After adopting a degree of sovereignty, The Russian republic had elections in June 1991. Boris Yeltsin won and was sworn as president on July 10, 1991 as Russia's first president. After the failed coup attempt in August 1991, Yeltsin usurped Gorbachev as the de facto leader of the Soviet Union and began transferring the assets of the Soviet Union to Russia. In December 1991 when the Soviet Union broke up, Yeltsin became leader of the Russian Federation.

In 1991, Yeltsin appointed a reformist government to carry out his shock therapy economic plan. He made himself prime minister, defense minster in addition to the Russian president, the position he was elected to.

A new constitution that replaced the Soviet-era one was approved in 1994 through a rigged national referendum. It weakened the parliament and gave the president (Yeltsin) tsar-like powers and made a mockery of the democratic principles that helped place Yeltsin in power. It also gave Russians the rights of freedom of movement and free speech, endorsed free trade and the ownership of land, and banned torture, censorship and the imposition of an official ideology.

Yeltsin opened up Russia to Westernization and reform but lacked vision and had only limited knowledge of economics. It often seemed that all the important policy decisions were made by his aides while he decided whom to fire.

Rather than moving into the Kremlin, Yeltsin continued to live in his modest four-bedroom apartment in an unfashionably part of Moscow with his wife, daughter Tanya, her husband and grandson Boris. For security reasons his family was advised to spend most of their time at their government dacha outside of Moscow. In his early years as president, Yeltsin usually only slept fours a night and arrived home at around 10:00pm, ate, watched the late news and worked until he went to bed. His wife only slept when he did.

Yeltsin had a reputation for sometimes reeling off anti-American and anti-Western bluster but ultimately giving into all the demands made by the United States and Europe. By contrast, Putin was much less pliable.

Yeltsin had a reputation for sometimes reeling off anti-American and anti-Western bluster but ultimately giving into all the demands made by the United States and Europe. By contrast, Putin was much less pliable.

Yeltsin and Domestic Policy

The first years of Yeltsin's presidency, which began with an overt challenge to the Soviet Union's authority over Russian affairs, brought a surge of activity that promised economic and political reform and an end to the economic stagnation and social malaise of the 1980s. Both Russians and Westerners hoped that Russia could make a short, painless transformation to democratic rule and free-market economics. Although events of the first five post-Soviet years provided some reasons for optimism, all observers soon realized that whatever transformation Russia was to experience would require much more time, and would yield much less predictable results, than initially expected. *

Soon after Yeltsin became president, the 20 nominally autonomous ethnic regions scattered throughout Russia—some of them rich in important resources—began declaring themselves autonomous republics. There were some concerns that Russia could disintegrate the same way the Soviet Union did. A potential showdown was averted when an agreement between the regions and Russia was worked with a federative treaty in 1992 and a new constitution in 1993 that gave the regions more say in their own affairs.

Yeltsin was constantly battling hardliners and Communists that controlled the Parliament and seemed to spend most of their time creating obstacles for Yeltsin's policies and trying to oust him that doing anything constructive. Yeltsin response was to circumvent them and issue decrees.

Yeltsin Reforms the KGB and Closes the Gulags

After coming to power Yeltsin tried to control the KGB by dividing it into a dozen agencies and diminishing their power. He eliminated the feared Fifth Directorate which pressured dissidents and spied on ordinary citizens. Later, Yeltsin became heavily dependent on the military and security services in carrying out his agenda. By the mid-1990s the KGB had regained much of its power. Yeltsin gave the secret police broad powers as part of is his anti-crime initiative. Police were allowed to conduct searches without warrants, tap hones, set up front organizations, interrogate suspects for days, and make arrests without charges. They were also put in charge of the prisons.

Parliament members and former Yeltsin ministers complained they were being bugged. But the KGB provided poor intelligence on Chechyna and worsened that situation. The KGB was renamed the Federal Security Service (FSB). It leaders accompanied Yeltsin on hunting and fishing trips and reportedly provided him advice on the occult and astrology.

In 1992, Yeltsin ordered the release of "last 10" political prisoners a the camp near Perm. Among the last prisoners at Perm was one man sentenced to 15 years in 1978 for seeking asylum in Iran. Another was a man imprisoned for switching over to the “mujahidin” in Afghanistan. Another was sentenced to 13 years for planning to flee the Soviet Union in a crop duster.

In 1990 a team of French journalists headed by Jean-Pierre Vaudon visited one of the last Siberian Gulags. The only noise they heard was the sound of electric razors, prisoners reciting bible passages and the shutting of doors. Some prisoners they said passed out in front of their cameras and others hugged the walls.

