President Boris Yeltsin on Saturday spared his top economic reformer, Anatoly Chubais, but purged two more senior officials caught up in a scandal about a book advance deemed lavish by Russian standards.
Chubais, 42, Yeltsin's finance minister and first deputy premier, sent a letter of resignation to the Kremlin, apologizing for accepting, along with four other officials, $450,000 to write a book on Russia's privatization process.Yeltsin, though, considered Chubais too valuable to lose and rejected the resignation.
Russia's financial markets, like those across Asia and Latin America, have been pummeled of late, and the government has had to take steps to shore up the currency, the ruble. Yeltsin does not want to further spook investors, many of whom see Chubais not only as the Kremlin's most capable economist but the one most committed to making free markets work in Russia.
With Russia facing "an extremely critical social and economic situation," firing Chubais "would destabilize the executive branch of government, which would do serious damage to the nation's economy," a Kremlin source told the Interfax news agency.
The two men to whom Yeltsin showed the door Saturday - privatization chief Maxim Boiko and Pyotr Mostovoi, who headed the federal bankruptcy office - do not wield Chubais' influence. They joined Alexander Kazakov, a Kremlin aide dismissed Thursday.
The fifth co-author, Alfred Kokh, was fired as privatization chief some months ago when news of a separate, $100,000 book deal surfaced.
The five members of the "writer's collective," as they were being called in Moscow, received $90,000 each as an advance on a book to be called, "A History of Privatization in Russia." The work has not yet been published, and there are conflicting reports over how much of it has been written.
Critics charged the advance was little more than a bribe. The publisher, they suggested, is controlled by powerful business interests who got help from Chubais and his team in the high-stakes, cutthroat battle for privatized state assets.
In his defense, Chubais said most of his money would go to charity, a new group called the Fund to Defend Small Businesses and the Middle Class. It is headed by a Chubais associate.
Chubais also blamed the furor on his political enemies, who are legion. Among his fiercest and most powerful is Boris Berezovsky, an industrialist and media magnate whom Yeltsin, at Chubais' urging, fired earlier this month from the national security council.
As the scandal worsened, Chubais acknowledged that the deal looked bad.
"The fee was high, this is true," Chubais said. "The reproach was justified, we have to admit."