With unstable political, legal, and adminis-
dictated that only Chubais (at the time
trative structures, there were myriad opportu-
Yeltsin's chief of staff) had the authority to
nities for clans to penetrate public institu-
decide whether presidential decrees were ready
tions, bypass other influences, and lay claim to
to be signed--a directive that could be circum-
resources. No member of the St. Petersburg
vented only upon receiving direct instructions
Clan appeared to be more shrewd than the
from the president.32
chief figure in the group, Anatoly Chubais.
Through all this, Chubais enlisted the help
Before going to Moscow to work in the
of his energetic associates--the "St. Petersburg
national government in 1991, Chubais and
mafia"--to "infiltrate the power structure in
other members of the clan were influential
Moscow," as a report paid for by U.S. AID
expressed it.33 Members of the St. Petersburg
with the mayor of St. Petersburg, Anatoly
Sobchak, and worked in the city's administra-
Clan quickly discovered that their Western
tion. Several members of the clan, including
contacts could help them leverage support
Chubais, served as first deputy mayor under
that would serve as a critical launching pad
Sobchak.
and a political and economic resource at home
Chubais was a useful figure for Russian
and abroad. Indeed, U.S. support helped to
president Boris Yeltsin: first as head of Russia's
propel members of the clan into top positions
new privatization agency, the State Property
in the Russian government and to make them
Committee, beginning in November 1991,
formidable players in local politics and eco-
then, in addition, as first deputy prime minis-
nomics.
ter in 1994, and later as the lightning rod for
Reform by Decree
complaints about economic policies after the
Communists won the Russian parliamentary
The preferred method of governance con-
(Duma) election in December 1995. Chubais
tinued to be presidential decree, now orches-
made a comeback in 1996 as head of Yeltsin's
trated by Chubais. This applied not only to
successful reelection campaign and was
political moves but also to market reform. The
named chief of staff for the president. In
Communist-controlled Russian Federation's
March 1997 Western support and political
Supreme Soviet had passed a law mandating
maneuvering catapulted him to first deputy
privatization in June 1991 followed by a priva-
prime minister and minister of finance.
tization program in 1992 that was structured
Although fired by Yeltsin in March 1998,
to prevent corruption.34 However, the program
Chubais was reappointed in June 1998 to be
that Chubais implemented led to the accumu-
Yeltsin's special envoy in charge of Russia's
lation of property in a few hands and opened
Since 1994, when
relations with international lending institu-
the door to widespread corruption. Chubais's
tions.
program was so controversial that he ulti-
consultants work-
Anointed "the czar of economic reform in
mately had to rely largely on presidential
ing under U.S.
Russia" (as a U.S. AIDsponsored report put
decrees for implementation. Members of the
it),30 Chubais acquired a broad portfolio, rang-
St. Petersburg Clan noted that, after the priva-
AID contracts
tization program passed the Duma, "every
ing from privatization and the restructuring
totaling $13.9 mil-
subsequent major regulation of privatization
of enterprises to legal reform and the develop-
lion set out to
was introduced by Presidential decree rather
ment of capital markets and of a Russian secu-
than parliamentary action."35
rities and exchange commission. The creation
design and imple-
of the Commission on Economic Reform in
Some U.S. AID officials explicitly promot-
ment CSOs in five
1995 was further confirmation, as the Russian
ed market reform through presidential decree
Russian cities,
newspaper Kommersant-Daily declared, that "a
and circumvented parliamentary authority. As
new center of economic power is being created
Walter Coles, a key American official in the
very little evi-
around First Deputy Prime Minister Anatoly
privatization and economic restructuring pro-
dence of progress
Chubais."31 Chubais also secured sweeping
gram in Russia, explained, "If we needed a
decree, Chubais didn't have to go through the
political powers: a 1996 presidential directive
has emerged.
7