The prisoners worked eight hours a day, six days a week for US$40 a month. Half was taken for board. If they refuse to work they were placed in a four-by-eight-foot cell with no blankets and only a wooden plank for a bed. Former dissident Natan Sharansky claims it was worse when he was a prisoner when they weren't even allowed to lay down.◘

Yeltsin's Disbands the Russian Parliament

On September 23 1993, Yeltsin ordered the Supreme Soviet—which had opposed him and planned to remove many his president powers—to be disbanded and called for new elections. Hardline communists and nationalists that were elected in the Soviet Union era and had supported him during the coup in 1991 were outraged by the pace and comprehensiveness of the economic reforms, the weakening of the state and friendly relations with the West.

The old constitution was partly to blame for the 1993 showdown because it failed to clearly define the separate powers of the president and the legislature. Also to blame was the fact that most of the members of parliament were communists who were elected before the break up of the Soviet Union.

Yeltsin delayed taking action for three days partly because he feared that events were unfolding as they did before the 1991 coup. Yeltsin later wrote, "the fate of the White House of Russia leaves me no peace. It was amazing how the events of August 1991 coincide with details of the 'defense' of the White House in October 1993. I don't want to look into that mirror,' but I must."

Hardline communists and nationalist deputies refused to disband and they "stripped" Yeltsin of his powers and formed their own government with their own president. The deputies barricaded themselves inside the White House, the Russian parliament, and demonstrators surrounded it. Even though the support of the military was only lukewarm, Yeltsin was able to round up soldiers and tanks loyal to him and ordered them to surround the White House and blockade it. "Even I felt as if I'd been knocked out the ring," Yeltsin wrote. His effort to win support from the Russian military he said was met with "a heavy, morose silence."

Tanks Open Fire on the White House

On October 3, 1993, extremist nationalists and communists, attempting to spark an insurrection, overwhelmed the troops outside the White House and roamed through the city and attacked the central television station while Vice president Alexander Rutskoi threatened to charge the Kremlin.

Yeltsin negotiated with his opponents for 13 days and finally called for tanks because, he said, he had no other choice. "The country was hanging by a thread," Yeltsin wrote. On October 4, 1993, following a plan to recapture the White House devised by presidential security guards, Yeltsin ordered tanks to blast the hardliners out of their stronghold in the White House.

The tanks blasted the Supreme Soviet into a burning shell. Snipers fired at people from rooftops. The deputies surrendered by that evening. The next few weeks Moscow was under a curfew and gunfire was often herd at night. So much for democracy. As tanks fired on the Moscow's parliament building, one journalist insisted, "Russian democracy has to be strong to defend itself." The plotter of the coup, Ruslan Khasbulatov said, "I have known Yeltsin for a long time, but never expected anything like this from him."

The violence around rebellion left at least 150 dead, including 62 during the attack on the television station and 70 during the blasting of the White House. Rutskoi and other hardline leaders were arrested.

Yeltsin’s First Wave of Economic Reforms

For the new Russian Federation, the Yeltsin administration set ambitious economic reform goals in 1992: strict limitation of government spending to cut inflation; redirection of state investment from the military-industrial complex and heavy industry toward consumer production; a new tax system to redistribute financial resources to more efficient sectors; cutting of government subsidies for enterprises and eliminating government price controls; and lifting of government control of foreign trade. Privatization of the major sectors of production, still virtually state monopolies in 1991, was another primary goal. [Source: Library of Congress, 1996 *]

In 1993 and 1994, soaring inflation and government deregulation of prices robbed consumers of much of their purchasing power before a government tight-money policy brought inflation under control in 1995 and 1996. In December 1996, prices rose by 1.4 percent, although wage arrears made that figure irrelevant for many Russians.*

In 1992 worsening economic conditions brought a confrontation with the Supreme Soviet (legislature) over economic policy. The clash forced Yeltsin's dismissal of reform Prime Minister Yegor Gaydar and a general modification of reform goals under Gaydar's pragmatic successor, Viktor Chernomyrdin. At that point, failing enterprises still received easy credit from the banking system and from other enterprises — a continuation of Soviet-style fiscal management and a crucial flaw that began to be corrected only in 1995.*

The course of foreign investment has been uneven. Although Western and Japanese firms have shown great interest in joint ventures with Russian enterprises, Russia's unfinished and uncertain commercial and legal infrastructure has limited foreign participation, and protectionist laws restrict foreign activity in industries such as communications and automobiles.

Shock Therapy for the Russian Economy

In 1991, Yeltsin initiated a reform program that fell in line with the "shock therapy," a strategy in which a country switches over quickly to a market economy employing price liberalization, budgets stabilization, ending subsidies and privatizing industry. The primary aim of shock therapy is to change the economy as quickly a possible to a market economy. The main cost is that inefficient companies quickly go out of business and large numbers of people become unemployed.

Under the Russian "shock therapy" program, Yeltsin phased out state subsidies, freed prices, reduced government spending and privatized state businesses. shock therapy, relinquished control over the ruble, and freed prices, which had been held artificially low, on consumer goods but kept prices fixed in oil, timber and minerals.

