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Slideshow Download our Wider Image iPad app Images of October Follow Reuters Facebook Twitter RSS YouTube Read Americans vote after long and bitter campaign for White House | 10:39am EST Putin sacks defense minister amid scandal 10:21am EST Fort Hood shooting victims sue government, accused shooter 05 Nov 2012 U.S. judge tosses Apple vs. Google lawsuit over patents 05 Nov 2012 Emotional Obama ends campaign in Iowa with call for change 12:36am EST Discussed 194 Jobless rate seen rising, offering Obama no relief 170 Fuel scarce, East Coast struggles to recover 80 Ryan says Obama compromises Judeo-Christian values Sponsored Links Putin sacks defense minister amid scandal Tweet Share this Email Print Related News INSIGHT-Putin's Russia: more fragile than it looks Fri, Nov 2 2012 Russia's election Magician pans "undemocratic" U.S. vote Wed, Oct 31 2012 U.N.-Arab League envoy regrets Syria truce not successful Mon, Oct 29 2012 Russia activists detained after opposition council meets Sat, Oct 27 2012 Russia's jailed punk rock band members sent to prison camps Mon, Oct 22 2012 Analysis & Opinion Fresh faces, old issues in Indiaâ€™s new cabinet Related Topics World » Russia » Anatoly Serdyukov speaks during a news conference in New Delhi October 10, 2012. Credit: Reuters/B Mathur By Thomas Grove MOSCOW | Tue Nov 6, 2012 10:21am EST MOSCOW (Reuters) - President Vladimir Putin fired Russia's defense minister over corruption allegations on Tuesday, the latest twist in an unfolding saga of power, money and suspected adultery at the heart of the Kremlin. Putin announced on television that he had fired Anatoly Serdyukov, once seen as one of the president's most loyal courtiers but lately a liability amid allegations that the military sold off assets cheaply to insiders. "Taking into consideration the situation around the Defense Ministry, in order to create conditions for an objective investigation into all matters, I have decided to remove Defense Minister Serdyukov from his post," Putin said. Serdyukov's replacement will be Sergei Shoigu, recently named governor of the Moscow region and known as a popular and loyal Putin ally during nearly two decades as head of the Emergencies Ministry. The defense minister wields immense power in Russia, channeling billions of dollars every year through the country's powerful defense industry, the second largest arms exporter in the world. Putin has promised to spend 23 trillion roubles ($726.30 billion) on the military by the end of the decade. Corruption has been endemic at the defense ministry for decades. The country's top military prosecutor said last year that a fifth of the budget was stolen or embezzled. Putin said at the televised meeting with Shoigu that he must continue "grandiose plans for the reform of the army". Russian investigators raided the offices of Defense Ministry firm Oboronservis last month and opened an investigation into the company on suspicion that it had sold assets to commercial firms at a loss of nearly $100 million. Russian media have been speculating for days that Serdyukov had lost Putin's support after having an extra-marital affair that infuriated Serdyukov's powerful father-in-law and patron, Viktor Zubkov, chairman of oil monopoly Gazprom. When police raided the apartment of Serdyukov's neighbor, 33-year-old female military bureaucrat Yevgeniya Vasilieva, they found valuable paintings, rare antiques and more than 100 expensive rings. A Russian tabloid newspaper with connections with security personnel reported that Serdyukov was in the apartment as well when the raid began. Vasilieva was reported on Tuesday to have left the country, Interfax news agency reported. ENEMIES IN HIGH PLACES A one-time furniture salesman, Serdyukov owed much of his career to Zubkov, a confidante of Putin from their days in St Petersburg, who served as prime minister in 2007-08. Serdyukov's control over Russia's arms budget had earned him enemies among ambitious Kremlin figures, including Deputy Prime Minister Dmitry Rogozin who oversees the country's defense industry, government sources say. "Mr. Serdyukov controlled at least a quarter of our budget and of course there are a lot of people who wanted a share of that pie," said independent defense analyst Thomas Golts. Serdyukov's military reforms, which reorganized troops, cut the number of officers by more than 100,000 and exposed high level corruption, also made him disliked in the ranks. He headed the tax ministry from 2004-07 when a tax case dismantled the assets of jailed former oil tycoon Mikhail Khodorkovsky, a role that had led many analysts to believe Serdyukov was untouchable and would weather the scandal. Shoigu, 57, an army general, was emergencies minister from 1994 until this year, earning a reputation for personally intervening in natural disasters and other calamities that plagued Russia in the years since the Soviet Union collapsed. He gained the trust of the Kremlin and average Russians after his effective reorganization of the civilian defense troops, a paramilitary body he inherited from the Soviet Union. In April of this year, when he took office as Moscow regional governor, he was considered Russia's third most trusted politician in a survey by independent pollster Levada. That popularity may leave him room to travel higher in the government run by prime minister Dmitry Medvedev, a former president whose star, some analysts speculate, is falling. "Shoigu is unknown in our country as a great strategist or as a powerful military officer, but that is not needed in the post of the minister of defense," said Alexei Arbatov, a military analyst at the Russian Academy of Sciences. "If the defense minister is largely an administrative post, then Shoigu has very great merits ... As an administrator he is already regarded very highly and moreover, he is popular in Russia and in social opinion," he said. ($1 = 31.6675 Russian roubles) (Additional reporting by Lidia Kelly and Maria Tsvetkova; Editing by Timothy Heritage and Peter Graff) World Russia Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (4) SyriasTruth wrote: Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Back to top Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index Legal Bankruptcy Law California Legal New York Legal Securities Law Support & Contact Support Corrections Connect with Reuters Twitter Facebook LinkedIn RSS Podcast Newsletters Mobile About Privacy Policy Terms of Use AdChoices Copyright Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Thomsonreuters.com About Thomson Reuters Investor Relations Careers Contact Us Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. 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