1. The Battle for Moscow's Billions
Power and Money in the Russian Capital Under Mayor Sergey Sobyanin
Donald N. Jensen
Kennan Institute
February 4, 2011

2. The Many Faces of Moscow
“Moscow at night glitters as never before. The Russian capital…is vibrantly alive, almost pulsating with energy…. Mayor Yuri Luzhkov has seen to it that virtually every building façade, every urban surface, is well-scrubbed or freshly painted – and brightly lit. Very brightly. Hundreds, perhaps thousands, of spotlights and streetlights have been installed by Luzhkov’s government to display the new Moscow to best effect. And the sight is indeed impressive. In its central districts, Moscow can be compared to the downtowns of the great cities of Europe – something that could never be said truthfully before, at least not since 1913.” -Blair Ruble Mid-1990s

3. The Many Faces of Moscow (cont’d)
Westernized: Moscow-Siti
Desacralized symbolic Soviet spaces: skating rink near Lenin mausoleum;
Russified: refurbished statues of Aleksandr II; Peter the Great
Diversified: new lifestyles, housing, ethno-cultural diversity
“Many Faces of Moscow -- Global, Multiculturalm Russian, talk bt Olga Vendina, Kennan Institutem December 4, 2009.

4. Moscow: the Economic Powerhouse
Gross regional product: $340bln (24% of Russia’s GDP)
40% of Russia’s foreign investments

5. Moscow the Economic Powerhouse: August 2010 budget draft calls for 1
Moscow the Economic Powerhouse: August 2010 budget draft calls for 1.3 trillion rubles ($43bln) of spending in 2011
Sample figures:
Social Benefits: 592 blnR
Road construction: 38blnR
Metro construction: 26blnR
25 August 2010

6. Moscow Is By Far the Richest Region in Russia

7. Downside: the Unheavenly City?
Pervasive corruption
High crime rate
Pollution
Deteriorating roads
Traffic congestion
Deteriorating public transport
High cost of living (eg, utilities and housing)

8. Transportation bottlenecks: 3.6 Million Cars for 10.5 Million People
Sept 14, 2010

9. Macro-Issues (Colton)
Service and Responsiveness
Scale
Accessibility
Coherence and Accountability
Regional cooperation
Local-central diplomacy
Strategic planning
An expanded policy reportoire

10. Outline Moscow, the Economic Powerhouse Moscow, Inc.
Why Luzhkov Was Ousted?
How is Sobyanin doing?
Deluzhkovization
Battling crime and corruption
Redistribution of property
Public satisfaction
Transport
Social payments
Tolerance of public protest
Challenges: Ethnic riots, Oppposition Demonstratios, Domodedovo bombing
Prospects: the Meaning of Moscow

11. Luzhkov’s Moscow: Keys to prosperity
Takeover of city’s Soviet-era assets
Supermayoral system of governing
Luzhkov’s charismatic leadership
City Hall’s extensive involvement in business
Massive inflow of resources from Russia’s regions and foreign investment
Highly criminalized political and business climate
Federal subsidies
Luzhkov’s alliance with Yeltsin, then Putin

12. Luzhkov’s Moscow: A semiautonomous political-economic system embedded within the Russian Federation
Money-power nexus
Relatively consolidated
In Putin era, federal patrimonialism as in important ways come to resemble that in Moscow, rather than vice versa

13. Moscow, Inc.
The mayor and his proteges act as owners of the city as well as its political leaders:
Extensive participation of the city in business
The involvement of Moscow businesses and financing city programs and the commercial use of Moscow city funds
An opaque budget process marked by extensive use of off budget funds as well as federal subsidies.
Russian Finance Minister Kudrin recently claimed that one quarter of Moscow’s government decrees were secret, including decrees allocating land in central Moscow.

14. City of Moscow Owns:
356 State Unitary Enterprises
337 blocs of shares in ventures and companies including:
Agricultural holdings
ZIL automotive metallurgy plants in Smolensk
Building projects in:
Abkhazia and South Ossetia
Crimea, Ukraine
Other foreign countries, from Mongolia to Venezuela
As of 2008 Moscow received 0.15% of its budget revenue from these enterprises.
During the economic crisis, this revenue shrank by 90%.
The city poured 100 times that much money into supporting the enterprises
Mosmedynagroprom holding in Kaluga Oblast (experimental corn, purebred cattle)

15. Moscow, Inc. (cont’d)
The AFK Sistema conglomerate, headed by Luzhkov crony Vladimir Yevtushenkov, embodied the fomer mayor’s blend of politics and business. Sistema operates consumer service businesses in telecommunications, microelectronics, insurance, home construction, oil, the media and banking. Sistema’s firms draw loans and business from the city government and generated funds for Luzhkov’s projects.

