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Russia Report: September 18, 2003

18 September 2003, Volume 3, Number 37
Presidential administration head Aleksandr Voloshin came out this week and defended Russia's 1990s privatization process -- at least its overall results, if not every specific case. Voloshin, who was on an official trip to Azerbaijan, told reporters in Baku on 16 September that there will be no "revision of the results of privatization" while admitting the obvious -- that "specific cases" are under investigation. "This is not a simple issue for us, either from the political or the legal point of view," Interfax quoted Voloshin as saying. "The process of the privatization does not go easily anywhere. Legislation during the period of privatization was not complete and suffered from defects and, if sought, a defect could be found in any privatization deal." In instances of "obvious violations," Voloshin said, the law enforcement organs cannot be told to "close the Criminal Code and go home." Russia, he said, must "quietly leave the initial period of capital accumulation without shaking the foundations of its economy. The law will triumph, and the results of privatization will not have to be reviewed."

While Voloshin's comments were similar to those made earlier by other officials -- most notably, Prime Minister Mikhail Kasyanov and Economic Development and Trade Minister German Gref -- they were important given his status as the de facto leader of the so-called Family, the Kremlin faction made up of Yeltsin-era holdovers associated with various leading "oligarchs" and the controversial privatization process more generally. The Family is said to be locked in a power struggle with the so-called siloviki faction, which is reportedly led by former Mezhprombank head Sergei Pugachev and deputy presidential administration heads Viktor Ivanov and Igor Sechin -- two of the many security-service veterans elevated to top political posts by President Vladimir Putin. Foundation for Effective Politics head Gleb Pavlovskii, reputedly a close ally of Voloshin's, recently warned that the siloviki group aims to restructure all levels of political power -- including the presidential level -- and to dictate government policy in a number of areas, including reexamining the results of privatization (see "RFE/RL Newsline," 4 September 2003).

While this summer's legal attack on oil giant Yukos appears to have been a siloviki-inspired assault on privatization and, concomitantly, the Family's power base, there are signs that the parliamentary-election campaign now under way might become another theater in this war. Sergei Glazev, the economist who heads the newly formed Motherland National-Patriotic Union leftist electoral bloc, has come out in favor of revisiting the privatization deals of the last decade. Glazev told a press conference in St. Petersburg on 16 September that the results of privatization are being "reexamined every day on this or that basis," with lawsuits often being filed on the basis of investigations carried out by the Audit Chamber or prosecutor's offices. "If the legitimacy of a deal is called into question, then all such cases should be taken up in the courts in order to close the books on them," Glazev said. If controversial privatization deals are not reviewed, then "our natural-resources fees will be squandered further and [more] foreign soccer clubs will be bought," Glazev said, referring to the recent purchase of England's Chelsea soccer club by tycoon and Chukotka Autonomous Okrug Governor Roman Abramovich.

Glazev added, however, that he is against the idea of "seizing and dividing everything up," because this would mean simply another round of property redistribution "by means of fraud." The real problem is not incorrect privatization, he said, but "the incorrect redistribution of incomes." "The disproportion in the redistribution of incomes must be eliminated," RosBalt quoted Glazev as saying.

Both Voloshin and Glazev were careful to stop short of adopting opposing maximalist positions on the issue of whether to undo the results of privatization. Still, their respective comments suggest the privatization issue could loom large in the parliamentary-election campaign. It will be interesting to see what position the pro-Kremlin Unified Russia party takes on the issue, given that Pavlovskii is reportedly overseeing its campaign (see "RFE/RL Newsline," 4 September 2003). (Jonas Bernstein)

Motherland National-Patriotic Union, the new left-oriented election bloc headed by Duma Deputies Sergei Glazev and Dmitrii Rogozin, held its founding congress in Moscow on 14 September. The bloc's constituent parties include the Party of Russian Regions, the Socialist Unity Party of Russia (formerly, the Spiritual Heritage movement), and the Party of National Rebirth (also known as the People's Will Party, headed by Sergei Baburin), RosBalt reported. Glazev, Rogozin, and 1991 coup plotter Valentin Varennikov will occupy the top three spots on the bloc's election list, respectively. Also on the list are Baburin; former Central Bank chief Viktor Gerashchenko; former Airborne Forces commander Colonel General Georgii Shpak; and Aleksandr Lebedev, chairman of National Reserve Bank and president of Russia's National Investment Council. The bloc plans to run Lebedev, who worked in London as an intelligence officer under diplomatic cover in 1988-92, as its candidate in the 7 December Moscow mayoral race, "Gazeta" reported on 15 September. Glazev said the bloc's program "makes it possible to combine the demands of social justice and the demands of economic growth, the demands of economic efficiency and the provision of all social guarantees," ORT reported on 14 September. JB

