Roman Abramovich is no longer Chukotka’s governor

Roman Abramovich’s dream of slipping off the gubernatorial shackles has finally come true.

The Kremlin reported today President Dmitriy Medvedev has granted Abramovich’s request to resign from his post as governor of Chukotka. Medvedev reached the decision after receiving a written request from Abramovich. Deputy Governor of Chukotka Roman Kopin was appointed acting head of the region. Abramovich’s Press Secretary John Mann confirmed the information to KP.

Abramovich’s resignation was hardly a sensation in political circles. It was commonly known that Abramovich appealed to former President Vladimir Putin on numerous occasions with a similar request. In late 2006, news about the his intention first shook the Chukotka population, which considers Abramovich almost a “white shaman.”

The billionaire oligarch Abramovich has resided in Moscow and London in recent years. He was estimated by Forbes magazine as the 15th richest person in the world with a net worth $23.5 billion. He is best known as the owner of the private investment firm Millhouse Capital and Chelsea Football Club in London.

Abramovich’s romance with Chukotka began in 1999. The oligarch was elected as the region’s state deputy. A year late, he became the governor and registered his Sibneft subsidiaries in the region. Today, they account for 80 percent of Chukotka’s budget.

“I think they’ll declare a regional mourning,” economist and political scientist Yulia Latynina said about his resignation. “But Abramovich is probably sighing in relief. He spent an enormous amount of money on Chukotka. He built everything in the region from the airport to hotels and hospitals. He was kind of praying for the forgiveness of his sins in the region. It’s just like the Russian trader who stole something and then lit a candle in church. Chukotka was Abramovich’s personal candle. And minimizing Sibneft’s taxes was just incidental.”

“Abramovich isn’t going anywhere,” said Mikhail Leontev, editor of Profile magazine. “His main work is being Abramovich. Lately he hasn’t been personally involved in managing the region anyway. The infrastructure there was built long ago. His people are in place and I think it’s unlikely anything will change. If the taxes from Abramovich’s companies keep passing through the Chukotka budget then everything will be fine in the region just as before.”

KP’s Dossier

Roman Abramovich — An oligarch’s fate

Biography
Roman Arkadevich Abramovich was born Oct. 24, 1966 in Saratov. His mother Irina Vasilevna was a musician and his father worked as a supplier at a construction trust in Syktyvkar.

Abramovich became an orphan at a young age. Both his parents died within two years — first his mother and then his father.

After his parents’ death, his grandmother (on his father side) Tatyana Semenovna took him in.

In 1970, Abramovich and his grandmother moved to Ukhta to live with his father’s brother, Leyb Nakhimovich.

In 1973, Abramovich went to first grade at Ukhta School No. 2.

In 1974, Abramovich and his grandmother moved in with his second uncle Abram Nakhimovich in Moscow. Abramovich studied at School No. 232, which stressed the performing arts. After graduating from school and botching his university studies, he moved to his relatives in Komi.

In 1984, Abramovich went to the army (artillery regiment in Kirach in the Vladimirsk region).

In December 1987, Abramovich married Olga Yurevna Lysova.

In October 1991, Abramovich married a second time to stewardess Irina Vyacheslavovna Maladina.

From 1991-1993, Abramovich was the director of the Moscow firm AVK. The firm handled commercial and intermediary activities, including reselling oil products.

In 1992, Abramovich became the central figure in a criminal case for stealing government property.

What happened: As part of their intermediary activities, AVEKS-Komi sent a train with 55 cisterns of diesel (worth 3.8 million rubles) from the Ukhtinsk Oil Production Factory. Abramovich met the train in Moscow and resent the shipment to the Kaliningrad military base using a fake agreement, but the oil products arrived in Riga.

In June 1992, Abramovich was arrested in Case No. 79067 for the large-scale theft of state property. He actively cooperated with the investigation. The Ukhtinsk Oil Production Factory was compensated for the loss by the diesel’s buyer — the Latvian-U.S. Chikora International. The case was closed.

In 1993, Abramovich founded Mekong. He began selling oil from Noyabrsk. He met Boris Berezovsky.