16. Moscow, Inc. (cont’d)
Inteko, the firm owned by Luzhkov’s wife, Yelena Baturina – named by Fortune in 2010 as the world’s third richest woman – is one of the most power business empires in Moscow
Baturina’s brother, Viktor Baturin, sued Inteko for $120 million in 2007 alleging wrongful dismissal

17. Supermayoralism
Powerful elected mayor and apparatus
Weak city Duma
Tight Luzhkov team
Neighborhood institutions (prefect, subprefect), largely act as transmission belts for City Hall orders
Fawning local media

18. Luzhkov’s Friends, Enemies , Inventions,Medals

19. Luzhkov’s “Team” of closest advisors
Yuriy Roslyak
Valeriy Shantsev
Vladimir Resin
City Duma Speaker Vladimir Platonov
[10] Ирина Алешина. Лужков выставляет запасных. — Газета.Ru,
[11] Мария Баринова. Павлиныч, говоришь... — Профиль,
[12] Илья Барабанов, Алексей Левченко. Шанцева развели с Батуриной. — Газета.Ru,
[13] Сергей Анисимов, Александр Колесниченко. Шансы Шанцева. — Новые Известия,
[14] Росляк или Полтавченко вместо Лужкова. — Stringer,

20. Relations with Federal Authorities
Kremlin has allowed Moscow significant autonomy, (exemption from federal privatization in exchange for Luzhkov’s loyalty and and mainenance of political stability
Bolstered by Luzhkov’s alliance with Yeltsin, then Putin; Luzhkov was a key Yeltsin ally in ‘91, ‘93, ’96 crises; relations with Putin were correct, but not close (Luzhkov made a presidential run in 1999)
Moscow receives lucrative subsidies and privileges
Moscow depends on revenue sharing from federal center
Moscow is largest contributor to national budget

21. Luzhkov’s Foreign Policy
To ensure Moscow has sufficient fuel, food, and other supplies, Luzhkov has placed a high priority on cultivating good relations with other Russian regions and other countries
Economic cooperation agreements with most of Russia’s 88 units
City loans to other regions
Direct ties with Ukraine, Lithuania, other CIS countries, Latvia, and the separatist regions of Transdnestria, and Abkhazia

22. Law Enforcement in Moscow
The courts, the Procuracy, the FSB, the MVD, are formally subordinated to the federal authorites
In practice, the city has say over their budget, personnel and operations
Moscow subsidizes police officers salaries
More than 100,000 federal armed troops are also are based near Moscow
The city has provided material support to many of these troops,

23. Corruption
Central to governing city. It has “…has stopped being a problem and become a system.” (Nemtsov)
Interlocking network of politicians, businesses, media holdings, law enforcement personnel, answerable to City Hall. Bribery, protection, graft is widespread

24. High Costs of Road-Building in Moscow: A Sign of Corruption?
Figures from August 2010.
An officer of Mostotrest contracting company cites high costs from the “Kafkaesque paperwork associated with transfers of ownership to City Hall” and the need to move the underground “tangle of pipes, power lines and telephone lines, most of which have different owners …”
31 Aug Sources: economist Krichevsky, a critic of Kremlin-connected oligarchs, and Transportation Minister Levitin. On the costs, see Ben Aris, “What Drives Russia’s Astronomical Road Costs”, Business New Europe, 6 October 2010, reprinted in Russia Now: Advertising Supplement to the Washington Post, Oct 20, 2010, citing Maksim Bakshinskiy of Mostotrest (a road construction contractor of which 37% is held by a company affiliated with Russian Railways; in mid-October (after Luzhkov’s ouster) Putin friend Arkadiy Rotenberg bought the share formerly owned by Mikhail Abyzov. Mostotrest has an interest in the Khimki road. [Under “Rotenberg’s Bridge’, Moscow Post, 25 Oct 2010,

25. Moscow real estate
Favored construction companies—especially Baturina’s Inteko, Su-155 and others– received preferential treatment: permissions, municipal orders.
Kickbacks in the permissions process can reach percent of housing costs
Municipal orders accounted for almost half of the living space under construction in 2007 (yellow windows in the diagram).

