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Russia Report: July 4, 2003


4 July 2003, Volume 3, Number 26
ELECTIONS
THE KREMLIN UPS THE ANTE IN ST. PETERSBURG
By Nikolai Petrov

Russia is at the start of a new election cycle that will culminate in State Duma elections on 7 December and presidential elections on 14 March 2004. However, before these are held, there will be a series of regional elections. In September, gubernatorial elections will be held in the Sverdlovsk, Omsk, and Leningrad oblasts and in St. Petersburg. These elections -- especially the race in St. Petersburg -- will serve as bellwethers for the entire election cycle.

The stakes in the 21 September St. Petersburg race are higher than elsewhere because the Kremlin is seeking not only to install its own loyal representative in one of Russia's largest and most important cities, but is also seeking revenge for past setbacks. The resignation of former St. Petersburg Governor Vladimir Yakovlev, who is widely seen as President Vladimir Putin's nemesis, came immediately after the pompous celebration of the city's 300th anniversary and might best be characterized as a surrender. Yakovlev finally gave in after a protracted battle. The outcome of the election in St. Petersburg will show whether Putin and his supporters can follow up on their vanquishing of Yakovlev by replacing his administration with one of their own.

In the 1996 St. Petersburg elections, Putin headed the election headquarters for incumbent Mayor Anatolii Sobchak, who lost to Yakovlev, his former first deputy. At the time, Putin publicly referred to Yakovlev as a "Judas" for running against his former mentor. Four years later, after he had risen to the highest office in the land, Putin found himself in a position to even an old score, and he tried to replace Yakovlev with his own candidate, then-Deputy Prime Minister Valentina Matvienko.

However, when it was clear that she couldn't win, Putin recalled her a month before the election was held. It might have appeared that Putin had simply accepted his inability to oust Yakovlev and reached a kind of understanding with him in exchange for Yakovlev's public demonstrations of loyalty.

But appearances can be deceiving. Less than a week after the 2000 election in St. Petersburg, Putin tapped Federal Security Service (FSB) General Viktor Cherkesov to serve as his presidential envoy to the Northwest Federal District. From the very beginning, Cherkesov entered into a struggle with Yakovlev and his team. The results of his activities were the resignations of a series of key players in Yakovlev's administration and the launching of a criminal investigation against them on various charges. On the eve of the city's 300th anniversary celebration, when enough "kompromat" on Yakovlev had apparently been gathered to compel him to resign, Matvienko took over Cherkesov's post. And last week, Matvienko announced her candidacy for Yakovlev's former seat.

Backing Matvienko in the 2000 St. Petersburg race was not the first time the Kremlin had participated in a regional election. In December 1999, Sergei Kirienko, who was later named presidential envoy to the Volga Federal District, was the Kremlin's candidate in the Moscow mayoral race. He was then a high-profile former prime minister and a leader of the Union of Rightist Forces (SPS). He participated in the race not so much to achieve victory as to reshape the SPS and intimidate incumbent Moscow Mayor Yurii Luzhkov, who was then in opposition to the Kremlin. Kirienko received just 11 percent of the vote, which was an even more meager show of popularity than Matvienko was polling on the eve of voting in St. Petersburg in 2000. Nevertheless, the Kremlin managed to impress upon Luzhkov that he was not invulnerable.

By pushing Matvienko forward a second time, the Kremlin is not simply acknowledging that the first time around Putin wanted more than simply to pressure Yakovlev. He actually wanted to get rid of Yakovlev and failed. Moreover, many analysts concur that unless Yakovlev resigned early and a special election was held at short notice, the Kremlin might well lose again. It would seem, therefore, that the Kremlin has finally achieved what it couldn't four years ago. But the election of Matvienko under such conditions would certainly appear to be purely a result of political machinations, while her defeat could be perceived as a public failure for the Kremlin's failure.

Another negative result of the Kremlin's manipulations in St. Petersburg is that it makes the case of former Primorskii Krai Governor Yevgenii Nazdratenko look unexceptional. Amid charges of corruption, Nazdratenko resigned from office in February 2000 only to be appointed to a high-level post in Moscow, chairman of the State Fisheries Commission, later that month. In Yakovlev's case, his came together with his appointment as deputy prime minister in charge of communal-services reform. As a result, the public perception is created that senior government posts are something to be traded like baseball cards, and that blackmail and the manipulation of elections are routine methods used by Moscow to manage regional leaders.