The "shock therapy" strategy was partly devised by Harvard economist Jeffrey Sachs and supported by Lawrence Summers, the U.S. Under Secretary of the Treasury in charge of International Affairs. Sachs made a name for himself by developing an economic strategy that ended Bolivia's 24,000 percent of inflation. He was called on to develop an economic strategy for Poland and then was asked to do the same thing for Russia.

Sachs and Summers encouraged the United States to push the IMF and World Bank to lend Russia tens billions of dollars to prop up the ruble so it could be internationally convertible and attract investment and kickstart the economy.

In 1991, the economy was already in chaos and the changes didn't help matters. There were huge budgets deficits. The harvest was the lowest in years due to breakdowns in the distribution system. Some regions hoarded foodstuffs and declared autonomy and control over their resources. In the end real shock therapy did not take place. The government was unwilling to face the unemployment, bankruptcies and other hardships that would take place if the shock-therapy reforms were taken. Many economist feel that even if shock therapy was fully implemented it wouldn't have succeeded because Russia is too big and fundamentally different from the West for Western strategies to work.

Elections of 1993

In November 1993, Yeltsin issued decrees prescribing procedures for multiparty parliamentary elections, which would be the first since tsarist times. Besides setting the configuration of the new bicameral parliament, the Yeltsin plan called for half of the 450 State Duma deputies to be elected from national party lists with representation proportional to the overall votes received by each party. The other half would be elected locally, in single-member districts. The party-list procedure, a new feature in Russian elections, was designed to strengthen the identification of candidates with parties and to foster the concept of the multiparty system among the electorate. To achieve proportional representation in the State Duma, a party would need to gain at least 5 percent of the nationwide vote. [Source: Library of Congress, July 1996 *]

The CEC declared thirteen parties eligible for the party list, and 2,047 individual candidates were selected to compete for Federation Council seats (490) and State Duma single-mandate seats (1,567), allotted to individuals regardless of their parties' overall performance vis-à-vis the 5 percent threshold. Although the CEC reported some voting irregularities, the vast majority of the more than 1,000 international observers termed the elections largely free and fair, with some reservations expressed about manipulation of results. In several republics, the referendum results were invalidated by low turnouts caused by boycotts, or because voters failed to approve the constitution. *

Many experts divided the myriad parties of the 1993 elections roughly into three main blocs: pro-Yeltsin reformists, centrists advocating a slower pace of reform, and hard-liners opposing reforms. The main reformist party was Russia's Choice, led by former prime minister Yegor Gaydar. The main centrist parties were the Yavlinskiy-Boldyrev-Lukin bloc, commonly referred to as Yabloko (the Russian word for apple), headed by economist Grigoriy Yavlinskiy and former ambassador to the United States Vladimir Lukin, and the Democratic Party of Russia, headed by Nikolay Travkin. The main hard-line parties were the LDPR, the KPRF, headed by Gennadiy Zyuganov, and the Agrarian Party, which represented state- and collective-farm interests and was headed by Mikhail Lapshin. *

In 1993 the strongly nationalist, antireform LDPR emerged with the largest vote on the State Duma party lists, followed by Russia's Choice. By faring much better in the single-member districts, however, Russia's Choice emerged with sixty-six seats, the most in the State Duma. The LDPR followed with sixty-four seats. Altogether, reformist and centrist parties emerged with the greatest number of seats in the State Duma, followed by nationalist and antireform parties. Some 127 State Duma seats were won by individuals not formally affiliated with a party, many of whom were former CPSU members. *

Of the thirteen parties participating in the December 1993 legislative elections on the party lists, eight exceeded the 5 percent threshold to win seats in the State Duma. In addition, all thirteen parties, as well as some local parties, won seats in single-member districts. Once the new parliament was seated, the parties aggregated into several factions. A number of deputies coalesced into the Union of December 12 faction. Sixty-five centrist deputies formed the New Regional Policy faction, and some LDPR members shifted their affiliation to the KPRF or the Agrarian Party, or supported former vice president Aleksandr Rutskoy's Concord in the Name of Russia policy agenda. *

Russian Legislative Elections in 1995

In December 1995, there were more than 8,000 candidates from 43 parties vying for 450 seats in the Duma. An estimated 60 percent of Russia's 104 million registered voters turned out. By 1997, only 15 members of the original reform-minded 1990 legislature remained in the 450-seat Duma.

