Coronavirus politics

Hello! This week our top story is about the power struggle that is causing delays to tough, new coronavirus restrictions. We also look at why ex-lawmaker Sergei Petrov was obliged to sell his top car dealership at a significant discount, and what happened when a top movie director told Putin to let the North Caucasus secede.

Coronavirus restrictions divide Russian political elite

Despite stubbornly high COVID-19 death rates and the emergence of the Omicron variant, the Russian authorities remain unwilling to introduce unpopular restrictions. The government has proposed several new laws that would make life difficult for the unvaccinated, but it’s not clear if they will ever be passed. The wrangling over the laws is the result of a power struggle among different groups of Russian officials who are attempting to find a way of containing coronavirus without harming President Vladimir Putin’s popularity.

What happened

The State Duma was due to consider Wednesday two new laws on restrictions for unvaccinated Russians — but it never happened. They were first put forward early last month and, under normal circumstances, would have been passed within a week. But one of the bills has been withdrawn, and the second will not be approved until at least mid-January.

• The first bill — on QR-codes in public places — has been the most controversial piece of legislation this year (we wrote more about it here). It does not impose any direct restrictions, instead giving regional governors the right to restrict access to public places for anyone who cannot produce a QR-code proving they have had a coronavirus vaccine. The second bill would stop people without QR-codes from buying tickets on flights, or inter-city trains.
• Both bills were drawn up by the government and their passage seemed to be a formality. But things went wrong immediately after their Nov. 12 presentation to parliament. First, the Duma announced it was sending the QR-code bills to regional parliaments for their approval. Although largely symbolic, this is a rarely used step that was last taken for the legislation on last year’s constitutional reform.
• A week later, Duma speaker Vyacheslav Volodin took another unusual step when he invited people to debate QR-codes on his Telegram channel, which he made publicly accessible for this purpose. In just one day his post attracted 300,000 comments and there are now over 800,000. A significant chunk of these were anti-QR-code comments left by bots, but nobody has totted up the exact numbers
• As the deadline for accepting the laws approached last week, we saw another plot twist. First Putin said Dec. 10 that discussions of the proposals should “proceed without rash decisions”. Three days later, Volodin announced the bill about QR-codes for transport would be temporarily withdrawn following “dialog with the government”. The bill about QR-codes in public places, however, was finally accepted for its first reading in Duma on Wednesday, but was immediately referred back to the regions for another month of discussion. This means the law cannot be enacted before mid-January, and will need to be re-written at least once more.

What does it mean?

As the Russian authorities seek to juggle two tasks — controlling the pandemic and preserving Putin’s popularity — COVID-19 restrictions have become something of a political football in a battle between different elite factions.

• Prime Minister Mikhail Mishustin and Deputy Prime Minister Tatiana Golikova are two of the leading supporters of stricter measures. Their support was described by The Bell’s sources and confirmed in reporting by media outlet Meduza (which has been designated a ‘foreign agent’ by the Russian authorities). During the first coronavirus wave, Mishustin, who became prime minister just two months before the pandemic, faded into the political background (governors were given responsibility for the unpopular restrictions). In effect, Russia’s coronavirus response was led by Moscow Mayor Sergei Sobyanin. However, as a result, Sobyanin’s relationship with Putin deteriorated. Now, Mishustin is coming to the fore.
• The main opposition to the QR-code laws likely came from Volodin (previously first deputy head of the presidential administration with responsibility for domestic politics). From day one, few doubted his offer to debate the plans on Telegram was designed to highlight public discontent. According to Meduza, influential Deputy Prime Minister Andrei Belousov is also opposed to the plans: he fears a negative impact on the economy.
• In the Kremlin, first deputy head of the presidential administration Sergei Kiriyenko (the successor to Volodin) was concerned that imposing QR-codes did not harm Putin’s popularity. As a result, he insisted that responsibility for the law be taken by the government and that Putin then announced mitigating measures, a source told The Bell. And so it came to pass — Putin earned political capital by announcing there will be no travel restrictions before New Year.

The Kremlin has every reason to be cautious about implementing coronavirus restrictions. According tо independent pollster Levada Center, 76 percent of Russians are opposed to QR-codes and 54 percent are against compulsory vaccination. And, despite the best efforts of state propaganda, 36 percent of Russians say they won’t have the jab (although this number is coming down — it used to be over 60 percent). A separate poll found that 24 percent of Russians were ready to take part in protests against coronavirus restrictions.

Why the world should care

Russia’s attempts to introduce coronavirus restrictions show how even an authoritarian regime is limited when it wants to impose something unpopular. When Russia raised the pension age in 2018, the authorities ignored widespread opposition and forced through the measures — for some reason, they are unwilling to do the same this time around.

Car dealership tycoon sells out in face of criminal case

Former opposition deputy Sergei Petrov sold his Rolf car dealership to a competitor last Monday amid a long-running criminal case. The value of the deal (likely between $300 million and $500 million) was far less than the real value of Russia’s largest car dealership.