26. Criminalized Law Enforcement
Position
Cost
Police general in Moscow
Approx. $1 million
Police chief of an administrative district in Moscow
$100,000-$1 million or powerful business connections
Chief of prosperous Tsaritsyno precinct in Moscow
$500,000
Precinct captain
$50,000-$100,000 to be put at the head of the waiting list for the post
Criminal police chief, precinct level, central or southern Moscow
$25,000-$30,000
Precinct criminal investigation chief in prosperous part of city
$10,000-$15,000
Chief of public order section, precinct level
$15,000-$30,000
Position
Cost
Police general in Moscow
Approx. $1 million
Police Major-General in Moscow Oblast
$500,000
Police chief of an administrative district in Moscow
$100,000-$1 million or powerful business connections
Chief of prosperous Tsaritsyno precinct in Moscow
Precinct captain
$50,000-$100,000 to be put at the head of the waiting list for the post
Criminal police chief, precinct level, central or southern Moscow
$25,000-$30,000
Precinct criminal investigation chief in prosperous part of city
$10,000-$15,000
Chief of public order section, precinct level
$15,000-$30,000
Estimate by Moscow policeman’s union leader Mikhail Pashkin, in Vladimir Demchenko, "Leader of Police Union Mikhail Pashkin: 'A Generalship in Moscow Costs a Million Dollars', Izvestiya, | 21 May 2009; MVD officer quoted in Ilya Barabanov, “A Lucrative Spot,” The New Times, | 18 May 2009; Sergey Kanev, “Police Precinct Ltd.: Commercial Secrets of a Police Department,” Novaya gazeta, | 29 May 2009.

27. Moscow Police On the Take: Who paid whom for protection in 2007
Payer or Purpose of Bribe
Who receives it
Average amount, 30 R/dollar
Trading stall (palatka)
Patrol officers and precinct duty officers
$17/day
Old lady selling dill
$3-$7/day
Guarding a prostitutes’ hangout
$50/night
Providing krysha (protection) for prostitutes
Moscow police official at the administrative district (UVD) level
$5000-$10000/month per hangout
Stores, companies, cafes, small restaurants
Local detective (field investigator)
[not specified]
Sellers of counterfeit CDs, vodka, Chinese counterfeit
Economic Crimes Department officers
Large trading houses, farmers’ markets, large enterprises
Precinct (OVD) or administrative district (UVD)-level police officials
Sergey Kanev, If Someone from the MVD Became President, the Lubyanka People Would Be the "Werewolves in Shoulderboards": How 'Krysha' Is Structured in Russia, Novaya gazeta, 22 Oct 2007, republished in Kompromat.ru and pegged to upcoming presidential elections and "Werewolves in Uniform" police corruption scandal. Other sources later cited these figures without attribution. The article is about a Moscow-based criminal who claimed to be a Moscow policeman, so it is safe to say that these figures refer to Moscow.

28. Prices of Favors in the Law Enforcement System
Payer or Purpose of Bribe
Who Receives It
Amount (30 Rubles/$)
Police officer-- to receive credit for meeting quotas of crimes solved
Superior
$67
Credit for traffic inspector for return of stolen vehicles
Station Duty Officer $
Person stopped without registration
Patrol officer
$10-$17
Big businessman seeking to have criminal accusation dropped
Law enforcement officials
$1.5 million
To avoid arrest (minor case)
Local detective (field investigator)
$1000-$10,000
To get a case dropped once arrested
$25,000-$30,000
To get a case dropped once underway
$100,000-$150,000
To get a case dropped if someone has ordered it
Much more, if at all possible
Patrol officer, to get assigned to a lucrative route (market, train station)
$17

29. Organized Crime
Organized crime is pervasive:
It plays a political role as lobbyist and partner in governing the city.
City hall manages oc rather than fights it
In recent years evolved from burglary, robbery and protection racket to acquisition of real estate, manufacturng firms and business

30. Criminal Map of Moscow (Komsomolskaya pravda September 2009)
Solntsevo Group
Slavyanskiy Group (Usoyan)
Tbilisi Crime Clan (Oniani)
Izmaylovo Group
Shushanashvili’s Georgian Gang
Azerbaijani Gang
Taganka-Chinese Gang
Golyanov Group
Anna Veligzhanina: "How the Crime Gangs Divided Up Moscow,“ Komsomolskaya Pravda, 17 Sep 09

