RUSSIA -- BRINGING SECHIN INTO FOCUS

S E C R E T SECTION 01 OF 03 MOSCOW 002759



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DEPT FOR EUR/RUS, FOR EEB/ESC/IEC GALLOGLY AND WRIGHT

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DOC FOR 4231/IEP/EUR/JBROUGHER



E.O. 12958: DECL: 09/05/2018

TAGS: EPET, ENRG, ECON, PREL, PINR, RS

SUBJECT: RUSSIA -- BRINGING SECHIN INTO FOCUS



REF: MOSCOW 2473



Classified By: Ambassador John R. Beyrle for Reasons 1.4 (b/d)



1. (C) Summary: As Deputy Head of Putin's Presidential

Administration, Igor Sechin cloaked himself in secrecy,

leaving some Kremlin watchers, especially economic liberals,

to portray him as a one-dimensional, malevolent figure.

These analysts see Sechin as driven by self-interest, working

behind the scenes as Putin's business manager to distribute

assets and property to favored parties. Others, however,

seek to portray a more enlightened Sechin, pointing to his

stance on business issues and international integration as

indicators of a more nuanced approach to difficult economic

questions. There is also disagreement on whether Sechin has

been demoted or made even stronger by his move to the

Russia's White House as one of Putin's deputies. As he

fulfills his new responsibilities, greater public exposure as

Deputy Premier may bring this former "grey cardinal" of the

Kremlin into sharper focus and may give us a better sense of

this powerful and secretive figure. End summary.



A Dark Force...

--------------



2. (C) A close aide to then-President and now Premier Putin,

Igor Sechin is at the top of Russia's power structure -- a

position many believe he abuses. The overarching sense of

Sechin's role in Russia among liberal observers is that of a

puppet-master pulling the strings of power for his own

personal gain and for that of favored colleagues and

partners. Former Economic Development Minister Yevgeniy

Yasin told us recently (ref A) that he thinks Sechin is

"dangerous," that he "lacks a moral center," and that he does

not use his power for good.



3. (S) Many see Sechin as a leader of a cadre of high-level

GOR officials engaged in massive graft. Rumors of Sechin's

ill-gotten wealth abound, even though all who discuss it are

quick to admit that the rumors are purely speculative.

Vladimir Konovalov (strictly protect),head of the Petroleum <br />
Advisory Forum, the association of Western oil and gas

companies, told us he understands that Sechin's wealth, which

he put at a surprisingly specific $14 billion, is second only

to Putin's among high-ranking government officials. There is

concern that Sechin's new official portfolio, overseeing the

energy sector (septel),gives him still more opportunity to

accumulate wealth. Former Deputy Energy Minister Vladimir

Milov highlighted personal corruption in discussing Sechin

with us, noting something that many others with whom we spoke

also alluded to -- that Sechin's new direct authority over

the lucrative energy sector would give him "better access to

cash flow."



4. (C) Yet given that Sechin's power derives from his

relationship with Putin, many see Sechin only as Putin's

agent. Masha Lipman, editor of the Carnegie Moscow Center's

journal "Pro and Contra," described Putin as the ultimate

arbiter of the "redistribution" of wealth, assets, and

property in Russia, with Sechin as one of his managers.

Political analyst Dmitri Oreshkin told us that Sechin, in

effect, maintains "a business empire protected by Putin," and

run using bribes, fear and "kompromat." He suggested

President Medvedev's role should be to provide an alternative

and more benign power center -- "someone to run to when

Sechin demands more protection money" -- but that Medvedev is

making only slow progress, leaving Sechin unchecked.



... or Pragmatic Patriot?

--------------



5. (C) Against this widespread image, there are some who see

Sechin as a more complex character, whose interests lead him

to take a more "liberal" or "integrationist" approach.

Editor-in-chief of Ekho Moskvy radio Aleksey Venediktov,

after a one-on-one lunch with the Deputy Premier, told us

that Sechin sounded like former Yukos owner Mikhail

Khodorkovskiy, in the sense that Sechin understood the need

for Western expertise and capital to develop Russia's energy

resources. Evoking another controversial reform figure,

Venediktov said Sechin also resembled former RAO UES head

Anatoliy Chubays ) in that "he gets things done."