Together with Berezovsky, the future oligarch founded the offshore company Gibralter-registered Runicom Ltd. and 5 Western European subsidiaries. Abramovich headed the Moscow affiliate of the Swiss firm, Runicom S.A.

In August 1995, Sibneft was created by Boris Yeltsin’s presidential decree. It was rumored that Abramovich was the chief of the organization with Berezovsky promoting the business at higher circles.

In May 1998, Abramovich and Berezovsky had their first conflict. Experts say the reason for the disagreement was Berezovsky’s interest to merge with Yukos. Berezovsky thought he would gain political benefits from the move, while Abramovich insisted on putting business first. He tried to purchase Sibneft from Berezovsky.

The second serious conflict was over Abramovich’s attempt to replace Berezovsky’s figure in the Presidential Administration.

In December 1999, Abramovich won the State Duma elections in the Chukotka Single Member Constituency District No. 223 with 59.78 percent of the votes. He worked in Moscow at the Committee for North and Far East Issues.

In 2000, Abramovich graduated from the Moscow State Judicial Academy. At the year’s end, he won the Chukotka gubernatorial elections with 90 percent of the votes. In January 2001, he gave up his deputy’s mandate to head the region.

Abramovich sent clothes, food and medicine to Chukotka using his own finances ($18 million, he says). Thanks to Abramovich, 3,000 residents had the chance to vacation on the Black Sea.

Abramovich’s idyllic efforts to support the region were interrupted when the General Prosecutor’s Office called him in for an interrogation. A criminal case was launched regarding the Accounts Chamber of the Russian Federation’s act to privatize Sibneft.

At long last, their conclusion was read — the company had been sold for pennies. The auditors were also surprised why Abramovich had received such enormous tax privileges — twice more than the federal norm. But it turned out everything was legal. The majority of the employees were handicapped.

In late 2000, Abramovich bought the Berezovsky’s controlling share in ORT. In the summer of 2001, he sold the stake to the state-owned Sberbank. He then purchased shares in Aeroflot — part of the Russian-Belarusian company Slavneft. He became one of the world’s richest men estimated at $1.4 billion.

In the summer of 2003, Abramovich bought a bankrupt English football club, Chelsea. He covered the team’s debt his first week on the job, and quickly purchased a number of international stars.

In 2004, UK media became interested in Abramovich. BBC shot a documentary about the Russian oligarch. The publisher Harper Collins Willow released the book, “Abramovich: The Billionaire from Nowhere.”

In 2005 and 2006, Chelsea became England’s football champion for the first time in 50 years.

All these years, Abramovich was buying and selling… He was subject to constant checks and accusations, and forced to make numerous payments and compensation.

In the summer of 2005, Berezovsky announced that he was taking Abramovich to court. He said Abramovich had forced him to sell his shares in Russia at a lower price, threatening the state would seize them if he refused. In 2000-2003, Berezovsky sold 50 percent of Sibneft to Abramovich for $1.3 billion and 49 percent of ORT for $150-170 million. In 2003-2004, he sold 25 percent of Russian Aluminum to Abramovich for approximately $500 million.

In October 2007, Berezovsky tried to hand Abramovich a notice of appointment when he stumbled upon him at a London boutique. Berezovsky extended a folder towards Abramovich, but the latter held his hands behind his back. The documents fell onto the floor. According to British law, a notice of appointment must be handed over in front of witnesses.

Berezovsky says he has the following issues with Abramovich: ORT, Sibneft and Russian Aluminum. He says Abramovich stole his legal business through blackmail and other illegal proceedings. He estimates the financial loss at 5 billion pounds.

In 2005, contrary to rumor, Abramovich didn’t plan to continue his gubernatorial duties a second term. Bu the oligarch was again appointed by parliament to head Chukotka.

In December 2006, Abramovich asked the president to relieve him of his gubernatorial duties. The head of state refused.

What does Abramovich own?

In early 2006, Abramovich was the 11th richest man in the world, and Russia’s richest man worth $18.2 billion. He holds an honorable 2nd place among Britain’s richest men at 10.8 billion pounds.

Property:

Boeing 737 and Boeing 767

Two helicopters

Yachts (one of the largest, most expensive in the world) “Le Gran Bleu”, “Pelarus” (equipped with a missile system and mini-submarine) and “Project 790.”

