The party M&A market: the new right


At a meeting last week, the Union of Right Forces (SPS) political council voted to disband the party. The former SPS and its political spoilers – the Democratic Party of Russia (DPR) and Civil Force – will now participate in a Kremlin project aimed at establishing a new liberal party. This party expects to compete with United Russia and Yabloko. Analysts say that with an economic crisis under way, there will be demand for a party expressing the interests of small and medium-sized business… unless this is yet another of the Kremlin’s divide-and-conquer plans.

Three parties – the SPS, the DPR, and Civil Force – have held political council meetings in Moscow, voting to disband themselves.

Now there is a plan to create a new party based on these three. They are supposed to hold regional party conferences by November 10 and national party congresses by November 15, at which members should vote to confirm this decision. And the new party will hold its inaugural congress on November 16.

According to Nezavisimaya Gazeta, President Dmitri Medvedev is very keen on the idea of uniting the pro-democracy forces. Yevgeny Minchenko, director of the International Institute of Political Analysis, says this is hardly surprising: “President Medvedev has the image of a person with liberal convictions. He is a true supporter of multi-party systems, striving to ensure that the whole political spectrum is represented. Yet Medvedev, like Putin, believes that parties should have some sort of consensus on national sovereignty and reject any radical methods of changing the political system.”

Itogi magazine agrees: “The Kremlin doesn’t intend to let the situation slide, allowing the opposition outside the system to have the right-wing electorate. To paraphrase Vladislav Surkov, the Kremlin is prepared to stand on three party-legs rather than two: United Russia in the center, Just Russia on the left, and the new liberal party on the right.”

The new right-wing party’s organizing committee is chaired by Boris Titov (head of the Business Russia regional movement), political analyst Georgy Bovt, and Leonid Gozman (acting leader of the SPS).

In an interview with the Vedomosti newspaper, Titov attributed his participation to the stance taken by “the moderators representing the authorities” – including Vladislav Surkov, deputy head of the presidential administration – who have stimulated the process of establishing an influential party on the right. Titov said: “The authorities have realized that Russia needs a right-wing party reflecting the interests of the business community and liberals. The financial crisis and the events in South Ossetia have prompted this awareness.”

Georgy Bovt told Kommersant that he wants to “add some diversity to the dull political landscape.”

Leonid Gozman says he is aiming to save the right-wing idea. In an interview with Itogi, he acknowledged that the SPS cannot be preserved in its present form: “The party’s crushing failures in the last two parliamentary elections cannot be blamed entirely on the Kremlin’s provocations, the actions of spoiler parties, or even the errors of SPS leaders. Our country has changed, and if we want to remain in politics within the system, we must respond to those changes.”

Kommersant quotes Gozman as saying: “Our country needs a right-wing party. And we must do whatever it takes to establish such a party – working with the Kremlin or the Devil himself.”

In an interview with Kommersant-Vlast magazine, Gozman said: “If all of us decide to keep our hands clean and have nothing to do with the ‘damn anti-people regime,’ this niche will be claimed by others – who might hold less lofty values.”

Gozman blames the current state of the right wing on the leaders of liberal parties, saying they have split and re-split the parties, reducing them to insignificant fragments.

This seems to be why one of the conditions for establishing the new party was that the leaders of the DPR and Civil Force should resign. “We named the people we consider unacceptable, and they are no longer there,” said Gozman in his Itogi interview.

Civil Force leader Mikhail Barshchevsky (named as “unacceptable” by the SPS, along with DPR leader Andrei Bogdanov) announced that he is stepping down and quitting public politics.

Nikita Belykh has lost the SPS leadership. After his resignation, the Novaya Gazeta newspaper asked him: “Did the Kremlin promise to ease pressure on the SPS if it replaced its leader?” Belykh replied: “The feeling was mutual. I’m not a barricade-hero type, after all.”

The media are saying that one of the main reasons for disbanding the three parties involves their huge debts. According to federal law, any party that gets less than 3% of the vote in parliamentary elections must pay state-owned media companies for airtime and newspaper space provided free of charge during election campaigns.

