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    Russian Press - Behind the Headlines, September 25

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    Berezovsky Backs Off From Suing Abramovich Over Sibneft, Rusal Shares/ Putin Demands Increasing Three-Year Budget / United Russia Gears Up for Ratings War in Regional Elections

    Moskovsky Komsomolets

    Berezovsky Backs Off From Suing Abramovich Over Sibneft, Rusal Shares

    Russian businessman Boris Berezovsky, currently residing in Britain, said he will not contest the most recent court ruling which declined his lawsuit against Chelsea Club owner Roman Abramovich.

    “There will be no appeal. This is a British court decision. I congratulated Roman Abramovich and his team. They won,” Berezovsky told the BBC Russian Service.

    Berezovsky said he sees no legal grounds for an appeal. “My personal attitude is a different story,” he added.

    In late August, a London court ruled against his lawsuit for compensation for the assets he was allegedly forced to sell to Abramovich between 2000 and 2003, shortly after his flight from prosecution in Russia. He said after the hearing that the decision undermined his confidence in British justice and that he will discuss the possibility of an appeal with his attorneys.

    The disputed assets include some 43 percent of Sibneft stock and a stake in Rusal, an aluminum producer. According to Berezovsky, Abramovich intimidated him and his business partner Badri Patarkatsishvili into selling the assets far below their market price. Abramovich allegedly threatened them with expropriation of the shares in favor of the government. Berezovsky sought $5.5 billion in damages.

    According to media reports, the Russian oligarch, who was once ranked highly on the Forbes list, is no longer a billionaire. His net worth has plummeted to no more than $250 million after his recent divorce. If these rumors are true, his legal expenses will leave him with practically nothing. He has already put his Surrey house and his vintage Rolls-Royce worth $1 million on the market.


    Nezavisimaya Gazeta

    United Russia Gears Up for Ratings War in Regional Elections

    Khimki mayoral candidate Yevgenia Chirikov filed a complaint this week against United Russia candidate Oleg Shakhov. Shakhov may remain unfazed however thanks to his recent approval ratings, which, according to the All-Russia Public Opinion Research Center (VTsIOM), suddenly quadrupled in ten days, reaching 29 percent. Analysts see this as manipulation to prepare the community for a winning pro-government candidate.

    VTsIOM reported on September 7 that Oleg Shakhov’s approval ratings were 7 percent, meaning 7 percent of the local population deemed him the best mayoral candidate. Yevgenia Chirikova was not far behind at 6 percent. Ten days later the situation changed radically – VTsIOM now reports that 29 percent of the electorate are ready to vote for Shakhov, while Chirikova remains at 6 percent.

    VTsIOM also reported that Shakhov enjoys an unprecedented level of confidence in Khimki – 42 percent of respondents trust him while 24 percent view Chirikova negatively.

    The situation from the other camp is even more intriguing. In early September, Ekho Moskvy radio conducted a poll in which 32 percent of voters were ready to vote for Chirikova and only 14 percent for Shakhov.

    Also noteworthy is the fact that Oleg Mitvol, the former prefect of the Northern Administrative Area of Moscow, is in second place in both surveys. According to polls, 24 percent to 27 percent of Khimki residents are ready to  vote for Mitvol. 

    Lev Gudkov, Director General of the Levada Center, takes these polls with a grain of salt. He explained that high ratings and sharp increases are only possible in two cases – with very powerful propaganda and no other source of information or if  an atmosphere of extreme crisis and disaster is created, and the person in question serves as a savior and leader.”

    Chirikova explained that the “Shakhov ratings” rose two days after she posted information compromising the local administration on her LiveJournal blog. “You cannot achieve such ratings with zero popularity,” she says.

    Yabloko leader Sergei Mitrokhin also questioned the survey.

    “Such fantastic growth is simply impossible,” he said, adding that working on election campaigns has weaned him from trusting polls. “I know what their selection process is and how they work.”

    Alexei Makarkin, Deputy Director General of the Center for Political Technologies, said this was a classic “ratings war.” “Although it usually involves smaller PR companies,” he added. 

    “Shakhov is not a charismatic person and is little-known in Khimki,” Makarkin added. “I don’t remember a rating growing so much in such a short time.”

    Makarkin is also skeptical about Chirikova’s 32 percent rating, but added that  Chirikova’s victory would be undesirable for the authorities.

    “Since the elections will be held in one round, Chirikova’s competitors will effectively rob her of protest voters. Especially since Mitvol confidently holds second place.”

    According to pollsters, United Russia needs high ratings to justify its election victory amid accusations of election fraud. Good ratings can cast doubt on any competitors’ claims.



    Putin Demands Increasing Three-Year Budget

    President Vladimir Putin, who criticized the government for disregarding his instructions when drafting the budget, has ordered Prime Minister Dmitry Medvedev to increase the budget by 250 billion rubles ($8 billion).

    According to sources in the presidential administration, several hours before the final reading of the 2013-2015 budget at the government building on September 19, Putin instructed Medvedev to increase the budget by 250.4 billion rubles, to be allocated to the Russian Direct Investment Fund (RDIF) until 2015. During the preliminary hearing of the budget the day before, the president criticized the ministers of labor, education and regional development for failing to act in accordance with his instructions.

    Putin has issued an executive order to increase the market value of the RDIF by 62.6 billion rubles ($2 billion) annually until 2015. The implementation of this order is to be monitored by Finance Minister Anton Siluanov and Economic Development Minister Andrei Belousov. The document specifies two ways to increase the RDIF’s value: “federal budget subsidies in the form of property contributions” to Vnesheconombank (VEB) worth 62.6 billion rubles annually for the acquisition of RDIF shares, or “depositing the said amount from National Wealth Fund resources with Vnesheconombank for the designated purposes.”

    The RDIF was established in the fall of 2011 on instructions from Vladimir Putin, then prime minister, for the purpose of “investing in the leading companies of the most rapidly growing and promising economic sectors.” In September 2011, Putin said the fund’s value would increase to $10 billion within five years. The first allocations were provided later that year in the form of budget subsidies for VEB, but then the drafting of the 2012 budget and the presidential election campaign overshadowed that and other commitments.

    Kommersant’s sources say that the RDIF is ready to invest these allocations in 2013 and the first quarter of 2014 in 12 promising sectors, primarily infrastructure, transport and logistics (9.4 billion rubles), agriculture (7.8 billion rubles), as well as mechanical engineering and instrument production (1.6 billion rubles).

    The initial draft of the 2013-2015 budget did not envisage any allocations for the RDIF and the Finance Ministry did not add this provision in time for the government meeting on September 20.

    According to sources, the provision concerning the RDIF and one more similar presidential instruction will be added to the draft budget which the Finance Ministry will forward to the government today. The Kremlin and government officials could not say which budget items would be adjusted to make room for the allocation of the required sum before the document is submitted to the State Duma.


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