31. Glossary of Criminal Organizations
Solntsevo Group
Territory of Mozhayskiy and Khoroshevskiy highways, Perovo, Shchukino, Ramenki, Dinamo, Cheremushki, area surrounding Southern and Prague subway stations, Balashikha, Odintsovo, and several large firms in downtown Moscow -- Solntsevo gang's sphere of influence.
Approximate size: More than 1,000 soldiers, not counting brigade leaders and underlings.
Specialization: real estate, protection of firms on "its own territory," and money laundering, including proceeds from drug trafficking. Sphere of interests -- hotel business and all waste disposal firms in the capital.
Area surrounding Belarus subway station -- Tbilisi crime clan. Approximate size -- about 3,000 members.
Leader -- "Thief-in-Law" Ded Khasan (Aslan Usoyan)
Base -- in Sochi.
Specialization: Interest in oil, hotel, trade, gambling business; banking, metal sales, travel industry, motor vehicle sales, and money laundering.
Tbilisi clan
Central District -- Tbilisi crime clan.
Size -- over 3,000 members.
Leader -- "Thief-in-Law" Tariel Oniani, aka Taro.
Base -- in Spain.
Specialization: gambling, banking, real estate, drugs, arms trade, and money laundering.
Izmailovo
Northern District -- Izmaylovo gang.
Size -- over 1,000 members.
Leader -- "Thief-in-Law" Aksen (Aksenov).
Base -- in Moscow.
Specialization -- protection of local businesses and some banks, trade, insurance, and extortion. Protection of jitney lines.
Loyal to Ded Khasan (Aslan Usoyan) and Yaponchik (Vyacheslav Ivankov).
Georgian gang of Lasha Shushanashvili, loyal to Tariel Oniani
Altufyevskiy Rayon, Lianozovo, areas surrounding Polezhayev and Oktyabrskoye Pole subway stations, and Mnevnikov region -- Georgian gang of Lasha Shushanashvili. Loyal to crime boss Taro.
Specialization: Medium business, trade, theft of items left in vehicles.
Azerbaijani gang
Nagatino, Maryina Roshcha, Tekstilshchiki, Lyublino, Brateyevo -- Azerbaijani gang, no acknowledged leader.
Specialization: control of Moscow's outdoor markets. Protection of businessmen in "trust territory" and protection racket.
Lasha Shushanashvili
Altufyevskiy Rayon and areas surrounding Polezhayev and Oktyabrskoye Pole subway stations -- Lasha Shushanashvili's gang.
Specializing in real estate. Owns trade firms.
Taganka--Chinese gang
Taganka -- controlled by Chinese gang. Leaders constantly changing.
Specialization: contraband consumer goods, equipment sales, drugs.
Golyanov group
Izmaylovo, Tushino -- Golyanov gang.
Leader -- "Thief-in-Law" Pasha.
Specialization: Theft of items left in vehicles, burglary, and small business in trade sector. Controls outdoor markets and local businesses.
Georgian gang
Area surrounding Moscow Oil Refinery -- Georgian gang.
Specialization: banks, oil and hotel business, and protection of local enterprises and businesses. Slavyanskiy group
Part of Central District -- Slavyanskiy crime clan.
Based in United States.
Specializing in vehicle sales and contraband, interest in banking, gambling, and information technology. Affiliated with Ded Khasan (Aslan Usoyan).
Komsomolskaya Pravda -- Website of mass-circulation daily owned by the YeSN company of Grigoriy Berezkin, who has links to energy projects and the Russian Railways; it sometimes serves as a vehicle for Kremlin officials, security services, and prominent nationalists; URL:

32. Luzhkov’s friends with underworld ties
Iosif Kobzon, the Russian Frank Sinatra

33. Luzhkov’s last chance to boast: Moscow Day, September 4, 2010
Highway projects
Clinic
Sports complexes
“Worker and Peasant” statue museum
Music school
“Informational Intellect Center and Gimnazia”
Sept 2, 2010

34. Why was Luzhkov Fired?
Long rumored, causing widespread anxiety among Moscow elite
Medvedev: “lost trust”
The Kremlin wanted to further centralize political power,
Part of a broader trend toward replacing entrenched regional heads (18 fired in 2010)
Federal authorities wanted unfettered access to Moscow’s riches.
Luzhkov’s independence; his act had become tiresome
Repeated disputes with federal center over Moscow fires last summer, road construction, and corruption, and the Khimki forest
Putin: “Maybe it was for unsportsmanlike behavior.”

