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Russia Report: February 12, 2004


12 February 2004, Volume 4, Number 5
KREMLIN & THE WHITE HOUSE
RYBKIN TAKES A HOLIDAY?
In one of the stranger sagas of this presidential election season, candidate and former State Duma Speaker Ivan Rybkin disappeared from his home on the evening of 5 February, triggering a manhunt and national media storm. He turned up again on 10 February with an odd story about suddenly deciding to go to Kyiv to visit a friend. Rybkin is running in the 14 March presidential election with the support of a splinter group from the Liberal Russia party that is supported by self-exiled tycoon Boris Berezovskii.

On 8 February, Rybkin's wife, Albina, filed a missing-person report with the Moscow police, saying that her husband was last seen on the evening of 5 February. The next day, Interfax reported that police officials had formally opened a murder investigation in connection with the case, although other media later that day reported that that investigation had been closed.

The day before his disappearance, Rybkin claimed in an interview with RFE/RL's Moscow bureau that Russia's security services were exerting pressure on him to prevent him from campaigning. Rybkin also alleged that security-service agents were following him even when he traveled abroad.

Rybkin also reiterated claims he made in a paid advertisement that appeared in "Kommersant-Daily" on 2 February to the effect that a trio of businessmen -- Gennadii Timchenko and Mikhail and Yurii Kovalchuk -- have gained control over large financial flows in Russia through the acquisition of Russian television channels and other means.

Rybkin told RFE/RL that President Vladimir Putin, Timchenko, and the Kovalchuk brothers are close friends and meet often. One of the brothers is reportedly even an official adviser to the president. Rybkin also alleged that the Timchenko-Kovalchuk group has swallowed up money coming from embattled oil giant Yukos and will soon take control over Surgutneftegaz. Rybkin branded Putin "one of Russia's biggest oligarchs" and said he "has no right to power in Russia."

After Rybkin's disappearance, RFE/RL's Moscow bureau asked "Moskovskie novosti" political commentator Yurii Vasilev to evaluate Rybkin's claims. Vasilev told the bureau on 9 February that he has not seen any documents supporting Rybkin's allegations that Timchenko and the Kovalchuk brothers control major financial flows in Russia. He said that an article in "Moskovskie novosti," No. 4, confirmed that these people are acquaintances of Putin's and that they came into contact with him while he was working in the administration of former St. Petersburg Mayor Anatolii Sobchak. However, "to rank them as some kind of oligarchs or representatives of big business is, in my opinion, a big stretch," Vasilev said.

Rybkin's charges against Timchenko and the Kovalchuk brothers -- and Putin by association -- received almost no coverage in the national media, other than the small article in "Moskovskie novosti" explaining who Timchenko and the Kovalchuk brothers are.

And then, just as suddenly as he disappeared, Rybkin reappeared. He telephoned his campaign manager on 10 February saying he had spent the last four days in Kyiv with friends, unaware of the current "hysteria" in Moscow over his whereabouts. "I have the right to two or three days of a private life," Rybkin said, according to Interfax. "I came to Kyiv with my friends, had fun, turned off my mobile phones, and did not watch television." He offered no explanation as to why he would suddenly take a few days off with the presidential election little more than a month away.

Besieged by reporters upon his arrival in Moscow, Rybkin declined to offer much in the way of an explanation, but said he was thinking about withdrawing from the race. And in an interview with Ekho Moskvy the following day, he offered an odd discourse about being fed up with being followed everywhere, saying he generally announces his trips in advance to very few people.

Asked to comment on Rybkin's remarks, analyst Andrei Piontkovskii told RFE/RL's Moscow bureau on 11 February that either Rybkin is "not free to discuss his activities and was kidnapped, or he was occupied with things very far from politics." Panorama Center President Vladimir Prybylovskii favored the former explanation and suggested that the disappearance of Rybkin was a very well-planned action to discredit an opposition candidate for president. Prybylovskii noted that State Duma Security Committee member (and former FSB Colonel General) Gennadii Gudkov (Unified Russia) was sure in public statements that nothing had happened to Rybkin and that he would quickly be found (see RFE/RL's website "The Russian Federation Votes," "Presidential Candidate Rybkin Disappears," http://www.rferl.org/specials/russianelection).