The Green Party held its ninth congress on 12 September, during which it announced that it would not join any bloc or coalition for the parliamentary-election campaign, Interfax reported. The ecological party' s chairman, Anatolii Panfilov, said it might cooperate with Unified Russia and the People's Party in choosing candidates for seats in single-mandate districts. Panfilov also announced that he will top the Greens' election list, followed by Viktor Ignatov, a Federation Council member representing Novosibirsk Oblast, and Vladimir Yevstafev, president of the Russian Association of Advertising Agencies. Panfilov said the party would seek to "unite the forces of representatives of all the ecological movements and organizations of Russia in order to create a 'green' faction in the State Duma that will actively work for the goals of protecting the environment, the country's natural-resource potential, and the nation's health, and to harmonize the interests of man and nature." During the congress, a greeting to the delegates from Arkadii Volskii, president of the Russian Union of Industrialists and Entrepreneurs, was read out, in which he declared support for the Greens' goal of minimizing the negative impact of industrial enterprises on the environment. JB

The Agrarian Party held an extraordinary congress in Moscow on 9 September to outline its strategy for the 7 December State Duma elections, Russian media reported. Delegates approved plans for the party to campaign independently and named the party's top three candidates: Agrarian Party leader and head of the Altai Republic Mikhail Lapshin, Altai Krai legislature Chairman and former Agriculture Minister Aleksandr Nazarchuk, and party Deputy Chairman and businessman Aleksei Chepa. Lapshin and Nikolai Kharitonov, head of the Agro-Industrial Group in the Duma, traded insults during the congress, "Rossiiskaya gazeta" reported on 10 September. Kharitonov cooperates closely with the Communist Party and has long accused the Agrarian Party leadership of selling out to the authorities. Kharitonov will be the No. 3 candidate on the Communist Party list. The Agrarian Party received 8 percent of the vote in the 1993 Duma elections, but failed to clear the 5 percent threshold in 1995. In 1999, the party joined the Fatherland-All Russia alliance. (Laura Belin)

The Party of Life, which is headed by Federation Council Chairman Sergei Mironov, held its second congress in Moscow on 14 September, reported. The delegates approved plans to forge an electoral bloc with the Party of Russia's Rebirth, headed by State Duma Chairman Gennadii Seleznev, and approved the top three names on the party's election list. They are, respectively: Mironov; Valentina Tereshkova, the world's first woman in space; and Oksana Fedorova, an Interior Ministry officer who was briefly Miss Universe in 2002, but who was stripped of her title following allegations that she failed to live up to her commitments. Mironov told delegates that Russia needs a Social Code that would lay out the state's obligations to citizens and specifying which agencies should fulfill them. He also said the authorities should be concerned with "information security," given that the media's information flow includes "evil" as well as "good." While ruling out censorship, Mironov said Russia should have a "National Council to Defend Morality" made up of "respected people." "The spiritual health of the people is an issue of national security," he said. JB

The People's Party on 14 September held its second extraordinary congress in Moscow, during which 550 delegates from across Russia confirmed the party's election list, RIA-Novosti reported. The top three names on the list are, respectively: party leader Gennadii Raikov; Colonel General Gennadii Troshev, a former commander of Russian forces in Chechnya who is now the presidential adviser for Cossack affairs; and Nikolai Derzhavin, an aide to Patriarch of Moscow and All Russia Aleksii II. Earlier this month, Foundation for Effective Politics head Pavlovskii claimed that the siloviki faction within the Kremlin, led by deputy presidential administration heads Ivanov and Sechin and Mezhprombank head Pugachev, is backing the People's Party (see "RFE/RL Newsline," 4 September 2003). JB

The Great Russia-Eurasian Union bloc, an alliance of several obscure parties, held its founding congress in Moscow on 16 September, Russian media reported. Its top three candidates will be Russia-Belarus Union Secretary Pavel Borodin, former Ingush President Ruslan Aushev (leader of the Party of Peace), and retired General Leonid Ivashov (leader of the Military-Great Power Union of Russia). Abdul-Vakhed Niyazov, chairman of the Eurasian Party of Russia's political council, told NTV that hockey star Pavel Bure will be the bloc's No. 4 candidate. Borodin long served as the head of the property department in former President Boris Yeltsin's administration, but his last foray into electoral politics was a failure. Despite Kremlin backing in the 1999 Moscow mayoral election, Borodin finished a distant third with some 6 percent of the vote.

