The Ulyukaev case – tension inside the Russian elite

Abstract:

Alexey Ulyukaev, the Minister for Economic Development, was detained on 14 November 2016. Subsequently the Investigative Committee of the Russian Federation launched an investigation against him on the charge of accepting a bribe (US$2 million).

The bribe was reportedly offered in appreciation of the ministry’s positive opinion that enabled the state-owned oil company Rosneft to take over a 50.08% stake in Bashneft (the transaction was finalised on 12 October 2016). Much seems to indicate that the Ulyukaev case is an element of the rivalry of opposing groups of interest inside the Russian ruling elite. The operation was initiated by the CEO of Rosneft, Igor Sechin, and its goal was to deal a blow against the government’s economic bloc criticising Rosneft’s expansion in the Russian energy sector. In turn, the Ulyukaev trial itself has been used by Sechin’s numerous opponents to undermine his position.

However, the developments seen over the past year show that Igor Sechin remains the key player in the Russian energy sector. He owes his position to his close links with Vladimir Putin and the important function which Rosneft plays in the country’s domestic and foreign policy. The conflict between interest groups is an integral element of the Russian political system, and allows the Russian president to play the role of arbiter in the government elite. The rules of operation of this system are unlikely to change significantly in the coming years.