Rybkin's sponsor, the London-based former oligarch Berezovskii told RFE/RL that Albina Rybkina contacted Security Council Secretary Vladimir Rushailo on 7 February, because Rybkin had once headed the Security Council. It was a Saturday and a secretary called back saying that Rushailo could not speak, but that she shouldn't worry because Rybkin would appear on Monday. However, Berezovskii concluded that he "does not have enough facts." "It is possible to come up with a million different scenarios," he said, "but that would simply be speculation and not sober analysis."

While others retain doubts, human rights activist and Democratic Union leader Valeria Novodvorskaya is confident she knows what happened to Rybkin. She noted that Rybkin does not have the reputation as a libertine, and judging from his gaunt countenance and illogical speech at the airport, it did not appear that he had just gotten back from a fun trip. "They scared the living daylights out of him," she concluded, without elaborating. (Julie A. Corwin)

ST. PETERSBURG
CAPITALIZING ON ST. PETERSBURG'S CONSTRUCTION BOOM.
By Vladimir Kovalev The St. Petersburg construction market has been strongly affected by an influx of Moscow-based firms that have been rushing into the city since just before the newly elected Kremlin-backed governor, Valentina Matvienko, took over city hall in September 2003.

The story of the Moscow Investment and Construction Company (MISK) -- 51 percent of which is owned by Moscow Mayor Yurii Luzhkov's administration -- is particularly interesting. As late as February 2003, the company had been practically shut out of the St. Petersburg market by then-Governor Vladimir Yakovlev -- himself a builder by training -- whose administration pursued a policy of protecting local developers.

In June 2003, however, Yakovlev was named deputy prime minister and departed for the Kremlin. And in July 2003, acting St. Petersburg Governor Aleksandr Beglov gave MISK a project worth hundreds of millions of dollars to renovate city housing stocks built between 1958 and 1970. MISK was authorized to invest $30 million in 27 old buildings. Moreover, MISK was given 100,000 square meters of land to build a new housing project for people to be relocated from buildings that are scheduled for demolition. According to Luzhkov, the project is scheduled to begin this summer.

In addition to the private investments of Moscow developers, it will likely be financed by 170 million rubles ($6 million) from the Federal Construction Committee. The Kremlin promised these funds to Matvienko last year.

"Until recently, none of the Moscow-based companies had any chance of getting into the St. Petersburg [construction] market, although the St. Petersburg-based companies Stroimontazh and BSK were actively operating in the capital," Vladimir Resin, head of the Moscow government construction department, said, according to "Kommersant-Daily" in July 2003. "This was because of a solid policy of Governor Vladimir Yakovlev to defend local developers."

The MISK deal has been seen as opening St. Petersburg's gates to Moscow developers. The other 49 percent of MISK is owned by five major Moscow developers -- Moskapstroi, Glavmosstroiinvest, Inteko, Krost, and SU-55. MISK has opened its local office in the building of the official representation of Moscow in St. Petersburg on Kazanskaya street.

The companies' prospects in St. Petersburg seem virtually unlimited. Analysts predict that contracts worth several billion U.S. dollars to renovate housing stocks dating to the era of Soviet leader Nikita Krushchev will be issued in the next few years. There are 2,400 such buildings in St. Petersburg, with a total area of 9 million square meters.

In the run-up to last September's gubernatorial election in St. Petersburg, local construction companies united in a bid to withstand the anticipated onslaught from their Moscow competitors. Working through sympathetic St. Petersburg Legislative Assembly deputies, five local companies -- LenSpetsSMU, St. Petersburg Skanska, St. Petersburg Nedvizhimost, Stroitelnyi Trest, and SK Impuls -- pressured the city's Investment and Tender Commission to give them control over investment agreements with Moscow firms.

When it became evident that this effort was coming to naught, the local developers made a last-ditch effort to impress local elites by introducing their own candidate in the September gubernatorial election. The campaign of then-local Unified Russia branch head Konstantin Sukhenko was widely reported in the media to have been financed by the developers.

Sukhenko, though, polled just 5.13 percent of the vote and was punished by being expelled from Unified Russia for daring to run against Kremlin darling Matvienko. But as far as the construction sector is concerned, the big winner in the election seems to have been Moscow's Luzhkov.

