Already then the activities of the committee headed by Putin gave rise to questions from Petrosovet’s deputies. As far as January 10th 1992 Petrosovet’s 13th session decided to create a work group to investigate the CER’ activities. The group was headed by the deputy Marina Salye, chairwoman of the Petrosovet’s Committee on food and the deputy Yuri Gladkov. This is what the work group has established:
The raw materials, including rare metals were sold abroad with the CER’s permission “at dumping prices, lower the market prices”. In particularly, in the agreement of the Committee with the German firm Jikol (its principal shareholder, a certain Piter Bakhman received a license to export 13 997 kg of rare metals) the price for 1 kg of scandium was established at 72,6 German marks, while the price of scandium on the world market is two thousand times higher – 150 thousand German marks. Prices on other rare metals were understated by 7,10 or 20. Actually, Putin prudently did not sign this agreement, it was signed by one of his deputies.
The Committee’s agreements foresaw commissions for the firms. In the agreement of January 3rd 1992 with the firm LOKK signed personally by Putin the commission was 25% ($540 thousand). In the agreement with Interlesbirzha concluded “with the Committee’s chairman V. V. Putin” and signed by Anikin the commission made up 50% ($5 983 900). In the agreement with the Svyatoslav firm the commission for 20 thousand tons of cotton also made up 50% ($12 million).
Salye’s work group concluded by presenting cases when licenses were given out for exporting raw materials under wittingly fictive food deliveries (since the products did not enter the city). Part of the agreements was concluded with such huge formal violations that they made the agreements legally powerless and the court could not oblige the firms to execute them – to really deliver the food.
Salye’s work group recommended Sobchak to discharge Putin from his post and gave the materials of its investigation to the municipal attorney and to the Control Department of the RF President’s Administration. (The chairman of the Committee of external economic relations Petr Aven was also informed about the results of the investigation). On March 31st 1992 the head of the Control Department Yuri Boldirev put the following resolution on the work groups’ report: “The Department has received materials from the deputies of Saint Petersburg’s City Council demonstrating the need to discharge the chairman of the Committee of the city’s external relations Vladimir Vladimirovich Putin from his functions. I demand to exclude the possibility of his appointment to any other post until the decision of the Department on this matter”.
The city’s attorney Vladimir Yeryomenko sent Sobchak a representation about “incorrectly formulated CER agreements and some licenses”. The CER chairman Aven did not protest the licenses given out by Saint Petersburg’s CER. Possibly this episode is the one explaining president Putin’s perfect relations with the financing group Alpha headed by Petr Aven. Sobchak did not permit to discharge Putin. Nevertheless, Putin’s deputy Anikin was forced to resign. And a part of the concluded agreements was canceled. According to the Novaya Gazeta the firms, which received licenses for selling raw materials from Putin have only received $34 million as commissions (Novaya Gazeta March 13-19th 2000).
In 1992 Putin was appointed deputy mayor while keeping his post as the CER chairman. In other words he was raised and not discharged. And he kept a lucrative business: the Committee of the city halls’ external relations. In these years Putin received the nickname of “Grey Cardinal”. He advised Sobchak on all “external” matters, he was his very close person. All serious documents were first approved by Putin and only then by Sobchak.
From 1993 Sobchak begins to lead an “international” life style and goes often abroad. In his absence it is Putin who fulfills the mayor’s functions. The circle of his competence was surprisingly large – diplomatic representations, hotels, gambling business, public associations, supervising the special services and cooperating with the army, the police, the FSK, the Prosecutor General, the customs. Putin also managed large investment projects. In March 1994 he was appointed first deputy chairman of the city’s administration. And still he keeps his post as the chairman of the external relations Committee. It is as if this Committee was smeared in honey.
The Saint Petersburg’s period of Putin’s life is filled with scandals, through which he managed to come unscathed. One of the most interesting in my opinion was the episode when in 1991 at Sobchak’s and Putin’s demand the Moscow police illegally searched the house of Sobchak’s former assistant Yuri Shutov in order to confiscate a tape record of Sobchak’s conversation with a fixed-spot spy of the French intelligence service. In 1992, Shutov, author of the book “A Dog’s Heart” was attacked, however nobody risked linking this incident with the names of Sobchak or Putin. When Vladimir Vladimirovich came to power Shutov was arrested and charged with many crimes, including almost all ordered murders in the city of Saint Petersburg and it has been six years now that he is detained in prison. According to the Versia newspaper (August 17-23rd 1999) the materials about the unsanctioned search at Shutov’s house in 1991 are kept (or at least were kept) by the senior investigator of the Prosecutor General’s Department of special cases U. M. Vanyushin. The fixed-spot spy of the French intelligence service apparently spoke with Sobchak about such things that it is too scary to bring Shutov to court. This is why he stays in prison untried. The Iron Mask.
A lot of people were discontent with Sobchak’s first deputy. The following directions of Putin’s work have caused concrete admonishments:
1). Cooperation with foreigners, as suspected this was not disinterested;
2). Violations during the privatization of large objects of municipal property;
3). Illegal trade using his official position and other abuses;
4). Execution of Anatoly Sobchak’s confidential instructions.
About the first article. Putin assisted a series of large German firms and banks to move in the city. In particular, he assisted the opening of the filial of the BNP-Drezdner Bank (Rossija). (Putin’s relations with Dresdner Bank continue today. The head of the bank’s Russian department Mattias Wornig has joined Gazprom’s Council of directors in February. According to the Wall Street Journal, Worning was a Stasi major until 1989 and was a friend of major Putin. He is still his friend now, which explains his extraordinary career in Russia). Putin has helped the bank to move in the building of the former German embassy on Isakievskaya Square. He has also helped the Credit Lyonnais Bank to obtain a house on Nevski Street. The office of the Coca-Cola Company was moved to the building of the House of Political education of Leningrad’s CPSU committee. For some merits the company was even freed from local taxes. The Proctor-and-Gamble and Gillette companies also benefited from the future president’s patronage.