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that the involvement of aid-paid consultants

the St. Petersburg Clan controlled, directly

may feed the perception among some groups

and indirectly, millions of dollars in aid

that "foreigners have come to loot." In some

through a variety of institutions and organiza-

cases consultants' involvement appears to

tions set up to perform privatization, econom-

have encouraged anti-capitalist, anti-Western,

ic-restructuring,  and  related  activities.

and anti-privatization sentiments among radi-

Between 1992 and 1997 HIID received $40.4

cal populist groups (with elements of radical

million from U.S. AID in noncompetitive

nationalism) that charged that local elites

grants for work in Russia and was slated to

involved in privatization had been corrupted

receive another $17.4 million until U.S. AID

by the West. For example, the unionists at

suspended its funding in May 1997.27 In addi-

Ursus, a large Polish tractor enterprise, deco-

tion to receiving millions in direct funding,

rated the main entrance to the factory as fol-

HIID helped steer and coordinate U.S. AID's

lows: "A Foreign Elite Steals from Us While the

$300 million reform portfolio, which encom-

Polish People Are at the Bottom" and "Polish

passed privatization, legal reform, capital mar-

Property for All Poles."

kets, and the development of a Russian securi-

An analyst who observed efforts by Poland's

ties and exchange commission.28

Privatization Ministry to answer objections to

Further, U.S. support bolstered the St.

Did the strategy of

its mass privatization plan in 1992 holds that

Petersburg Clan's standing as Russia's chief

focusing on one

those efforts "indicate the ways in which it, the

brokers with the West and the international

MoP [Ministry of Privatization] and the for-

financial institutions. Chubais and the clan

group further the

eign consultant presence all were politically

were favorites of the IMF, and the clan man-

goal of establish-

sensitive and may have contributed to declin-

aged some World Bank loans to Russia.

ing the transpar-

ing support for privatization."24 Aid aimed at

But was economic reform the driving agen-

da of the St. Petersburg Clan? And what made

quick privatization may have helped to pro-

ent, accountable

it deserve the status of partner with the West

duce some of the same results as the ideology it

institutions so

more than other Russian reform-oriented

purported to replace--in short, it served to

groups and individuals? More important, did

replicate the same type of suspicion and plan-

critical to the

the strategy of focusing largely on one group

ning that existed under communism.

development of

further the aid community's stated goal of

democracy and a

establishing the transparent, accountable

A Few Good Reformers

institutions so critical to the development of

stable economy?

democracy and a stable economy for this

world power in transition? What were the

When Western governments promised eco-

long-term implications of supporting one

nomic aid to Russia following the collapse of

group of "reformers" at the expense of others?

the Soviet Union, they wanted to see new faces

From the very beginning, Russian observers

and remain untainted by association with the

took note of the activities and motivations of

erstwhile communist regime.25 And so a cadre

the St. Petersburg Clan. But it would not be

of self-styled Russian "reformers" stepped into

until 1997--and the eruption of a scandal that

that role. From 1992, when aid first appeared,

could hardly be ignored--that some Western

until 1997 U.S. economic aid to Russia essen-

observers would begin to consider the implica-

tially was entrusted to those men, who were

tions of U.S. and Western policy and what it

dominated by a decade-old clique from St.

had wrought.

Petersburg that Russians called a "clan" (here

referred to as the "St Petersburg Clan" or the

The Consummate Clan

"Chubais Clan," after its leader, Anatoly

In a 1996 article, Thomas E. Graham, a

Chubais).26

senior political officer at the U.S. embassy in

Working closely with Harvard University's

Moscow, opined that Russia was run by rival

Institute for International Development

"clans" with largely unchecked influence.29

(HIID), also known as the "Harvard Project,"

6