Russia 110111 Basic Political Developments

Russia Lawyer Risks Jail in Investor Campaign Against Transneft

http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=a7.CqJqOEelI

By Henry Meyer and Jason Corcoran

Jan. 11 (Bloomberg) -- Alexey Navalny says he’s trying to do to executives in Russia what WikiLeaks founder Julian Assange is doing to politicians worldwide.

“He’s fighting non-transparent governments and I’m fighting non-transparent companies, as well as the non- transparent activities of Russian officials,” said Navalny, 34, a Moscow-based lawyer and shareholder in 20 Russian companies, including OAO Gazprom and OAO Rosneft, the world’s largest gas producer and Russia’s biggest oil company.

Russia, ranked by Transparency International as the world’s most corrupt major economy, is spawning its own brand of online whistle-blowing to expose graft.

Prime Minister Vladimir Putin called Dec. 30 for an investigation into allegations of a $4 billion fraud during construction of an oil pipeline across eastern Siberia involving OAO Transneft. The claims were published by Navalny, who also owns stock in the monopoly pipeline operator, on a website he set up to expose Russian government contracts.

“Investors are definitely behind Navalny in his effort to shine some transparency on state-run companies,” said Michael Kart, a managing partner at Moscow-based Marshall Spectrum Ltd., which oversees about $100 million. “He has very good sources of information who bring things to light.”

Internet Claims

As well as Navalny, Novaya Gazeta, the Moscow newspaper controlled by former Soviet leader Mikhail Gorbachev and billionaire Alexander Lebedev, said it joined forces on Dec. 22 with WikiLeaks to publish documents related to corruption. None have been released so far.

Entrepreneur Sergey Kolesnikovpublished details on the Internet about a $1 billion palace being constructed on the Black Sea that he says is for Putin’s use and is allegedly funded by Russian businessmen and state coffers. Dmitry Peskov, Putin’s spokesman, denied the claims.

“This has nothing to do with Putin,” Peskov said in a Dec. 29 interview. “There is no connection between him and the property and there never has been.”

Navalny started the Minority Shareholders Association in Moscow in 2008 to gain greater information for investors. He said he spent $20,000 buying shares in 10 companies in 2007. He now owns stock in 20, he said.

Russia slid to joint 154th among 178 countries in Berlin- based Transparency International’s 2010 Corruption Perceptions Index, along with Cambodia and Central African Republic.

President Dmitry Medvedev vowed to take tougher measures against corruption in his annual state-of-the nation address on Nov. 30. He proposed fining people found guilty of bribery by 100 times their illegal revenue.

Under Investigation

Navalny is being investigated for allegedly costing a state timber company more than 1 million rubles ($32,700) by organizing a money losing contract while advising the regional governor on corporate transparency.

“I think they’re trying to scare me,” Navalny said in a Dec. 15 phone interview from New Haven, Connecticut, as he prepared to return to Russia after six months as a world fellow at Yale University. He faces as many as five years in jail if charged and convicted of causing damage through fraud or abuse of trust.

Prosecutors opened the probe on Dec. 10. Three weeks earlier, Navalny published on his website what he said was a report by the state budget watchdog showing that officials at Transneft embezzled $4 billion while building a link to the Pacific Ocean that opened a year late in December 2009.

‘Fantasy’ World

The allegation, denied by the company and the Audit Chamber watchdog, made the front page of newspaper Vedomosti and prompted the speaker of the upper house of parliament, Sergei Mironov, to call for an inquiry into the project. Putin followed.

Igor Dyomin, a Transneft spokesman, said the company held an internal investigation when the current management took over in late 2007 and discovered “problems” with contractors that have now been resolved by introducing open tenders.

Navalny’s claims about the amount of cost overruns are “fantasy,” Dyomin said.

Vedomosti, the Russian venture between the Financial Times and Wall Street Journal, named Navalny its “Private Individual of the Year” in 2009 for his work in pressuring companies such as VTB Group, the country’s second-biggest bank, to disclose more about its operations to shareholders.

Navalny’s campaign and revelations may make it harder for the government to convince foreign investors to buy into its privatization program, said Gregory Klumov, chief investment officer at Moscow-based Everest Asset Management, which oversees about $300 million in Russian stocks.

Stake Sales

The government is seeking to raise at least 1 trillion rubles over the next three years selling stakes in companies, including VTB and larger rival OAO Sberbank.

Gazprom, which has a 15 percent weighting in the 30-stock Micex Index, trades at about 4.6 times estimated profit for 2010, or about one-third the ratio of PetroChina Co., China’s biggest energy company, data compiled by Bloomberg show. Transneft trades at about two times estimated earnings.

“Any money wasted is partly our money, so of course it is a concern,” said Mattias Westman, chief executive officer of London-based Prosperity Capital Management, which has about $4.5 billion invested in Russia. Prosperity’s holdings include shares in Gazprom and Transneft.

Putin said Navalny’s claims must be verified. The prime minister’s spokesman, Peskov, said the reported fraud at Transneft is “far away from any possible reality” and that the lawyer’s campaign “has nothing to do with the interests of minority shareholders or transparency at state companies.”

The criminal investigation into Navalny is “the business of our law enforcement agencies,” not politicians, Peskov said.

Navalny said few people in power have backed him in the case of Transneft, which carries more than 9 million barrels of oil a day, enough to meet China’s demand for the fuel.

“A lot of people in the government, especially in Medvedev’s entourage, are ready to fight corruption in general, but they are pretty reluctant to support me in this particular case,” Navalny said.

To contact the reporters on this story: Henry Meyer in Moscow at [e-mail] Corcoran at [e-mail]

To contact the editor responsible for this story: Tim Quinson at [e-mail]

Last Updated: January 10, 2011 16:01 EST

January 11, 2011 8:37
Oppositionist Kosyakin was released

http://www.interfax.ru/news.asp?id=172525

GOOGLE TRANSLATION


Moscow. January 11. INTERFAX.RU - opposition leader Constantine shoals, arrested for 10 days after participating in an unsanctioned rally on Triumph Square on December 31, was released, told interfax.ru representatives of the opposition movement, the Left Front.
At the exit from the remand Kosyakin met representatives of the opposition and journalists.
Detainees at Triumph Eduard Limonov and Boris Nemtsov remain in detention.
January 11, 2011 8:21
Gryzlov has declared its intention to United Russia's victory in the spring elections in 12 regions

http://www.interfax.ru/news.asp?id=172523

GOOGLE TRANSLATION


Moscow. January 11. INTERFAX.RU - "United Russia" in the upcoming March elections in 12 regions of Russia intends to confirm the status of the party a parliamentary majority.
"Elections are elections, the outcome is not predetermined. But we will only work for victory" - quoted on Monday the chairman of the Supreme Council of United Russia, Duma speaker Boris Gryzlov, the press service of the United Russia faction.
As noted by Boris Gryzlov, considering that at the end of the year will be elections to the Duma, the spring will be of particular importance for all political forces.
10 January 2011 Last updated at 23:36 GMT