The Telegraph
Since 1st March, 1999
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Question that haunts President: Is he in charge'

Moscow, Oct. 27 (Reuters): A single compelling question hangs over Russian President Vladimir Putin after the arrest of oil magnate Mikhail Khodorkovsky: is he really in charge'

As Khodorkovsky paced his cell in a Moscow jail today, Putin declared unrepentantly that if a court had ordered the billionaire’s arrest there had to have been justification. Acting to avert fears of potential investors, he said the move had no implications for privatisations of the 1990s.

But analysts say Putin, behind a confident exterior, may be flying blind in the YUKOS affair, unable to assess the impact on investment and on Russia’s always problematic image in the West.

Most see the seizure of Khodorkovsky, Russia’s richest man worth some $8 billion, as a reflection of a wider struggle for power between the Kremlin old guard and the “hawks”. Many of the latter have roots in the security services and were brought in by the President, an ex-KGB agent, when he took power in 2000. These analysts say the hardliners have persuaded Putin to embark on a risky course, portraying Khodorkovsky as a threat to his authority in the run-up to parliamentary elections in December and a presidential poll in 2004.

“It is now difficult for the President to rein in his dogs and stop everything because any kind of compromise with Khodorkovsky now would mean his personal defeat or an expression of weakness,” said Lilya Shevtsova of the Moscow branch of the Carnegie Endowment think tank.

On the surface, the move could seriously damage Putin’s credentials as the guarantor of Russia’s post-Soviet commitment to economic reform and a free market, and to the rule of law. In early October, speaking at a forum of top world business leaders where Khodorkovsky appeared too, Putin pledged to reform laws and regulations to encourage greater foreign investment. With Khodorkovsky’s firm said to be involved in a multi-billion dollar deal with US Exxon Mobil, Putin must consider the impact the affair could have on his close ties with the US,

Unlike other “oligarchs”, he has refused to lower his public profile and, despite warning shots from the Kremlin, has been unambiguous about his political ambitions and maintained his support for the liberal opposition to Putin. Putin himself is all but certain to run for President in March next year.

Commentators say Khodorkovsky’s fabulous wealth would make him a natural kingmaker in presidential elections in 2008 — or even possibly, by then, a presidential contender.

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