World

Turmoil Grips Russia Cabinet

By CBSNews.com staff CBSNews.com staff

May 28, 1999 / 12:17 PM EDT / CBS

After losing a power struggle for control of Moscow's economic policy, First Deputy Prime Minister Mikhail Zadornov resigned Friday, less than a week after his appointment.

Following his promotion from finance minister to deputy prime minister in charge of economic affairs, Zadornov was said to be unhappy that he was not allowed to keep his portfolio as finance minister and retain control over Russia's economic policy.

Zadornov announced his resignation at a late afternoon news conference at the Finance Ministry.

"A few hours ago, the president signed a decree about my dismissal," he told a news conference.

Zadornov did not tell the news conference who would be finance minister in the government being formed by Prime Minister Sergei Stepashin. "That is not a question to me."

Earlier in the day, Stepashin had tacitly confirmed that a behind-the-scenes struggle was holding up a final decision on the makeup of his new government.

Stepashin, looking grim, asked reporters covering his meeting with Norwegian Prime Minister Kjell Magne Bondevik to stop asking questions about the drawn-out formation of the cabinet.

"You know yourselves how it's going," he said with a long face, confirming that at least some of the media speculation about in-fighting among President Boris Yeltsin's underlings.

All week long, Russian newspapers and airwaves had buzzed with theories about which powerful forces have been at work on the Kremlin's picks for key cabinet posts. Yeltsin's daughter Tanya, business mogul Boris Berezovsky and veteran reformer Anatoly Chubais were all believed to have a part in the decision-making, at Stepashin's expense.

At his news conference, Zadornov complained that he had no Kremlin support for his desire to maintain control over the Finance Ministry while carrying out the overarching job of first deputy prime minister.

Zadornov's resignation came a little more than two tumultuous weeks after Yeltsin sacked Prime Minister Yevgeny Primakov and appointed Stepashin to replace him. The lower house of parliament, the State Duma, approved Stepashin on May 19. He and Yeltsin have been negotiating over the composition of the Cabinet since then.

They had made several key appointments, but others remain undecided. The biggest struggle has been over the post of finance minister.

First the Kremlin said that Zadornov would keep the post, in addition to his new duties as first deputy premier. But then it said that another official, Mikhail Kasyanov, had been appointed.

Communist Party chief Gennady Zyuganov said Friday that the mixed signals, together with a tug-of-war between two of Stepashin's deputy prime ministers, resulted from competition between Chubais, Berezovsky and Yeltsin's family. He called Yeltsin "a hostage to these string-pullers," the Interfax news agency reported.

"They seem to be at odds about who will take over the best cabinet sets, embezzlement-wise," Interfax quoted him as saying.

But the Vremya daily noted today that the struggle over who would oversee the Finance Ministry was over much more than a single cabinet seat.

"The question is whether the peaceful change of power in Russia will come to its logical conclusion and juridical form," Vremya wrote. "Because today, one compact financial-industrial group, elbowing out competitors, is getting control in fact over all the key posts in the executive."

Vremya was referring to Berezovsky, who appears to be the biggest winner in the struggle over the cabinet. His protege, former Railways Minister Nikolai Aksyonenko, was the first official whom Yeltsin named to the new government, along with Stepashin.

Aksyonenko holds one of the slots of first five deputy prime minister posts in the cabinet, but he has made it clear he'll seize as much power as he can.

That put him on a collision course with Zadornov, who insisted on having control over economic policy.

Yeltsin and Stepashin met Friday -- as they have every day this week -- presumably to discuss the finance minister's appointment. Stepashin refused to tell reporters just what he had discussed with the president.

"What we discussed will stay between us. We discussed issues concerning the government," he said before pleading with reporters to drop the subject.

The new government has yet to voice any firm policies and Stepashin appears to be under the firm control of Yeltsin, who can remove him at any time.