Abramovich gave “Le Gran Bleu” away as a gift. But in March 2008, reports surfaced that the oligarch is building what will be the world’s second largest yacht at a German dock.

Abramovich purchased numerous land and homes in London and throughout the world.

In March 2006, Abramovich’s partners registered their investment firm Millhouse Capital in Russia. The firm planned to manage investments in Russian industries. In July 2006, Millhouse purchase 60 percent of the Courier publishing house that specializes the alcohol industry.

On June 13, 2007, it was reported that Millhouse Capital purchased a gold mine in Chukotka and later in the Magadansk region. READ MORE

Dmitriy Medvedev’s former classmate tells all

Zhanna Eylinen (formerly Popova) was born and raised in Leningrad where she went to school with Dmitriy Medvedev. Today Eylinen resides in Estonia

“Dima had integrity from childhood”

KP: Zhanna, we noticed that you and another girl were closest to Dmitriy Medvedev on this school photo. Did you two have a special or maybe even romantic relationship when you were growing up?

Zhanna: Oh no, that’s just a coincidence. The photo is actually a montage. There were more girls than boys in our class. So when they made the class album they usually put two girls next to each boy. Irina Ostratova and I wound up next to Dima Medvedev. Let me stress it’s only a coincidence.

KP: Could you tell us what school you graduated from? We’d also like to know what Dima Medvedev was like in his school years. How well did he study and what were his hobbies?

Zhanna: I only studied with Dima two years — in 9th and 10th grade at School 305 in the Fruzensk district in Leningrad. It was the only school that taught French in the district. So I can only speak about the years when we were together in one class. Dima Medvedev was a very independent young man. He was disciplined and orderly. He took his studies seriously and was a wonderful student. He was also an athlete. You could tell that he knew what he wanted from life. I mean, all of us knew Dima was going to study at the law faculty at the university. His family also had a strong influence on him. His mother was Russian language and literature teacher and his father taught at the university. As far as I know Dima wanted to be a teacher or lawyer ever since he was a kid.

KP: What kind of friend was he?

Zhanna: First I’d like to say that we just had a wonderful class. We talked a lot after our lessons, met up and went on hikes and excursions. Our class director Irina Ivanovna paid for everyone. Dima was always a kindhearted person. He always helped you out when you needed him to. Generally speaking, he was just easy to talk to…

KP: A lot of girls probably had their eye on him…

Zhanna: Yes, that’s true. A lot of girls wanted to date him. But Dima dated a girl named Sveta in another class. They had been friends since first grade. Svetlana later became his wife. We all saw them walking together and going home after school hand-in-hand.

KP: We’re getting a painfully positive picture here. You have to agree that at any school kids will be kids. In addition to studies you also have a lot of free time, personal relationships, beer outings and even fights…

Zhanna: Well, I studied with Dima during out last years at school. And we were all already fairly adult people. We never ever drank beer together. I don’t know. Maybe the boys drank when they were together, but never with us. We all knew that we needed to continue on with our studies, so no one did anything stupid out of idleness. And there were never any fights. And in terms of Dima, he was always so good-looking in his leather jacket with his folder under his arm. He was calm, cultured and reserved.

KP: What about love stories?

Zhanna: I already said that he dated Sveta. And that’s why Dima Medvedev wasn’t involved in any romantic dramas in our class. He spent his free time playing sports. Dima was also serious about music. He loved listening to rock and roll and jazz. He actually still collects original disks and is proud of his musical library.

KP: When some people leave school they hardly remember their classmates later in life. Especially those who go on to lead rich, busy lives. What is Dmitriy Medvedev like in this regard?

Zhanna: Very worthy. Dima never forgot about his school even when he held high positions. Not long ago I was at the school and saw how much everything has changed. I know that the school now has a great gym and modern computer lab thanks to his assistance. And there’s also a great stadium now right by the school. When our class met last year, Dima said it’s an immense pleasure to be with us.

Genuine friendship

KP: So your classmates still find the chance to meet like before?

