VOLGOGRAD: BUSINESS GROUPS CONTEST CITY DUMA

C O N F I D E N T I A L MOSCOW 000497

SIPDIS

SIPDIS

E.O. 12958: DECL: 02/22/2018
TAGS: PGOV PINR KDEM SOCI RS
SUBJECT: VOLGOGRAD: BUSINESS GROUPS CONTEST CITY DUMA
ELECTIONS AS REGIONAL ADMINISTRATION GETS OUT THE VOTE FOR
MEDVEDEV

REF: 07 MOSCOW 4708

Classified By: Pol M/C Alice G. Wells. Reasons: 1.4 (b,d).


1. (C) Summary: Conversations with politicians and
interested observers during a February 19 - 20 visit to
Volgograd suggested little interest in the March 2
presidential elections, except among those charged with
ensuring a high turnout. According to the Chairman of the
Regional Election Commission, liberal use will be made of the
mobile ballot box and lists will be pruned of duplicate names
and "dead souls" in an effort to ensure that the Region's
tallies on March 2 match those elsewhere in Russia.
Long-serving Governor Maksyuta, locals report, was largely
ignored by heir-apparent Dmitriy Medvedev during the latter's
February 1 visit, fueling rumors that the Governor's term
will not be renewed when it ends in 2009. Apathy about the
presidential election was contrasted by great interest, at
least among those running, in the City Duma elections, where
275 candidates are competing for 48 slots, and large numbers
of candidates have been de-registered, then re-instated by
the courts. Party allegiances seem to mean less than
business alliances for those involved. As predicted,
Communist Party-elected Mayor Grebennikov has joined United
Russia and, if rumors are correct, seems to be avidly
pursuing his business interests which, it is rumored, include
licensing construction in parks and the sedimentarily
unstable Volga floodplains. End summary.


Little Interest in Presidential Election
--------------


2. (C) The only people interested in the presidential
elections during our February 19 - 20 visit to Volgograd were
Chairman of the Regional Election Commission (REC) Gennadiy
Shaikhullin and employees of the Regional Administration.
Shaikhullin described to us preparations for the elections
that included a thorough scrub of the voting lists. The
purge of duplicate entries and "dead souls" currently
underway would ultimately reduce the roles in the region by
five - ten percent from their December total of 1,968,782, he
thought.


3. (C) In preparation for the elections Shaikhullin, who has
been on the REC since 1999, conducted training for domestic
election observers and, on February 17 sponsored a "Day of
the Young Voter" in an effort to interest the young in the
political process. Shaikhullin's office had accredited 1,618
KPRF observers --one for each polling place-- for the March 2
contests. United Russia would also have one hundred percent
coverage, while Zhirinovskiy's LDPR had registered 1,523
observers, and For A Just Russia was fielding 1,379.

Election Commissioner's Prediction
--------------


4. (C) Shaikhullin predicted that 64 percent of the voters
would go to the polls on March 2. (58 percent had voted in
Volgograd Region on December 2, and 52.5 percent had gone to
the Region's polls in the 2004 presidential elections.) His
forecasted outcome was 60 - 70 percent for Medvedev, 17 - 18
percent for Zyuganov, and 10 - 12 percent for Zhirinovskiy.
The KPRF had garnered 15 percent of the vote in the Duma
elections but Shaikhullin, while refusing to talk of a
protest vote, predicted more for the party this time around.

Getting Out the Vote
--------------


5. (C) The REC in December had not set up polling places in
the Region's train stations, but would be doing so this time
around in an effort to get out the vote, Shaikhullin said.
As of February 15, 2,743 absentee ballots had been issued of
the 25 thousand maximum allowed to the Region. Shaikhullin
also described an effort to ensure that those confined to
hospital or home on voting day would be able to vote, and he
guessed that as many as 3.5 percent of the votes could be
cast at mobile polling places. Mobile polling teams would
also make their way to the Region's factories many of whose
workers, Shaikhullin said, would be working 24-hour shifts on
election day and, hence, would otherwise be unable to vote.


6. (C) In a February 20 conversation, a visibly dismayed head
of the Regional Administration's Department for International
and Inter-regional Affairs Pavel Pavlovich told us that the
Governor's office had that day set a voter turnout goal of 85
percent. In the December 2 elections, Pavlovich said, he had
been made responsible for voter turnout in three of the
Region's villages and had dutifully gone door-to-door with


the voting urn. Meeting an 85 percent target this time
around would mean canvassing districts in the region's less
malleable cities or "using other techniques." Asked if the
authorities were had a number in mind for Medvedev, Pavlovich
replied that he expected that most of the region's electorate
would vote for Putin's successor.

Governor on the Way Out?
--------------


7. (C) Nikolay Maksyuta has been Governor of Volgograd Region
since December 1996, and his current, third term is scheduled
to end December 2009. The February 1 visit to Volgograd by
Putin successor Dmitriy Medvedev triggered much speculation
in the local press that Maksyuta would not be re-appointed by
the new administration. Regional Administration employees
confirmed media accounts that Maksyuta had not had a
separate, sit down meeting with Medvedev, and the heir
apparent said nothing about the Governor, positive or
negative, during his public appearances in the city.