In June 1995, the Federal Assembly passed — and Yeltsin signed — a new law to govern the next legislative elections, which were planned for December. This legislation echoed many provisions of Yeltsin's 1993 electoral decree, such as the division of the State Duma seats into party-list and single-member districts. Yeltsin had urged a change in this provision because he feared that Zhirinovskiy's LDPR might again gain many seats in the party-list voting, but the Duma had insisted on retaining the even-split voting procedure that gave such meaning to the party lists. The 1993 election had demonstrated that voting by party lists generally encouraged party formation and program pledges, whereas voting by district encouraged loyalty by deputies to local interests. The 5 percent threshold for party-list voting also was retained. In September 1995, Yeltsin decreed that the Federation Council seats would not be filled by regional elections; instead, the upper house would be composed of regional and republic executive and legislative leaders — a group with which Yeltsin had close contacts and from which he could expect strong loyalty. All of the suggested provisions were incorporated into the new election law. [Source: Library of Congress, July 1996 *]

In anticipation of the legislative races, early in 1995 Yeltsin encouraged the creation of two political parties that would lend support to his policies and form the basis of a stable, moderate, two-party system in Russia. One party would be led by State Duma speaker Ivan Rybkin, the other by Chernomyrdin (who by that time had proven himself a loyal and competent manager of the Yeltsin agenda). The unnamed "Rybkin bloc" was designed to attract centrist and leftist voters, and Chernomydin's party, Our Home Is Russia, was envisioned as a right-center coalition. Both parties would occupy the moderate band of the political spectrum. Having attracted the support of many Russian Government ministers and regional leaders, Our Home Is Russia became known as the "party of power." The Rybkin bloc, which was supposed to serve as the loyal opposition in the parliament, attracted several tiny parties, but major parties and groups refused to join the bloc because of opposition to some or all of Yeltsin's reforms. As a result, Rybkin's unification effort received little practical support. *

To qualify for the party-list voting, parties were required to obtain 200,000 signatures, with no more than 7 percent of signatures coming from any single federal jurisdiction. The latter requirement was designed to encourage the emergence of broad-based rather than regionally based parties. Candidates wishing to run in single-member districts had to obtain signatures from at least 1 percent, or about 5,000, of their district's voters. Forty-three parties succeeded in getting on the party-list ballot, and more than 2,600 candidates were registered in 225 single-member district races. Many individuals listed on the party ballot also ran in single-member districts. This was especially true of locally popular candidates whose minor parties could not surpass the 5 percent national threshold needed to get on the national party-list ballot. *

In the legislative elections of December 1995, voter turnout was high (about 65 percent), and international observers again evaluated the balloting as largely free and fair. The second such evaluation in two years boosted the image of electoral democratization in Russia.

Analysis of the Russian Legislative Elections in 1995

Dissatisfaction with the Yeltsin administration was conspicuous in the election results, but the showing of the reformist and centrist parties that supported some or all of Yeltsin's program was undermined by the disunity of that part of the political spectrum. Among the forty-three parties participating in the party-list vote, only four met the 5 percent requirement to win seats for their national party lists, although several other parties won seats in individual races. In the aggregate of party-list voting, reformists and centrists performed much better than they did in the single-member phase, receiving almost as many votes as the hard-liners. But pro-reform and centrist votes were dispersed among a multitude of parties, negating almost two-thirds of the party-list votes they received and costing these parties dozens of seats by keeping them below the 5 percent threshold. In contrast, the KPRF and its allies suffered much less from such dispersion and gained many seats from the party-list vote. *

Although centrists and reformers split single-mandate seats about evenly with the antireform parties, nonaffiliated candidates gained more than one-third of these seats. About 40 percent of the sitting State Duma deputies were reelected, and fifteen Federation Council deputies entered the State Duma, providing some continuity of legislative expertise. Under a provision of the new constitution, Government officials were obligated to resign their positions if elected to the parliament.

Overall, reformist parties did not do as well in the 1995 elections as they had in 1993. Gaydar's party, now renamed Russia's Democratic Choice, failed to meet the 5 percent requirement. Altogether, reformists and centrists won 129 seats in the State Duma (less than one-third of the total), and independent, nominally nonaffiliated candidates won seventy-seven seats (about one-sixth). The KPRF and its ally, the Agrarian Party, gained 179 seats as the KPRF achieved a plurality of seats, and the anti-Yeltsin nationalist parties won another sixty-five. Zhirinovskiy's LDPR received much less electoral support than in 1993, gaining 11 percent of the vote — a distant second to the KPRF — and fifty-one seats.

More than in the 1993 alignment, parties now tended to be either for or against reform, with former centrists moving either left or right. In the 1996 State Duma, the main reformist parties were Chernomyrdin's "official" Our Home Is Russia, the main advocate of Yeltsin's programs, and Yavlinskiy's Yabloko coalition, which was highly critical of Yeltsin's approach to reform but supportive of reform principles. The main hard-line, antireform parties in the Duma were the KPRF, headed by Zyuganov, and the LDPR, headed by Zhirinovskiy.

Altogether, in 1996 communist, nationalist, and agrarian parties controlled slightly more than half the State Duma seats. Their strength enabled them to pass some bills and resolutions if they voted together, but they still lacked enough votes to override Federation Council votes or presidential vetoes. The numerical proportions also did not permit antireformists to approve changes in the constitution, which require a two-thirds majority, that is, at least 300 votes of the full chamber.

1996 Russian Presidential Elections

Presidential elections were held in June 1996. The contenders were Yeltsin, Communist leader and nationalist Gennaday Zyuganov, general Aleksandr Lebed and the liberal reformer Yavlinsky. Communists controlled the Duma after sweeping the Parliamentary elections in December 1995.

