Political Battle in Moscow Escalates to Self-Destructive Confrontation

Beleaguered Moscow Mayor, Yuri Luzhkov, has departed on a week-long vacation in Austria to celebrate his 74th birthday with his family, but the political confrontation around his hold on office continues unabated (EDM, September 15). Over the weekend, the federal TV channels delivered new “black propaganda” salvos targeting particularly his wife, Elena Baturina, who built a multi-billion fortune in the Moscow construction business during the spectacular property boom of the 2000’s (Vedomosti, September 18). Meanwhile, Luzhkov has filed a series of slander cases in the Moscow courts, which have a long record of issuing verdicts in his favor, as a result the cautious Financial Times newspaper rushed to publish an apology after citing the accusations from the NTV channel (www.grani.ru, September 16). The battle has reached such intensity that whatever the outcome, the collateral damage for the integrity of the political system controlled by the duumvirate of President, Dmitry Medvedev, and Prime Minister, Vladimir Putin, is certain to be far greater than expected.

Replacing Luzhkov could have been a logical culmination of the sustained effort at replacing long-serving regional leaders, such as Tatarstan’s President, Mintimer Shaimiev, or Sverdlovsk oblast governor, Eduard Rossel, undertaken by Medvedev and aimed at tightening central control over the local elites (Nezavisimaya Gazeta, September 10). Moscow, however, is not Kalmykia, and Luzhkov is not only a master of an independent political machine but also an oligarch ruling a financial empire that towers over the legendary fortune of Roman Abramovich. Putin has always had issues with this deceptively simple-minded “father” of the Russian capital, but his earlier attempts to unseat the popular mayor were deflected with arrogant ease (Novaya Gazeta, September 17). Now, somewhat paradoxically, Luzhkov presents himself as an ardent Putinist, but what looks like an amateurish attempt to play on the differences between the co-rulers is in fact a brutal political gamble raising the stakes to the level of unacceptable damage.

All the key parties to this conflict have now discovered themselves to be trapped in a “lose-lose” situation. Medvedev is demonstratively unable to exercise his presidential power to sack any malcontent and is reduced to waging a propaganda war against a formally inferior opponent. Putin has proven yet again that no cadre decision could be taken without his consent, but is stuck in an awkward position of supporting the mayor, even if only by remaining silent, an official who has been portrayed in the whole country as corrupt and inefficient. Vladislav Surkov, deputy head of the presidential administration, rumored to be the mastermind of the entire campaign, is implicated in setting up both his masters in a dilemma with no good choices (Vremya Novostei, 15 September). The United Russia party cannot formulate any position on this crucial political issue as its Moscow branch has unanimously supported the mayor, who to all intents and purposes is one of the founding fathers of this pseudo-party. Luzhkov has burnt his bridges to an honorable retirement, like the one granted to the former Mayor of St. Petersburg, Vladimir Yakovlev, and cannot hope for any victory –but only for a very costly draw (Vedomosti, September 17).

Enormous wealth makes Luzhkov too dangerous an opponent in the camp of the political opposition, and there is hardly much leverage in the Kremlin to persuade him to accept defeat gracefully. Many smaller bureaucratic predators are eager to attack the exposed flanks of Baturina’s mega-conglomerate of construction companies and banks, but the scale of this empire is such that the dismemberment of the Yukos oil giant would pale in comparison. Mikhail Khodorkovsky, enduring his second trial, highlights the corruption of the law enforcement and legal systems, and this rot makes a massive redistribution of property a very risky proposition for the authorities (www.newsu.com, September 19). Luzhkov has good reasons to count on bitter quarrels in the crowd of courtiers around Putin and Medvedev about a possible replacement, who would have to take charge over the profoundly –and perhaps deliberately– disorganized economy of the megapolis (Kommersant, September 20).

There are certainly names mentioned in the media commentary, including Deputy Prime Ministers, Sergei Ivanov and Sergei Sobyanin, but they do not appear capable of establishing effective control over the complex political machine, which must function smoothly in the parliamentary elections scheduled for December 2011. Still contemplating the next reformatting of the executive power, Putin cannot afford a clan war over looting Luzhkov’s assets in the capital city, where contract killings of entrepreneurs and criminal “authorities” are a usual feature of social life (Moskovsky Komsomolets, August 31). Luzhkov has made himself indispensable in executing the brutal suppression of opposition rallies, and the pro-democracy groups are now uniting in order to participate in the election campaign (RIA Novosti, September 16). Ironically, the anti-Luzhkov documentaries produced by the official TV channels make free use of the research presented in the report “Luzhkov: Results-2” authored by Boris Nemtsov and Vladimir Milov, two leaders of the new democratic coalition, who also prepared the report “Putin: Results, 10 years” (www.nemtsov.ru).

Unleashing a propaganda campaign against a particularly stubborn bureaucrat/oligarch, the Kremlin is thus hitting hard at the very foundation of the ruling regime based on the merger of corrupt power and crazy money. Luzhkov’s case may be special but Moscow has become the center of hyper-concentration of all the luxury and poverty of Putin’s Russia. The inflow of colossal petro-revenues has pumped a super-bubble in real estate and enriched thousands of city officials beyond the income level of Arab sheikhs. The sudden arrival of the economic crisis has shocked this ruling class and the current trajectory of protracted recession, while as yet not fully internalized, leads to the collapse of the model of ever-growing prosperity and stability. The signs of governance crisis are clear and manifold, including for instance the abrupt dismissal of Sergei Bogdanchikov from the Rosneft oil company, so the discord between Putin and Medvedev is set to deepen. Luzhkov has been given a week to think about his future, but the duumvirs might also give a thought to how much this quarrel has shortened the life span of their reign.