Institute of Modern Russia

A false email sent by the Russian government press service on June 19 announcing the firing of Vladimir Yakunin, the powerful head of Russia’s state railway corporation and one of Vladimir Putin’s oldest allies, is the latest sign of increased tensions among the Russian leadership. The statement, issued on the eve of the prestigious St. Petersburg Economic Forum and retracted thirty-three minutes later, was quickly denounced as fake by the government and Yakunin, but not before Deputy Railway Minister Aleksandr Misharin, the man falsely named as his successor, had time to accept congratulations. The government blamed the incident on an unidentified hacker and said it was investigating the situation. Yakunin noted that he and his company have been under attack in an information war over the sums of money Russia is investing in its infrastructure.

“It is a provocation,” Yakunin told the press at the forum. “It has made everyone realize how vulnerable our society is to cybercrimes.” (In a display of oligarchic bravado—and excess—he also noted that at the time the story was being circulated, he and Putin were dining together on stewed wood grouse, and that the story of his resignation did not spoil his appetite).

Indeed, a smear campaign has been ongoing for months against Yakunin, whose company receives large subsidies from the federal budget in exchange for less-than-remarkable results. Attacks have included a recent media report about Yakunin’s luxurious country house, complaints by railway workers about pay delays and job cuts (railway workers greeted the news of Yakunin’s firing with cheers), and a broadcast by radio host Sergey Dorenko last November, in which he claimed that Yakunin was aggravating the financial condition of his agency (Yakunin is suing Dorenko for slander).

In addition, Yakunin’s entrenched position may have been weakened following the March publication of a report by the Governance and Problem Analysis Center, which is chaired by Russian Railways. The report concluded that the ruling United Russia party came in second to the Communist Party in the 2011 Duma elections, and received its official victory due to fraud. Yakunin fired the researcher responsible for the project.

Any dismissal of Vladimir Yakunin would mean the departure not only of a powerful oligarch—the latest survey in Nezavisimaya Gazeta ranks Yakunin the fifth most effective lobbyist in Russia—but the removal of a key pillar of the regime, a man who some speculate could be the successor to Putin himself. Yakunin and Putin have been acquaintances since at least the early 1990s, when the two men lived in St. Petersburg. They are co-founders of the so-called Ozero dacha cooperative, a society founded in 1996 that unites properties in Solovyovka in the Leningrad Region. The cooperative’s other founders and residents, including Yuri Kovalchuk, are also formidable players in the clan system today.

In his position as head of Russian Railroads, Yakunin wields considerable clout over government decisions. Several years ago, for example, Yakunin blocked a proposal to build an oil pipeline to Russia’s Pacific Coast because it would deprive the railways of one of its most important sources of revenue (transporting oil by freight). In addition to his political and business interests, Yakunin conducts many social and religious activities. He runs at least three non-profit organizations to promote Russian Orthodox values, Russian history, and strong ties with the Slavic world. Yakunin has also advocated a conservative ideology: he has backed changes to the Russian constitution to include definitions of “Russian tradition” and “national idea,” and he has encouraged grass-roots displays of patriotism, such as distributing ribbons in honor of the May 9 Victory Day. These are themes that resonate deeply with Putin’s diminished political base.

A year or two ago, the organization of such a provocation against a Kremlin heavyweight like Yakunin would have been inconceivable. In recent months, however, there have been signs that the system is unable to cope with the challenges Russia faces. As a consequence, elite politics have become increasingly fractious, money flows more contested, and status insecurities more evident. Although Yakunin blamed the false announcement of his resignation on enemies within the railroad sector, the available circumstantial evidence suggests much broader causes.

The traditional Kremlin brew of intrigue, suspicion, and half-truth has so far produced several, sometimes-contradictory versions of the Yakunin affair, with no clear explanation forthcoming. A common theme is the rivalry between Prime Minister Medvedev and Yakunin, the latter being a vocal opponent of the privatization of “Russian Railways” favored by many in the government. Theories include:

• That Yakunin himself was behind the press release, presumably to secure Putin’s endorsement of Yakunin’s continued tenure.
• That Misharin invented the “firing” and named himself successor in hopes of ensuring his promotion to the top job when it does become available.
• That Medvedev intended to replace Yakunin but made a “false start” with the press release. Putin had agreed to fire Yakunin, but then Yakunin persuaded him otherwise.
• That Medvedev was led to believe that Putin would go along with firing Yakunin, but was told otherwise after the fact, in order to demonstrate that Putin is still boss.
• That the false firing was a symptom of the increasingly public scrutiny Yakunin is facing over his business relationships and wealth, in what is a generational conflict between Putin’s allies and Medvedev’s supporters.
• Finally—and less related to Medvedev, whose political position is declining—that Yakunin is the target of other hard-line factions clustered around Sergey Ivanov and Igor Sechin.

Most difficult to fathom is the mind of Vladimir Putin. Yakunin’s position as co-founder of the legendary Ozero Cooperative seemed to grant him protection from outright dismissal; Putin might transfer him, but such a figure is rarely expelled from the elite. The recent departures of Defense Minister Serdyukov and ideologist Vladislav Surkov from the top levels of power, however, have left many elites uncertain of Putin’s plans for them. Firing Yakunin would be a definitive sign that Putin is changing the rules of the game.

Putin may indeed be reconfiguring the system. An initial reactionary turn by the regime in 2012 was a response to the Moscow street protests of 2011–2012. The current, second stage is apparently a longer-term move toward personal power, even as Putin becomes more conservative in his views. Putin is distancing himself from the party of power and selectively attacking corruption, and appears to be increasingly distrustful of his entourage, who are quietly unhappy with his demand that they bring their foreign assets back to Russia. Since Vladimir Yakunin personifies much of where the regime seems to be headed, however, he, rather than his critics, is more likely to be around Putin for a while.