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"Direct financial assistance to democrats is problematic: A check from an American embassy can taint its recipients. America’s next president should privatize such aid and help seed new independent foundations."
 
--Michael McFaul in the New York Times.
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Sergei Ivanov shares some mutual leopard love with Pamela Anderson.

Ivanov Out!


The surprise news of the week was the dismissal of Sergei Ivanov, longtime Putin courtier and head of the Presidential Administration since 2012. Ivanov’s new job is special representative to the president for ecology and transport, a clear demotion. The new head of the PA is Anton Vaino, grandson of the former head of the Estonian Communist Party, a career diplomat, and according to experts “purely a bureaucrat.” In comments to the Moscow Times, a source described Vaino as “totally neutral and polite, not ready to discuss anything or ask questions. It’s Putin’s personal choice.” In the same article, political commentator Stanislav Belkovsky said of Vaino, “He is perfect, by Putin’s standards: effective, but with no personal ties to him.” Apparently, becoming the head of the PA came as a surprise to no one.

But, why did Putin sack another longtime ally like Ivanov and what does it mean?

Here are four theories.

1. It’s a purge!


Many have drawn a straight line from the sacking of another longtime Putin courtier Vladimir Yakunin, the former railway head (interestingly it was just reported that Yakunin will be paid for the next three years. Purged with a golden parachute), last January to today’s removal of Ivanov. There’s been a series of other dismissals, transfers, and arrests in between. Most notably, the arrest of three governors and the Federal customs chief, the firing of the heads of the FSB’s anticorruption Departments K, P, and T for corruption, the mass dismissal of officers in the Baltic Fleet, and the replacing of regional positions with clients personally loyal to Putin. Taken as a whole, it seems that Putin is cleansing the elite and parachuting his people in those now vacant positions.

The problem with the “purge theory” is that if this is a purge it is one without precedent in Russian history. You see, the Bolsheviks had two general types of purges. One, the chistka, was an announced purge of the party to cut ballast out of a bloated apparat, remove incompetence, break clans, and squash dissent. These were fairly routine and usually accompanied by a wholesale check of party membership and served as a way for the Party to get some idea who were its members, which ones they wanted to keep, and which ones they wanted to toss.

The second type of purge was far more surgical and localized. This kind purge occurred when the center wanted to break clans in the regions or intercede in local conflicts. Moscow would usually parachute a trusted comrade (chided as a Varangian by locals) and clean out the apparat top to bottom, usually by simply scattering clan members via transfers. The Varangian would then proceed to bring his guys to town and install them into the apparat, thus repeating the problem over and over again.

But this doesn’t seem to be what Putin is doing. He’s certainly not doing a mass chistka because there’s no institution in existence to purge in that fashion. He also doesn’t seem to be cleaning out power structures or institutions. Take Ivanov for example. If Putin was “purging” Ivanov, he wouldn’t put his deputy Vaino in his stead. Putin would also cleanse out anyone under Ivanov in the PA. Same with the regional appointments. I haven’t noticed the Varangians Putin dispatched to Crimea and the North-Western, Siberian and North Caucasus federal districts, Kaliningrad, Yaroslavl and Kirov uprooting the locals there. If a purge was in the works, a cleansing out of the apparat would be especially appropriate in cases of corruption. So with the fall of Federal Customs Service chief Andrei Belyaninov, you would expect all his deputies and all their deputies to get axed too. But again, unless I’m mistaken, that’s not what is happening.

It’s also worth noting that Ivanov may have been removed as head of the PA, he still remains on Putin’s Security Council.
 

2. Cadres decide nothing


Another theory is that Putin is eliminating incompetence and the mediation between him and his officials by injecting new blood into the system. In this theory, the dismissals, arrests, promotions and transfers are the rotation of cadres, but not a rotation without purpose, but the positioning of people directly loyal to Putin. This is the argument in a recent Moscow Times article by Mikhail Fishman and Daria Litvinova.

They write:

Vladimir Putin is entering new phase of his leadership. As a source close to the Kremlin said, the president now thinks it’s easier to do everything himself. He doesn’t need comrades anymore, he doesn’t need creative input from within his team. He needs neutral executives.

From this angle, the appointment of Vaino follows the same logic as recent promotions of Putin’s personal bodyguards Alexei Dyumin and Yevgeny Zinichev as heads of the Tula and Kalinigrad regions. His former personal bodyguard Viktor Zolotov was also promoted earlier this year to become the head of a newly formed law enforcement division, the National Guard.

“People like Vaino are part of Putin’s most inner circle, they’re always with him, working as guards or at his chancery. Yet, for them he has always been this sacred figure — not an ally, not a comrade, but a boss,” said political analyst Alexei Makarkin.

