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
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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
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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
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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
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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