VZCZCXYZ0006
RR RUEHWEB

DE RUEHMO #1124/01 1201431
ZNR UUUUU ZZH
R 301431Z APR 09
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 3121
INFO RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE
RHEHNSC/NSC WASHDC
RUEAIIA/CIA WASHDC

UNCLAS MOSCOW 001124 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV KDEM PHUM PINR KCOR ECON RS
SUBJECT: COMMUNISTS IN OREL EMPOWERED AMIDST TWIN 
LEADERSHIP SCANDALS 
 
¶1. (SBU)  This message is sensitive but unclassified; please 
protect accordingly. 
 
¶2. (SBU)  Summary:  The Communist Party (KPRF) in Orel is 
gaining support at the expense of United Russia due to the 
overwhelming level of government corruption there, and the 
economic crisis in general.  Locals perceive the Communists 
as having made in-roads by blowing the whistle on malfeasance 
and by garnering support for an alternative anti-crisis plan. 
 Two major leadership scandals, involving both Orel's former 
governor and current mayor, illustrate the deep level of 
corruption in the region and throughout Russia.  End Summary. 
 
¶3. (SBU)  During an April 21-24 visit to Orel Oblast, five 
hours south of Moscow by train and home of the Russian writer 
Turgenev, discussions with prominent individuals always 
included a mention of the over 150 corruption-related 
criminal cases being officially investigated in Orel.  Two 
major leadership scandals, involving long-time Governor Yegor 
Stroyev and Mayor Alexander Kasyanov, are most indicative of 
the situation.  On February 16, following growing Kremlin 
concern of social unrest during the economic crisis, 
President Medvedev sacked Stroyev, along with three other 
prominent regional governors in Pskov, Voronezh, and the 
Nenetsky Autonomous District, citing the need to reevaluate 
"efficiency of governance."  On March 18, police arrested 
Kasyanov on charges of tax evasion to the tune of 137 million 
rubles (approximately USD four million).  These scandals, 
combined with the worsening economic crisis, have enabled the 
Communists to win over some support from the United Russia 
party. 
 
Stroyev:  Blossoming Career or Honorary Exile? 
--------------------------------------------- - 
 
¶4. (SBU)  Stroyev's situation and subsequent related events 
point to a deep level of political intrigue on a regional 
level.  Medvedev sacked Stroyev after his two deputies had 
been charged with fraud (one is currently in Israel awaiting 
possible extradition).  Two days later, Stroyev's former 
son-in-law, Alexander Rogachev, a retired general of the 
Russian Federal Security Service and a successful Orel 
businessman, was shot dead in Moscow.  Stroyev's daughter, 
Marina Rogacheva, immediately resigned her seat in the 
Federation Council so her father could fill in and retain a 
government position.  United Russia member Alexander Kozlov 
was appointed to replace Stroyev as Orel Regional Governor 
and, in turn, to replace his daughter, Marina Rogacheva. 
Russians are shell-shocked by this political chain of events 
because Stroyev had managed to serve as a Governor for 
decades, throughout the Gorbachev, Yeltsin, and Putin eras, 
as a member of both the Communist Party and United Russia. 
 
¶5. (SBU)  Sources in Orel presented diametrically opposing 
views about this scandal; that Stroyev's career will further 
blossom now that he is in the Federation Council or that he 
is on "honorary exile" since Kozlov merely gave Stroyev a 
generous gift in the form of a cushy job as senator in an 
administrative organ of little importance.  Veronika Katkova, 
Deputy Director of "United Europe" Public Problems Research 
Institute and former adviser to Kasyanov told us on April 22 
that Stroyev had an agreement with Putin that he would not be 
removed, but that Medvedev acted on his own.  She argued that 
Putin then helped Stroyev by ensuring that he ended up in the 
Federation Council.  Stroyev used to be close to Yeltsin and 
is now close to Putin.  She told us that Stroyev wants power 
in Moscow and thought he could ultimately become the next 
Federation Council Chairman replacing Just Russia's Sergey 
Mironov.  She said that this is all reshuffling and that 
Medvedev did not address corruption by firing Stroyev. 
 
¶6. (SBU)  On the other hand, Dmitriy Krayukhin, Director of 
two human rights organizations "United Europe" and the Orel 
Regional NGO "For Human Rights" told us on April 22 that 
Stroyev lost his influence in the Kremlin last year and there 
was a domino effect which resulted in many corruption 
scandals in Orel.  He told us that Stroyev is very talented 
and intelligent.  Initially, according to Krayukhin, Yeltsin 
hated Stroyev, but Stroyev managed to earn Yeltsin's respect. 
 Last year Stroyev was excluded from the list of so-called 
untouchable people which was the first sign that he was 
losing power in the region.  A few days before Stroyev was 
sent to the Federation Council, he was accused of stealing 
land.  People from Orel are upset that he was sacked as 
Governor, but made a "soft landing" as their un-elected 
senator. 
 
Kasyanov:  Tax Evader or Political Outsider? 
-------------------------------------------- 
 
 
¶7. (SBU)  Turning attention to corruption on the city level, 
Mayor Alexander Kasyanov was taken into custody on March 18. 
Officially he is being tried for tax evasion in the 
Novocheboksarsk City Court in the far-away Republic of 
Chuvash where Kasyanov was General Director of the 
construction company "Stroyinvestdevelopment."  Deputy Mayor 
Valentin Bocharov told us on April 22 that he believed this 
arrest was based not on politics but on strict violations of 
the law and that Kasyanov was accused of hiding profits 
related to his construction company.  He told us that 
Kasyanov was an independent candidate, but that the KPRF 
supported him.  Bocharov admitted that the relations between 
Stroyev and Kasyanov were not close and he characterized 
Kasyanov's relations with current Governor Alexander Kozlov 
as "business-like, but not close." 
 
