Yeltsin Rehires Vilified Reformer as Chief of Staff

By RICHARD BOUDREAUX

July 16, 1996 12 AM PT

TIMES STAFF WRITER

MOSCOW — Russian President Boris N. Yeltsin on Monday rehired a castaway leader of his economic team, Anatoly B. Chubais, and made him Kremlin chief of staff, vaulting a free-market pioneer into one of the three most powerful posts in his new administration.

Chubais, 41, architect of the massive sell-off of state property and tamer of Russia’s wild post-Soviet inflation, was fired six months ago as an unpopular political liability. But he remained loyal and managed the president’s come-from-behind reelection campaign against a Communist rival.

The surprise appointment delighted Russian reformers but was partly eclipsed by continuing concern about the health of the 65-year-old Yeltsin, who abruptly postponed a meeting Monday with U.S. Vice President Al Gore and left the Kremlin just before Gore arrived.

Brushing off the unusual lapse of protocol, U.S. and Russian officials said Yeltsin will receive Gore today at his walled summer retreat in Barvikha, west of Moscow.

“He is tired, really very tired,” presidential spokesman Sergei K. Medvedev said of his boss, whose public appearances over the last three weeks have been limited to heavily edited television clips. Denying a recurrence of heart trouble, he added: “I wish to repeat: He is not ill.”

News of Chubais’ new role--riding herd on a vast Kremlin bureaucracy and deciding who gets to see Yeltsin each day--was a political bombshell. It is certain to shape not only the policies of Yeltsin’s new four-year term but also the jockeying for succession if death or disability cuts that term short.

“This means hope that the mandate Yeltsin received in the election will be used to carry out needed reforms in Russia,” said Yegor T. Gaidar, who led Russia’s painful free-market revolution until he too was fired.

But Chubais’ elevation could also mean political turmoil. It appears to undermine any chance that the Communists, whose candidate got 40% of the vote against Yeltsin in the July 3 runoff, will accept a minority role in the new Cabinet--ending days of talk about a “government of national conciliation.”

A controversial and often vilified reformer, Chubais joins Prime Minister Viktor S. Chernomyrdin and the new Security Council chief, retired Gen. Alexander I. Lebed, as the president’s most powerful aides.

A U.S. official traveling with Gore said: “We know Mr. Chubais, and a number of us have worked with him. He’s very much a reformer, and we’re glad to see him as part of the Yeltsin-Chernomyrdin team.”

The appointment completed a shake-up begun four weeks ago with the firing of Gen. Alexander V. Korzhakov, Yeltsin’s chief bodyguard, and two other members of a powerful Kremlin faction that had edged the president away from reforms and into a 19-month-old war against separatists in Chechnya.

As chief of staff, Chubais replaces Nikolai D. Yegorov, the last member of that faction still in power. Chubais was also given a mandate to absorb the duties of chief presidential aide--the job now held by Viktor V. Ilyushin.

Kremlin watchers said the other winners--and apparent engineers--of this shake-up are Chernomyrdin and Ilyushin himself. Ilyushin is expected to become a deputy prime minister.

For his part, Chernomyrdin gains from having a longtime ally in power. Since Yeltsin brought Lebed into the Kremlin four weeks ago, Chernomyrdin has been struggling to keep the popular war hero from grabbing control of economic policy.

Chubais said earlier this month that it would be a “terrible mistake” if Lebed succeeded. Political analysts said Chubais can prevent him from doing so by influencing appointments in economic spheres as Yeltsin and Chernomyrdin shape a new Cabinet in the coming weeks.

Chubais, who will also push the Kremlin’s candidates in local elections this fall, is known as a brilliant organizer and strategist.

Starting in late 1992, he devised and oversaw the sale of more than 14,000 state companies--the biggest and swiftest privatization in history. Most of them were offered for sale in exchange for government vouchers that each citizen had received free.

But the process was poorly explained, marred by insider trading and accompanied by high inflation--touched off by the abolition of Soviet-era price controls. Many Russians sold their vouchers for quick cash; the enterprises ended up in relatively few hands.

After Communists won control of parliament’s lower house in elections in December, Yeltsin fired and humiliated his privatization chief, telling a nationally televised news conference, “Chubais is to blame for everything.”

Communist leaders said Monday that they were stunned by Chubais’ resurrection and said it undermines the potential inclusion of their party in the Cabinet.

“How can we sit at the same table with those who we think are personally responsible for screwing things up in Russia?” said Anatoly I. Lukyanov, a member of the Communist Party Politburo. “Why would we want to share responsibility for all their mistakes and crimes?”

Liliya Shevtsova, a political analyst who supports the reforms, warned that Chubais’ appointment could wreck Russia’s postelection peace.

“Yeltsin appointed one of the most hated figures in Russia at a time when the country is divided,” she said. “It will now be very hard for parliament to support the new government. You could see a confrontation, a dissolution of the parliament and a new tug of war. Russia doesn’t need this.”

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Profile

Anatoly Borisovich Chubais (pronounced choo-BICE)

Born: June 16, 1955, in Minsk

Education: Graduated in 1977 from Leningrad Engineering-Economic Institute; worked there as an associated professor from 1982 to 1990.

Career: Elected to the St. Petersburg City Council in 1990, he became deputy chairman in 1991; joined President Boris N. Yeltsin’s government in November 1991 as head of the State Property Committee, in charge of selling off property amassed by the Soviet state. While continuing in that job, he was made a deputy prime minister in June 1992; after Communists won control of Parliament, Yeltsin fired him in January as a political liability. But the following month he took over management of Yeltsin’s reelection campaign.

Personal: Married to Maria Vishnevskaya, an economist. He has a daughter and son from his previous marriage.