The Great Russia-Eurasian Union bloc clearly intends to play down Borodin's erstwhile close association with Yeltsin, while stressing "national-patriotic" and populist themes and even engaging in some oligarch bashing. Indeed, during the bloc's founding congress, Ruslan Aushev lashed out at Chukotka Autonomous Okrug Governor Abramovich, who was a member of the Yeltsin inner circle, reported on 16 September. Aushev called Abramovich's acquisition of England's Chelsea soccer club a "taunt" to many Russians, charging that it was accomplished using funds "received as a result of the illegal privatization of state property and state mineral wealth." "The wealth of the people," Aushev said, "must not belong to a small circle of people." Another founding member of the Great Russia-Eurasian Union bloc, union leader Sergei Khramov, warned that bad things would be said about Borodin, whom he hailed as "a simple bureaucrat" who "built the Kremlin and took nothing for it." In the waning days of Yeltsin's tenure, Borodin was implicated in an embezzlement and money-laundering scandal involving Kremlin reconstruction projects.

The Great Russia-Eurasian Union bloc might also try to play on nostalgia for the Soviet era. Niyazov said the bloc's main task will be to try and restore "a great Eurasian empire" on the territory of the former Soviet Union. It would also, he added, push for "state intervention in the economic processes, for support of traditional religions, for a revival of the regions and a redistribution of the extraction industries' super-revenues," reported. JB/LB

The Liberal Russia splinter group that supports self-exiled tycoon Boris Berezovskii held a congress in Moscow on 13 September, Interfax reported. Berezovskii addressed the congress from London via a video hookup, telling delegates that while they could not alone "put an end to the destruction of democratic institutions in Russia," this might be possible in conjunction with other political forces. He also said the party must create an "effective opposition" in the State Duma. The party congress confirmed its election list, with the top three spots going to Berezovskii; former Security Council Secretary Ivan Rybkin; and Yulii Dubov, the former deputy general director of Berezovskii's LogoVAZ company. Berezovskii and Dubov are wanted in Russia on charges of large-scale fraud, but the British authorities recently granted Berezovskii political asylum, after which a British court ruled that he could not be extradited to Russia.

The previous day, however, Central Election Commission (TsIK) Chairman Aleksandr Veshnyakov had called Berezovskii's plans to draw up a list of Liberal Russia candidates for the State Duma elections "absurd," Interfax reported on 12 September. He said there is a Liberal Russia on the list that the TsIK received from the Justice Ministry of parties permitted to participate in the Duma elections, but it is the one led by the same people who registered the New Course-Automotive Russia bloc -- namely, Duma Deputy Viktor Pokhmelkin, the Liberal Russia co-chairman whose faction ousted Berezovskii -- not the pro-Berezovskii group.

On the other hand, an Astrakhan court recently overturned the Justice Ministry's refusal to validate decisions adopted by the pro-Berezovskii splinter group during its 14-15 June congress, seemingly designating it the real Liberal Russia. Nonetheless, Veshnyakov said that if the pro-Berezovskii group is unable to win a court case ruling that it can use the Liberal Russia name, then the likelihood of its participating in the Duma election is "legally almost nonexistent," Interfax reported on 12 September. JB

On 12 September, the St. Petersburg Municipal Court ruled against two candidates in the city's 21 September gubernatorial election, St. Petersburg Deputy Governor Anna Markova and Konstantin Sukhenko, who had filed suits seeking the revocation of the registration of Valentina Matvienko, presidential envoy to the Northwest Federal District, as a candidate in that race, Interfax reported. Markova, who was the first to sue, charged that a nationally televised meeting between President Putin and Matvienko on 2 September during which Putin praised her proposals and wished her success in the governor's race violated election legislation. The court ruled that Putin's meeting with Matvienko was a "working meeting" between the president and a person who possessed information he needed to draw up the federal budget, and thus is not grounds for revoking Matvienko's registration. Markova said she and Sukhenko will appeal the decision to the Supreme Court, possibly as soon as 23 September, Interfax reported on 13 September.

Markova, meanwhile, lodged another complaint with the city's election commission, this time concerning election posters put up by Matvienko's campaign around St. Petersburg. The posters show Matvienko with President Putin and bear the slogan "Together we can do anything," reported on 11 September. However, both the election commission and Matvienko's campaign headquarters indicated that she had received written permission from the head of state to use his image for campaign purposes. JB

The State Duma on 16 September passed in its second and third readings a draft law on local self-government, Russian media reported. Although deputies initially approved the law in its second reading during the Duma's spring session, centrist and rightist factions orchestrated a return to the second reading to allow more amendments to the text, according to Russian Television (RTR). One of the new amendments delayed the date on which the law will take effect from 1 January 2005 to 1 January 2006.