“It’s the changing of guard. He is tired of the old-timers,” a source said. Ivanov’s dismissal and Vaino’s appointment are part of the trend that first became clear after the unexpected sacking of a Putin’s longtime friend and ally Vladimir Yakunin, head of Russian Railways, last year. His other long-time companions like the head of his personal security Yevgeny Murov and the head of Federal Drug Control Service Victor Ivanov also had to leave earlier this year. “Ivanov coalesced with others in the system, he became overgrown with interests and loyalties within the team. Putin does not need that anymore,” a source close to the Kremlin told the Moscow Times.


There are few institutional mechanisms for cadre renewal in today’s Russia, a stark contrast from the USSR and even Tsarist times. So appointments are very personalized in the hands of Putin. Given that such movements tend to come in batches, it’s not surprising that it looks and even smells like a purge even when it’s not.
 

3. Ivanov wanted out


According to RBC’s Kremlin sources, Ivanov wanted out. He planned on only serving for four years and he was a few months past that. He was apparently ready to leave last summer and everything was ready, but Putin squashed it. It seems, again according to RBC’s sources, that Ivanov just hasn’t been the same since the sudden death of his son in the United Arab Emirates in 2014. His heart wasn’t in it anymore and his poor performance showed. Now he has a pretty relaxed new job with I’m sure few expectations. Now he can just chat up the environment with Pamela Anderson. It works if you work it.

4. Preparations for the main event


Another theory in Fishman and Litvinova’s article as well as a column by Andrei Kolesnikov is that removing Ivanov is another step in setting the stage for early Presidential elections. You can also place all the recent cadre movements in this context. The argument follows that Putin has initiated a (mild) anti-corruption campaign and appointed trusted loyalists without their own clans and interests so they can implement the upcoming austerity. These reforms will undoubtedly be unpopular not only among the electorate but also among officials who either ideologically or materially (or both) oppose a tightening of the state’s belt. So move the Presidential elections up before the money runs out in 2017, get Putin reelected, and start the nasty reforms.

Also Kolesnikov suggests that there a long game afoot: getting rid of the Yakunins and the Ivanovs is looking ahead to 2024:

What's more important is the technocratic vector of rotation and course of rejuvenation. Putin is forming a new team on the eve of the election is not so much about 2016 as it is about 2018. It will take him to a brighter future into the next long and full of uncertainty and danger six political cycle (2018-2024).

And this team has to have an incredible degree of political loyalty and lack of independence. And it also has to be physically healthy and young to ensure transit to the "soft" exit (or not) of Putin in the 2024.


I don’t know if the six year cycle is what’s on the table. I’m more inclined to think that getting the apparat ready for some unpopular reforms is more likely. If that’s the case, more cadre changes are surely in the future.
The majority can't be mistaken

Who Represents Whom?


Polls in Russia are always tricky things. Though there’s a strong argument that Russia’s pollocracy is just another disciplinary mechanism, polls still say something about general Russian attitudes especially when they don’t concern the popularity of Vladimir Putin.

The Levada Center recently published a poll on the popularity of Russian political parties and what social groups Russians associate with them. While I don’t think these numbers suggest who Russians will ultimately vote for in September (the poll shows United Russia with a comfortable lead), let alone how many people will actually vote, they do point to a growing tendency for the electorate to associate social class with political parties.
It’s an interesting divide: unsurprisingly Russians associate left leaning parties like Just Russia and the Communist Party and the populist nationalist LDRP broadly with the “people.” The ruling United Russia, on the other hand, is the party of the wealthy, the bureaucrats, and the security services.

You see this even clearer when you just include the main parties: United Russia and the KPRF. The KPRF is even viewed as slightly more representative of the “middle class” than United Russia.

Donations for State Contracts


None of this is surprising considering recent news. Last week, the election monitoring group Golos released an interesting report examining the funding of Russian political parties. The report found that of the 90 companies that receive state contracts, 80, or 90 percent, donate to a single party: United Russia. Here are a few examples Golos provides for the donation-state contract nexus.

In the Perm region the construction company PZSP, which is 100 percent owned as of July 1st, 2015by Nikolai Demkin. the Regional Secretary of "United Russia" and the deputy of the Perm Legislative Assembly deputy, donated 16.6 million rubles to the party. In 2015, his company received 15 state contracts in the amount of 345 million rubles, and 14 more in the first half of 2016 worth more than 500 million rubles.

The company Glavvoenstroy donated 9.3 million rubles to United Russia and in the same year received a state contract worth 490 million rubles. For the money, the company pledged to build a school with 600 places in the Leningrad region.

