PRESIDENTIAL SUCCESSION MANEUVERING: EARLY STIRRINGS

C O N F I D E N T I A L SECTION 01 OF 04 MOSCOW 003335



SIPDIS



SIPDIS



E.O. 12958: DECL: 03/30/2016

TAGS: PGOV, ECON, PINR, RS

SUBJECT: PRESIDENTIAL SUCCESSION MANEUVERING: EARLY

STIRRINGS



REF: A. 05 MOSCOW 14734

B. MOSCOW 1082

C. MOSCOW 1434

D. 05 MOSCOW 15735

E. MOSCOW 3218



Classified By: Ambassador William J. Burns. Reasons: 1.4 (B/D).



1. (C) SUMMARY. In the months since President Putin's

November 14 personnel reshuffle that moved Dmitriy Medvedev

and Sergey Ivanov into succession spotlight, political

discussion has centered on how that move is playing out.

Most observers continue to accept Putin's word that he will

step down at the end of his term. They are divided over

whether Medvedev will ultimately benefit from having been

assigned to oversee Putin's national priority projects.

While Sergey Ivanov has taken some serious hits (on, e.g.,

military "hazing" excesses),he is fighting back, and most

observers do not rule him out as a potential successor.

Discussion also includes other possible contenders, with

Dmitriy Kozak and Sergey Sobyanin appearing more frequently

than previously. The general view is that all those

considered even potential contenders face enough serious

pitfalls to preclude confident predictions about who will

ultimately grab the brass ring. Meanwhile, the Kremlin is

working in overkill mode to neutralize any threats to its

succession scenario, notably from Dmitriy Rogozin and Mikhail

Kasyanov. The preoccupation with succession politics, and an

attendant increase in infighting over politics and assets,

leaves less Kremlin time and energy for policymaking. END

SUMMARY.



2. (C) On November 14 Putin shook up the political scene

with a major personnel reshuffle in the Presidential

Administration (PA) and government (ref A). Over the past

four months, that reshuffle has been the primary point of

reference in discussions of the succession, as that issue

increasingly dominates the domestic political scene.

.

PUTIN, MEDVEDEV AND SERGEY IVANOV

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3. (C) Most observers continue to see the November reshuffle

as confirming Putin's commitment to step down at the end of

his current term. In a meeting with the Ambassador, Norilsk

Nickel owner Vladimir Potanin said Putin remains determined

to leave office in 2008. Ekho Moskvy radio station head

Aleksey Venediktov shared that view, telling us Putin is

increasingly tired of the presidency. Venediktov believes

Putin's heavy focus on energy issues reflects a plan to

transition to a lucrative position in the energy sector once

he departs the Kremlin, leaving himself the option of running

for president again in 2012. (Note. The Constitution bans

more than two successive terms as President, but would not

ban a non-consecutive third term. End Note) Other scenarios

-- all equally speculative -- continue to circulate about

Putin's post-presidency plans. No one is entirely sure Putin

will step down, however, with Moscow Carnegie Center's

Aleksey Arbatov, for instance, casting doubt on the reports

that Putin is tired of his position and predicting that Putin

will find a way to stay on.



4. (C) Dmitriy Medvedev was initially seen as the big winner

in the November reshuffle. By moving him from PA chief to

First Deputy Prime Minister and above all by placing him in

charge of the national priority projects, Putin appeared

motivated by a desire to give Medvedev a higher public

profile and to increase his popularity as a way to lay the

groundwork for presidential anointment. Over the last few

months, Medvedev has sought to take advantage of the

opportunity, seemingly trying to cast himself as a

president-in-waiting. When PM Mikhail Fradkov has been away

from Moscow, Medvedev has made a point of running the Cabinet

and ensuring that the media covers his activities. A Center

for Political Technologies (CPT) study noted that Medvedev

has tried to adopt Putin's leadership style, brusquely giving

orders to Cabinet members to demonstrate that he is in

charge, although he has not always done so persuasively.

With the trappings of office, including an honor guard,

Medvedev attempted to "look presidential" when he recently

welcomed visiting Energy Secretary Bodman to the Kremlin.

(Olga Kryshtanovskaya, a sociologist specializing in elite

politics, has recently written that Medvedev's televison

appearances have left the impression of weakness and

indecisiveness, while Sergey Ivanov has more successfully

captured the "presidential" style that reminds viewers of

Putin.) In meetings with the Ambassador, Medvedev has been

very down-to-earth and focused on tangible progress on the

national priority projects.