Zhanna: Of course. But we don’t all meet that often. We last met in 2007 when we celebrated our 25th reunion. And before that we met for our 20th reunion. Dima Medvedev was actually the impetus for our meeting last year. His wife Svetlana organized the evening. A lot of people — 24 of 30 invitees. What’s really interesting is that almost all our class stayed to live and work in Saint Petersburg. Only one of our girls went to the U.S. and I went to Estonia. Surprisingly, nearly everyone became successful — Medvedev aside. He was spectacular and always knew what he wanted. But who would of thought that even our poorest students would have tremendous success later in life.

KP: Could you give us some examples about what your classmates accomplished?

Zhanna: One of our boys is the director of a large company in Saint Petersburg. Another owns a bread factory. Oleg Ivanov has his own photo gallery. He was always interested in photography. From a very young age he just loved photos. One of our girls has a restaurant. And everyone still helps each other out. If someone needs something, we always have people to turn to… Take Adelina, for example, who has the restaurant. She really wanted to get involved in the restaurant business, but she didn’t have the money or business connections. So our Saint Petersburg boys, some of whom have become businessmen, helped her out. Most of our classmates became successful later in life. I think I was quite successful, too.

KP: Does anyone maintain contact with Medvedev or work on his team?

Zhanna: Yes. Evgeniy Arkhipov, for instance, who was Dima’s friend at school. Today they even work together. It’s really great to see Dima hasn’t put on airs. When we met last year, I was so surprised by how relaxed he handled himself even though he was vice prime minister at the time. READ MORE

What to expect from Prime Minister Putin’s government?

After forming only one month ago on Monday, May 12, Prime Minister Vladimir Putin’s Cabinet of Ministers is still in its infancy. But unlike a child, the state has no time to be weaned. Immediately after its inception, the Cabinet of Ministers faced the myriad problems of a sprawling Russia.

What do the new state’s first steps tell us? What should be expected of Putin’s government? KP discussed these questions with renowned Russian political scientists.

Movable feast

Last December when Putin’s future role as prime minister was announced, he asked then-head of state Viktor Zubkov to structure the job so that his “arrival to the post of prime minister would be cause for celebration.” It should be noted, though, that there was quite a bit of anxiety despite the jovial atmosphere. The ministers had no idea who would remain in office until almost Putin’s first day in the White House. Spectators may safely assume that some officials learned their fate only that Sunday evening.

The heavy workload began on day one. Although the ministers might remember previous governments as “good times,” they will look back on Putin’s term as head of state differently. Before that Monday’s presidium, the vice ministers and ministers lugged around massive 20-centimeter thick folders and voluminous documents and discussed Putin’s arrival to the post. The faces were serious and concerned. In a word the officials were already working away.

Not all the White House department directors have been appointed just yet. And the authority has not been divided among the ministries. A handful of new arrivals to the government are also expected and the situation may continue as such until autumn. But the organizational work is progressing without halting manufacturing. The ministers are laboring over their tables, charts and figures trying to combine their economic dreams with reality. However, Putin is not always satisfied with the White House’s creative thinkers. At one presidium, he glanced at the presented prognoses and remarked: “I looked at the figures and for some reason they do not smell of innovative development.” Minister Elvira Nabiullina immediately headed off to search for new resources.

End in-fighting

Even on weekends, the White House officials are toiling away. As one of the civil servants said, Putin has set a tough rhythm and hopes to eradicate bureaucratic tenacity. For instance, when Putin spoke at a recent presidium about lowering taxes, his report as prepared by his assistants mentioned that the state must introduce amendments to the State Duma soon. But when Putin read the report he disagreed and said that the amendments should be introduced within a week. And they were.

But the government is not just equipped with a tough prime minister. There is also his First Deputy Igor Shuvalov. The White House officials fondly remember the disciplined manner in which he ran the ship during his time as chief of staff years ago.

“Of course, Putin is setting the goal to make the state’s work more dynamic,” said Director of the Institute of Strategic Studies and Analysis Vagif Guseinov. “Putin understands the White House’s problems well — bureaucratic delays, in-fighting among civil servants, if you remember Defense Minister Sergery Sokolov and Federal Culture Agency Director Mikhail Shvydkov (removed from their posts after Putin’s arrival)… But these are only the incidents which came to light. How many conflicts were there behind the scenes?”

