Russia's Grey Cardinal

Igor Sechin is one of the most enigmatic figures in the contemporary Russian political elite. His career has closely tracked that of his patron, Vladimir Putin. Both have a security background (although Sechin’s career in this respect is less transparent), both served in the Leningrad (St Petersburg) city soviet (council), and from 1998 both enjoyed a spectacular career in Moscow to reach the pinnacle of the power system. However, while Putin was the charismatic leader, Sechin throughout has remained in the shadows. Nevertheless, it is hard to overestimate the power that Sechin has wielded in shaping the dirigisme that characterized Putin’s second presidential term (2004-08), and which still hangs like a shadow over the current political system.

For over a decade Sechin has effectively been the head of the so-called siloviki faction, those who in one way or another represent the interests of the security faction and advance their policy concerns, notably in adopting a hard-line in dealing with domestic challenges and who advocate a robustly independent foreign policy for the country.

The turning point in their fortunes was the attack on Mikhail Khodorkovsky and his associates from 2003, accompanied by the dismantling of the Yukos oil company. The Yukos affair illustrates the deep inter-penetration of state and corporate interests in contemporary Russia. The counterpart of the system of managed democracy is a managed economy, in which classical regulatory mechanisms are reinforced by a range of administrative interventions. Sechin contributed much to the creation of this, with all of the deleterious effects that this has had on Russia’s investment climate.

From romance language studies to the top...

Sechin was born on 7 September 1960 in Leningrad into a family of metal workers. He studied romance language at Leningrad State University from 1979, and graduated in 1984 as a linguist specializing in Portuguese and French. In the 1980s Sechin worked in Mozambique and Angola, according to his official biography as a military translator and interpreter as well as with Soviet trade and diplomatic missions, notably with the Tekhnoexport agency. This is assumed to have been a cover for spying activity. The intelligence company Stratfor alleges that Sechin was the USSR’s coordinator for smuggling weapons to much of Latin America and the Middle East, working with the GRU (military intelligence) agent and suspected arms smuggler,external pageViktor Boutcall_made. Bout external pagedenies any linkscall_made with Sechin.

From 1988 Sechin worked in the foreign economic relations department of the executive committee of the Leningrad city soviet (Lensovet), meeting Putin on a visit to Brazil in 1990 by Leningrad city officials. In 1991 Sechin joined the St Petersburg’s mayor’s office, becoming in 1994 chief of staff to the first deputy mayor, Putin. When the mayor of St Petersburg, external pageAnatoly Sobchakcall_made, lost his battle for re-election in 1996, both Putin and Sechin shortly thereafter decamped to Moscow. Sechin once again closely tracked Putin as the latter began his vertiginous path to the top. In 1996-97 Sechin was Putin’s deputy running the Kremlin’s property services directorate; and in 1997-98 Sechin headed the general department of the main control directorate, headed by Putin. When Putin was appointed prime minister in August 1999, Sechin took over as head of his secretariat. Between 24 November 1999 and 11 January 2000 Sechin served as the first deputy head of the presidential administration.

With Putin’s elevation to the presidency on 31 December 2000, Sechin worked as deputy head of the presidential administration for the entire two terms up to May 2008 (formally becoming an aide to the president in March 2004), where he was able to shape national policy according to his preferences. He acted as the gatekeeper to the president, earning the moniker ‘the grey cardinal’, as well as being dubbed ‘Darth Vader’ by the Russian press and ‘the scariest man on earth’. He also forged alliances with other siloviki, notably through the marriage of his daughter Inga to Dmitry Ustinov, the son of the prosecutor general Vladimir Ustinov. After a series of strange manoeuvres in 2006, Ustinov was shifted to become minister of justice before he was sent down to become the presidential envoy to the Southern Federal District. To shore up his authority, Sechin was able to get his nominee external pageVladimir Bastrykincall_made to take over as the inaugural head of the Investigative Committee of the General Prosecutor’s Office.

The third man

On 12 May 2008 Sechin followed Putin to the White House (the seat of the Russian government) where he became part of the new cabinet as a deputy prime minister responsible for industrial policy (excluding the military-industrial complex) and energy. His scope for intervention in national politics was now more limited, although he enjoyed responsibility for energy policy. This had long been a sphere in which Sechin had made his mark. On 27 July 2004 he was appointed to the board of directors of external pageJSC Rosneftcall_made, and in 2006 he formally took over as chair. It was at this time that the attack on Khodorkovsky was transformed into a broad assault against the Yukos oil company. This saw its main production asset, external pageYugansneftegaz, being swallowed up by Rosneftcall_madein December 2004 in a deeply flawed auction. From the first Khodorkovsky accused Sechin of being the main instigator of the attack against his company. Following his second conviction, Khodorkovsky external pageargued thatcall_made ‘The second as well as the first case were organized by Igor Sechin… He orchestrated the first case against me out of greed and the second out of cowardice'.