5. (C) Heading the national projects initiative offers



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Medvedev an opportunity to gain popularity, but it comes with

pitfalls, as many observers are underscoring. Mastering the

new bureaucracy emerging around the national projects, as

well as dealing with the old one that is still addressing the

four project areas, is a significant bureaucratic challenge,Qnd Medvedev has already publicly complained about

unjustifiable delays. Potanin told the Ambassador that of

the priority projects, only housing offers any real chance of

demonstrating significant progress. Some think Medvedev was

put in charge of the national projects to limit corruption.

Particularly for that reason, a corruption scandal involving

the projects would be a serious failure, even if Medvedev

himself were not accused of wrongdoing. The National

Strategy Council's Iosif Dyskin, an advisor to presidential

contender Vladimir Yakunin, predicted to us that such

scandals would emerge over the next few months, sullying

Medvedev's reputation even though he would not be directly

implicated in corruption.



6. (C) Meanwhile, Medvedev must deal with political

infighting with potential rivals. Venediktov told us how ill

feelings arose in the Kremlin when Medvedev decided that, by

virtue of being First DPM, he should have almost as large a

staff as Fradkov. Seeking to spite Medvedev and deny him

slots for some trusted staffers, Fradkov pared down his own

apparat, forcing Medvedev to lessen his demands, Venediktov

related. Fradkov has also sought to hinder Medvedev by

assigning him extraneous tasks that distract from his work on

the national projects, such as insisting that Medvedev be put

in charge of the campaign against avian flu, which offers

little political gain if the disease doesn't spread -- but

much room for blame in the event of a serious outbreak.



7. (C) In another example of infighting, reports surfaced

that Boris Kovalchuk, the 28-year-old son of Putin insider

Yuriy Kovalchuk, would be appointed to head the newly formed

department in charge of the national projects. Federation

Council member Vladimir Slutsker echoed to us the view of

many observers that the decision to install a young and

inexperienced person to head a key department was meant to

undercut Medvedev. The older Kovalchuk was not necessarily

opposed to Medvedev but simply wanted to have his son

installed in an important -- and lucrative -- position,

according to Slutsker, who said others encouraged the idea to

damage Medvedev. Venediktov, by contrast, told us that

though the appointment might not encourage efficiency,

Medvedev consciously accepted it to court Putin insiders such

as the older Kovalchuk.



8. (C) In sum, observers agree that Medvedev faces a tough

road ahead, despite being given an early chance to succeed.

Potanin told the Ambassador he thinks Medvedev will likely

become PM, possibly even this year, but the presidential

succession would not necessarily follow. Venediktov believes

Medvedev remains the front runner, and that if he does well,

Putin may call early Duma elections to test Medvedev's

political skills.



9. (C) Although many thought he was advanced only into a

"fall-back" position, Sergey Ivanov also gained from the

November reshuffle, which made him a Deputy Prime Minister

while he retained his position as Defense Minister. He has

had some troubles since then, taking a public relations

beating over a brutal hazing incident in Chelyabinsk (ref B)

and sparring with the Military Prosecutor's Office.

Venediktov told us that the extensive airing of the hazing

story in the Russian media was clearly orchestrated by

Ivanov's opponents. Observers believe Ivanov has fought back

vigorously and effectively, and Putin recently broaden his

control of the military-industrial complex, putting him in

charge of the government commission that oversees that

sector. Potanin told the Ambassador that Ivanov is smart and

remains in contention. Our sense is that most other

observers similarly do not rule him out.

.

OTHER CONTENDERS

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10. (C) Given broad agreement that Medvedev and Sergey

Ivanov could well falter, observers are also watching other

potential contenders. Of late we have heard renewed

discussion about Southern Federal District Presidential

Representative (PolPred) Dmitriy Kozak. That may have been

precipitated by press rumors, which could have been planted

by Kozak's supporters, that Putin is considering installing

him as Justice Minister in the near future. Potanin told the

Ambassador that Putin will bring Kozak back to Moscow before

2008, and he should not be counted out for the succession.

Aleksandr Machevskiy, the well-connected assistant to

Presidential Envoy to the EU Sergey Yastrzhembskiy, noted to

us recently that the Kremlin saw Kozak as having done a good



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job in the North Caucasus under extremely difficult

conditions, and he hinted that Kozak's succession prospects

had improved as a result.



11. (C) We also have noted more talk recently about Sergey

Sobyanin, the former Tyumen governor who was appointed to

head the Presidential Administration (PA) in the November

reshuffle, as a possible albeit still dark-horse contender.

Although Venediktov downplayed Sobyanin's abilities in a

conversation with the Ambassador last month (ref C),others

have told us he is performing well and will soon begin to

assert himself in the PA. Some of our reformist economic

contacts express pleasant surprise with Sobyanin's

willingness to consider tough structural reforms and support

the national priority projects. Potanin told the Ambassador

that Sobyanin, despite his low profile, was proving effective

and warranted attention. Andrey Ryabov of the Institute of

World Economy and International Relations told us Sobyanin

was gaining strength in the PA and would soon begin to bring

in officials from Siberia to take over mid-level PA slots

currently dominated by St. Petersburgers.