• Rolf was sold to a competitor, Klyuchavto, the fourth largest car dealership on the Russian market with annual profits of $1.5 billion (compared to Rolf’s $3.5 billion). Multiple media reports suggested the company was sold at a discount due to on-going legal issues, with Forbes’ estimating the deal was worth up to $500 million and media outlet RBK’s reporting it was between $300 million and $400 million. When Petrov first put Rolf up for sale in 2019 he was seeking about $700 million.
• The wrangling over a sale began after Petrov was named as a suspect in a 2019 criminal case. In July of that year, law enforcement carried out searches in Rolf’s offices and the homes of its top managers — and it was announced that Petrov and several colleagues were suspected of withdrawing 4 billion rubles (about $55 million) from Russia. The subsequent criminal case hinged on claims that Rolf acquired real estate from its Cypriot partner company at a sum investigators believed was inflated. Lawyers who spoke to The Bell at the time described the case as absurd, commenting that — following this logic — any currency transaction was a crime.
• Petrov and most of Rolf’s senior management escaped jail because they were abroad at the moment when the police searches took place. Instead, they were arrested in absentia. For a long time, there were no further developments in the case, but the Prosecutor General filed claims last month for almost 12 billion rubles ($165 million) against Rolf and Petrov personally. The company’s accounts were frozen.
• Petrov has identified two possible motives for all this: it’s either an attempt to wrest control of his company by a rival, or revenge for his political activities — the billionaire was a State Duma deputy between 2007 and 2016 and an outspoken critic of the authorities. He voted against several Kremlin cause célèbre such as the ‘Dima Yakovlev law’, which banned U.S. citizens from adopting Russian children, and abstained from the 2014 vote on the annexation of Crimea.

Why the world should care

It’s much more likely that the legal action against Petrov is the result of a business conflict. But Petrov’s politics made him far more vulnerable in such a conflict than he would otherwise have been — ultimately, this meant he had to sell his business at a big discount.

Talk of North Caucasus secession angers Putin

Putin’s annual meeting last week with members of Russia’s Human Rights Council led to an unexpected conflict. Prominent movie director Alexander Sokurov, who is known for his personal ties to Putin, unexpectedly suggested the president think about “letting go” of republics in the North Caucasus that do not wish to be a part of Russia. Putin responded by scolding Sokurov. Chechen leader Ramzan Kadyrov also reacted with anger. When Sokurov began to receive threats, he was forced to publicly apologize.

• Sokurov told the Human Rights Council that Russia’s foreign policy was too expensive to hold onto regions that do not want to be a part of Russia. He also said that Russians were increasingly unwelcome in the largely-Muslim North Caucasus, adding: “Let’s release all those who no longer want to live in a single state with us. We wish them luck. We wish good fortune to all these Padishahs.”
• One of those to whom Sokurov was clearly referring was Kadyrov (earlier he had mentioned a territorial dispute between Chechnya and neighboring Ingushetia that led to Chechnya gaining land and Ingush protestors receiving long prison terms).
• The relationship between the federal authorities and the republics of the North Caucasus has long been complex. Broadly speaking, Moscow offers rich subsidies to these regions and turns a blind eye to how the local authorities rule their fiefdoms. In return, the republics guarantee good numbers for ruling party United Russia and Putin at the ballot box.
• Putin is almost always calm in public encounters — and his connection with Sokurov goes back more than 30 years. Unusually, however, Putin responded sharply to Sokurov’s remarks. “I’ve known you for a long time and I have great respect for you,” he told the director. “You always speak sincerely, but far from always accurately. There are 2,000 different claims to Russia’s territory. Don’t look for trouble, as we say. This is something that needs to be approached very seriously… Before speaking, it’s important to think carefully. Many things are best brought out in the open, but there are other times when it is best to keep quiet.”
• Kadyrov was first in the queue to take offense. On his Telegram channel he likened the director to a gossiping grannie. “Sokurov was too cowardly to mention my name but everyone knows who he is talking about. I’m not the president, I’m no padishah. I’m the head of the Republic of Chechnya,” Kadyrov wrote. He urged law enforcement to review Sokurov’s statement for evidence of extremism.
• After Kadyrov’s post, Sokurov began receiving threats. It would be very interesting to know whether there was any further communication between Sokurov, Kadyrov and the Kremlin — but, unfortunately, nothing of the kind was reported. The only public follow-up was when Sokurov sent Friday an open letter to the Human Rights Committee in which he apologized to his fellow council members. “My friends are warning me that my life is in danger. The only guarantee of my safety lies in the president’s ability to prevent this radical outcome,” Sokurov wrote.
• Public apologies to Kadyrov are nothing new in Russia: the Chechen leader’s entourage is always on the lookout for those who, in their opinion, have insulted Chechnya or the Caucasus. Sokurov did not formally address Kadyrov, but his letter was inevitably interpreted as a personal apology. Later, Putin’s press spokesman Dmitry Peskov said the director could rely on Putin’s protection, adding that “nothing had happened that required any kind of apology.”

Why the world should care

Every part of this story is revealing: both Putin’s reaction (crushing Chechen separatism and ‘rebuilding Russia’ after the 1990s are two pillars of his domestic image), and the way a conflict between Putin’s personal friend and the unpredictable Kadyrov was resolved.