This will be the third consecutive gubernatorial election in St. Petersburg to encounter scheduling difficulties. In 1996, the ballot was moved to May to coincide with presidential elections and to help incumbent Mayor Sobchak. Holding elections earlier is generally thought to help the incumbent because the opposition has less time to organize a campaign, although in this case Sobchak still managed to lose. The next time around, the election was scheduled to be held in May 2000, but the pro-Yakovlev faction in the city's Legislative Assembly voted to move it forward to coincide with State Duma elections in December 1999. However, the Supreme Court ruled just days before that ballot that the Legislative Assembly had acted illegally and ordered the gubernatorial election to be held on 14 May 2000. Nevertheless, Yakovlev won in one round with almost 75 percent of the vote.

Now, with Yakovlev's resignation, it will again be impossible to hold the city's ballot jointly with the State Duma elections. The Kremlin appears virtually to have won in its effort to ensure victory for its favored candidate. But perhaps it is instead poised to repeat its old mistakes.

On the surface, the situation in St. Petersburg now appears extremely favorable for the Kremlin. Yakovlev has not left behind an official successor and the local opposition is in disarray. There do not seem to be any potentially strong rival candidates, and apparently nothing can stop the Kremlin from not just winning, but winning decisively.

However, an alternative candidate around whom the various opposition groups could rally might still appear. Even more likely, the competition for power within the presidential administration might play itself out in St. Petersburg, as competing clans within the Kremlin struggle to create the impression that they are responsible for any victory. The Kremlin will be competing not just against any opposition, but against itself as well.

Finally, a Norilsk-type variant is possible. In a mayoral race in that city in April, all of the candidates -- including the one backed by the regional powerhouse Norilsk Nickel -- withdrew their candidacies after the first-round front-runner was disqualified before the second round. That election has not yet been rescheduled. The St. Petersburg electorate, which is reputedly the most democratic in the country, might reject playing the role of doing the Kremlin's bidding, especially since the people of the second capital generally have an extremely negatively attitude toward Moscow.

The attitude of the elite in Russia's emerging "managed democracy" toward challenging the Kremlin is already clear. Even in this region with strong democratic traditions there have been no viable candidates for the governorship to run against the Kremlin-backed candidate, despite the presence of many colorful, federal-level politicians who theoretically might have chosen to participate. State Duma Deputy Speaker Irina Khakamada (Union of Rightist Forces), who is popular in St. Petersburg, declared even before Matvienko announced her candidacy that her party would support Matvienko. Likewise, another strong candidate on the right, Lenenergo Director Andrei Likhachev, announced that his Our City movement will support Matvienko. On 30 June, Oksana Dmitrieva (independent), who was elected to the State Duma from a local single-mandate district, announced that she will not run. City Legislative Assembly Chairman Vadim Tyulpanov and Federation Council Chairman Sergei Mironov, who is from St. Petersburg, have also expressed their support for Matvienko. Few are willing to challenge the will of Putin directly. So far, only Deputy Governor Anna Markova, former Lipetsk Oblast Governor Gennadii Kuptsov, and Legislative Assembly deputies Aleksandr Gabitov and Aleksei Timofeev have declared that they will run against Matvienko.

In the series of gubernatorial elections in 2000-02, there were about a dozen instances in which incumbents did not run. However, in the majority of those cases, the incumbent's declared successor won. The only two exceptions were in the Ivanovo and Kamchatka oblasts. And in the latter, victory was achieved by the representative of the leftist opposition. The Kremlin has not been able to elect a single candidate of its choosing in these races. In almost all cases in which the acting head of a region is participating in the race, he or his chosen candidate, through the use of local administrative resources, is able to win.

If the Kremlin succeeds in foisting "managed democracy" on the electorate in St. Petersburg as it already seems to have on the city's elite, then it will hardly have to bother in the rest of Russia. St. Petersburg is a sophisticated city in terms of the latest techniques of conducting campaigns and elections. It also has old traditions such as the rolling out of high-level candidates even for the so-called "alternativeless" elections. During the first election for the Congress of People's Deputies of the Soviet Union in 1989, the entire upper layer of city administration was rocked by defeat.