"We will cooperate actively," Matvienko told Luzhkov publicly during her inauguration ceremony in October 2003. "I will not promise to wear a cap like you do, but I do promise that the priceless and progressive experience of Moscow will be used in St. Petersburg." Just a couple of hours after Matvienko made this statement, Luzhkov withdrew behind closed doors to talk turkey with city Construction Committee Chairman Aleksandr Vakhmistrov.

But the St. Petersburg prospects of Moscow companies do not end with the renovation of old housing stocks. It now seems likely that the Muscovites will muscle into the city's lucrative road-construction projects, which are also worth billions of dollars. Moscow's Transstroi has already gained a foothold in the $1.2 billion project to construct a 152-kilometer ring road around St. Petersburg, which is scheduled for completion in 2007.

Just this month, President Vladimir Putin gave the go-ahead to Matvienko's plan to build a $5 billion freeway linking St. Petersburg and Moscow and ordered the government to begin developing the project. Analysts, considering Matvienko's increasingly cozy relationship with Luzhkov, widely anticipate that this project will be dominated by Moscow firms.

Of course, there is nothing wrong with companies from different regions competing for projects. However, events in St.Petersburg are demonstrating once again that politics, rather than market forces, is the key factor in determining how such "competition" plays out. What's more, it can hardly be healthy for the country if a still-larger proportion of Russia's economic activity is absorbed by the all-dominating capital.

Vladimir Kovalev covers local politics for "The St. Petersburg Times," in St. Petersburg, Russia.

ELECTIONS
AND THEN THERE WERE SEVEN.
This week the official tally of registered political candidates for the 14 March presidential race numbers one woman and six men.

On 6 February, the Central Election Commission (TsIK) registered Federation Council Chairman Sergei Mironov, after a random check of 600,000 of the 2.499 million signatures he submitted found that 5.18 percent were invalid. President Vladimir Putin, Communist Party State Duma Deputy Nikolai Kharitonov, and Liberal Democratic Party of Russia (LDPR) candidate Oleg Malyshkin had all been registered earlier.

On 8 February, the TsIK registered Union of Rightist Forces (SPS) Political Council member Irina Khakamada, Motherland faction leader Sergei Glazev, and former State Duma Speaker Ivan Rybkin. The commission found only 5 percent of a sample of Khakamada's signatures invalid, while around 14 percent of Glazev's were invalidated, according to RosBalt.

According to newsru.com, the TsIK initially announced that more than 26 percent of the signatures supporting Rybkin's nomination were invalid. According to the election law, a candidate can be refused registration if more than 25 percent of his or her signatures are invalidated. However, the TsIK later lowered the figure for Rybkin to 21.17 percent and registered him.

The Supreme Court on 6 February upheld a decision by the TsIK to refuse to register former Central Bank Chairman Viktor Gerashchenko as a candidate in the election, Russian media reported. The commission ruled that Gerashchenko, who was nominated by the Russian Regions party -- which is a constituent part of the Motherland bloc -- had to gather 2 million signatures to support his candidacy, despite the fact that the Motherland bloc surpassed the 5 percent barrier to Duma entry. Candidates from parties that surpassed that hurdle are exempted from the signature requirement, but the TsIK ruled that Gerashchenko had not been endorsed by the entire Motherland bloc.

Gerashchenko, who is now a State Duma deputy, told reporters that he does not know whether he will appeal the court's verdict to the Supreme Court's Appeals Collegium, Interfax reported. He said the decision will depend on how the registration process for Motherland bloc head Glazev unfolds. Prior to his 8 February registration, Glazev had expressed pessimism about whether the TsIK would accept his candidacy.

On 9 February, Glazev pledged to cooperate with the TsIK in an investigation into charges that some of his campaign workers paid voters to sign petitions in his support, RosBalt reported. However, Glazev told reporters, "I don't understand why [Federal Security Service] officers were involved in the process of checking signatures, and I have sent a letter about this to [TsIK Chairman Aleksandr] Veshnyakov." (Julie A. Corwin)

COMINGS AND GOINGS
IN: President Putin has named General Yurii Kovalev as deputy emergency situations minister, replacing Aleksandr Moskalets, who was elected to the State Duma on the Unified Russia party list in December 2003, "Kommersant-Daily" reported on 10 February. Kovalev most recently headed the ministry's Central Regional Center for Civil Defense and Emergency Situations.

