Boris Fyodorov, a former tax and finance minister, founder of the Forward Russia! political movement and a leader of the Right Cause coalition of liberal reformers, spoke to The Russia Journal.

Russia Journal: You see yourself as a shareholder representative on the Unified Energy Systems (UES) board of directors. How closely will you be able to follow the company's activities?

Boris Fyodorov: The board of directors cannot give orders, but it is responsible for some decisions - share issues and large loans, for example. Independent shareholders know that with someone like me on the board, some things won't be allowed to happen. If it became known, for example, that [Chairman of the board Anatoly] Chubais was using the company to finance Right Cause [political bloc], I'd create a scandal. Chubais knows that.

RJ: You would do that even though you are a Right Cause leader?

BF: I know Chubais and [former acting Prime Minister Yegor] Gaidar well. They know I won't overstep certain limits. Shareholders don't want their money diverted for other uses.

RJ: But if you weren't on the board of UES, as a leader of Right Cause, would you be against this source of funds?

BF: I don't meddle in financial affairs, but as a representative of shareholders, I would have to act to protect their interests.

RJ: Openly?

BF: Of course. I openly criticized Chubais over the loans-for-shares [privatization] program, I openly criticized [former Central Bank Chairman Sergei] Dubinin, Aleksashenko and Chubais when they introduced the ruble corridor. And, unlike the Communists, I voted against Chubais' budgets when I was a Duma deputy.

They know that. That doesn't mean there won't be any problems, but there should be fewer major problems. Shareholders know they can count on me. They own part of mammoth companies such as UES, Gazprom and Sberbank, and it's not all the same to them if the Central Bank is shamelessly milking them, if their money is being wasted.

I think it's an important development that for the first time, there are independent people on the boards of these large companies. I don't own shares in Sberbank, so I'm not thinking only of my own interests. There is a political advantage for me. Being on the boards of these companies gives me another forum to air my views and other sources of information.

I've always said what I think loud and clear. If I think [Central Bank Chairman Viktor] Gerashchenko, for example, is a bad central banker, I say so. If I think [former Finance Minister Mikhail] Zadornov left foreign investors in the lurch, I say so. I say he's not competent.

RJ: Don't you think the boards of directors of these companies do investigate possible diversion of company funds themselves?

BF: Who would do it? The ministers are busy elsewhere, management isn't interested. That's why it's so important that now there are independent people who will ask questions and stick their noses everywhere. Until now, everything was one cozy little get together: management and the state are so intertwined, they all move back and forth between the government and these companies. Now, people like I are there to ask for information, demand, hold extraordinary shareholders' meetings.

RJ: Wouldn't you be taking a risk?

BF: What risk? I'm not in business, you can check my tax statements.

RJ: But take UES, for example, it's common knowledge that it's a base for Right Cause.

BF: That's what the tabloid press says. It's not serious .

RJ: But there's something behind those claims.

BF: Yes, Chubais. But in UES there are thousands of bureaucrats from the old system who hate Chubais. If Chubais does something, it will be in all the papers, it will be the talk of the Duma. You can keep secrets within a closed little circle, but UES is a huge organization with thousands of people. It isn't so easy to divert financial resources in that kind of situation.

RJ: But Chubais is a real professional, isn't he?

BF: In what sense?

RJ: When it comes to management.

BF: Yes, but not when it comes to finance. And as far as managing something like UES goes, he's still learning.

RJ: Do you still share the same political views as Chubais?

BF: On some of the big issues, yes, but on other issues, I have my differences with Chubais, Gaidar and others. We are all in a coalition after all, some issues are easier to agree on than others. We all agree that Russia should be a democracy, a market economy and a state with rule-of-law. We disagree on some other things, but at the moment we're too weak individually to go our own separate ways.

RJ: Right Cause gave some hope at first, but then things seemed to start coming apart...

BF: That's because it's a coalition. It's hard to say where it will go. I'm the furthest to the right politically, and my movement is the most critical [to those now in power]. But we're not going to cause a split. We are not the group who brings the most votes to the coalition, so we do not have a decisive voice. We want progress, but it's hard when our voters are all so different. My voters like [General Alexander] Lebed and they don't like Gaidar.

RJ: Will you stand in a single-member district?

BF: I'm going to run for governor of the Moscow region.

RJ: What is your forecast?