Moscow's overt manipulation of the election in St. Petersburg could, as in the last gubernatorial election there, produce undesired results. And even the popularity of native-son Putin might not help. Clearly, the stakes today are a lot higher than they were four years ago. The Kremlin is engaged in a risky game, and this time it is not simply working against Yakovlev, but against the very system of democratic elections. If it has skill enough to win, society will be the loser.

Nikolai Petrov is scholar-in-residence at the Carnegie Moscow Center.

PROFILE
VLADIMIR YAKOVLEV: A POLITICAL SURVIVOR
By Brian Whitmore

There's one thing you can say for certain about former St. Petersburg Governor Vladimir Yakovlev: He is a political survivor -- often in spite of himself. Throughout the past decade, Yakovlev has been on the losing side of most of Russia's main political battles, but he has still managed to remain politically alive and viable.

On his watch, St. Petersburg residents have seen the roads, buildings, and infrastructure of Russia's once graceful imperial capital deteriorate, while the city's streets descended into unprecedented gangland violence and fresh allegations of brazen corruption were leveled nearly every day.

Yet despite the pothole-pocked streets, crumbling buildings, contract killings, and graft, Yakovlev managed to build an effective -- and at times brutal -- political machine in Russia's second city, winning re-election in 2000 by a comfortable margin. Then, with his second and presumably final term as governor expiring next year and his popularity rating sinking to about 20 percent, Yakovlev was said to be angling for a federal post. And he got one.

But with Yakovlev's 16 June appointment as deputy prime minister in charge of Russia's moribund housing and utilities sectors, his luck might have finally run out. Unlike other St. Petersburg politicians brought to Moscow by President Vladimir Putin -- Federation Council Speaker Sergei Mironov, Economic Development and Trade Minister German Gref, and presidential chief of staff Dmitrii Kozak -- Yakovlev is not, and never has been, the president's ally.

In fact, Putin and Yakovlev are old enemies, their rivalry going back to when both served in the administration of former St. Petersburg Mayor Anatolii Sobchak (the title of St. Petersburg's chief executive was changed to governor in 1996). Analysts and pundits say Putin is setting Yakovlev up for a fall by giving him one of the toughest briefs in the cabinet and predict that Putin will dismiss him when he fails.

When Putin announced the appointment, anybody who knows St. Petersburg politics could not miss the symbolism and irony: The beaming president could hardly contain his delight as a grimacing Yakovlev appeared to be staring at his shoes. Most pundits trace Putin's animosity toward Yakovlev to the 1996 elections when Yakovlev "betrayed" Sobchak, St. Petersburg's first democratically elected mayor, by running against him and winning. Sobchak, who died of a heart attack in 2000, was Putin's law professor and later his political mentor.

But this rivalry is actually rooted in the clan warfare that marked Russian politics throughout the 1990s. In the early 1990s, former President Boris Yeltsin's Kremlin was divided between the so-called "young economic reformers," led by Anatolii Chubais, and another group associated with former Kremlin security chief Aleksandr Korzhakov. This schism was reflected in local and regional administrations around the country. In St. Petersburg, Sobchak and Putin were in the "Chubais camp," while Yakovlev was an ally of Korzhakov's. In the May 1996 gubernatorial elections in St. Petersburg, Yakovlev -- allegedly with financial support from Korzhakov -- mounted a surprise challenge against his boss. Yakovlev's campaign spent lavishly, and he won in a runoff against Sobchak by 27,000 votes.

The election took place just a month before Yeltsin's own re-election bid. After Yakovlev's victory, most of Chubais' allies in St. Petersburg, including Putin, resigned from the city government and took jobs in Moscow. But although Chubais' allies lost St. Petersburg's city hall, they were about to win their battle in the Kremlin. Shortly after his re-election in July 1996, Yeltsin fired Korzhakov and appointed Chubais as his chief of staff. It appeared that Yakovlev had lost his political godfather in Moscow and was in trouble.

Soon rumors began circulating in St. Petersburg that Yakovlev had ties to organized crime, particularly to the city's powerful Tambovskaya gruperovka, or the Tambov Gang. Throughout the early 1990s, "mafias" that had grown out of the Soviet-era black market were quickly building up capital, power, and influence. In St. Petersburg, the Tambov Gang, which reportedly ran extortion and loan-sharking rackets in the 1980s, quickly established control over much of the city's petroleum, real estate, and banking sectors.