Yeltsin won 35 percent of the vote and Zyuganov took 32 percent. The 46-year-old Lebed took 15 percent and played a pivotal role in determining the election's outcome by supporting Yeltsin, who won the run-off against Zyganov by 13 percentage points. When asked why he voted for Yeltsin, one man told Time, "it was a case of the lesser evil. The one thing I wanted to avoid was a turn back to the past. If Yeltsin didn’t win in 1996 there were worries that the Communists would win and possibly re-establish a dictatorship.

Before the runoff, Yeltsin had a serious heart attack. With the help of the media, the Yeltsin team was able to cover up the fact. Foreign reports were ignored. Old clips of a healthy Yeltsin were shown and the public had little idea anything was amiss.

Yeltsin’s Campaign in 1996 Elections

During the campaign before the election in July 1996, Yeltsin was shown on television doing a silly dance with Russian folk dancers and walking around blindfolded and carrying a long stick, playing a Tatar game. The 1997 novel “China Lane”, a fictionalized account of Yeltsin's 1996 presidential campaign, was regarded as a Russian version of “Primary Colors”.

American political consultants George Gorton, Dick Dresner and Joe Shumate went from working for the 1996 presidential campaign of Republican California Governor Pete Wilson to helping Yeltsin in his 1996 campaign. Bankrolled by the oligarchs oligarchs (super rich Russian tycoons), they were sequestered in a hotel and were sworn to secrecy. The convinced the Yeltsin “family” to incorporate some American campaign tactics into their strategy: focus groups, photo ops and negative ads. Their story was made into the Showtime movie “Spinning Boris”.

In 1996, Yeltsin sold a large chunk of Russia's diamond stockpile to pay for his reelection campaign. It was estimated that Yeltsin made $11 billion in campaign pledges, promising miners back wages and expansion of the subway system in Novosibirsk. Chubays estimated that spending promises made during Yeltsin's campaign amounted to $250 per voter, which if actually spent would approximately double the national budget deficit (most of Yeltsin's pledges seemingly were forgotten shortly after his reelection).

Analysis of the 1996 Russian Presidential Elections

The 1996 presidential campaign yielded two distinctly opposed theories of governance: the KPRF's frank appeal for return to the central rule of Soviet days and Yeltsin's sometimes timid commitment to democratization and economic reform. In general, however, the national party system remained quite fluid. Although a large number of parties with national constituencies emerged, much shifting occurred among the smaller parties as coalitions formed and dissolved. Some forty-three parties and coalitions registered for the 1995 legislative elections. In 1995 Yeltsin attempted to dominate party politics by forming two nominally opposed parties with essentially pro-administration positions, but his strategy was unsuccessful. The one major party that emerged from his manipulations, Our Home Is Russia, captured relatively few seats in the State Duma in 1995 but retained national standing as a major party because of its identification with Chernomyrdin. [Source: Glenn E. Curtis, Library of Congress, July 1996 *]

Of the proreform opposition groups, the Yabloko coalition remained the strongest in 1996, but its influence was limited because it refused to join forces with other reform parties. The candidates of Yabloko and other reformist groups fared poorly in the first round of the 1996 presidential election. Meanwhile, the KPRF had developed a unified and loyal following among Russians disillusioned with Yeltsin and nostalgic for the Soviet past.*

As the presidential campaign developed, the KPRF candidate, former CPSU functionary Gennadiy Zyuganov, emerged as the prime competitor of Yeltsin. The president used his access to broadcast and print media (which feared the repression that would result from a KPRF victory) to climb steadily in the polls. In the first round, Yeltsin defeated Zyuganov narrowly. Before the second-round faceoff with Zyuganov, Yeltsin dismissed the most visible hard-liners in his administration, added popular third-place finisher Aleksandr Lebed' to his administration, and coaxed lukewarm endorsements from Yabloko and other reformist parties.*

In the second round, Yeltsin easily defeated Zyuganov, a dull campaigner who could not convince undecided voters that a KPRF victory would not mean a return to the days of Soviet repression. In what amounted to a contest between anti-Yeltsin and anticommunist sides, Yeltsin attracted an estimated 17 million voters who had voted for Lebed' or Yabloko candidate Grigoriy Yavlinskiy in the first round, and for whom Yeltsin now was the lesser of two evils.*

To gain acceptance as the main opposition faction at the national level, after the presidential election the KPRF attempted to broaden its constituency by forming a coalition called the National Patriotic Union of Russia. The coalition included the leftist and nationalist groups that had supported Zyuganov's 1996 presidential bid. To improve its national image from one of disruption to one of constructive cooperation, the coalition softened its antigovernment rhetoric. A prime example of the new approach was KPRF support of the Chernomyrdin government's draft budget in the State Duma deliberations of December 1996-January 1997.*