BF: It's hard to say because we will know all the candidates only at the end of August. One of the strong contenders will be [former Defense Minister Boris] Gromov, who has Luzhkov's backing. But it's not clear, because [incumbent Governor Anatoly] Tyazhlov is one of the leaders of Otechestvo, and so there's some contradiction there. All I can say about Gromov is that if the Moscow region is planning to have a war with someone, then they could do with a general as governor. But if they want to clean the streets and build roads, then perhaps an economist would be more suitable.

RJ: What about the incumbent governor?

BF: There's so much to criticize in the Moscow region, I hardly know where to start. But it's Luzhkov who is the crucial factor. He's having more problems of his own now, though, and maybe the Moscow region won't be such a priority for him.

RJ: Do you mean Luzhkov's financial problems, his presidential ambitions, or do you think [former Prime Minister Sergei] Kiriyenko will be a problem for him?

BF: There are financial problems because the Moscow authorities haven't chosen a strategy that will stand the test of time. It makes no economic sense to build shopping centers like the Manezh complex and do nothing for the economy itself. People say, "Oh, Moscow is looking so much nicer," but it isn't the Moscow city government that is out there restoring buildings. We also have to think about how the city will develop in the future. How many suburbs like Kapotnya can you build where people live in chicken coops? How much of Moscow's land is occupied by factories that aren't working? How much money can we keep pumping into them when they have no future? Why are architectural monuments being destroyed and works by [sculptor Zurab] Tseretelli going up? There are a lot of questions, but nonetheless, Luzhkov is one of the better mayors in the country, even if he could not now win 90 percent of the vote like in the last mayoral elections. Even if he's not entirely sure about his presidential ambitions, he remains the strongest politician in Russia today.

RJ: And Primakov?

BF: Primakov and Luzhkov could do something, but Primakov alone has no financial base, no system backing him up. And he's almost 70.

RJ: You're not afraid to speak out in UES, but what about in Moscow?

BF: Yes, Kiriyenko spoke about not being able to criticize the way Moscow is run, and in some ways he's right. How can the rest of the country be corrupt but not Moscow? Do Moscow traffic officers not take bribes? Do we not have too much bureaucracy? Democracy means being able to speak openly about problems. If Luzhkov had thought a bit, he wouldn't have reacted so sharply to Kiriyenko's criticism.

RJ: But Kiriyenko said that people are afraid to speak out in Moscow.

BF: Yes, the Moscow authorities can make life difficult if they want. If you have firemen coming to your office everyday, for example. We often have firemen coming to see us for various reasons. For a bit of money, you can sort out these problems. You can have your gas cut off, or plumbing problems or cockroaches, so people don't want to get involved.

RJ: Businessmen want a quiet life?

BF: I don't think anyone is afraid for their life, but there is state racket. Often, I think Luzhkov himself simply isn't aware of all that goes on, he's busy travelling the country, busy with issues like Kosovo or Sevastopol.

RJ: But Luzhkov has built up a whole system.

BF: It's what in English is called "growing capitalism," crony capitalism with many socialist features.

RJ: Is it possible to fight this system?

BF: If there's political will. Luzhkov gets people worried because if he gets to the top with his system, then no one else will be needed. His people will take all the posts. Having this kind of system in Moscow is one thing, but it would be quite another for the whole country. With foreign investors, I joke that if Luzhkov becomes president, the country would be renamed Luzhkov Inc. (formerly the Russian Federation). I'm exaggerating, but if Luzhkov really is a democrat, he ought to take a look at what is going on around him, listen to criticism, not react the way he did to Kiriyenko's statements.

RJ: What about the news that Gaidar may take part in the mayoral elections?

BF: Who says that? Kommersant? It's not professional. Right Cause hasn't decided yet.

RJ: Into whose hands is this kind of information playing, then?

BF: There are plenty of people who'd like to see Kiriyenko and Gaidar clash.

RJ: Does Right Cause back Kiriyenko?

BF: We don't know. We don't know that Kiriyenko will actually stand in the elections. He's a cautious person and he won't have made his decision yet. I think that Right Cause should have a candidate, but whether that will be Kiriyenko or Gaidar or someone else remains to be seen.

RJ: But if Kiriyenko does stand, will Right Cause support him so as not to divide the democratic vote?

BF: Of course. I don't think that both Kiriyenko and Gaidar will stand.

RJ: The news about Gaidar disappointed democrats, who thought "they [the different movements in Right Cause] have only just come together and they're already getting in each other's way."

BF: It's a deliberate strategy being used against us.

(Next week: Part II of interview)