8. (C) Unlike other regions we have visited, in extended
conversations about the region's political and economic life
the governor's name was not mentioned, unless we asked. A
local journalist and members of the regional administration
guessed that the Governor wanted to be appointed for a fourth
term --he is now sixty years old-- but thought that
Maksyuta's inability to exert meaningful control over the
city of Volgograd and his continued membership in the
Communist Party (KPRF) were liabilities. (Maksyuta,
according to KPRF Regional Deputy Nina Salina, does not
advertise his KPRF membership for fear of problems with the
ruling, Kremlin-sponsored United Russia party.) Maksyuta's
delicate relationship with United Russia meant that neither
his name nor face figured on posters around town urging votes
for the party's candidates in the City Council, regional, and
presidential elections, all scheduled for March 2.


9. (C) Director of the Volgograd Office of the national daily
Kommersant Dmitriy Grushevskiy described Maksyuta as a "weak
leader" of a different generation, and "with no sympathy for
United Russia." "It's sad to watch (Maksyuta) deal with
those city slickers," Grushevskiy said. (Maksyuta is a
communist Horatio Alger. He was born in a village in Ukraine,
and after graduating from the Nikolaev Shipbuilding
Institute, was sent to the Volgograd Shipbuilding Factory,
where, over the next seventeen years, he worked his way up
the ladder from welder to the position of Director. In 1995,
he was elected to the Volgograd City Council.)

Mayor Much in the News
--------------


10. (C) The almost complete silence about Maksyuta was in
stark contrast to interlocutors' volubility about 32-year old
Volgograd Mayor Roman Grebennikov. Grebennikov had come to
office May 2007 (reftel) in a by-election occasioned by the
jailing of predecessor Yevgeniy Ishchenko. (Ishchenko was
eventually convicted of illegal possession of munitions and
illegal business activity. He was banned from public office
for four years and sentenced to one year in jail.) As
predicted, Grebennikov traded his Communist Party membership
once elected for United Russia. In a February 20
conversation, Salina insisted to us that Grebennikov remained
a member of her KPRF, but signs throughout town asked voters
to join the Mayor in keeping United Russia number one in the
March 2 elections. Salina portrayed Grebennikov as a wayward
son. The Party had called him in many times for counseling
but, she sighed wearily, he was too infatuated with being
mayor. She hoped that would pass. The Party had provided
him with the tools necessary to get where he was, and he owed
it a debt of gratitude.


11. (C) Virtually everyone else we spoke to were as critical,
but less charitable about Grebennikov. Grushevskiy described
him as a "lawyer, with no managerial talent," and said
Grebennikov had surrounded himself with a lackluster team.
Just Russia Regional Deputy Natalya Latyshevskaya echoed
Grushevskiy; Grebennikov was not a manager. He was, she
grudgingly admitted, a politician; expert at self-promotion.
Taxi drivers we talked to agreed that since Grebennikov came
to power, "the streets never get cleaned." Grushevskiy and
Latyshevskaya hinted broadly that Grebennikov and his team
were corrupt. They, and "Volga Region Business" newspaper
Editor Anna Stepnova described a history of mayors using
their offices to advance their, and their cronies', financial
interests. Ishchenko had been preceded in office by Yuriy
Chekhov who had, according to Grushevskiy, "privatized much
of the city center" during his term of office. Among his
acquisitions was the Hotel "Volgograd." Center for Civic
Education President Inna Prikhozhan alleged that Chekhov had


acquired "57 enterprises" when Mayor. Since leaving
politics, Chekhov had jealously guarded his acquisitions. An
effort by his successor, Ishchenko, to use the powers of the
mayoralty to make inroads on Chekhov's empire had contributed
to Ishchenko's legal problems, Grushevskiy said, and
Ishchenko himself had feathered his nest.


12. (C) Grebennikov had used his relatively brief time in
office, according to Stepnova and Prikhozhan, to pursue the
easy ruble via licensing questionable real estate
developments. He and his predecessor Roman Kherianov, who
had been acting mayor after Ishchenko's arrest, were
licensing the building of high rises in floodplains along the
Volga. The developers were building, then selling the
properties to others, who would be left to deal with the
consequences as the soil settled. Building in the city's
riverside parks was also being allowed. Poloff was shown one
high-rise that appeared to being erected within the bounds of
one such park. The building "boom" had spun so far out of
control, according to Stepnova and Prikhozhan, that during
his February 1 visit, Medvedev had announced that the city's
park, cemetery, and memorial complex Mamaev Kurgan would be
administered by the Federal government. A gas station,
restaurant, and the beginnings of a ski jump had been built
on the territory of the complex with the assent of
Grebennikov and his predecessors. Another opportunistic
building project shown Poloff featured a high-rise wedged
between two existing buildings in order to allow the new
building to, more cheaply be connected to the existing water,
gas, and electricity mains. Construction had caused
structural damage to the older buildings.