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6. (C) Renaissance Capital Deputy Chairman Bob Foresman

(Amcit, strictly protect) who has worked with Sechin over

many years described him as someone who deeply cares about

the future of Russia and who sincerely believes he is acting

in the best interests of the country. He praised Sechin as

"very smart," "incredibly hard-working," and "exceptionally

courteous." He said Sechin's courtesy is especially evident

when dealing with helpers to whom many others in Russia's

elite would barely give a passing glance -- doormen, drivers,

guards, etc. Foresman brushed aside rumors of Sechin's

illicit wealth, saying "I don't know what he would do with

the money; the guy is always in the office, morning to

night."



7. (C) Dmitriy Butrin, the economics editor for the

Kommersant newspaper, has argued that Sechin has taken an

unexpectedly "liberal" approach as Deputy Premier. In an

article in Vlast, Butrin noted that Sechin has promoted

efforts to coordinate the work of the Ministry of Natural

Resources with ecological groups, fought for lower taxes on

the energy sector and industry, and opposed the use of

government funds to support the state-owned pipeline company

Transneft. While many saw Sechin as the driver behind

Putin's attack on coal producer Mechel (and indeed Sechin

himself told Venediktov that he had pushed Mechel four times

on transfer pricing),Butrin disagreed. According to Butrin,

Sechin's public assertion that the state had no problems with

Mechel or its owner Igor Zyuzin had been meant to reassure

the market and take the pressure of the company.



Another Mystery: Has Sechin been Demoted?

--------------



8. (C) As Deputy Head of the Presidential Administration in

charge of the security services, there was little doubt about

Igor Sechin's power. He was widely regarded as a very

influential member of Putin's inner circle, perhaps even the

most influential, with the requisite FSB background to

advance the President's (and his own) agenda. However, there

was also a great deal of mystery surrounding the secretive

Sechin's specific responsibilities. His move to the more

public role of Deputy Premier with responsibility for energy,

the most important sector of the Russian economy, may change

that. Milov told us recently he believes the new job has

erased some of the "mythical" aura Sechin enjoyed "when he

was working in the shadows."



9. (C) Milov is also one of many analysts who saw Sechin's

transfer to Deputy Premier as a demotion, indicating the

weakened role of the siloviki in favor of more

"reform-minded" leaders such as President Medvedev, with whom

Sechin reportedly had an uneasy relationship. Milov told us

that Sechin had been "institutionally weakened" in his new

role because "he now needs bureaucratic buy-in, but he

doesn't have strong bureaucratic skills."



10. (C) Many of our other contacts disagree, suggesting

Sechin, if anything, is even more powerful now because he

maintains his behind-the-scenes influence while having added

direct legal authorities. These analysts note that Sechin's

relationship with Putin is ultimately the source of his

power. Oreshkin and Lipman independently explained to us

recently that titles and positions in the hierarchy have

little to do with power in Russia. In a similar vein,

Foresman told us Sechin's power extends far beyond whatever

institutional role he fills at any given time because he is

"very close to Putin." As Oreshkin put it, "whoever thinks

Sechin is weaker now must think Medvedev is in charge, and

that is obviously not the case."



Comment

--------------



11. (C) The competing views of Sechin and his place in the

Russian government elite may be clarified as a result of his

new responsibilities. Moving from the shadows of the Kremlin

to a more public role as Deputy Premier will force Sechin to

be a more open and accessible figure and it will subject him

to public criticism and scrutiny. In the interval, while

Sechin may still be primarily driven to serve Putin's and his

own interests, there appears to be some evidence that his



MOSCOW 00002759 003 OF 003





actions since taking responsibility for energy and industrial

policy reveal an unexpected understanding of the importance

of integration, markets, technology, and international

expertise. As such, he may hew closer to the

"integrationist" camp than we might have previously expected.

End comment.

BEYRLE