Money, Munitions And The Mistress: Russian Defense Minister Sacked Amid Rumors Of Scandal

Analysis

 @JaceyFortin
on November 06 2012 1:27 PM

The Kremlin lost one of its most ruthless reformists on Tuesday when Russian President Vladimir Putin announced the sudden sacking of his longtime ally, Defense Minister Anatoly Serdyukov.

“Taking into consideration the situation around the Defense Ministry, in order to create conditions for an objective investigation into all matters, I have decided to remove Defense Minister Serdyukov from his post,” Putin said in a televised announcement, according to Reuters.

The “investigation” is a likely reference to a case that began last month, when authorities carried out a surprise raid on the offices of Oboronservis, a defense ministry company.

Oboronservis is being accused of selling off military assets -- primarily real estate -- at overly discounted prices, costing the state at least $95 million. If those sales did in fact occur, it is likely that Serdyukov was behind them. He has not yet been formally charged with any crime.

The incoming defense minister, Sergei Shoigu, was formerly the minister of emergency situations. Shoigu is seen as a popular and capable official; his appointment is expected to go over well with members of the Russian military.

Serdyukov, on the other hand, was a controversial figure. His zeal for military reform earned him countless enemies among the highest ranks of the armed forces.

President Putin made military modernization one of his top priorities when he was campaigning for the presidential election earlier this year. His proposed budget for defense reform was 23 trillion rubles, or $730 billion -- the largest such allotment since the Cold War.

His plans came under fire from finance officers, many of whom argued that the spending would strain the national budget. This was especially worrisome considering dangerous fluctuations in the price of oil, Russia’s main export, due partly to faltering demand in the debt-ridden economies of Europe, Russia’s biggest market.

Budget negotiations are still underway, but Putin is determined to beef up Russian defense in order to bolster its strength, which pales in the face of Western forces like NATO.

Ever since he became defense minister in 2007, it has been Serdyukov’s job to promote efficiency and root out corruption, making the military -- and any necessary reforms -- more efficient. This bureaucrat stayed far from the barracks; his was an administrative post, first and foremost.  

But Serdyukov’s pen was mightier than the shashka. He fearlessly upended a deeply entrenched military hierarchy, dispensing with thousands of top officers in favor of younger replacements and mercilessly rooting out corruption. He overhauled a backward conscription system and waged a campaign to attract and train a more competent force of professional fighters, all with a constant eye on expenditures so as not to put undue strain on the national budget.

In a country where the military is powerful and cronyism is endemic, Serdyukov’s reforms might have landed him in hot water. But the defense minister was a friend of Putin, and, perhaps more importantly, he had married the daughter of Viktor Zubkov, a Kremlin heavyweight and former prime minister who now chairs Gazprom, the state-owned gas company.

Military leaders have long despised Serdyukov, but Putin’s support kept him safe -- until now. The sudden sacking has many wondering what went on behind closed doors to facilitate Serdyukov’s downfall.

One possibility is rather straightforward: Military opposition to Serdyukov’s tenure may have simply reached a fever pitch, prompting Putin to cave in after years of standing by his man. The Kremlin might benefit from appearances, too, since the allegations of underpriced military asset sales have tarnished Serdyukov’s image. By firing him, Putin can play the role of a president cracking down on corruption -- something he is keen to do as an increasingly bold activists’ movement in Russia is shining new light on the Kremlin’s suppression of dissent.

But there is also a more sordid rumor about the reason for Serdyukov’s dismissal, one that was reported by several Russian gossip magazines as well as the newspaper Izvestia.

Last month, when investigators raided the officers of Oboronservis, they also made a surprise visit to the apartment of one of its top officers, a 33-year-old woman named Yevgeniya Vasilyeva. She had been a former property manager for the defense ministry, as well as a trusted associate of Serdyukov.

It has been reported that Serdyukov was found at Vasilyeva’s apartment at the time of the raid, suggesting a history of infidelity to his wife, Yulia Pokhlebenina. If true, the discovery may have angered Pokhlebenina’s father, Zubkov, and that may have been the beginning of the end of Serdyukov’s unique immunity in the Kremlin.

Whatever the reason, the sacking of Serdyukov could bring an end to years of hard-nosed reforms for the powerful Russian military. Putin said on Tuesday that Shoigu must continue the implementation of “grandiose plans for the reform of the army,” according to Reuters, but it remains to be seen whether the new defense minister can live up to Serdyukov’s legacy for ruthless efficiency.

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