NEWS ANALYSIS:Kiriyenko Shows He Is Own Man

He went out on a limb, explaining his actions only later.


When he was nominated to the post of prime minister in March, Sergei Kiriyenko was widely written off as a mere technocrat -- a number-spouting economic manager who would not have the stomach for the brawling world of Russian politics.


He did little to strengthen his image as an independent leader by meeting repeatedly with a small circle of Russia's financial magnates before drafting his economic program.


But the 35-year-old prime minister has shown a different face over the past week with a risky attack on natural gas giant and tax debtor Gazprom.


In a self-confident performance during a live interview on NTV television's "Itogi" program Sunday night, Kiriyenko said he did not consult President Boris Yeltsin before making the aggressive move to extract back taxes from Gazprom.


The only thing he got Yeltsin's approval for, he said, was the basic position that "the country cannot live if taxes are not paid. ... Therefore we will demand that taxes be paid, and these demands will be very tough ones."


When Yeltsin chose Kiriyenko to replace the fired Viktor Chernomyrdin, opposition politicians like Yabloko leader Grigory Yavlinsky and Communist Gennady Zyuganov, along with political analysts in the press and research institutes, said Kiriyenko was a mere errand boy lacking the political base to take independent action.


But Kiriyenko's performance last week, and on television Sunday, were evidence that the formerly obscure fuel and energy minister had consolidated enough authority to decide to take on a company big enough and powerful enough to cause him -- and Yeltsin -- major political headaches.


Swigging nonchalantly from a large white NTV tea mug, Kiriyenko said Sunday that he had been forced to plunge into political battle -- against his wishes.


"After everything ... do you still insist that you are not a politician?" he was asked. Kiriyenko answered, a hint of regret in his voice: "I would be happy to say that, but alas, it would not be true."


Kiriyenko gave his version of last week's stormy events, saying that the government decided to move against Gazprom, Russia's biggest company, after it seriously underpaid its June tax bill.


The prelude to Thursday's conflict was a decision by new tax service chief Boris Fyodorov to tear up a semi-legal deal struck by his predecessor, Alexander Pochinok, with Gazprom.


Under the deal, Gazprom had guaranteed to pay 2.45 billion rubles of its estimated 4 billion ruble monthly tax bill, leaving the rest till the end of the year.


Kiriyenko said the decision to tear up the deal and force Gazprom to pay its full bill drew the powerful gas monopoly's ire. "Gazprom felt hurt and decided to retaliate by not paying even the 2.45 billion," said Kiriyenko, adding that instead the company paid only about 800 million rubles.


Kiriyenko dubbed Gazprom's conduct an unacceptable "attempt to teach the state a lesson." Gazprom, he said, was threatening that if the state would not accept 2.45 billion rubles, "it would get nothing." Kiriyenko said he responded by threatening to have the state take direct control over the 35 percent stake in Gazprom now held in trust by its President Rem Vyakhirev. Eventually, this could mean Vyakhirev's dismissal.


After Kiriyenko's remarks, a political furor broke lose, with the State Duma and television channels sympathetic to Gazprom attacking the government. The outcome of the battle is still very much in doubt. The crisis was defused when the company made vague promises to pay, but has not yet delivered a ruble.


Nevertheless, Kiriyenko went out on a limb and only explained his actions to the Kremlin after the storm broke.


So far Yeltsin has backed him up. After the incident, Yeltsin told his ministers that he would have allowed Gazprom not months but "a day" to pay up.


Yevgeny Volk, a political analyst and director of the Heritage Foundation Moscow office, called the battle with Gazprom "a draw" but said that "Kiriyenko wants to show his power, to establish his independence and show he's a real prime minister independent of the president and the oligarchs."


With Gazprom apparently agreeing to pay, the government unfroze company assets and backed down from its threat to tear up the trust agreement with Vyakhirev.


Kiriyenko is a long way from triumphing over Gazprom and the battle may have triggered a backlash.


His bold move earned the enmity of other powerful financial interests, who used their newspapers and television stations to back the gas monopoly. Some of the media moguls who have financial holdings that are also deep in tax debt fear similar treatment.


And the controversy may stiffen resistance in the Duma, the lower house of parliament, to Kiriyenko's efforts to raise tax revenue through emergency economic legislation.