The KPRF found this position tenable while Yeltsin was ill and the moderate Chernomyrdin had a strong position in the Government. However, the Government reorganization of March 1997 gave new power to reformists with whom the KPRF shared little common ground. The party also showed signs of a split between moderates and radicals who rejected compromise. Meanwhile, young Russians showed little interest in joining the KPRF, which offered few constructive ideas about Russia's future and whose membership increasingly was based on an old guard of Soviet-era activists.*

Yeltsin’s Second Term

Beginning his second term, Yeltsin filled his new cabinet with individuals with reformist credentials. Free-market advocate Aleksandr Livshits was appointed minister of finance, and reformist Yevgeniy Yasin retained his position as minister of the economy. In another indication that economic reform would continue, Yeltsin named reformist Al'fred Kokh as deputy prime minister for privatization. Retained from the previous Government were Minister of Foreign Affairs Yevgeniy Primakov (a 1996 appointee), recently appointed Minister of Defense Igor' Rodionov, and hard-line Minister of Internal Affairs Anatoliy Kulikov. [Source: Glenn E. Curtis, Library of Congress, July 1996 *]

The Ministry of Environmental Protection and Natural Resources was redesignated the Ministry of Natural Resources; environmental issues were shifted to a new, subcabinet agency, the State Environmental Protection Committee, headed by Viktor Danilov-Danil'yan, who had been minister of environmental protection and natural resources in the first Yeltsin administration. The only minister affiliated with the KPRF was Aman Tuleyev, a strong proponent of reintegration of the CIS states, who was appointed to head the Ministry of CIS Affairs.*

In August 1996, Chernomyrdin listed among the new Government's goals a dramatic reduction of the state bureaucracy, including the elimination of twenty-four ministries and agencies. However, no streamlining occurred until March 1997, when Yeltsin dropped three of his deputy prime ministers and announced a large-scale Government reorganization as a remedy for what Yeltsin admitted was poor performance by his second-term appointees. The new, smaller Government was to include eight deputy prime ministers (compared with twelve previously), twenty-three ministries (three of which were headed by deputy prime ministers, and a reduction of one from the previous organization), sixteen state committees (compared with seventeen previously), and twenty other federal agencies.*

A key appointment in this period was Boris Nemtsov as deputy prime minister in charge of social issues (including the crisis of wage and pension arrears) and the extremely prob-lematic reform of state monopolies and housing subsidies. As governor of Nizhniy Novgorod Oblast, Nemtsov had gained international recognition for his brilliant regional economic reforms. Nemtsov's reputation for honesty also was expected to improve the tarnished image of Yeltsin's administration.*

The Government reorganization process required much more time than expected because factions struggled to gain coveted posts and no qualified persons could be found for others. Reportedly at least twelve individuals refused appointments to head ministries and committees. The reorganization also sharpened the power struggle between the Government and the State Duma, the main political bastion of numerous special interests that the initiatives of Chubays and Nemtsov promised to attack, and whose patron, Chernomyrdin, now was fading.*

In June 1996, the appointment of former general Aleksandr Lebed' as head of the Security Council improved the prospects of an already promising political figure. In this position, Lebed' remained in the public eye by making controversial speeches on matters of policy and by negotiating what turned out to be the conclusive cease-fire of the Chechen conflict. Lebed' had a base of avid supporters who craved charismatic, assertive leadership. Unlike most other Russian government figures, he created a positive image on television, which by 1996 was the most important source of news for most Russians. In October Yeltsin responded to continued criticism from Lebed' by dismissing him from the Security Council. In the months that followed his dismissal, Lebed' polished his public image in Russia and abroad. He began preparations for a future presidential campaign by seeking funds for future political activities, and by traveling to the United States and Western Europe. Although he virtually disappeared from the pro-Yeltsin television networks after his dismissal, in early 1997 polls indicated that Lebed' remained the most popular political figure in Russia. In March he established a new opposition party, the Russian People's Republican Party, which he described as an alternative to the KPRF and the ruling elite.*


During Yeltsin's absence, another figure bore the brunt of opposition attacks on the administration. In 1995 and early 1996, Yeltsin had dismissed reform economist Anatoliy Chubays from two high-level economic positions in response to strong criticism from antireform factions. However, after directing Yeltsin's successful 1996 presidential campaign, Chubays was rewarded with the chief of staff position in Yeltsin's second administration, at the same time increasing the prospects that the pace of reform would increase. [Source: Glenn E. Curtis, Library of Congress, July 1996 *]

Although too unpopular to have a realistic chance at the presidency, Chubays maneuvered effectively within the Yeltsin administration. He formed an alliance with Yeltsin's ambitious daughter, Tat'yana Dyachenko, who was rumored to have substantial influence over her father's policy decisions. The work of Chubays was widely seen in the dismissal of the Aleksandr Korzhakov coterie in June and of Aleksandr Lebed' in October. Chubays was credited with maintaining some sort of order during Yeltsin's convalescence in the early stages of the second administration, even as Chubays's many enemies spread rumors of illegal campaign funding and links with organized crime.*