12. (C) Sobyanin's impact on the byzantine politics and

power balance inside the PA, and any resulting impact on the

succession, remain unclear. According to Ryabov, Sobyanin's

growing influence will soon pose a threat to PA deputy head

Vladislav Surkov. Putin chose Sobyanin to bolster the

influence of regional leaders, Ryabov continued, and thus to

counter Surkov's Moscow-dominated approach. Slutsker also

told us that Surkov's star is on the wane, with Putin

increasingly disappointed in him. Indeed, by some accounts,

the publication of Surkov's February speech to the United

Russia party (ref E) was aimed at least in part to shore up

his position.



13. (C) Russian Railroads CEO Vladimir Yakunin, a close

friend of Putin, has kept an extremely low profile but

continues to be seen by many observers as in the running.

Dyskin, a close Yakunin advisor, told us Yakunin was keeping

a low profile at present to avoid being attacked by

opponents. At the same time, Yakunin was using his post at

the railroads to build wide regional support and demonstrate

managerial expertise. Dyskin suggested that Yakunin's camp

was discreetly helping undercut potential rivals, including

by helping to develop plans to set off a corruption scandal

involving the national projects that would harm Medvedev.



14. (C) The candiates mentioned above do not necessarily

exhaust the range of possibilities. Kryshtanovskya continues

to predict that still other names (e.g., head of the

government apparat Sergey Naryshkin) will be surfaced as the

process moves forward.

.

NEUTRALIZING THE OUTSIDE OPPOSITION

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15. (SBU) Even as the maneuvering among political insiders

picks up steam, the Kremlin has made significant progress in

recent months in neutralizing outsiders perceived as at least

potential threats to secure Kremlin management of the

succession process. Most recently, at a Rodina party

congress on March 25, Dmitriy Rogozin stepped down as the

party's top leader, being replaced by Aleksandr Babakov.

Rogozin explained his move as a result of Kremlin-driven

intrigues, a claim that virtually no observers doubt. By

most accounts, Rogozin -- although a "Kremlin project" in

2003 to drain votes away from the Communist Party in Duma

elections -- had become too popular and was trying to become

independent of his original Kremlin sponsors. That

precipitated the Rodina's removal from the ballot in the

Moscow city elections and in seven of eight regional

legislative elections on March 12, seen as a clear signal

that the Kremlin would paralyze Rodina unless Rogozin stepped

down. According to a CPT analysis, the Kremlin finds Babakov

a more manageable figure, and will allow the party to

continue functioning now that it no longer represents a

serious political threat.



16. (C) At the same time, the Kremlin has been working on

various fronts to counter the efforts of former PM Mikhail

Kasyanov to mount a presidential bid. Most recently, it was

by all accounts the Kremlin that engineered Kasyanov's

failure to take over the Democratic Party of Russia (DPR),

helping forestall the already remote chance that the

democratic camp as a whole would fall in behind the former PM

(ref D). Indeed, the democrats continue to show meager

prospects of uniting behind anyone. That wound appears to be

largely self-inflicted, with Yabloko and the Union of Right

Forces (SPS) far from showing signs of unifying despite

cooperation in the most recent round of regional elections.

The Kremlin, or at least elements therein, may also be



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contributing to the continued disunity, with Ryabov

speculating to us, for instance, that new DPR leader Andrey

Bogdanov had been instructed by the Kremlin to promote a

unification within the democratic camp but without any big

names.

.

COMMENT

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17. (C) The succession process is now fully underway, albeit

in an early stage. The current focus remains on the two

figures seen to have gained from the November reshuffle, but

the prospects of both remain highly uncertain. For that

reason, other political figures are being discussed, and the

list of perceived candidates is likely to change with some

frequency. Although reforms and policy initiatives

considered or proposed in the period ahead may have substance

in their own right, all will be viewed primarily through the

prism of the succession, and many decisions will be taken

primarily with an eye to their anticipated impact (positive

or negative) on contenders for succession. Security Council

head Igor Ivanov may have captured the situation best in a

side conversation with the Ambassador when he said the

Kremlin's preoccupation with 2007-08 distracts it from

pursuing policies on their own terms. While focusing on the

impact of their actions on potential contenders in the

succession, many of the players will also look to feather

their own nests while they know they are in a position to do

so. And, Ivanov stressed, the process is only beginning and

will not get better in the period ahead.

BURNS