13. (C) A number of contacts alleged a shadowy relationship
between newly-elected Just Russia State Duma Deputy Oleg
Mikheev, and Kherianov. In a February 13 conversation,
Mikheev told us he had had the lead in the May by-election
for Mayor won by Grebennikov, but had been "forced" to
withdraw. Latyshevskaya confirmed Mikheev's account and
alleged his business interests had suffered as a result of
his insistence on staying in the race after he had been told
to leave. Mikheev is the owner of "Diamant," which, among
others things has a chain of construction material stores in
the Volgograd Region.) She was less forthcoming on the
circumstances that led to Mikheev becoming a Duma Deputy.
Since the mayoral campaign, a rebounding Mikheev has joined
Kherianov in form an organization "Presidential Union" that
is backing Medvedev's presidential bid in Volgograd.
Kherianov, who was de-registered, then re-registered by
decision of the regional court as a candidate in the City
Council race is, some say, in league with other candidates to
swing the balance of power from Mayor Grebennikov to the
Council, which Kherianov hopes to chair if elected.

The City Council Elections and The Mayor
--------------


14. (C) Unlike the lackluster presidential campaign, the City
Council contest is hotly contested. More than 300
Volgograders threw their hats into the ring at the beginning
of the race. Attrition in different forms has trimmed that
to 275 candidates contesting for the 48 slots on the Council.
(Only ten percent of the 48 will be full-time, paid
positions. The Council currently meets once a month.) Of
the 46 candidates originally nominated by United Russia, 39
remain. The KPRF's initial 36 has been reduced to 21, and
Just Russia's 39 has fallen to 26. Just Russia appears to
have experience the most turbulence. Twenty candidates on
its initial list, including former acting mayor Roman
Kherianov, were struck by the City Electoral Commission
(CEC). The CEC's decisions were uniformly upheld by the city
court, then largely overturned by a regional court. Also
excluded, have been a number of non-party businessman,
including Natalya Klyuchevskaya, owner of "MANN," one of the
largest retail chains in Volgograd. The race has featured as
well the initiation of at least one criminal case, against
would-be LDPR Deputy Dmitriy Krylov, who has been accused of
using airtime owned by his television company "Eros" to
promote his candidacy before the official beginning of the
campaign.


15. (C) United Russia has endured turmoil of its own, with
the Party's Political Council removing candidates Sergey
Ananskikh and Lev Grigorev from the race for "ineffective
election campaign efforts." Aiding Grigorev's ouster were
charges that he had failed to pay taxes amounting to about
one million rubles. Other United Russia candidates have
withdrawn, ostensibly of their own volition.


16. (C) Behind the turmoil in the ranks of both United Russia
and Just Russia is, according to observers, Grebennikov's


insistence on having his own United Russia/Just Russia team
in the new City Council. Some in Volgograd, who are used to
the rough-and-tumble of regional politics, describe the
sometimes ugly process of consolidation as "natural," while
others see in it a collision of competing, shadowy business
interests. All agree that party affiliation is of less
importance in this race than business and clan allegiances.
They note the large number of businessman attempting to win
election as indirect proof that there is much money to be
made, or business interests that can best be furthered from a
deputy's perch. Others ascribe the heightened interest in a
City Council seat to the more intensive appearance on the
scene of Moscow business interests, that need to be fought
with all means available. Still others suggest that a less
welcoming business climate has caused some to seek refuge or
protection in government.


17. (C) Prikhozhan, who has studied the workings of the City
Council closely as both a political scientist and member of
the Regional Public Chamber, ascribed the interest to the
"big role the Council will play in shaping the city's
substantial budget." Also within their grasp would be
subsidies that come from the Region. Others, like Stepnova,
have focused on the amount of money to be made via the city's
housing sector. Two attempts to auction the right to
administer housing utilities (water, gas, electricity, etc.)
have been contested by the losers. Stepnova contends that
Grebennikov attempted to manipulate the last auction in
which, she says, two of the bidding companies represented the
interests of businessman Viktor Vekselberg and the
Volgograd-based Lukoil. The two interests, in her telling,
united but then came into conflict with a company with links
to Mikhail Fridman. With up to seventy percent of the
utilities infrastructure in Volgograd in immediate need of
replacement, the amount of Federal money in the hands of
winner would be substantial, Stepnova thought.


18. (C) By Prikhozhan's count there were "two or three
businessmen candidates" in each district, and she expected
that the complexion of the Council, which is currently
dominated by "doctors and teachers," would change radically.
The new crop of deputies, in Prikhozhan's pessimistic
assessment, would practice "slash and burn" politics at the
expense of the interests of the whole city. Whatever the
reason or reasons, much of the city is festooned with the
campaign posters of the 275 competing candidates. In the two
days that Poloff was in Volgograd, he noticed many defaced
posters, suggesting an interest in the campaign, if only on
the part of the candidate's opponent.
BURNS