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Yeltsin fires privatization officials over book fee scandal

November 15, 1997

MOSCOW (AP) _ President Boris Yeltsin dismissed two top officials Saturday for taking huge advance fees to write a book and sharply rebuked the administration’s top reformer for his role in the scandal.

While no laws have been broken, some say the payments _ by a publisher with ties to a bank that is bidding for privatized companies _ are in fact thinly disguised bribes.

First Deputy Prime Minister Anatoly Chubais had offered to step down, but Yeltsin declined to accept his resignation. Instead, the president reprimanded him for taking a hefty advance for the yet-to-be-published book, ``The History of Russian Privitization,″ the presidential press service said.

Although Chubais escaped dismissal, Yeltsin said his activities ``were not acceptable,″ the press service said.

Chubais and at least six other top officials reportedly each received a $90,000 advance for contributing to the book. The royalty payments came from Segodnya-Press, a Russian publisher partly owned by an affiliate of Oneximbank, one of Russia’s largest banks and a major beneficiary of the government privatization program.

Yeltsin signed decrees Saturday removing Deputy Prime Minister Maxim Boiko, head of the government’s privatization program, and Pyotr Mostovoi, the head of the Federal Bankruptcy Agency, the press service said.

On Friday, the president fired his first deputy chief of staff, Alexander Kazakov, for accepting an advance.

The scandal has dominated Russia politics for the past week, with the Communists and other hard-line opponents of market reforms accusing the Kremlin of pervasive corruption.

Most of the government team involved in efforts to privatize the economy have been linked to the book imbroglio.

Critics of Yeltsin’s economic reforms have charged repeatedly that valuable state-owned businesses have been sold at bargain-basement prices to wealthy bankers with close ties to the Kremlin.

Despite the frequent claims of malfeasance, no formal charges have been filed against leading government figures in connection with the privatization program.

After winning a second term last summer, Yeltsin pledged to revive stalled economic reforms and complete Russia’s transformation from the failed Soviet system to a modern market economy.

Chubais is the administration’s main architect of that effort, and his departure from the administration would be a major setback.

Chubais admitted Thursday that taking the advance may have been ill-advised and said he and the other authors would donate 95 percent of their fees to a private charitable foundation.

The other authors include Alfred Kokh, a former head of the privatization program, Federal Securities Commission chairman Dmitry Vasiliev, and Arkady Yevstafiev, a former Chubais aide who now runs a foundation.

Opposition politicians have asked prosecutors to look into the case.

Prime Minister Viktor Chernomyrdin, who met with Yeltsin on Saturday to discuss the matter, said he was outraged.

``Neither I nor the president knew that high-ranking officials had received excessively high royalties,″ the ITAR-Tass news agency quoted him as saying. ``No one who works in the government can behave in such an indecent way.″

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