President Yeltsin brought his disgraced former defence minister, Mr Pavel Grachev, back into the Kremlin fold yesterday, appointing him as chief military adviser at Russia's main arms exporter, Rosvooruzhenye.
The move confirms Mr Yeltsin's desire to have allies controlling potential sources of campaign funds in the countdown to the next presidential election. It may also signal Russia's determination to sell weapons to countries considered "pariah states" by the United States.
Mr Grachev oversaw a rapid rise in corruption in the army during his tenure as defence minister from 1992 to 1996. Along with Mr Yeltsin, he also bears responsibility for the Russian army's humiliating defeat in breakaway Chechnya, which led to more than 100,000 deaths.
Despite Mr Grachev's mounting unpopularity, it was not until the 1996 presidential elections that Mr Yeltsin finally withdrew his support and sacked him. Gen Alexander Lebed, the popular former paratrooper who came third in the first round of the election, secured Mr Grachev's dismissal in return for supporting Mr Yeltsin in the second round. The huge private fortune Mr Grachev very conspicuously acquired while head of Russia's defence establishment earned him the nickname "Pasha Mercedes". His new job gives him the opportunity to do legally what he allegedly did illegally throughout his government tenure - sell weapons.
Mr Grachev's appointment dampens speculation that he is to be charged in connection with the 1994 murder of Dmitry Kholodov, a journalist murdered while investigating illegal arms sales during the Red Army's withdrawal from former East Germany. Mr Yeltsin's vote of support for Mr Grachev gives him virtual immunity from prosecution.
The close relationship they enjoy goes back to 1991 when Mr Grachev, as chief of Russia's paratroopers, backed Mr Yeltsin against the hardline putchists who attempted to oust the former Soviet leader, Mr Mikhail Gorbachev.
In 1993, a year after Mr Grachev was appointed defence minister by Mr Yeltsin, he executed the presidential order to bomb parliament. He then ordered Russian troops into Chechnya to defeat the separatist government. Mr Grachev openly boasted that "one paratroop regiment will be enough to retake the Chechen capital, Grozny". But the separatists refused to yield in the face of massive aerial bombardment and tens of thousands of civilians and soldiers were killed in what proved to be one of the biggest defeats for the Russian army since the second World War. - (Guardian Service)
AFP adds: Mr Yeltsin also kept faith with the reformer Mr Boris Nemtsov yesterday, making him one of two deputy prime ministers, Interfax reported. The appointment of Mr Nemtsov, a close ally of Russia's new Prime Minister, Mr Sergei Kiriyenko, had been seen as an important signal of the incoming administration's commitment to reform.
Mr Viktor Khristiyenko, a reformer in his thirties, was named as the other deputy prime minister. Mr Yeltsin also confirmed Mr Igor Sergeyev as defence minister, Mr Mikhail Zadornov as finance minister, Mr Yevgeny Primakov at the foreign ministry and Mr Sergei Stepashin at the interior ministry.
The Kremlin said yesterday that Mr Yeltsin did not have a problem with his liver after the French President, Mr Jacques Chirac, was quoted as saying the Russian leader was abstaining from alcohol on doctor's orders.
"His liver is completely fine," said Mr Aleksei Gromov, head of the Kremlin press service.
"Yeltsin is not experiencing any problems in this regard."
The former Japanese Prime Minister, Mr Yasuhiro Nakasone, quoted Mr Chirac as telling him about Mr Yeltsin's drinking reform.