A new constitution is to be drafted that could provide the legal basis for Kokoity to remain in power after his second presidential term expires in November 2011.
Meanwhile, an investigation into the operations of the First Republican Bank, which is owned by Albert Dzhussoyev, a Moscow-based opposition businessman, has reportedly uncovered numerous financial violations. The authorities have threatened to rescind the bank's license on the grounds that it was issued in violation of existing legislation.
As indicated above, the May 31 ballot was rigged to preclude any opposition representation in the new parliament. In mid-April, South Ossetia's Election Commission refused to register the opposition People's Party headed by Roland Kelekhsayev to participate in the election, but it did register a second party of the same name established days earlier by persons said to be utterly loyal to Kokoity. It also registered only nine of the 10 candidates on the list of the socialist Fydybasta (Fatherland) party, rejecting party Chairman Vyacheslav Gobozov, who headed it.
The conduct of the vote and the outcome confirmed the opposition's worst fears. The Russian dailies "Kommersant" and "Vremya novostei" both reported procedural violations reminiscent of those registered in recent elections across Russia. Voter turnout was given as 81.9 percent, or 52,000 of a total of 56,000 registered voters; Dzhussoyev rejected that figure as grossly overstated, and claimed that the entire population of South Ossetia today does not exceed 20,000 people.
According to the official results, Kokoity's Unity party garnered 46 percent of the vote, which translated under the proportional system into 17 of the total 34 parliament mandates. The pro-Kokoity People's Party won 22.58 percent of the votes, giving it nine mandates, and the Communist Party 22.25 percent (eight mandates). Fatherland polled only 6.37 percent of the vote, less than the minimum 7 percent required to win parliamentary representation.
The Communist Party and Fatherland both queried the accuracy of those returns. Communist Party leader Stanislav Kochiyev said he had hoped for a larger share of the vote, while Fatherland 's Gobozov alleged widespread multiple voting and other violations and demanded that the Election Commission release voter lists.
Kokoity by contrast termed the voting "absolutely transparent and honest," and announced that he would relinquish some of his presidential powers. Specifically, he said that in future the parliament would have a greater say in forming the government.
In what looked suspiciously like an attempt to buy the Communists' loyalty, Kokoity then proposed Kochiyev as parliament chairman. His candidacy was duly approved on June 19 by 22 votes to 12.
It was Kochiyev who announced on June 23 that the parliament would draft and adopt a new constitution, but he denied that the objective was to enable Kokoity to serve a third presidential term.
What prompted the investigation launched into Dzhussoyev's bank, and when that probe was launched, is unclear. Dzhussoyev was quoted on June 26 by kavkaz-uzel.ru as tacitly admitting unspecified irregularities that could incur a financial penalty, but he insisted that they were not of a magnitude to warrant stripping the bank of its license (which was issued by the National Bank of South Ossetia).
Dzhussoyev recalled that he received permission to open his bank in late 2006 (immediately after Kokoity's reelection for a second presidential term), and that both Kokoity and the unrecognized republic's prime minister attended its formal inauguration in May 2007.
In a lengthy interview with kavkaz-uzel.ru shortly before the May parliamentary ballot, Kokoity gave an exceptionally negative assessment of the construction work carried out by Dzhussoyev's Stroiprogress company on the Tskhinvali-Dzaurikau natural-gas pipeline.