Often, after a company begins to regularly receive state contracts after it becomes a United Russia donor. For example, Investkom from Tomsk donated 2 million rubles to United Russia in 2015. That same year, the company received state contracts amounting to almost 60 million rubles. And for the first half of 2016 an additional 43.7 million rubles. It is worth noting that in 2015 was the first time the company obtained a state contract in its more than ten year history.

United Russia isn’t the only one, of course. Just the most egregious for obvious reasons. Just Russia and the KPRF also get donations from companies with state contracts, but far fewer.

What is more several donors are owned by offshore companies, a violation of Russian law. According to Russian election law, party donors can’t be owned more than 30 percent by foreign entities.

According to the Golos report:

For example, in 2015 the company Magnitogorsky Iron and Steel Works, one of United Russia’s largest donors, donated 30 million rubles. According the business registry, Magnitogorsk Iron and Steel Works (MMK) owns 18.4 percent while Customs Broker LLC owns 81.6 percent. Customs Broker is solely owned by MMK. According to a June 2015 list of affiliated entities, 87.26 percent of its shares is owned by the Cypriot company Mintha Holding Limited.

Mintha Holding Limited is in turn owned by Viktor Rashnikov who is 23rd of Forbes Richest Russians list and owner of the world’s 10th largest yacht.

Of course, all of the parties deny any wrongdoing and there is little chance the Central Electoral Commission will do much about it. No need to upset the apple cart.

This is a central aspect of Putin’s Russia: tribute to Putin’s vassal political parties begets access to state coffers via contracts. You got to pay to play, and if you pay you win. Big.
 
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Crimean Kerfuffle


The Donbas and Crimea are getting renewed attention. Fighting in eastern Ukraine spiked in July, and there have been several reports on the situation at and behind the front.

Whether a return to a hot war is imminent or things will remain at warm is anyone’s guess. A lot of where you stand might depend on how far you let yourself get beyond the pleasure principle. At any rate, the chances that the conflict will return to a frozen slushy is doubtful.

Especially considering the latest news: Russian allegations that on the evening of August 7 and August 8 armed men tried to enter Crimea with the intend to carry out “terrorist” attacks. Meduza has a good rundown of the particulars and Kevin Rothrock points out that news of a skirmish was in the local media while an alleged APB for the assailants circulated on social media three days before the FSB released its narrative. Aric Toler has also tried to parse through the various narratives. After all, everyone seems to have their own story, as Novaya gazeta has laid out. The paper counted four: two FSB versions, an Ukrainian version, and a Western version. All of them are contradictory and serve each player’s agenda. It seems to me that which one you believe depends where you generally fall in regard to the wider conflict.

The lead Russian outlet on this is Kommersant. Its reporters are working their inside police sources, or their inside police sources are working them, and the paper is adding details to the story.

The Russian response was quite forceful, though predictable. The FSB quickly connected the incursion to a wider operation by Ukrainian security services while Putin called the action “stupid,” a “very dangerous game,” and that Kiev has chosen terrorism over peace. He also took the opportunity to use the incident to pressure Ukraine by, once again, calling on the Europeans and Americans to tame Kiev and even pulled out of side bar talks with the Normandy Four at the G20 in China next week.

Equally predictable, Kiev has called Russia’s allegations “fantastical” and said that the incident, if there was one, was a provocation on Russia’s part. Ukraine claims Evgenii Panov, one of the people the FSB arrested, was kidnapped.(Additional note: now the FSB is saying that Panov didn't actually participate in the firefight. He only wanted to and had vacationed in Crimea several weeks ago with his family.) Valery Kondratyuk, the head of intelligence in Ukraine's Ministry of Defense, admitted there was indeed a fire fight, but it was between the FSB and Russian border guards.

Everyone is going on high alert just in case.

While it’s hard to know what exactly is going on here, my sense is the following. It’s not inconceivable that a group of guys got their hands on some weapons and explosives with the intend to carry out attacks in Crimea. There are enough disgruntled folks in Ukraine and Crimea (the FSB said several of the attackers are Crimean residents) and enough weapons and explosives lying around to do this raid.

Now whether this ragtag group is following the orders of the Ukrainian security services is another matter. I suspect not. There are enough local actors on both sides operating without and outside of Kiev’s and Moscow’s control. But since Kiev and Moscow effectively “own” these people, they have to spin any and every situation to their advantage in the larger game.

I think it’s safe to presume how serious all this is will play out in days rather than hours. Until then, I’m sure more and more people will consult the stars, stare intently at their chicken bones, sharpen their verbal knives, and set their retweets into overdrive.

It’s August and the Olympics, after all.

My position will be what I often tell my five-year old daughter: patience young Jedi.
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