¶8. (SBU)  The KPRF's Regional Council Faction Head Vasiliy 
Ikonnikov told us that Kasyanov's removal was "absolutely 
political" and that there was a personal conflict between 
Stroyev and Kasyanov which resulted in Stroyev ousting 
Kasyanov.  Katkova told us that Kasyanov did not realize 
"Stroyev was like a monster."  Ikonnikov explained that 
nobody has ever been convicted under the obscure charge that 
Kasyanov was facing (concealment of due financial payments, 
Article 199.2 of the Russian Criminal Code).  Ikonnikov told 
us that Kasyanov was the head of an enterprise in Chuvash and 
people supported him; "he was not corrupt."  According to 
Ikonnikov, during the last mayoral elections in 2006, Stroyev 
endorsed a candidate who lost to Kasyanov, and investigations 
of Kasyanov date back to this time.  After a year in office, 
however, Kasyanov joined United Russia and this change eroded 
his base of support among the Communists.  According to 
Katkova, Stroyev threatened Kasyanov that if he did not join 
United Russia, he would go to prison.  State Duma elections 
were held by party list and United Russia put Kasyanov on the 
top of the Orel Regional voting list to attract voters. 
Although United Russia won, Kasyanov gave up his seat instead 
of resigning as mayor.  Katkova argued that after joining 
United Russia, Kasyanov lost KPRF's support and was arrested. 
 She stated that "this was all done intentionally, there is 
no issue of tax evasion and nothing criminal; this is 
strictly political."  Finally, Kommersant newspaper reported 
on March 19 that Kozlov "invited Stroyev to voluntarily write 
a letter of resignation," which further implies a political 
scandal. 
 
¶9. (SBU)  Kasyanov's days as mayor appear to be numbered, but 
he could face one of several different scenarios.  Kasyanov 
is currently being held in pre-trial detention.  On April 29, 
the Federation Council approved federal legislation to allow 
representative bodies of municipal authorities to terminate 
the powers of mayors.  When Medvedev signs this law (expected 
any day), it will allow for the City Council to sack Kasyanov 
for failure to carry out his duties, but it is not clear if 
or how soon they may dismiss him.  Deputy Mayor Bocharov told 
us if there is a guilty verdict, he will step down as mayor. 
However, Bocharov hopes Kasyanov will be acquitted and can 
work again.  According to Bocharov, Kasyanov is in the middle 
of serving a five-year term as mayor and the next elections 
are not scheduled until March 2011.  Katkova thought that 
Kasyanov may not be acquitted because the Chuvash prosecutor 
would have to admit to Stroyev pressuring him.  In Katkova's 
view, Kasyanov was doomed.  She argued that Stroyev had used 
this case to demonstrate his power and did not expect to be 
removed.  Krayukhin argued that the mayor will likely get a 
conditional sentence (guilty, no prison time) this summer. 
He told us "this is the only way out" because if Kasyanov is 
acquitted the authorities will have to acknowledge that they 
acted wrongly by arresting him.  Mayoral elections would then 
likely be moved up to the fall of 2009. 
 
Communist Party Attracts Disenfranchised Voters 
--------------------------------------------- -- 
 
¶10. (SBU)  According to our interlocutors in Orel, voters in 
the Orel Region have shifted their attitudes away from United 
Russia and toward KPRF leadership because they are fed up 
with corruption and the economic crisis.  According to Deputy 
Mayor Bocharov, KPRF already had a good basis of support 
before these events as Orel has 263,000 military veterans in 
a population of nearly 900,000 and is located in Russia's 
agrarian "Communist Red Belt."  In the December 2007 State 
Duma elections, the KPRF posted a relatively strong showing 
(17.58 percent) in Orel, overshadowed by United Russia with 
59.85 percent of the vote.  Similarly, as a result of the 
2006 elections for the Orel City Duma, there are 11 KPRF 
deputies as opposed to 27 United Russia members.  In the 
Regional Council of Peoples' Deputies, there are 11 KPRF 
 
deputies (20 percent) compared to 35 United Russia members, 
and members from both the Liberal Democratic Party of Russia 
(LDPR) and Just Russia.  The KPRF's Ikonnikov told us on 
April 22 that the Communists played a key role in removing 
Stroyev as governor as well as his two deputies.  He 
described the Communists' growing role in Orel Region, 
stating that 30-36 percent of voters currently support KPRF 
in Orel City and Region, but that the numbers are growing and 
may soon reach 40 percent.  He attributed this spike in 
popularity to KPRF's anti-corruption measures and proposed 
alternative 15-point strategy to handle the economic crisis. 
He explained how the Communists have initiated several 
corruption cases in Orel and that they have made 
anti-corruption their key goal.  Ikonnikov thought that the 
factors behind this shift, included that the KPRF party is 
very active; it has a very effective anti-corruption 
campaign; protest actions regarding housing, rising communal 
services prices, and employment are perceived as evidence of 
the Communists defending social rights of the population; and 
people see the Communists' tangible results concerning 
anti-corruption. 
 
Comment 
------- 
 
¶11. (SBU)  Medvedev's sacking of Governor Stroyev, allegedly 
to root out corruption, only resulted in a reshuffling.  This 
shows that corruption continues to be an endemic problem here 
that will be difficult to address.  In spite of these signs 
in Orel Region as well as in other regions, United Russia 
will have little trouble maintaining broad national support 
in the short term. 
 
BEYRLE