According to informed sources in St. Petersburg's political establishment, by the mid 1990s the group had become more ambitious and hoped to establish a foothold in local government by backing a candidate for governor. Eventually, the sources say, they settled on Yakovlev. These rumors gained credence when, in December 1996, Anatolii Ponidelko, then the city's police chief, publicly announced that the Tambov Gang had gained undue influence over Yakovlev's city hall. Yakovlev angrily denied the allegations and arranged Ponidelko's dismissal.

Mafia ties or not, Yakovlev's St. Petersburg soon became the site of some of Russia's most violent gangland-style slayings. Some of these were related to battles for control of the city's fuel-and-energy sector, while others were blatantly political -- and the victims were often Yakovlev's rivals.

In August 1997, Mikhail Manevich, chairman of the City Property Committee -- a federal post in charge of local privatization -- was gunned down by a sniper as he was being driven to work along Nevskii Prospekt, St. Petersburg's main thoroughfare. Manevich was Chubais's ally and close friend and had been locked in a fierce battle with Yakovlev's financial backers over how prime local real estate would be privatized.

In November 1998, State Duma Deputy Galina Starovoitova, another foe of Yakovlev's, was gunned down in the stairway of her St. Petersburg apartment building. With alleged financial backing from Chubais, Starovoitova had been organizing a slate of candidates opposed to Yakovlev to run in St. Petersburg's December 1998 Legislative Assembly elections.

Then, in October 1999, Viktor Novoselov, a powerful Legislative Assembly member and one-time Yakovlev ally, was decapitated when a man placed an explosive device on the roof of his car when it was stopped at a red light. Novoselov was widely reputed to have organized-crime ties, and was planning to support another candidate in the May 2000 gubernatorial election. According to several Legislative Assembly members, Novoselov had compromising material on Yakovlev that he was ready to make public. Yakovlev's critics never tire of pointing out that the governor just happened to be out of town when these assassinations took place.

Besides assassinations, other strange things happened to Yakovlev's enemies. When Legislative Assembly speaker Yurii Kravtsov re-engineered the passage of the City Charter that would limit the governor's power, Yakovlev orchestrated his removal from office. Several Legislative Assembly members reported that members of Yakovlev's government used bribery and blackmail to get them to vote to remove Kravtsov.

When Oleg Sergeev, a pediatrician and Legislative Assembly member exposed corruption in Yakovlev's health-care bureaucracy and introduced legislation to clean it up, assailants wielding rubber truncheons attacked him in his apartment stairwell on 30 April 1998. The attackers broke Sergeev's nose, ribs, and skull, but took no money or valuables.

In the midst of the clan warfare that marked the end of the Yeltsin era, Yakovlev made his debut in national politics during the 1999 State Duma elections when he teamed up with former Prime Minister Yevgenii Primakov and Moscow Mayor Yurii Luzhkov to form the Fatherland-All Russia political party.

Luzhkov and Primakov were locked in a battle with Yeltsin's Kremlin over who would succeed the ailing president when his term expired in the summer of 2000. Fatherland-All Russia was designed to be a vehicle to win the Duma elections and then catapult either Luzhkov or Primakov into the Kremlin.

Instead, Putin rose from obscurity to the presidency, aided by his tough-guy stance in the Chechen War and Yeltsin's unexpected resignation on 31 December 1999. Fatherland-All Russia faded into obscurity.

Once Putin was in the Kremlin, nearly everybody in St. Petersburg expected that Yakovlev was finished. Putin was widely expected to back former Prime Minister Sergei Stepashin in St. Petersburg's gubernatorial elections in May 2000. But instead, Putin unexpectedly endorsed Valentina Matvienko, a deputy prime minister who was virtually unknown to the public at the time.

But a month before the election, Putin met clandestinely with Yakovlev, and soon thereafter Matvienko withdrew her candidacy. Political sources in St. Petersburg say the two made a deal: Yakovlev pledged loyalty to the Kremlin in exchange for a free ride to re-election. Yakovlev had again backed the wrong horse, but managed to survive anyway. At least, until his latest "promotion."

Brian Whitmore is a Prague-based journalist who covered Russia from 1996-2000.