The law transfers municipal authority to a system of two levels, one covering villages, settlements, and other small population centers, and the other covering large towns. Each would have its own list of functions and financing sources, Mayak radio reported on 16 September. Deputy Kremlin administration chief Dmitrii Kozak, who headed the presidential commission that began the push for local self-government reform and drafted the original legislation, called the version passed by the Duma "one of the key laws in area of state construction" that will "significantly increase the effectiveness of the work of organs of local self-government, subordinate their activities to the interests of the citizen, [and] guarantee the rational expenditure of taxpayers' money," Interfax reported on 16 September.

Meanwhile, the Duma on 16 September approved in the third reading a draft law to defend the rights of legal entities and individual entrepreneurs when state inspections are carried out, RIA-Novosti reported. Among other things, that bill stipulates that certain inspections may be done no sooner than three years after an enterprise is registered. LB/JB

Forty-five Federation Council members have filed a Constitutional Court appeal challenging the legality of an article in the 2003 budget, Interfax reported on 16 September. The article in question suspends passages in the law on the Audit Chamber dealing with that chamber's obligation to provide parliament with a report on how the budget is being fulfilled. Without such a report, the court appeal argues, the Federation Council and State Duma cannot monitor the execution of the budget. In the post-Soviet period, federal expenditures have not always corresponded to budget allocations, causing friction between government officials and parliamentarians. LB

Federation Council Chairman Sergei Mironov on 10 September advocated elections for the upper house of the parliament, Interfax reported. Speaking to students at the St. Petersburg State Mining Institute, his alma mater, Mironov said the Federation Council "should be formed by the general public." After next year's presidential election, Mironov plans to submit to parliament a draft law on the matter, with the goal of holding elections for the Federation Council in early 2005. The constitution does not specify how members of the upper chamber are to be selected. The first Federation Council members were elected to two-year terms in December 1993. But under a law adopted in 1995, the heads of the executive and legislative branches in each region automatically became members of the Federation Council as well. Under the current system, implemented early in President Putin's presidency, Federation Council members are selected by regional authorities and can be recalled at any time. LB

19 September: Mikhail Gorbachev's Social-Democratic Party of Russia will hold a party congress in Moscow

19 September: First reading of the 2004 budget will be held in the State Duma

19 September: CIS Summit will be held in Yalta, Ukraine

21 September: St. Petersburg and Leningrad and Tomsk oblasts will hold gubernatorial elections; a runoff election for Sverdlovsk Oblast governor is also planned

22 September: Registration begins for candidates in the 7 December State Duma elections

22-23 September: U.S.-Russia energy summit will take place in St. Petersburg

23 September: The first European-Pacific Ocean Conference, devoted to improving dialogue among intellectuals in European countries and the Pacific region, will take place in Vladivostok

23 September: The trial of those accused of killing investigative journalist Dmitrii Kholodov will reconvene

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

29 September-3 October: The Third World Conference on Climate Change will take place in Moscow

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

October: Second Civic Forum will be held, according to presidential Human Rights Commission Chairwoman Ella Pamfilova

October: Israeli Prime Minister Ariel Sharon to visit Russia, according to Reuters

October: President Putin and German Chancellor Gerhard Schroeder will meet in Yekaterinburg

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

1 October: Monthly minimum wage to be raised to 600 rubles ($19.80), according to Federation Council Chairman Mironov

1 October: Visas for travel between Poland and Russia will be required

5 October: Presidential election to be held in Chechnya

9 October: The commission for administrative reforms chaired by Deputy Prime Minister Boris Aleshin will submit its proposals to the government, according to "Izvestiya" on 14 August

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

26 October: Repeat mayoral elections will be held in Norilsk

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

5 November: President Putin will visit Italy for the EU-Russia summit in Rome

7 November: Campaign for the State Duma elections officially begins

19 November: Deadline for investigators working on the case against Yukos security official Aleksei Pichugin

20 November: Fifth anniversary of the killing of State Duma Deputy Galina Starovoitova

7 December: Bashkortostan will hold a presidential election

7 December: Novosibirsk and Sakhalin oblasts will hold gubernatorial elections

7 December: Moscow to hold mayoral election

7 December: State Duma elections will be held.