kasyanov formally left his post as Finance Minister. Last year, Chernukhin became head of Vnesheconombank. He replaced Andrei Kostlin, who was named CEO and Chairman of sister state bank Vneshtorgbank. Kostlin accompanied Kasyanov during his talks with the London Club of creditors.

A former superior of Chernukhin's, Alexander Zhitnik, was named in October of 2001 to head Rosselkhozbank, which controls the agro-industrial complex's funds. The deputy head of Vnesheconombank's legal department, Tatyana Trefilova, was named to head the Federal Service on Bankruptcy and Auditing (FSFO) in February, 2001.

All questions pertaining to Russia's debts have remained under Kasyanov's control up to this day. In the beginning of 2000 he concluded negotiations with the London Club on restructuring Russia's debt. Today debt matters are handled by the head of Vnesheconombank, Chernukhin, as well as Oleg Buklemishev, an advisor to Kasyanov who was once his colleague in the MinFin, and another deputy finance minister, Sergei Kolotukhin, who is also, according to general opinion, one of "Kasyanov's men." Kolotukhin worked at Vnesheconombank before moving to the Ministry of Finance, where he was named deputy minister by Kasyanov in February, 2000.