Targeting regional officials
With regard to regional elites, deserving of particular attention is the case
against the influential North Ossetian clan headed by the republic’s former prime minister, as well as widespread arrests in Rostov Region as part of cases against three “organized criminal groups” – said to be in the courts, the Ministry of Internal Affairs and the traffic police (we wrote about them in our April 17 Bulletin
– now they are headed to court).
In 2021, the Kremlin installed replaced the local head of North Ossetia with the decisive but not very successful Admiral Sergei Menyailo, who, following the annexation of Crimea, was appointed governor of Sevastopol and later the envoy to the Siberian Federal District. Menyailo has Ossetian roots and back in 2010 had been considered as a candidate to head the republic. When he was appointed in 2021, a large-scale purge began in the region. Three former ministers and former Prime Minister Sergei Takoev were detained on charges of group-organized embezzlement “on an especially large scale.”
All of them, following the previous change of power in North Ossetia in 2015, had gone into business but retained political ambitions. Along with them, several business leaders were also arrested, all charged
with “providing for the conclusion of a state contract to acquire plant property at an inflated price in the amount of RUB 180 million.”
Last week, the trial in the “North Ossetian case” began, and there is every reason to believe that severe sentences await the defendants.Targeting business
In the sphere of business, there is the case of the well-known Urals businessman Malik Gaisin. He is the CEO and main shareholder of the Ural Plant of Electric Connectors Iset in Kamensk-Uralsky. Its products are used in aviation, space and rocket technology, as well as railway transport, machine tool building and medicine.
The case has unfolded rapidly
: in mid-March, a criminal case was brought against Gaisin for an abuse of power that led to the disruption of state defense procurement. Later, another charge for embezzlement was added.
At the end of March, Gaisin’s controlling stake in the Iset plant was taken over by the state. The reason was that Gaisin had managed the enterprise while holding office (from 1996 to 2000, he was a member of the State Duma Committee on Budget, Taxes, Banks and Finance), which is prohibited by law, and allegedly used his position to acquire the controlling stake.
Gaisin is under house arrest. Last week, the Sverdlovsk Regional Court upheld
Gaisin’s temporary removal from the management of the Iset plant.
The Gaisin case is a warning to all owners of enterprises fulfilling state orders: violating state demands is punishable by seizure of property. Such are the rules of the mobilization economy into which Russia is increasingly drawn.
A similar episode took place in 2022, when the Prosecutor General’s Office had a strategic enterprise located in Perm Region, the Solikamsk Magnesium Plant, taken out of private hands and put under state control. The plant, owned by four major private shareholders
, is the only producer of rare earth elements and processor of rare earth in the country. The court agreed with the opinion of the Prosecutor General’s Office that the privatization of the strategic enterprise in 1992-96 was carried out in violation of the law, without the permission of the Russian government. Revisions of the 1990s privatizations have been relatively rare, but the practice may become more common with further court-ordered seizures.
Stealing an attractive private business by suing the owner is certainly nothing new. Suffice it to recall Bashneft
, the world’s largest titanium producer. However, previously such cases dragged on for years and were essentially forced transactions. Sometimes they ended in an “amicable agreement” in which the owner “voluntarily” waived his rights to the property, while today undoing privatizations, especially if carried out in the interests of the military-industrial complex, can be carried out in a matter of weeks.
The only thing needed is a court that is ready to decide cases without delay in favor of the prosecutor’s office, even if the charges are brought against regionally influential politicians and businessmen. This, in fact, is the lesson of the above-mentioned Rostov case where representatives of the judicial branch were targeted.Conclusions
Despite the similarity of the stories and the monstrous punishments, which until recently would have seemed surreal, the logic of the repressions differs depending on the group targeted.
Sentences to civic activists, up to life imprisonment, are meant to intimidate the disloyal.
Cases related to providing for the war – whether it be army suppliers or private business that is poorly fulfilling defense orders – are a signal that “everything is for the front.” Defense orders are a reliable way to get rich, but only for those “who are supposed to.”
Businesses are taken away as a warning to other businesspeople, and it is done as a blitzkrieg. To ensure this lightning speed, the “Rostov case” has seen judges targeted. Judges are an important component in the repressive system, and the highest power is demonstrating to them, firstly, that nobody is immune and, secondly, that not only “politicals” but also businesspeople may be imprisoned swiftly.
With regard to the regional elites, repression has long become an element of “political technology” to strengthen and simplify the Kremlin’s control over the region.
In addition, repression is inevitably expanding and spreading, with influential clans in the elite also using it in their own interests – there is a creeping privatization of the repressive resource. A striking example is the completion this week of a criminal investigation into the extortion
of money from Rostec head Sergei Chemezov for blocking negative information about him in Telegram channels.