As deputy prime minister Sechin appears to have encouraged Hugo Chávez to develop a nuclear programme, and Sechin negotiated the transfer of nuclear technology and weapons to Venezuela. In July 2009 he arranged a deal with Cuba that allowed Russia to conduct deep water drilling in the Gulf of Mexico. Among his many responsibilities Sechin was head of the board of directors of the United Shipbuilding Corporation. This came to end with President Dmitry Medvedev’s order of 31 March 2011 that ministers should not simultaneously hold directorships, an attempt to address the problem of the lack of transparency in decision-making. This meant that Sechin had to step down from his role at Rosneft, although he was able to retain influence in other ways.

Until his ministerial appointment Sechin had kept himself very much in the shadows, but from 2008 he was rather more forthcoming. In one of his interviews he contested the way that he was usually categorized. As he put it in an interview with the Financial Times:

‘It is not often that you find the word siloviki in the Russian press’, external pagehe sayscall_made, with no hint of irony. ‘Take John McCain, he is a silovik: should we treat him differently to anyone else? This is more a myth than reality'.

The report noted that he was often considered to be ‘the third man’ in the tandem of Medvedev and Putin, acting as ‘a sort of Russian Richelieu’. He continued to assert that energy was ‘the locomotive of the Russian economy’, but the economic crisis had exposed Russia’s vulnerability to domestic and global shocks, and the rhetoric lost some of its earlier bombast, notably in the claims in 2007 that Russia had become an ‘energy superpower’. Sechin’s statist views, according to those who know him, had been tempered by the experience of Rosneft’s successful IPO in London in July 2006, when for the first time he had to work with foreign bankers, and thereafter he had been rather more respectful of the market and property rights. As one of his associates noted, ‘He is less ideological and much more pragmatic now’.

This does not mean that he was ready to make amends over the effective expropriation of Yukos assets from 2004. As he put it in his first public comments on the controversial use of the courts and a leveraged transfer in the ownership of Yuganskneftegaz: ‘Rosneft bought these assets. It didn’t repossess anything from anyone. It paid a huge sum. The valuations were conducted according to market methods … Nothing was repossessed and nothing was received as a gift’. He also repudiated Khodorkovsky’s charge that the case was political: ‘If I were you I would go to the prosecutors and ask to see the case. You would get an absolutely clear answer on this question’. external pageSechin’s defensivenesscall_madewas also apparent when questioned about the poor investment climate in Russia, damaged by the Yukos affair and then the continuing controversy over the external pagedeath of Sergei Magnitskycall_made in the Hermitage Capital case.

He insisted that Russia had fundamentally changed, and thus comparisons with the Soviet era were inappropriate: ‘We have political stability. We have practically replaced all of the old Soviet infrastructure. We have built new gas pipelines. We have created a modern banking system. I think that investors are quite satisfied’. Concerning Magnitsky, he insisted that ‘A criminal case was opened upon the death, the investigation is under way, and I am confident that the court will clear up everything’. On the Yukos affair external pagehe stressed the new themecall_made that had emerged in official rhetoric on the question: ‘Let me remind you that Yukos leaves a trail not just of simple violations, but of very grave criminal offenses, such as murders, torture and extortion'. This was a theme advanced by Putin in his press conference of 16 December 2010, but lacked any substantive evidence.

The new generation

Although unbending on the Yukos issue, Sechin was rather more flexible in other matters. This may well reflect concern about his future if Medvedev returns for a second term, a worry shared by his entire faction. Personal relations between Sechin and Medvedev were at best strained, and there are reports that senior officials in Sechin’s entourage at Rosneft external pagereferredcall_made to the president’s associates as ‘the boy scouts'.

Sechin’s pre-eminence in Russian politics symbolizes the power of the old Soviet establishment, and although it has undoubtedly evolved over the course of the last two decades, this particular faction of the old elite still bears a heavy baggage. The need for business transparency, independent courts and a genuinely competitive political environment does not come easily to them. We also know that this faction will fight to retain its privileges, and hence it had opposed Medvedev’s nomination to the presidency in 2008. They now fear a second term, in which the president would be released from some of the constraints imposed by the ‘tandem’ form of rule in the first. For them, a return to power by Putin would be optimal, ensuring that their power and privileges would be secure. While Putin no doubt still has the power to evolve and to adapt his policies to the new challenges facing the country, it is precisely his association with people like Sechin that raises doubts about his ability to lead the genuine modernization of the country. For this a new generation is required, one in which the likes of Sechin are no longer so prominent.