Putin ally under fire as information wars intensify

ST PETERSBURG (Reuters) - A hoax email which for 30 minutes had Russians believing one of President Vladimir Putin’s oldest allies had lost his job has deepened suspicions that a battle between business and political groups over money and power is intensifying.

The email sent to media late on Wednesday purported to be a government statement announcing Vladimir Yakunin’s removal as head of state-owned Russian Railways, at his own request.

It was later denounced as a fake by the government and Yakunin, an old friend of Putin, but not before the man falsely named as his successor had time to accept congratulations as he headed - by train - to a conference.

The government blamed the saga on an unidentified hacker. But Yakunin, 65, said such things did not happen by chance and that he and his organization were under attack in an information war over the vast sums Russia is investing in infrastructure.

“It’s a provocation,” Yakunin told Reuters at a business forum in Russia’s second city of St Peterburg that was dominated by gossip about his false dismissal. “It’s made everyone realize how vulnerable our society is to such cyber crimes.”

Yakunin, who has run the railways since 2005, vowed to find out who was behind the false statement, and the Kremlin said an investigation had been launched by the FSB security force.

Russian Railways is a prize asset, carrying freight and about 1.3 billion passengers a year across the world’s largest country. It accounts for about 2.5 percent of Russian gross domestic product and employs more than 950,000 people.

MIND THE GENERATION GAP

Yakunin has faced increasing public scrutiny over his business relationships and wealth in what analysts interpret as a generational conflict between allies of Putin, a former KGB spy, and backers of his younger prime minister, Dmitry Medvedev.

Industry insiders also speculate that Yakunin, who has reached retirement age, is under attack from rivals who want to loosen his grip on the 1.5 trillion roubles ($46 billion) that the state has earmarked for rail investment.

One financial source linked the furor to disagreements surrounding the signing in St Petersburg on Thursday of a $2.7 billion deal between the Russian Railways and its counterparts from ex-Soviet Belarus and Kazakhstan.

As part of the deal to create a joint freight venture, Russian Railways will contribute assets. These include an interest in a firm called Transcontainer, in which infrastructure group Summa is a minority shareholder.

Summa is controlled by Ziyavudin Magomedov, who prospered during Medvedev’s four-year presidency, but has since been at odds both with the railways and Rosneft, the state oil major headed by another Putin ally, Igor Sechin.

MEDVEDEV ISOLATED?

Since Russia’s ruling “tandem” swapped roles in May 2012, Putin has shown increasing frustration with the weak performance of Medvedev’s government and three ministers have been ousted, including chief of staff Vladislav Surkov.

Tensions within the elite intensified with the recent flight of economist Sergei Guriev, a speechwriter for Medvedev, who had come under pressure over an investigation related to jailed former oil tycoon Mikhail Khodorkovsky.

This has dampened the mood at the St Petersburg forum, Russia’s answer to Davos, especially as Putin has shied away form reforms to reduce Russia’s dependence on oil exports and the country is in danger of sliding into recession.

The attack on Yakunin could signal the liberals are fighting back. He is in the conservative camp and has been under pressure over criticism over allegations that he owns a luxurious country house outside Moscow despite being a public official.

Others suggested the stunt had been staged to undermine Medvedev as he battles for survival. His power base has been largely eroded since Putin’s return to the Kremlin, even though he is a long-time ally of the president.

“Nothing like this has ever happened before,” Alexander Rahr, a biographer of Putin, said of the report that Medvedev had fired Yakunin.

“It could be an intrigue against Medvedev. Everyone has him in their sights and their guns are loaded. They want to get rid of him.”