35. Anti-Luzhkov Campaign
Dismissal preceded by ugly smear campaign on state tv which “revealed” massive corruption, traffic paralysis, and other problems obvious to anyone who has ever visited Moscow
Luzhkov hit back: he wrote an open letter to Medvedevaccusing him of organizing a witch hunt and being “undemocratic”
Sensing the end was near, many Luzhkov cronies embedded themselves in the Olympic construction mess, and were blamed by some for construction cost overruns and delays

36. Who Fired Luzhkov: Putin or Medvedev?
Putin said it was Medvedev’s decision and he made it because he and Luzhkov did not get along}
Ultimately Putin’s decision, not Medvedev’s

37. Selecting a new mayor

38. Meeting Mr Sobyanin
Disproves speculation about growing political clout of Medvedev. He is a Putin man.
Shows no indication he is anything but loyal to the federal center. Tight lipped bureaucrat rather than populist politician
His career track is closely linked to oil and gas sector, especially to Lukoil and TNK-BP

39. Sergey Semenovich Sobyanin
Considered an ally of Vladimir Bogdanov (Surgutneftegaz) and Roman Abramovich
Received support from Putin and siloviki in the Tyumen governor’s race
Not tied with “Petersburg group” or particular silovik groups, though some see a tie with Prosecutor Chayka
“Kogalym Group” unites him with ex-Transneft head Semen Vaynshtok, ex-Energy Minister Aleksandr Gavrin
His aide Anastasiya Rakova followed him from Tyumen and is now Deputy Mayor, staff member, and mayor’s representative to the City Duma
Born 21 June 1958, Khanty-Mansi Autonomous Okrug
1980s Komsomol work in Chelyabinsk, local administration in Kogalym
1990s: Regional posts in Khanty-Mansi Autonomous Okrug
: Federation Council member
: Tyumen Oblast governor
: Board chair of TNK fuel company
2004: The first governor to support Putin’s plan to end gubernatorial elections
Dec. 2005: Head of Putin’s Presidential Administration
2006: Board chair of TVEL nuclear fuel company
May 2008: Head of Putin’s government administration
2009-: Chair of Channel 1
Oct : Inaugurated Moscow Mayor

40. Sobyanin-Tyumen Group
Semyon Vaynshtok (Former head of Transneft
Aleksandr Gavrin (Former Fuel and Energy Minister)
Irina Rubinchik (Sobyanin’s wife; headed various regional projects when Sobyanin was governor; reportedly related to Vaynshtok or Gavrin)
Oleg Chemezov (former deputy to Sobyanin in Tyumen, then vice president of TNK/BP)
Laura Sokratova (Gavrin’s wife)

41. Sobyanin Agenda Development of transport system Health care Education
Social support
Housing
Development of communal-engineering infrastructure
Energy conservation
Environmental protection
Scientific development and innovation

42. First 100 Days Sobyanin Soaring?
Suspended several construction projects, including $49 billion 4th Ring Road
Towed many cars
Further centralized power by demoting many district prefects to below cabinet rank; many have been replaced
Sacked many City hall bureaucrats
At Davos, promised to transform Moscow unto a business-friendly financial center free of corruption and red tape
A November poll (VTsIOM), found that 63% of Musovites appproved his work

43. Sobyanin Stumbling?
Late December Levada poll found that 46% of residents said Sobyanin left a “neutral” impression on them; 23% positive
Opposition to his crackdown on kiosks
Neither poll captures raising of communal service charges by 10% on January 1
Criticized for lack of planning and competency (kiosk campaign)
Many dismissals may be for show. Resin and Kuzmin, construction barons, remain
Many projects which threaten historical sites continue

44. Deluzhkovization: Symbolic
Plans to remove a Peter the Great statue commissioned by Luzhkov and widely despised by Muscovites

45. Deluzhkovization: Symbolic
Peter the Great to Sobyanin: “What are we going to do with the statue?” (Yelkin, 10/30/10)
Yelkin, probably from RIANovosti, Oct 30, 2010

46. Deluzhkovization: Cadres
Sobyanin has been systematically replacing officials in City Hall and neighborhoods
Some holdovers remain, however, including Deputy Mayors Vladimir Resin and Ludmila Shvetsova.
These may be those deemed “irreplaceable” or part of a deal between the Mayor’s office and the feds
Unclear whether Resin and Shvetsova still retain real power

47. The caps show Luzhkov-era holdouts; the eagles show new cadres
Cadres decide everything: Changes in Moscow city government as of October 26, 2010
The caps show Luzhkov-era holdouts; the eagles show new cadres
26/10/2010

48. Sobyanin and his team, February 2011
More deputy mayors (11 versus 8).
Mayor’s office includes people from:
Business (Golodets, Sharonov)
Federal agencies (Lyamov, Rakova, Sergunina)
Regions (Khusnullin—was in Tatarstan)
Proportion of Luzhkov-era cadres has sunk to 40% (Shvetsova, Biryukov, Resin and Shukshin).
More women (4 versus 2)

