#14
Novaya Gazeta
No. 34
May 2003
REDISTRIBUTION IN RUSSIA MEANS ELECTIONS ARE COMING UP
The St. Petersburg people are raising money for the presidential campaign
Author: Yulia Latynina
[from WPS Monitoring Agency, www.wps.ru/e_index.html]

IN RUSSIA THERE IS A POLITICAL TRADITION OF FUNDING PRESIDENTIAL ELECTION CAMPAIGNS: WHOEVER FINANCES THE ELECTION INSTALLS HIS OWN MAN IN OFFICE. REDISTRIBUTION OF ASSETS IN RUSSIA ALWAYS MEANS THAT A PRESIDENTIAL RACE IS COMING UP.

In Russia there is a political tradition of funding presidential election campaigns: whoever finances the election installs his own man in office.

Redistribution of assets in Russia always means that a presidential race is coming up.

Boris Yeltsin had to be re-elected in 1996. Two groups fought to control the election - a group of oligarchs led by Anatoly Chubais, and a group of security structures under Alexander Korzhakov.

The plans of the oligarchic group came down to the following: they intended to hand out property and assets, to spend half the dividends on the election (stealing some funds in the process), and to have Yeltsin elected in a democratic manner.

The group led by Korzhakov and Soskovets was much less subtle - assuming that it would be best to cancel the election altogether, so that Boris Yeltsin should receive the reins of power directly from the hands of the security structures.

The oligarchs won the battle.

The fact that they won doesn't really matter. What matters is that this group received its payment before the election itself, through the "privatization auctions". Smart oligarchs knew they would be forced to pay for everything after the election. Vladimir Gusinsky was supposed to get the Svyazinvest company after the election. He never got it, even though his contribution to Yeltsin's victory had been among the most significant.

Redistribution accompanied Putin's election as well.

I don't even mean the open season declared on two media tycoons, Gusinsky and Berezovsky, one of whom was reckless enough to join the opposition and the other flippant enough to emphasize that Putin owed his victory to this particular tycoon.

I mean redistribution of the aluminum industry in favor of Roman Abramovich and Oleg Deripaska, the tycoons essentially representing Yeltsin's Family and its interests.

It may be added that all subsequent attempts at redistribution by the same people failed.

So here are the rules of Russian politics.

First: Each election is accompanied by a redistribution of assets in favor of sponsors.

Second: Each redistribution takes place before an election.

In accordance with these rules, the new ruling elite - the "people from St. Petersburg" - have received several companies from the president (Gazprom, Rosspirtprom, Rosneft, Rosoboroneksport) and immediately launched a fund-raising campaign for the presidential election.

A prominent business leader told us: "Everyone is raising money for the presidential election, even guys who have never met the president personally."

The people from St. Petersburg operate on a staggering scale. Here are just two examples.

Rosneft paid $600 million in one deal. Other oil companies were assured by their analysts that this price was $200-250 million more than it should have been. Mikhail Khodorkovsky of YUKOS said as much at a meeting with the president. Putin's move against YUKOS was so swift and vindictive as to dispel all doubts and confirm the assumption that the rest of the sum was to be spent on the election.

And another deal: Gazprom will be selling gas from Turkmenistan to Ukraine via Eural TransGas this year. Eural TransGas, a Hungarian company, has authorized capital amounting to $12,000. It was formed by four individuals and registered in the town of Chabdy. Analysts from Hermitage Capital Management estimate the company's potential revenues at between $320 million and $940 million, depending on where the gas Eural TransGas is entitled to will be sold. Even if half the sum is transferred to Ukraine, it is highly unlikely that the Russian gas monopoly would sign such a deal with an obscure company without bearing in mind its election obligations.

With money like that, it would be possible to elect Putin as president of Russia - or even president of America. For all their power, even oligarchs cannot afford anything remotely like it.

Elections are elections; money will be embezzled and stolen; but where is the privatization of the loot?

No privatization.

The impression is that the ruling elite is thinking in tactical rather than strategic terms this time. In terms of looting, not in terms of a war.

After all, there is only one difference between William the Conqueror and a pickpocket: both are greedy, but they operate on different scales.

Hence the difference in results. In the first case, greed leads to establishment of empires. In the second, pockets are picked.

Elites thinking in terms of tactics are safe for the regime - but certainly unsafe for the nation.