THE END OF OLIGARCH POLITICS IN SAMARA

C O N F I D E N T I A L MOSCOW 000629

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/06/2018
TAGS: PGOV PHUM SOCI RS
SUBJECT: THE END OF OLIGARCH POLITICS IN SAMARA

REF: 07 MOSCOW 04598

Classified By: Political Minister Counselor Alice G. Wells. Reason: 1
.4 (d)

Summary
--------------


1. (SBU) As many expected, the appointment of Vladimir
Artyakov as Governor of Samara region has ushered in a new
era in regional politics in which previously influential
oligarchic groups that had made substantial gains over the
past few years are quickly being marginalized. The moves to
manage the mayoral election in Tolyatti, the new pressure on
Samara mayor Viktor Tarkhov, and the slow "velvet
re-privatization" of assets to Arkyakov's Rosoborneksport
(ROE) all indicate a general trend to consolidate the
vertical of power and to marginalize local business interests
-- a parallel course to that which Putin followed when he
took power in 2000. End summary.

Oligarchic Politics
--------------


2. (C) The Samara region had enjoyed a reputation as a region
of comparative political pluralism. In an environment
similar to that which flourished at the federal level under
President Boris Yeltsin, politics in Samara were synonymous
with wrangling among local oligarchs and their political
allies (reftel). At the same time, the residents of the
region's two major cities -- Samara and Tolyatti -- proved
somewhat unruly, leading to unexpected political outcomes.
Perhaps the most significant was the victory of Samara city
Mayor Viktor Tarkhov, who ran on the "Just Russia" ticket,
over incumbent and United Russia candidate Georgiy Limanskiy
in the election of 2006. At that time, key business groups
including automobile marketer and parts manufacturer SOK;
drilling tool maker Volgaburmash; and Volgapromgaz supported
Tarkhov and exploited public dissatisfaction with Limanskiy's
neglect of the city and the conduct of a particularly dirty
campaign to bring an unexpected change to city hall.


3. (SBU) Indeed, Tarkhov's very success may well have marked
the turning point in the fate of Samara's business groups.
Tarkhov's victory, despite the application of strong-armed
administrative resources by his opponent, detracted from a
host of United Russia victories across Russia during a time
of party consolidation of power in many regional elections.
The surprise resignation of then Governor Titov in August
2007 opened the door for the appointment of Vladimir
Artyakov, who at the time headed Rosoborneksport -- a
state-owned firm that controls the Avtovaz factory in
Tolyatti, whose director Sergey Chemezov is a Putin confidant.

Into the Weeds-
Tolyatti Mayoral Election
--------------


4. (C) The mayoral election in the Samara region's second
city, Tolyatti, typifies the process consolidating the
"vertical of power" to the lowest rungs of the administrative
ladder. In mid-February, there were 10 candidates vying for
voter support in Tolyatti, five of whom were serious
contenders. A large number of voters remained "undecided,"
the others were split amongst contenders supported by a range
of financial groups and even criminal organizations. The
Center for Research of Public Opinion (TsIOM) conducted a
poll in early February to sample the mood of city voters.
Given that the city had been without a mayor for several
months since the May arrest of then Mayor Utkin, almost 60
percent of Tolyatti's voters planned to take part -- leading
to a wide range of possible outcomes and the expectation that
the race would require a second round, presumably between the
two leaders Sergey Andreev and Aleksandr Pushkov. According
to the TsIOM survey:

-- 33.2 percent of respondents who planned to vote supported
Andreev, an "independent" candidate with support from the
"December" group of former Union of Right Forces (SPS)
members from the regional Duma.

-- 25.3 percent favored Pushkov, the chief engineer at
Avtovaz and United Russia candidate. Pushkov enjoyed the
backing not only of the local United Russia machine but also
the endorsement of the Communist Party. His campaign had
made strong strides forward in the polls thanks to an
aggressive campaign managed by the Moscow political
technologies Nikol-M, according to sociologist and former
Tolyatti Duma Representative Sergey Dyachov.

-- 15.1 percent backed Petr Zolotarev, a leader of the
independent trade union "Unity" who had narrowly lost to
Utkhin in the second round of the 2006 mayoral election.

-- 14.2 percent planed to vote for Dmitriy Savenkov, the
General Director of Motor-Super, a firm connected with the
regional financial-industrial group SOK.

-- In last place, General Director of Ton-Avto Aleksandr
Kurylin enjoyed the support of 6 percent of those who planned
to vote. He also benefited from the support of Governor
Artyakov, with whose brother he had certain unspecified
business ties. Kurylin took an early lead in the campaign and
was seen as the "alternate" United Russia candidate. (Both
Kurylin and Pushkov received support from United Russia, with
the former being the candidate for the "Moscow" group around
ROE and Pushkov the favorite of the regional Avtovaz elite.
Notably, Pushkov did not use the United Russia bear symbol on
his campaign material.)


5. (C) Only a week before the election, several of the
candidates made a "voluntary" withdrawal in favor of the
United Russia candidate, Avtovaz manager Aleksandr Pushkov.
The first to do so was Savenkov who abandoned his campaign on
February 21, shortly after the polling numbers were
announced. Olga Popova of the regional bureau for Ekspert
magazine viewed this decision as an indication of a
"compromise" between the SOK group and the authorities. Then,
Kurylin on February 27 -- the last possible day -- withdrew
from the race and gave his backing to Pushkov. Borislav
Grinbalt, also a member of the regional legislature and an
Andreev supporter, alleged that Kurylov's withdrawal was a
result of a quiet agreement with Pushkov for a prominent post
in the city administration.