50. Vladimir Resin, chief of Metro construction commission
Luzhkov-era holdouts
Vladimir Resin, chief of Metro construction commission
Resin picture from masalygin.ru reproduced in On Roslyak:

51. Robert Moses

52. Lyudmila Ivanovna Shvetsova
1970s-1993: Komsomol and Supreme Soviet posts
: Headed Moscow government's committee of public and interregional relations
2001: Moscow deputy mayor
Was considered a top candidate to replace Luzhkov.
Oversees departments of housing policy and housing stock, social protection, family and youth policy, culture, and public relations.
Health and education reforms will now be handled by her new colleague Olga Golodets.

53. Yuriy Vitalyevich Roslyak, former Deputy Mayor for Economics
Since 1970s: engineering and construction work in Moscow.
Since 1980s: Moscow administration.
First Deputy Premier of Moscow/ First Deputy Mayor since 1995.
Was considered part of Luzhkov’s inner circle.
Represents Moscow in the Federation Council (Senate) since Dec 22, 2010.
This post provides immunity.
Member of Senate Committee on Economic Policy, Entrepreneurship and Property.
[10] Ирина Алешина. Лужков выставляет запасных. — Газета.Ru,
[11] Мария Баринова. Павлиныч, говоришь... — Профиль,
[12] Илья Барабанов, Алексей Левченко. Шанцева развели с Батуриной. — Газета.Ru,
[13] Сергей Анисимов, Александр Колесниченко. Шансы Шанцева. — Новые Известия,
[14] Росляк или Полтавченко вместо Лужкова. — Stringer,

54. The Kremlin has taken the fist steps to break up Luzhkov’s empire
Criminal bribery prosecution reopened against Deputy Mayor Ryabinin
Initial inquiries have been made into Luzhkov and Baturina business activities
Federal auditors, working with Mayor Sobyanin, have reportedly come up with evidence of “systemic problems” in Moscow authorities actions regarding financial contracts and violations concerning more than $7 billion in investment in city transport in past three years.
Interdistrict tax inspectorate deputy chief Tatiana Demenok was arrested for accepting a 90,000 R bribe
Medvedev has directed Sobyanin to eradicate all administrative decisions that encourage corruption along with secret Luzhkov-era “personal decrees” that violate the law

55. Public transportation reform?
Prosecutor Chayka calls for criminal charges against Metro head Dmitriy Gayev
Says he has 100mlnR in illegal income
Accounting Chamber finds 230mln of the 500mlnR spent on city transportation in were misspent
Gayev’s son directs a subsidiary of Sitroniks IT company that makes swipeable metro cards
Gayev’s daughter sells souvenirs with his face on them
Fired Feb
22 Dec 2010;

56. Selling off the Bank of Moscow
Moscow City owns 47%
City keeps $3.5bln in accounts there.
Founder and Luzhkov friend Andrey Borodin is consolidating his assets—said to control 44% of the bank’s shares.
The Audit Chamber started, then cut short, an investigation of the bank.
Experts say it would be complex to remove city accounts from Bank Moskvy
Who might buy shares—VTB? Alfa (Kremlin-friendly?)

57. Closing Casinos 7500 gambling apparatuses have been confiscated.
Most casinos were closed July 1, 2009 under a 2006 decree
January 15: Sobyanin visits a warehouse with confiscated gambling equipment, watches as it is sawed apart.
Between 6 December 2010 and 13 January 2011, Moscow law enforcement closed:
239 “lottery clubs,”
8 illegal casinos and poker clubs
33 computer clubs hosting online gambling
7500 gambling apparatuses have been confiscated.
There remain 111 “non-working lottery clubs to which law enforcement and district authorities have no access.”

58. Whither Inteko ? Baturina’s brother reopened a lawsuit against Inteko
Baturina discussed sale of assets to Vasily Anisimov of Coalco.
Suleiman Kerimov reportedly also Inteko purchase
Baturina has agreed to sell her stake in Moskva-Citi to Magnitogorsk Iron and Steel Works.
Sold % of Russky Zemelny Bank to six Cypress-registered companies (5.4 billion rubles)

59. Whither Moskva-Siti (Moscow International Business Center), a $12bln construction project?
The first zone in Russia to combine business activity, living space and entertainment in one single development
First conceived by the Moscow government in 1992
Will include a central City Hall and City Duma
Sobyanin said it was a “mistake”
Putin visited, praised VTB
Sobyanin changes the committee overseeing Moskva-siti
Resin remains head of commission
The construction of Moscow IBC is taking place on the Presnenskaya embankment of the Moscow River approximately 4 kilometers (2.5 miles) west of Red Square, and just east of the Third Ring Road. The project occupies an area of 60 hectares,