Despite speculation that Yeltsin would limit Chubays's power by increasing the prestige of rivals — a technique Yeltsin had used throughout his presidency — in the Government reorganization of March 1997 Yeltsin advanced Chubays to the positions of deputy prime minister in charge of economic affairs and minister of the economy. Chubays now had direct control of the governmental restructuring that Yeltsin prescribed to end bureaucratic gridlock, and the new faces that Yeltsin appointed at that time improved the prospect that the new minister would be able to accelerate economic reform in 1997.*

Bureaucratic Maneuvering Under Yeltsin

In July 1996, experts had seen Yeltsin's creation of a civilian advisory Defense Council as an effort to balance the power that Lebed' had gained as chief of the Security Council. In October the head of the Defense Council, Yuriy Baturin, supplanted Lebed' as the primary architect of military reform, dismissing six top generals and reassigning several who remained. By the end of 1996, Baturin was in a bitter battle with defense minister Rodionov for authority over reform policy. By March 1997, Rodionov's position in the administration was reported to be quite tenuous. [Source: Glenn E. Curtis, Library of Congress, July 1996 *]

Late in 1996, another extraconstitutional organ was formed in the Yeltsin administration: a permanent, four-member Consultative Council that included the president, the prime minister, and the speakers of the two houses of the Federal Assembly. The council was to meet twice a month in an effort designed to smooth differences between the two branches of government. The inclusion of the State Duma speaker brought a prominent KPRF deputy, Gennadiy Seleznev, into a top advisory group — a move calculated by Yeltsin and Chubays to either divide or conciliate the strongest of the opposition parties. The fourth member of the council was Yegor Stroyev, speaker of the Federation Council and usually a Yeltsin supporter. During Yeltsin's illnesses, Chubays represented the president at council meetings.*

Already in the mid-1990s, the executive branch contained numerous directorates and commissions answering only to the president. In 1996 the addition of extraconstitutional governing bodies such as the Defense Council and the Consultative Council continued Yeltsin's propensity to govern by decree and outside constitutionally prescribed lines of power. According to some experts, the existence of seemingly redundant presidential policy-making groups was a new manifestation of Russia's long tradition of arbitrary rule; according to others, such organs were necessary to circumvent the gridlock of opposition in the State Duma.*

In the fall of 1996, Yeltsin's illness brought demands from all political factions for clarification of the 1993 constitution's vague language on replacing a disabled head of state: the conditions for such replacement are listed in the constitution, but the authority to make the decision is not specified. In this case, Yeltsin responded by temporarily delegating to Prime Minister Chernomyrdin his authority as commander in chief of the armed forces, head of internal security, and custodian of the codes needed to unleash a nuclear attack. Within hours of his successful heart bypass surgery in November, Yeltsin publicly reclaimed full control, apparently seeking to end the impression of a power vacuum in Moscow. In the months that followed, however, government assurances of Yeltsin's continued competence met increasing skepticism as the president appeared only in carefully edited news film. In the first months of 1997, KPRF deputies introduced motions in the State Duma to impeach Yeltsin on health grounds, and the Duma discussed constitutional amendments limiting the powers of the president.*

Rise of Regional Governments Russia in the 1990s

Between September 1996 and March 1997, Yeltsin's administration faced a new political challenge when a series of regional elections provided the KPRF and its nationalist allies another opportunity to weaken Yeltsin's political base. Fifty-two of Russia's eighty-nine subnational jurisdictions were to elect chief executives during that period, and all of those executives are ex officio members of the Federation Council, the upper house of parliament and a bastion of Yeltsin support until 1997. (The chief executives of republics are called presidents; those of other jurisdictions carry the title governor or administrative head.) [Source: Glenn E. Curtis, Library of Congress, July 1996 *]

Before the elections began, experts identified fifteen of those constituencies, primarily in the "Red Belt" along the southern border from the North Caucasus to the Far East, as sure to elect communist leaders. At the end of 1996, a Yeltsin-appointed incumbent chief executive had been defeated in twenty-four of the forty-four elections decided to that point. The KPRF had backed fifteen of the new officials, and six had had Yeltsin's support. Among the victors were former vice president and outspoken Yeltsin critic Aleksandr Rutskoy, who was elected governor of Kursk Oblast, and Vasiliy Starodubtsev, a central figure in the 1991 coup against the Gorbachev government, who was elected governor of Tula Oblast. In most cases, successful candidates took less partisan positions and were more ready to negotiate with their opposition than experts had predicted when the elections began. Incumbents generally fared better in northern and urban regions where economic conditions were the most favorable. Yeltsin's doubtful health and the rescinding of his 1996 campaign spending promises hampered some progovernment candidates. All the chief executives elected in 1996 were expected to wield greater political power because they now had direct mandates rather than presidential appointments, and that legitimacy also would bolster the power of the Federation Council vis-à-vis the State Duma in the Federal Assembly.*

