C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 005627

SIPDIS

SIPDIS

DEPT FOR EUR/RUS, NSC FOR WARLICK

E.O. 12958: DECL: 11/30/2017
TAGS: ECON PREL PGOV EINV RS
SUBJECT: MORE BUSINESS VIEWS ON PARLIAMENTARY ELECTIONS


Classified By: Ambassador William J. Burns for Reasons 1.4 (b/d)

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Summary
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1. (C) Boris Jordan, a well-known American businessman of
Russian ancestry, said the December 2 parliamentary elections
should be seen as part of President Putin's plan to continue
to exercise influence after his current term expires,
preferably from the sidelines. Jordan expressed hope that
bilateral relations would improve once Russia's elections
were over, led by increasing economic ties. Charlie Ryan,
another leading American businessman in Russia, also saw the
elections as part of an effort by Putin to retain influence,
but said he still expected Putin to choose a strong successor
and step further back when the new president showed he could
control elite infighting without Putin's aid. End Summary.

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Boris Jordan on Election; Bilateral Relations
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2. (C) Jordan told Econ MC that United Russia would have won
the elections with 60-70 percent of the vote even without the
pressure tactics the party has deployed. Putin was genuinely
popular and his endorsement of the party alone would have
been enough. Even allowing the opposition access to
television would have made no difference. That said, the
leadership of United Russia besides Putin was average at best
while the leadership of the opposition was even worse. The
bottom line was that Putin was in complete control.


3. (C) Jordan said the conduct of the elections showed that
Putin was not prepared to give up the reins of power.
However, he thought Putin was tired from the effort it had
taken to restore order to Russia following the chaos of the
1990s and would prefer to exercise control from the
sidelines. Jordan said he fully expected Prime Minister
Zubkov to be Putin's choice as his successor because of his
personal loyalty to Putin. However, he would not be
surprised to see Putin return to the presidency in two to
four years if the situation became unstable or if his
influence began to slip.


4. (C) Jordan added that he had once had a close relationship
with Putin, which cooled after his dismissal as head of the
NTV television station and after the 2004 presidential
election when Putin began to distance himself more from "all
things American." The rising anti-Americanism connected with
this election was troubling. Jordan himself had recently
come under attack in the Russian media solely because of his
U.S. citizenship. He hoped that after the elections the
growing economic ties between the United States and Russia
would provide the momentum needed to restore good bilateral
relations.

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Ryan on Elections
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5. (C) Deutsche Bank's Ryan told Econ MC that as a long time
resident of Russia and someone committed to the country's
economic future, he found the conduct of the parliamentary
elections deeply troubling. It had also been unnecessary.
Putin was wildly popular and his support alone would have
guaranteed United Russia a massive victory. He added that
the opposition parties were largely irrelevant and that it
was only the government's heavy-handed tactics that gave
Kasparov and others any legitimacy at all. Ryan said he
believed and hoped that United Russia's tactics were coming
from the "bottom up," motivated by a desire on the part of
the party cadre in various regions to outperform each other
with respect to voter turnout and United Russia's share of
the vote.


6. (C) Ryan said he thought the parliamentary elections were
an attempt by Putin to ensure his continued influence after
the presidential elections by installing a parliament
personally loyal to him. Putin was also taking steps to
assert greater control over Gazprom, the principal source of
government revenue, through personnel changes with the same
goal in mind. Ryan noted a certain irony in Putin using the
Duma in this manner, an institution he had weakened in favor
of the presidency. Ryan said Putin would ultimately be
judged by history on how he handled the succession. If as
Ryan thought still likely, Putin chose a strong successor,

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helped the new president establish the ability to arbitrate
intra-elite disputes, and then retired gracefully he would be
seen positively, regardless of any damage he had done to
Russian democracy.

BURNS