60. Sobyanin Budget: More spending
Projections
Luzhkov draft of August, (approved by city Duma Sept )
Sobyanin-era budget approved Dec
Revenue
1.29trlnR
1.24 trlnR
Spending
1.19trlnR
1.38 trlnR
Deficit
100blnR
146blnR
Social Benefits
592 blnR
722blnR
Income from sale of city assets
900mlnR
13,9 blnR (may rise depending on Bank Moskvy and Vnukovo sales)
Road/transport construction
Road construction: 38blnR
Metro construction: 26blnR
Reserve for road and public transportation construction: 123blnR
Other
Assumes 11% growth in salaries
City police: 29blnR (including 14bln for Moscow salary supplements)
“Un-allocated estimates for targeted investment program” : 91blnR
тыс. рублей, projected expenditures тыс. рублей; deficit тыс. рублей. Sept budget provisionally approved by city Duma: Aug 2010 draft approved by city governmen: 25 August The comparison: I don’t understand: Chistova said the amount of social spending seems to have decreased. Maybe it did from the Sept 29 Duma-approved version? The city Accounting chamber head said there were нераспределенные лимиты по объектам адресной инвестиционной программы of 91blnR.

61. Keeping the public happy
Solving transportation problems
Reducing corruption
Retaining social benefits (pensions, Moscow supplements)
Keeping city services running
Managing public protest
Sobyanin visits a resident of a rest home for “veterans of labor,” 20 Jan 2011

62. Moscow Metro Development Plan: 79 km of new lines and 43 stations by 2015 (Luzhkov’s plan called for 60 new stations)
Resin commission gets a 60% increase in subway construction funding, up to $50bln
Sobyanin also proposed public-private partnerships to fund construction
"Мы будем вкладывать в развитие транспортной инфраструктуры большую часть средств в соответствии с инвестиционной программой. Только в 2011 году направим более 200 млрд рублей", - отметил Мэр и добавил, что в первую очередь средства пойдут на строительство новых линий метро, развитие общественного транспорта, создание крупных развязок и создание интеллектуальных систем управления городским транспортом.

63. Sobyanin clarifies his kiosk cleanup campaign
Jan : Sobyanin specifies that kiosks should sell goods that are really needed; that they should be connected to legitimate electric lines, not from trolleybus lines; that they be “esthetically attractive,” that they not hinder pedestrians, and that prefects should prepare maps of planned locations of kiosks by February and put them on the internet for public discussion.

64. Tests for Sobyanin Moscow ethnic riots in December
December 31 opposition demonstrations
Domodedovo airport bombing

65. Manezh Square riot, December 11, 2010: “Russia for the Russians!”

66. Moscow police responded carefully
Moscow Police tried and failed to protect a cluster of young men from the Caucasus who were beaten by the crowd.
“Beat the Khach!” yelled voices from the crowd.
“I didn’t think a person could look like that—like rubber. Blows flew about his body, his head, his face…”
frame 31, citing “Ekho Moskvy” correspondent Vladimir Romenskiy

67. Sobyanin tolerates limited opposition protests
“Legal demonstrations will be facilitated, but unsanctioned demonstrations will be strictly suppressed.”
(Sobyanin, announcing approval of 31 December protest led by human-rights activist Ludmila Alekseyeva for 1000 people at Triumfalnaya Square).
“On the one hand, we must not create artificial barriers to mass demonstrations, legal protests, and citizen activism. On the other hand, you and I must strictly suppress illegal demonstrations and attempts to provoke mass disorder in the city.” (Sobyanin to Moscow police, Jan )
Для проведения законных мероприятий будут созданы все необходимые условия, несанкционированные акции будут жестко пресекаться", - отметил мэр Москвы. Мы, с одной стороны, ни в коем случае не должны создавать искусственных преград и препон для проведения массовых акций, законных манифестаций, проявлений гражданской активности. С другой стороны, мы с вами должны жёстко пресекать все незаконные акции и попытки спровоцировать массовые беспорядки в городе. [

68. Harsher measures toward human rights activists:
RIANovosti comparison of October 31 demonstration by human rights activists with the December 11 “youth demonstrations” by “leftist-radical youth”
Harsher measures toward human rights activists:
At the Oct 31 meeting, for which permission was received, 28 of 800 people were detained.
At the unsanctioned Dec 11 demonstration, 65 of 5500 participants were reportedly detained at police stations, and about ten criminal cases were brought.