6. (C) On February 22, the regional court charged Andreev
with violations of intellectual property rights and vote
buying -- leading to his removal from the ballot on February

28. The core issue was a charge, brought by a rival
candidate Mikhail Bulatov, that Andreev had used a picture of
a building designed by a local architect without the
architect's permission. (Bulatov was, a "walk-on" candidate
from Yekaterinburg, who played the role of political "killer"
according to Grinblat.) Andreev had enjoyed the support of
the state employees -- teachers, doctors, administrators, and
other bureaucrats with generally higher education -- who had
hopes that the independent candidate would bring an
improvement to their lives, according to Dyachov. As such,
his supporters were not in the "protest vote" camp and were
expected to vote for Pushkov once Andreev was removed. And
indeed, Pushkov won by a landslide, receiving almost 79
percent of the votes cast.

Tarkhov Under Pressure:
The Big Snow Hits Samara
--------------


7. (C) Samara Mayor Tarkhov has also come under pressure from
the administration/United Russia machine in recent weeks and
could, according to local newspapers, be facing a fate
similar to that of former Tolyatti Mayor Utkin. The
precipitating event was a "100-year" snowstorm that hit the
region in early February and paralyzed the city for several
days. (Even today, the streets of Samara are lined by 5-6
foot-high snowdrifts and huge piles of snow dominate the
city's open spaces.) The local administration had difficulty
dealing with the crisis, lacking the equipment and
organization to get the city's streets cleaned -- leading to
a shutdown of the entire city for several days. In the
aftermath, Governor Artyakov has voiced his own criticisms of
the Tarkhov administration, comments that have fed popular
discontent against the mayor. According to local sociologist
Vladimir Zvonovskiy, the mayor's popularity plummeted after
the snowfall, from an already low 55 percent approval rating
in late January to only 35 percent in the most recent survey.
Perhaps more troubling, the press has reported that the
regional administration has initiated an investigation on
charges of "incompetence" against Tarkhov, although it is not
clear how Artyakov's criticisms could be turned into a
criminal case.


8. (C) Not all in Samara blamed Tarkhov. Independent Samara
city Duma delegate Alla Dyemina held former Mayor Limanskiy,
who she said had "privatized" the city's street cleaning
department and left no equipment for the current
administration to use during the crisis, responsible for the
problems. She defended Tarkhov as "a capable man" and said
he simply had not had enough time to deal with the problems
created by Limanskiy's mismanagement. Local political
observer and PR technologist Yuriy Kochkin noted that
Artyakov waited several weeks before weighing in with his
criticism, leading many in the region to see this as part of
a "propaganda war" against Tarkhov. Former editor of the now
shuttered regional affiliate of the opposition Novaya Gazeta
Sergey Kurt-Adzhiev also viewed the criticism of Tarkhov as
political maneuvering, noting that Tolyatti and other
regional towns also faced challenges dealing with the snow
but had not drawn the same scrutiny and he accused the local
press of exaggerating the problem. (Perhaps as evidence of a
politicized campaign, Artyakov called for Tokharev to explain
the deaths of five Samara residents, who were killed by
falling icicles during an unexpected thaw during the last
week of February.)

The Vertical of Power
--------------


9. (C) The Head of United Russia's Samara Regional Department
Aleksandr Fetisov was unabashed in his description of the
consolidation of political power that has taken place in the
Samara region, starting with the appointment of Artyakov last
August. Fetisov spoke approvingly of the Governor, noting
that Titov had been too beholden to regional interests and
unable to secure for Samara region its share of federal
spoils. (In an aside, Fetisov reminded us that Titov had run
against Putin for President -- an indication of his
disloyalty.) He said that he considered the election of
Tarkhov as "unfair" and as ultimately hindering the
development of the region. Fetisov implied that Tarkhov's
problem was that he was too involved in politics and not
enough in city management -- "Mayors should be the 'master'
of the city, ensuring snow removal, trash pick-up, etc. and
not political infighting." Similarly, Fetisov expected
Pushkov, as Mayor of Tolyatti, to fulfill this role with the
support of a United Russia party machine. Valentin Romanov,
the First Secretary of the Communist Party, echoed Fetisov's
position when explaining his party's decision to back Pushkov
in the Tolyatti elections. He too described the position of
mayor as the "master" of the city and saw Pushkov as honest,
competent and capable of bring the city back to order.


10. (C) Other contacts in Samara acknowledged the importance
of the "vertical of power" in resolving the region's
problems. For example, Olga Popova explained that Tarkhov's
problems during the snow emergency were a result of his poor
relationship with the governor -- when crisis came, he no
ability to garner outside support. She said that Tarkhov was
essentially "beholden to nobody" and had done nothing for
Samara. Popova expected Tarkhov to be removed from office
and that his replacement would be from United Russia, thereby
opening the potential for greater financial and political
support for the city. Sergey Dyachov reluctantly noted that
Tarkhov was unable to get additional resources from the
regional government and admitted that the mayor would have
been smart to have taken his State Duma seat that he had
earned as the head of the "Just Russia" ticket last December.


11. (C) According to Kurt-Adzhiev and other contacts,
Samara's business groups are already coming to terms with the
vertical of power. Several firms, including SOK and
Motorstroyiteliy, have sold at least part of their business
to ROE at "fire sale" prices and there are expectations that
others will follow suit in the coming months. As such, ROE
and the Artyakov administration are set to consolidate their
hold on the economic life of the region.

Comment
--------------


12. (SBU) Recent events in Samara have borne out predictions
that Artyakov's appointment as Governor would usher in an era
of greater political control. The administration's
manipulation of the Tolyatti mayor election and the pressure
against Samara Mayor Tarkhov illustrate the reduction of
political pluralism in a region that had enjoyed maverick
status under Governor Titov. As such, the limited political
competition reminiscent of the Yeltsin years are being swept
up in Samara, signaling the intensification of Plan Putin:
the consolidation of the vertical of power.
BURNS