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The Moscow Times, September 1, 2003

Deputy Goes After Kokh, For a Day

By Francesca Mereu and Valeria Korchagina

A State Duma deputy from Yabloko briefly put his party in the unlikely position of pushing for the revision of privatization results last week by filing a formal request to the Prosecutor General's Office to investigate the privatization of Norilsk Nickel, a core enterprise of Vladimir Potanin's Interros empire.

In a letter filed Thursday, Alexei Melnikov requested that a criminal investigation be reopened against Alfred Kokh, the head of the State Property Committee when Norilsk Nickel was privatized in 1995 and currently the campaign manager for the Union of Right Forces, a party that competes with Yabloko for the support of liberally minded voters.

Even though Melnikov withdrew his request Friday -- the same day it made the front page of the Vedomosti business daily -- observers and party colleagues were left wondering what prompted the attack.

Melnikov has been one of the fiercest defenders of key Yukos shareholder Platon Lebedev, who was arrested in July over an old privatization case. Yukos CEO Mikhail Khodorkovsky, seen as the real target of the case against Lebedev, has funded Yabloko.

Melnikov explained his action by saying he was responding to Kokh's declaration in early August that as head of the election campaign for the Union of Right Forces, or SPS, he planned a determined effort to try to steal votes from Yabloko.

"It was my personal initiative. I did it without a previous agreement with the Yabloko leadership," Melnikov said Friday in an interview.

Melnikov said he withdrew his request after "friends" called and persuaded him it was a mistake. The initiative would have been understood as Yabloko's support for revisiting the privatizations, he said.

"Just now before the elections I don't want to ruin my party's reputation," Melnikov said. He did not elaborate on who the "friends" were.

A Yabloko official, who asked not to be named, blamed the incident on Melnikov's tendency to take everything to heart. He is a "sensitive person" and was trying to do what is best for the party, the official said.

Yabloko leader Gregory Yavlinsky's spokeswoman, Yevgenia Dillendorf, said the party learned about Melnikov's initiative from Vedomosti on Friday.

A 38 percent stake in Norilsk Nickel ended up in the hands of Potanin's Uneximbank in a loans-for-shares auction in 1995 for $170 million, a sum $140 million short of the state's initial asking price. The privatization was completed in 1997. The enterprise, in which Interros now owns 63 percent, currently has a capitalization of $8.1 billion and in 2002 its net profit was $584 million with total revenues of $3 billion.

Details of the Norilsk Nickel privatization, including Kokh's role, had already been scrutinized by prosecutors. In November 1999, the Moscow prosecutor's office opened a criminal case claiming that Kokh had exceeded his authority and caused losses to the state in the privatization of the plant. But the case was later closed in an amnesty.

Further attempts to dispute the Norilsk Nickel privatization were also made by the Audit Chamber, the State Duma's budgetary watchdog. Finally in 2000, a deputy prosecutor general sent a letter to Potanin giving him the choice of coming up with the $140 million or facing charges. Interros paid the money.

Melnikov, who said he has monitored the situation since 1996, said he just recently obtained copies of internal Uneximbank memos indicating that on Sept. 1, 1997, a special expense account was opened for Kokh with a spending limit of $6.5 million.

"This is direct evidence that Kokh, in a mercenary-minded way, acted in the interests of Uneximbank," Melnikov was quoted in Vedomosti as saying.

Political analyst Andrei Piontkovsky said he was puzzled by Melnikov's actions. "It really was rather stupid, and if anything gives extra points to Yabloko's competitors," Piontkovsky said. "But the fact that the letter was recalled the next day just proves that whatever Melnikov intended, it in no way reflected the position of the party."

In Friday's interview, Melnikov complained of too much "black PR" against his party.

At the beginning of August, a new movement called "Yabloko Without Yavlinsky" emerged. The founders of the movement stated that Yavlinsky's desire for power was costing Yabloko support.

Yabloko deputy leader Sergei Mitrokhin accused SPS of being behind the movement.

Vitaly Yevstigneyev, a spokesman for Irina Khakamada, an SPS leader, said SPS would "not comment on this, since SPS is not involved in any PR stunts against Yabloko."

Yevgeny Volk, the head of the Heritage Foundation, said further attacks against one another by people associated with the liberal parties can be expected, even if they are likely to backfire.

"Whether it [Melnikov's request] was a sanctioned or unsanctioned step, it was a trial balloon," Volk said. "And given the fact that polls show that large parts of the population are in favor of redistributing wealth, coupled with a traditionally low awareness of the boomerang effect in Russia, more similar actions can be expected."

 

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The Moscow Times, September 1, 2003

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