Russia 111206 Basic Political Developments

As Putin Forces Hold On To Power, Evidence Mounts Of Pre-Election Press Crackdown

By Alexander Zhuravlev

The day before, he had received notification that his site violated media regulations in its coverage of the Duma elections. “It turned out that the reason for the summons were two letters, one signed by the head of the Central Executive Committee, Vladimir Churov, and another by the deputy attorney general, Alexander Buksman,” Katov said.

The main claim was that gazeta.ru was publishing information about violations the United Russia party allegedly committed during the pre-election period. “The committee did not recognise these violations, and therefore they considered the publication of this information as ‘illegal agitation,’” Katov said.

“Surprisingly, no concrete examples of our violations were presented; they simply told us that we were behaving badly,” the editor added. “They wanted us to talk about United Russia as one would about the dead, to say only good things. In that way, the media was pressured.”

But Katov stressed that despite the warnings he received: “Gazeta.ru will stick to its editorial policy.”

Roskomnadzor has refused to comment. Meanwhile, Prime Minister Vladimir Putin and President Dmitry Medvedev's United Russia party held on to parliamentary power in the Duma elections, though its popularity has slipped considerably.

Shortly after the voting ended, the website of the radio station Echo Moscow crashed. Editor-in-chief Alexei Venedictov said the site was victim of a DOS attack and was offline from 6.40 a.m. The station has already appealed to the Central Executive Committee, and Venedictov will make a complaint to the Prosecutor General.

“We directly link the attack on the Echo Moscow site with the information about the State Duma elections, and in particular, details of election violations which were published on our site,” said Venedictov. “The attack on the site on election day was obviously linked with attempts to disrupt publication of information about the violations.”

The chairman of Echo Moscow’s board of directors, Nikolai Senkevich, said: “I think that any hacker attack on any resource that leads to financial losses is tantamount to theft.”

The websites Live Journal, slon.ru, as well as the sites of the newspaper “Big City” and the New Times also stopped working. The day before the elections, the website of Kommersant was subject to a hacker attack, resulting in a 35% drop in visitors.

The head of Kommersant’s legal division, Georgi Ivanov, said the paper would file a complaint, but is not holding its breath over any investigation. “Whenever there is a hacker attack, we always make a complaint, but it is simply an expression of our position, a symbolic gesture. None of our complaints have ever led to anything,” he said. “Honestly, I don’t think I have heard of any case of DOS attacks being successfully investigated."

Also affected was the website of the country’s only independent election observer, Golos, which was targeted over several days and even accused of treason for accepting western financial grants. The watchdog’s director, Lilia Shibanova, was detained at a Moscow airport for 12 hours and her laptop seized while a court fined Golos $1,000 for violating a law that prohibits publication of election opinion research five days before a vote.

Back in April, Russian President Dmitry Medvedev discussed hacker attacks with the editors from the mass media and pledged to find experts that could investigate them. But Novaya Gazyeta editor-in-chief Dmitry Muratov doubted this would happen as this would effectively mean that “the group that carries out attack, will investigate them.”

Read more from Kommersant in Russian

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Investors Upbeat About New Duma

By Anatoly Medetsky

United Russia won enough seats to usher government-sponsored bills through the State Duma, but the decline in popular support for the ruling party as revealed by Sunday's elections will likely have consequences that reach beyond law making.

Led by President Dmitry Medvedev and Prime Minister Vladimir Putin, the party will occupy 238 seats in the new Duma, while a bill requires at least 226 votes to pass.

The loosening of the tight grip that United Russia had on the previous Duma, where it counted 315 deputies, could trigger earnest liberal reforms and a few showcases in the tepid fight on corruption. This could allow the government to win over voters who are not placated by the state's increased social spending.

"Its good news because it will hopefully give the message to the leadership that it will have to change to continue to be successful," said Jochen Wermuth, chief investment officer at Wermuth Asset Management.

"To not lose these people who want to modernize the country, the Russian authorities will have to start implementing reforms that will make them happy — independent judges, rule of law, fighting corruption," Wermuth said. "There could be a war on corruption — not with words but actions — for example, putting in prison high-level people who have taken or given bribes at the high level. That would be a chance to impress people."

Some investment banks and asset managers predicted that the swollen ranks of the leftist forces in the Duma could prompt the government to undermine their support by expanding social spending. The Duma election results could "induce extra populist steps on the part of the country's leadership to move the needle of public opinion" ahead of the presidential election March 4 where Putin will run, VTB Capital said in a note to investors Monday.

Tim Ash, head of emerging markets research at Royal Bank of Scotland in London, said: "The natural instinct for Putin will be to pump more money into the economy," Bloomberg reported.

Viktor Szabo, who helps manage about $7 billion in emerging market debt, including Russia's ruble eurobond, at Aberdeen Asset Management in London, also agreed about the prospect of increased spending, saying it could stoke inflation.

But the most plausible interpretation of the success at the polls for the Communist Party and A Just Russia is venting frustration with United Russia, both Alfa Bank and Wermuth said.

"We do not see this necessarily as nostalgia for Soviet times, but rather as an indication of protest voting," Alfa Bank chief economist Natalia Orlova and analyst Dmitry Dolgin wrote in a note to investors Monday. "Supporting the Communists as a prominent second party was the most obvious way to vote against United Russia in the absence of a legal means to express this view."

Therefore, the government should think twice before dipping into the budget to spend more in response, an option that would strain state finances further, Wermuth said.

"I have some faith that the Russian government is professional enough to understand that they have already overcommitted themselves in the 2012 budget and there's no room for more social expenditures," he said.

In terms of Duma operations, United Russia's majority will provide enough support for Putin as the likely next president and Medvedev as the likely next prime minister.

"It will allow us to work calmly and rhythmically," Putin said at a Presidium meeting Monday.

United Russia's faction will still be able on its own to confirm prime ministers, express votes of no confidence to the Cabinet, appoint and remove Central Bank chairpeople and pass any legislation — though it doesn't have enough seats to unilaterally change the Constitution.

"They still have a chance to pass through the parliament all the required reforms," Wermuth said. "United Russia can still rubber-stamp anything. It's positive in a sense because if they are serious about reforms they can make a difference."

Read more: http://www.themoscowtimes.com/business/article/investors-upbeat-about-new-duma/449312.html#ixzz1fjTyS0St