IN: Union of Rightist Forces (SPS) Political Council member Boris Nemtsov has agreed to join the Neftyanoi oil company, the company's president Igor Linshits announced on 11 February. According to "Vedomosti," former colleagues of Nemtsov say that he has decided to focus on earning money.

IN: State Duma Speaker and Unified Russia party leader Boris Gryzlov announced on 9 February that he would like to join the party he leads, ITAR-TASS reported on 10 February. Gryzlov has been leader of the party since November 2002, but when he was Interior Minister he was forbidden by law from formally joining any political party.

POLITICAL CALENDAR
12 February-12 March: Period during which free airtime will be provided to presidential candidates

12 February: State Duma Constitution Law Committee will consider draft constitutional amendment extending presidential term from four to seven years

14 February: Party of Russian Regions will hold a congress in Moscow to discuss the future of the Motherland-People's Patriotic Union bloc and the nature of the party's participation in the presidential election

15 February: The Economic Development and Trade Ministry will submit to the government a new concept for the creation of special economic zones

16 February: The Nikulskii Raion Court in Moscow will consider applications to evict 25 former Duma deputies who were not re-elected in December and who have not moved out of their government housing

16-20 February: Cardinal Walter Kasper, the president of the Pontifical Council for Promoting Christian Unity, will visit Moscow at the invitation of the Conference of Catholic Bishops of Russia

19 February: The cabinet will examine the preliminary results of the first stage of the administrative reform of the Russian federal government

20 February: Presidential-election ballot papers to be printed

21 February: The Party of Russian Regions and the Socialist Unified party will hold a joint conference to discuss the Motherland bloc

23 February: Defenders of the Fatherland federal holiday

23 February: 61st anniversary of the 1944 deportation of the Chechen people by Stalin's secret police

24 February: Next hearing in the St. Petersburg trial of the accused murderers of State Duma Deputy Galina Starovoitova

26 February: Yukos's board of directors will make a final decision on its de-merger with Sibneft

27 February: Early voting in presidential election to begin for citizens in remote areas of the Russian Federation

28 February: Turkish Foreign Minister Abdullah Gul visits Russia to meet with Foreign Minister Igor Ivanov

March: Audit Chamber investigators will start on-site inspections in a probe of federal budget expenditures in Chukotka Autonomous Okrug, which is headed by oligarch Roman Abramovich

6 March: A founding congress for the political party to be formed by the Union of Soldiers' Mothers Committees

8 March: International Women's Day observed

9-14 March: Further publication of results of opinion polls about the presidential election banned

11 March: EU-Russia ministerial troika to be held in Dublin

14 March: Election for president of the Russian Federation

14 March: Gubernatorial elections in Voronezh, Murmansk, Chita, and Arkhangelsk oblasts; Altai and Krasnodar krais; and Koryak Autonomous Okrug

14 March: Republican-level presidential election in Udmurtia

14 March: Repeat State Duma elections in single-mandate districts in Ulyanovsk and Sverdlovsk oblasts and St. Petersburg where no candidates succeeded in garnering sufficient votes on 7 December

25 March: Date by which prosecutors must either complete their criminal investigation of former Yukos head Mikhail Khodorkovskii or ask a Moscow court to extend his period of pretrial detention

26 March: Date by which official presidential-election results will be released

30 March: Date by which prosecutors must either complete their criminal investigation of Menatep Chairman Platon Lebedev or ask a Moscow court to extend his period of pretrial detention

31 March: Date by which prosecutors must either complete their criminal investigation of St. Petersburg legislator and accused murder conspirator Yurii Shutov or ask a St. Petersburg court to extend his period of pretrial detention

End of March: NATO Secretary-General Jaap de Hoop Scheffer to visit Russia, according to Interfax

1 April: Administrative reform of Russian federal government will be completed, according to Deputy Prime Minister Boris Aleshin

4 April: Second round of federal presidential election to be held, if no candidate receives 50 percent of the vote in the 14 March first round

4-5 April: Foreign ministers of five Caspian states, Russia, Kazakhstan, Turkmenistan, Azerbaijan, and Iran, to meet in Moscow

23 April: First anniversary of the murder of State Duma Deputy Sergei Yushenkov

June: Communist Party will hold congress to hear reports and elect new party officials

1 June: New deadline for exchanging Soviet-era passports for new Russian passports

19 June: End of State Duma's spring session.

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