“The state is looking for its path,” said political scientist and PR-3000 Director Stanislav Radkevich. “It’s already known that a well-defined socially oriented policy and tax indulgences have been declared. But here’s the question — will offering benefits provide a new impulse for inflation, which is in essence a hidden tax on the population that goes unwritten in legislation?”

“It is obvious that the Cabinet of Ministers wants to execute the so-called Livshchits system (ed. sharing with the people)… Social expenditures have been announced,” said Nikkolo M Strategic and Analytical Director Mikhail Afanasev. “But some of the government’s steps cannot be judged unequivocally. For example, the appointment of Putin’s inner circle as vice prime ministers — how effective will they be? Is this just handing out earrings to all one’s sisters?”

“All the staffing was done appropriately,” said Guseinov. “The people close to Putin have remained in the Kremlin and individuals close to Medvedev have come to the White House. The prime minister and president have sorted their people in different teams and established a system of interdependence. This is insurance against conflicts and confrontation. Shuvalov is both Putin’s and Medvedev’s man. And another important figure in the control mechanism Chief of Staff Sergey Sobyanin is an effective manager and non-conflicting person. The state has liberal figures and those loyal to the state. It is good when an orchestra has different voices — not all trumpeters for example.”

Why an ambassador for the White House?

As soon as Prime Minister Putin went to Paris and started speaking about foreign policy he was heavily criticized. He is usurping presidential authority, they said. But it would seem strange indeed should Putin have suddenly lost all interest in international affairs. It was Putin who changed the world’s attitude towards Russia from one of neglect to respect. Putin’s proactive nature in the country’s foreign relations does not hinder President Medvedev. Take his tough speech in Berlin. In many ways Medvedev’s stance follows the course set by his predecessor.

“I feel a bit sorry for Lavrov,” said Radkevich. “Either the prime minister or president is doing his job… And Lavrov is a top professional.”

But it is unlikely that Foreign Minister Sergey Lavrov will be left twiddling his thumbs. Ultimately, the preparatory work that he puts in, which often goes unseen by the public, ensures that Medvedev and Putin are able to make their colorful speeches in the West. It is also difficult to talk about resentment in world politics. In almost any nation, the country’s leading figures make the strategic speeches that define the state’s foreign policy.

Speaking about professionals… Recently Russia’s Ambassador to the U.S. Yury Ushakov became Sobyanin’s deputy. They say that the U.S. is in shock. It seems almost impossible to pressure Ushakov. He firmly defends Russia’s interests without considering U.S. authority or demands. Here is a short segment from his article published in the Los Angeles Times last year: “We will not allow anyone to define our domestic and foreign policy. We find the point of view upheld by some officials in Washington D.C. to be insulting that Russia can be used when needed and then shoved to the side and abused when the country does not benefit U.S. interests.”

Ushakov’s appointment to the state is symbolic. The move means Russia will continue to advance its interests on the international area. Prime Minister Putin will allocate serious attention to this issue.

Tackling inflation

Of course Putin and his team know that today curtailing inflation is vitally important and a priority issue.

“It is clear that the Cabinet of Ministers wants to tackle inflation, but they are using what seems to me to be a unilateral approach at the moment — reducing the money passing through the banking system,” said political scientist Mikhail Afanasev. “Experts say that the economy has overheated, but this is doubtful. Inflation must be fought through economic development and not limiting funds.”

“Competition and a viable market are necessary to conquer inflation. We have neither at the moment,” said Economics Professor and author of “Russian with Putin after 2008” Yury Boryan. “Look, they decided to cut down on U.S. chicken imports and said that our manufacturers will earn instead. But who knows that this is what will happen? I think our manufacturers will simply raise their prices. The Anti-Monopoly Committee is underfilling its role. This is evident by the prices on gasoline. Costs will decrease only in a competitive market.”

Professor Boryan said that the ministers need to explain how their steps will affect everyday people. He added that in the Soviet era, the economic effect on each individual was always broken down and demonstrated.

“But how does our government function today?” he said. “If a project brings in money it is good and if it does not then it is bad. They go on and on about macroeconomic figures and the country’s prestige. But they do not say a word about what the project will specifically bring you and me. And that is exactly what the people need to know.” READ MORE