In 1996 the central government's economic and legislative control of subnational jurisdictions continued to slip away as the power of regional chief executives increased proportionally. Governors such as Yevgeniy Nazdratenko of strategically vital Maritime (Primorskiy) Territory on the Pacific coast and Eduard Rossel' of Sverdlovsk Oblast in the Urals already had established personal fiefdoms outside Moscow's control. Nazdratenko openly challenged the national administration on a number of issues, including the transfer of a small parcel of his territory's land to China as part of a Sino-Russian border treaty. In 1993 Sverdlovsk Oblast briefly declared itself a republic under Rossel'. As of January 1997, Moscow had signed bilateral agreements, establishing a wide variety of power-sharing relationships, with twenty-six subnational jurisdictions.*

By 1996 regional governments raised 50 percent of taxes and accounted for 70 percent of government spending in Russia. Although only fifteen of eighty-nine subnational jurisdictions were net contributors to the federal budget and sixty-seven relied on federal subsidies for pensions, in 1996 Moscow still had no centralized system to account for movement of funds between the federal government and the regions. Many jurisdictions complained that the 1997 budget did not allocate sufficient funds to them to compensate for their tax payments to Moscow. As of March 1997, no subnational jurisdiction had received a full allotment of federal pension funds, and only ten jurisdictions had paid their federal taxes in full.*

In October 1996, the emergency tax committee was forced to withdraw its threat of bankruptcy proceedings against the Kama Automobile Plant (KamAZ), one of the Republic of Tatarstan's largest industries, for nonpayment of federal taxes. Citing the 1994 power-sharing treaty between the republic and the federal government, Tatarstan's president Mintimer Shaimiyev convinced Chernomyrdin that ending KamAZ's favorable tax status would intrude on the republic's economic sovereignty.*

Experts predicted that tensions between Moscow and the subnational governments would intensify during the shaping of Russia's new federal system, especially as that system addresses the question of who controls the country's vast national resources. After the regional elections, a loose coalition of jurisdictions that were net contributors to the federal budget ("donor regions") was in a position to gain significant economic concessions from the federal government. At the same time, the eight regional economic associations, which include all of Russia's eighty-nine subnational jurisdictions except Chechnya, showed new cohesiveness and also were expected to gain greater autonomy and attention from Moscow in 1997. Those associations are: the Far East and Baikal Association; the Siberian Accord Association; the Greater Volga Association; the Central Russia Association; the Cooperation Association of North Caucasus Republics, Territories, and Oblasts; the Black Earth Association; the Urals Regional Association; and the North-West Association.*

In October presidential chief of staff Chubays began a campaign to reverse the movement toward regional autonomy. Chubays called for a review of the many regional laws that contravene the national constitution, in an effort to curtail the autonomy that such legislation encourages. (Several of the regional constitutions adopted after 1991 contain language contradicting the national constitution, and the electoral laws of some twenty-seven regions reportedly violate federal law.) However, the project was postponed because regional procurators, who would be responsible for such an investigation, lack sufficient authority over regional officials. After the elections of 1996-97 gave most regional leaders a popular mandate, the lack of federal sanctions on subnational jurisdictions violating federal law became a more significant threat to the integrity of the federation as well as to human rights and the balance of political power within jurisdictions. Meanwhile, local and municipal administrations chafed under restrictions imposed by regional jurisdictions, just as the latter complained about Moscow's restrictions.*

Yeltsin and the Oligarchs

Yeltsin was an underdog going into the 1996 election with an approval rating in the single digits . Many analysts believe that the abundant air time and positive publicity he was granted in the newspapers and television stations controlled by the state and the oligarchs (super rich Russian tycoons) was the deciding factor in the election. If Yeltsin hadn’t won there is good chance the President would be a member of the Communist Party and that would have been very bad news for the oligarchs.

Under Yeltsin the oligarchs were created in rigged auctions that allowed them to acquire properties for a fraction of what they were worth. The oligarchs in turn supported Yeltsin by giving him money and television exposure, in the media they ran to allow him to get reelected in 1996. Yeltsin in turn was then committed to support the oligarchs as they became even richer and more powerful

The oligarchs became very powerful under Yeltsin. One Yeltsin aide told the New York Times, “To some degree the oligarchs regarded themselves as the real government of Russia and to some degree they “were” the real government. They could easily dismiss ministers and nominate people who people who would be loyal to them in ministerial positions.

The oligarch Boris Berezovsky was referred to as Rasputin because of the influence he had on Yeltsin and his family. Valentin Yumashev (a former journalist and ghostwriter of Yeltsin's memoirs) said Yeltsin’s daughter and son-in-law were close to Berezovsky. Berezovsky fell out of favor after one of his companies was accused of bugging Yeltsin.

Image Sources:

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, Lonely Planet Guides, Library of Congress, U.S. government, Compton’s Encyclopedia, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Foreign Policy, Wikipedia, BBC, CNN, and various books, websites and other publications.

Last updated May 2016

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