69. Moscow’s Airports Ownership Passengers in 2009 Domodedovo East Line
18.7mln
Sheremetyevo
State
14.8mln
Vnukovo
Moscow City owns 75% (may sell)
7.7mln
The only evident connection between the city of Moscow and Sheremetyevo is that as of mid-2010 one of the board’s independent directors is (or was) Andrey Sharonov, then of Troika Dialog, who became new mayor Sobyanin’s deputy in charge of the economy

70. Domodedovo Attack of January 24 2011
Airport not within city limits: Sobyanin not formally responsible
Nevertheless, he and Moscow Oblast governor Gromov competed to appear responsive.
No apparent connection of Luzhkov or Sobyanin to East Line, the company that owned Domodedovo.However, close to Moscow Oblast authorities
(as of Dec 2005) “Ист Лайн” же в своих документах указывает, что акционерами контролирующей группу компании FML Limited с о. Мэн являются два резидента острова — Джейн Петерс (75%) и Шон Каирнс (25%).

71. Domodedovo Airport Bombing: Struggles Over Money and Power
Medvedev criticized the airport’s owners for lax security.
Who owns Domodedovo?
Domodedovo’s ups and downs:
High-level competition over airport traffic, China trade (and contraband?) monopolies.
Criminal investigations
Battles with Russian Property Agency
Powerful protectors
Possible changes in ownership after bombing?

72. Domodedovo: choice property
2000: Rosimushchestvo (Russian state property ministry) sued East Line, alleging improprieties in past rental agreements.
2005: President Putin recommended that East Line be left alone. Economics Minister Gref ordered Rosimushchestvo head Valeriy Nazarov to drop the lawsuit
Rosimushchestvo ignored them, continued the suit.
Did it have a powerful protector?
September : On instructions from new President Medvedev, the Supreme Arbitration Court quashes Rosimushchestvo lawsuits against East Line.

73. Who Owns Domodedovo Airport?
Hacienda Investments (Cyprus) >
East Line Group (Ист-Лайн)>
FML Ltd. (Isle of Man) >
Nominal owners: Jane Peters and Sean Cairns
Real majority owners thought to be Dmitriy Kamenshchik and Valeriy Kogan
Others: FSB-linked arms exporter Rosoboroneksport was said to receive 25% in 2000.

74. Valeriy Mikhaylovich Kogan, chair of the Supervisory Council, Domodedovo International Airport since 2004
Said to be the one who really controls the company.
Allegedly helped Kamenshchik settle disputes with Russian Property Agency in 2005.
Said to have been seen skiing with Putin.
Owns mansions in Caesaria, Israel and Greenwich, CT. His wife’s application to “build a replica of Orly Airport” at their Greenwich home was denied.

75. Dmitriy Vladimirovich Kamenshchik, Chairman of the Board
According to a 2002 Stringer investigation he:
Worked with the UralMash organized crime group in the 1990s
Hauled contraband (clothing and other goods from China), evading import tariffs.
Turned over 25% of East Line shares to an FSB-linked company in 2000 in return for the FSB’s tapes and other evidence of his sexual and financial misconduct.
Serves on Council on Entrepreneurship under the Russian Government, advisor to the State Duma chair, advisor to the Moscow Oblast administration.

76. Don’t let a crisis go to waste
Don’t let a crisis go to waste. Who might take advantage of the Domodedovo tragedy?
East Line was planning an IPO. If Medvedev’s warning indicates trouble with the government, its share value will fall.
Possible merger plan for the three Moscow-area airports has been developed by Troika Dialogue for a Putin-led government commission.
Under one variant, Kamenshchik and Kogan would hold the largest number of shares, but the state would own the golden share.
Kamenshchik and Kogan reportedly resisted this idea.
Criticism following the airport tragedy could pressure them to agree to it, and could lower the value of their stake in the combined airport.

77. The Meaning of Moscow
Sobyanin is now the federal mayor rather than Moscow’s mayor
Moscow’s problems are now increasingly federal programs
Although destabilizing unrest in the city is unlikley, it remains a possibility.
If Sobyanin is judge successful, he could become a national figure (replacing Medevedev?)

78. Whither Luzhkov? Former mayor is exploring his options
A potentially destabilizing factor if he became politically active
Former mayor is exploring his options
Says he wants to stay in Russia
But has also explored his options in Latvia and the UK

79. Meanwhile, Luzhkov tries to Move to Latvia
RIANovosti cartoon, Jan