PAN-REGIONAL ISSUES
SOUTHERN REGIONS FACING AGRICULTURAL CRISIS.
Officials in Krasnodar Krai and Rostov Oblast said that they expect their harvests this year to be just half as large as last year's, "Vremya novostei" reported on 26 June. In Rostov Oblast, authorities are looking at the feasibility of subsidizing local bakeries to prevent further rises in the price of bread, "Nezavisimaya gazeta" reported. In Krasnodar Krai, authorities imposed a ban on the export of fodder grain, hay, and straw beyond the borders of the Kuban area, according to "Vremya novostei." Governor Aleksandr Tkachev warned that the krai will literally be following every ear of corn. JAC

BASHKORTOSTAN
MOSCOW PUTS TAX COLLECTION IN BASHKORTOSTAN IN HANDS OF THE OPPOSITION.
Tax Minister Gennadii Bukaev announced on 27 June that he has appointed Aleksandr Veremeenko as director of the Tax Ministry's branch in Bashkortostan, "Kommersant-Daily" reported on 28 June. Veremeenko, a former general director of Bashtransgaz, is one of Bashkir President Murtaza Rakhimov's chief political opponents. Veremeenko was dismissed as head of Bashtransgaz on 18 June, in part because of his open conflict with republican authorities, according to the daily. Aleksandr Veremeenko's brother, Sergei Veremeenko, who is chairman of Mezhprombank, is considered a likely challenger to Rakhimov in the 2003 republican presidential elections, TVS reported on 20 June. According to "Kommersant-Daily," the local political elite is in shock over Aleksandr Veremeenko's appointment. Aleksandr Veremeenko told the newspaper that his chief task in his new post will be to "struggle for the supremacy of Russian financial laws in Bashkortostan." JAC

LENINGRAD
OBLAST EXPERIENCES ANOTHER HITCH IN APPOINTMENT OF NEW SENATOR...
A court in Vyborg on 27 June invalidated a Leningrad Oblast legislature decision to select Damir Shadaev as their representative to the Federation Council, "Kommersant-Daily" reported on 28 June (see "RFE/RL Newsline," 25 June 2003). According to the daily, the court found that legislators elected Shadaev despite having been informed by the head of the local Interior Ministry directorate and a local prosecutor that criminal cases are pending against him. Shadaev is suspected of using forged documents, specifically two fake diplomas from higher-educational institutions. Shadaev told the daily that he was warned by the chief federal inspector for Leningrad Oblast, Nikolai Sedykh, to withdraw his candidacy for the post or risk "various [forms of] unpleasantness." JAC

...AS KREMLIN MEDDLING ALLEGED.
Shadaev told "Kommersant-Daily" that Sedykh and his allies supported another candidate for the post: Vladimir Churov. Churov worked with President Putin in the administration of former St. Petersburg Mayor Anatolii Sobchak. Earlier, Shadaev accused presidential administration head Aleksandr Voloshin of pressuring the oblast legislature to support a candidate that the Kremlin favors (see "RFE/RL Newsline," 24 March 2003). Last year, the oblast legislature's attempt to elect former Gazprom-Media head Alfred Kokh as its representative failed (see "RFE/RL Newsline," 29 March 2002). JAC

PENZA
PENZA, EU BUREAUCRATS COMPARED...
A group of British farmers is leasing 10,000 hectares of farmland in Penza Oblast, RTR reported on 25 June. Colin Hinchley from Nottinghamshire told the station that the overproduction of grain back home and excessive bureaucracy inspired him and his countrymen to try farming in Penza. For its story about the farmers, "Moskovskie novosti," No. 24, asked Penza residents whether their bureaucracy could compete with the EU's. Marina Gorshunova, head of the ecology department at the beer brewer Staryi Pivovar replied: "Of course, everywhere is different, but we have enough bureaucracy.... But we need investment. I think things will be easier for the British farmers than they are for us." Igor Chekanov, local television producer, echoed this sentiment. "If our governor says 'yes,' then no kind of bureaucracy will pose an obstacle [for them]," he said. JAC

...AS LOCAL SUGGESTS DONATION REMOVES BUREAUCRATIC HURDLES.
"The bureaucracy in our city is faring quite well," computer programmer Sergei Novikov was quoted as saying in the "Moskovskie novosti" article. "And it is not only the dominance of government bureaucrats, but the bureaucracy is already growing within commercial structures. Recently, a friend of mine wanted to lease an area in a shopping center. At first, he spent two months running around gathering completely absurd papers, and then he simply gave a bribe to the administrator and within three days he was trading." JAC

