PUTIN BACKS MEDVEDEV FOR PRESIDENT

C O N F I D E N T I A L MOSCOW 005771 SIPDIS SIPDIS E.O. 12958: DECL: 12/10/2017 TAGS: PGOV PINR PREL RS SUBJECT: PUTIN BACKS MEDVEDEV FOR PRESIDENT Classified By: DCM Daniel A. Russell. Reasons: 1.4 (b,d). Summary -------------- ¶1. (C) Representatives of United Russia, the Agrarian Party, Patriots of Russia, and Just Russia, headed by United Russia Chairman Gryzlov, asked December 10 for Putin's support for the presidential candidacy of First Deputy Prime Minister Dmitriy Medvedev. The media report that Putin told Gryzlov and company that he "completely" supported Medvedev's candidacy. This latest development caps a period of ups and downs for Medvedev, who began the year as first among equals in the succession race, only to see himself eclipsed by First Deputy Prime Minister Ivanov, PM Zubkov, and others, then take a back seat to Putin himself, when the President decided to head United Russia's party list. Contacts welcomed Medvedev's nomination, and described it as sending a positive signal both to the West and to the international business community. The decision to nominate Medvedev ends a year of suspense, but still leaves at least one major mystery unsolved: Putin's future after he leaves the presidency. End summary. Medvedev It Is -------------- ¶2. (SBU) On the afternoon of December 10, the media here reported that United Russia Chairman Boris Gryzlov led representatives of Just Russia, Patriots of Russia, and the Agrarian Party in proposing to President Putin that First Deputy Prime Minister Dmitriy Medvedev stand as their joint candidate for the presidency. Putin told the party representatives that he "has known Medvedev for more than 17 years, is very close to him, and completely supports Medvedev's candidacy." ¶3. (C) United Russia's intention to nominate Medvedev was announced exactly one week before the party's nominating convention, and it caps almost one year of intense speculation about the identity of Putin's successor. Medvedev's name figured prominently in the succession lottery at the beginning of the year, but with the elevation of Sergey Ivanov to the same position of First Deputy Prime Minister in the spring, the two began to share joint billing as heirs apparents. ¶4. (C) Although both Medvedev and Ivanov continued, after Putin, to command the lion's share of television new time, the continued lack of clarity and the near-exclusive concentration of Medvedev, after his Davos speech, on the National Projects, prompted much speculation that another successor was being groomed. Among those briefly thought to be in line were Deputy Prime Minister Naryshkin, Rosoboroneksport's Chemezov, Russian Railroad's Yakunin, and even Prime Minister Zubkov. With Putin's October 1 decision to lead United Russia into the Duma elections, media attention focused almost exclusively on the President, and Medvedev, although he continued to figure in the evening news reports, remained conspicuously in the background. Initial Reaction -------------- ¶5. (C) Medvedev enters the race with the bona fides that many observers expected to find in Putin's successor: he is from St. Petersburg, he worked with Putin, he has had considerable media exposure and is known to the Russian people, he is seen to be unswervingly loyal to the President and not threatening to the country's sometimes restive elites. ¶6. (C) Initial reaction to the news by Embassy contacts has been positive. An ebullient Chairman of the Union of Industrialists and Entrepreneurs Aleksandr Shokhin told Ambassador that Medvedev's nomination was "good news for business." Medvedev, he said, was "well known to have the right instincts." ¶7. (C) Former Presidential Administration head and Chairman of the Board of UES Aleksandr Voloshin told the Ambassador he thought the appointment was a positive indication that a "real transfer of power" is under way. (This has been Voloshin's line on the succession for some time now.) ¶8. (C) Pro-Kremlin think tanker Andrannik Migranyan, when told by us of the news, described Medvedev as someone who would defer to Putin and whose election campaign would be framed in terms of implementing "Putin's Plan." Medvedev's legitimacy as President, he argued, would be defined entirely by his commitment to Putin. Migranyan was less convinced than Voloshin that Medvedev's nomination would mark a real transfer of power: "Imagine Medvedev calling Putin into his office," he laughed. Migranyan thought that a Sergey Ivanov prime ministership could not be ruled out. The main mystery, he noted, remains Putin's future. Medvedev's nomination was a gesture to the West, Migranyan thought, and a positive signal to business. Migranyan attributed Medvedev as the originator of a recent media salvo against Igor Sechin and agreed that his nomination was a win for moderates. ¶9. (C) Political commentator Dmitriy Badovskiy described Medvedev to us as a candidate who could be controlled and who was "predictable." Like his colleagues, Badovskiy also saw in Medvedev's nomination a tip of the hat to the West and to the business community. Putin's future plans remained a mystery, but the "party scenario," Putin as head of the a revitalized United Russia, remained in play. The Petroleum Advisory Forum's Vladimir Konovalov told us he thought the West should be happy with Medvedev, whom he termed "not too scary," but worried that Medvedev was neither charismatic nor strong enough to follow Putin into the presidency. ¶10. (C) Leading investment bank analysts, Renaissance Capital's Aleksandr Burganskiy and Alfa Bank Chief Strategist Ron Smith told us that few in the investment community knew Medvedev, but that his support for Gazprom had been crucial to its success. Smith predicted that the markets would react positively to the news, and termed Medvedev a "pragmatist" and a "liberal." ¶11. (SBU) Duma Deputy Vladimir Ryzhkov described Medvedev as a "successor who represents a compromise." Medvedev could be a legitimate successor, should Putin want to leave politics, but was pliable enough to stand aside if the President decides to return to power, Ryzhkov said. The Clans -------------- ¶12. (C) It is too early to say definitely, but the choice of Medvedev seems to represent a victory of sorts for those in the epicenter and on the other side of the aisle from Presidential Administration Chief Sechin, who rumors have it will soon leave the PA for Rosneft. BURNS