ST. PETERSBURG
MEDIA UNDER PRESSURE IN PUTIN'S HOMETOWN.
St. Petersburg Television General Director Irina Terkina resigned on 20 June, and the hosts of two political programs, Daniil Kotsubinskii and Petr Godlevskii, have been dismissed, "The St. Petersburg Times" reported on 24 June. The municipally controlled channel was considered close to former St. Petersburg Governor Vladimir Yakovlev. Kotsubinskii alleged that his dismissal was "accomplished to make life easier for one candidate [in upcoming gubernatorial elections -- presidential envoy to the Northwestern Federal District Valentina] Matvienko." Godlevskii said that he was told that he "stirs up political tensions in the city." Local political analyst Leonid Kesselman told the newspaper that it was clear that Kotsubinskii and Godlevskii got into trouble for their criticism of the federal government. According to regions.ru on 24 June, the channel's broadcasting license is valid until 20 July. It has received two official warnings from the Media Ministry; the receipt of a third warning would mean that its license is automatically revoked. Terkina's resignation came just one day after she met behind closed doors with Media Minister Mikhail Lesin. However, she refused to discuss that meeting, saying only "it is my own decision to resign," the newspaper reported. In an interview with "Kommersant-Daily" on 23 June, the channel's new general director, Igor Ignatev, said that Lesin had suggested that he, Ignatev, head the channel. Ignatev added that his number one goal is "to save the channel for the city." JAC

POLITICAL CALENDAR
3-5 July: Romanian President Ion Iliescu visits Russia

7 July: The working group on Russia's accession to the WTO will meet in Geneva to discuss a draft of its final report

7-10 July: Jalal Talabani, the secretary-general of the Patriotic Union of Kurdistan, will visit Russia

13-16 July: Great Britain's Prince Charles will visit Russia

14 July: Deadline set by President Putin for Russian regions to bring their laws into compliance with federal regulations

14 July: Federal law on basic guarantees of electoral rights will come into effect, requiring that half the mandates in regional legislatures be elected from party lists

15 July: Government will consider draft bill on mineral resources, Prime-TASS reported on 28 May

15 July: Deadline for new company, Russian Railways, to be registered

1 August: Deadline for Russian peacekeeping troops to withdraw from Kosova

12 August: Third anniversary of the sinking of the "Kursk" nuclear submarine

13 August: Air-traffic controllers will hold a national protest

15 August: Date by which Duma should approve new map of single-mandate districts; if it fails to do so, the Central Election Commission will have the right to confirm the map

17 August: Karachaevo-Cherkessia will hold presidential elections

Late August: Campaign officially begins for 7 December State Duma elections

September: Second Russian-U.S. Commercial Energy Summit will take place in Moscow

September: State Duma Speaker Gennadii Seleznev's Party for Russia's Revival will hold a congress in Moscow

1 September: Date by which government commission will have drafted 2004 budget

7 September: Sverdlovsk, Novgorod, and Omsk oblasts will hold gubernatorial elections

7 September: Murmansk will hold mayoral elections

10 September: Special party congress for Communist Party of Russia

14 September: Volgograd will hold mayoral elections

21 September: St. Petersburg and the Leningrad and Tomsk oblasts will hold gubernatorial elections

23 September: The first European-Pacific Ocean Conference will take place in Vladivostok devoted to improving dialogue among intellectuals in European countries and the Pacific region, regions.ru reported on 6 March

24 September: Federation Council will hold its opening session after summer recess

30 September-2 October: The Second All-Russian Sociological Congress will take place at Moscow State University

1 October: Thirty-three percent salary hike for budget-sector workers will go into effect, pending the passage of legislation being revised by a conciliation commission

6 October: British court to consider Russia's request to extradite tycoon Boris Berezovskii

October: President Putin and German Chancellor Gerhard Schroeder will meet in Yekaterinburg, Novyi region reported on 14 April

23-26 October: First anniversary of the Moscow-theater hostage crisis

25-26 October: Russian Forum on the development of civil society will be held in Nizhnii Novgorod

29 October: 85th anniversary of the founding of the Komsomol

7 December: State Duma elections will be held

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