Kommersant notes that results in the December 2007 elections were as follows: 1.05% of the vote for Civil Force, 0.96% for the SPS, and 0.13% for the DPR.

Novye Izvestia lists the party debts as at February 21, 2008: Civil Force owed 168.42 million rubles, the DPR owed 161.1 million rubles, and the SPS owed 158.81 million rubles. In other words, the three parties that are now uniting have debts totalling almost half a billion rubles.

Will all these debts be written off once the new party is established? Central Electoral Commission (CEC) members and the parties themselves hold different views on that point.

CEC Secretary Nikolai Konkin told Kommersant: “The debts for free airtime during the 2007 Duma elections must be paid, even by parties that decide to end their existence by merging with other parties, shutting down, or transforming themselves. There is no question of writing off party debts automatically.”

CEC member and political scientist Elena Dubrovina told RBC Daily that debt obligations are maintained if two parties merge: the new party is regarded as the legal successor of the ex-parties. But if a party disbands itself and ceases its activities, with its members joining another party as individuals, the old party’s debts are written off.

Leonid Gozman reminded Vedomosti that under the law, a party cannot be declared bankrupt. Vadim Soloviev, Communist Party (CPRF) lawyer and Duma member, noted that according to the law on political parties, the new party would be regarded as the legal successor only if this is specified in its charter. “But why should they assume responsibility for all the debts?” said Soloviev. “Besides, it’s a Kremlin-sanctioned project and they will be registering a new party with a clean slate.”

Vremya Novostei reports that the new party’s members are likely to include Anatoly Chubais (SPS organizer and head of the Russian Nanotechnologies corporation), Boris Nadezhdin (former Duma member), and Andrei Bogdanov (former DPR leader). Bogdanov told Vremya Novostei that he is prepared to join as an ordinary party member.

RBC Daily reports that Bogdanov is not seeking a place in the party leadership; he doesn’t want to quarrel with his party colleagues, and his plans include “finally starting to write his Ph.D. thesis on Pochvennichestvo (Return to the Soil) ideas in Russia.”

As yet, it is not known whether the new party will have only one leader. Kommersant-Vlast says: “Rumor has it that the Kremlin wouldn’t mind placing a heavyweight at the head of the new party. The search for such a figure is under way among liberal-minded regional leaders.”

Andrei Fedorov, director of the Political Research and Consulting Foundation, told Kommersant-Vlast that the new party won’t have one clear leader: “No one will allow them to create a pro-right-wing party with a leader at present. The right-wing alliance will get on perfectly well without a leader – it might even receive some supplementary funding from the state.”

According to the Gazeta newspaper, the new party expects to lure some voters away from Yabloko. However, Gozman and Titov maintain that cooperation with Yabloko is a priority objective. They have also said that their main objective is competition – but not confrontation – with United Russia.

Could United Russia lose some politicians to the new party? Sources told Vedomosti that no United Russia politicians will be involved – they have “received orders not to quit United Russia.”

Vladimir Pligin and Valery Fadeyev, co-chairs of United Russia’s liberal wing and the November 4 Club, said in an interview with Kommersant that they don’t rule out the possibility of some member exchanges between the two parties, although they themselves don’t intend to leave their wings of United Russia at this stage.

Pligin hinted that he has “many friends among those who will join the new liberal party.” Fadeyev noted that the new party’s members may include “entrepreneurs who don’t like dealing with marginal parties.”

Analysts say that the next round of regional elections, in spring of 2009, will indicate the nature of the new party’s prospects. says: “Some certainty should be provided by the new party’s first successful (or very unsuccessful) performance in regional elections. This will happen either in spring of 2009 (if the party is registered in time) or during the Moscow municipal legislature elections. Then, depending on the party’s rhetoric and its reactions to the Kremlin’s initiatives, the decision will be made: instructing the regions to either support or block the new party.”

In RBC Daily, political analyst Dmitri Badovsky says: “There may well be some demand for a new party to represent the interests of the middle class during the financial crisis.” The prosperous years when the middle class could afford to ignore politics have come to an end; our society is sure to become more politicized in crisis conditions, says Badovsky, and the Kremlin is seeking to establish a loyalist party to express the interests of small and medium-sized business.

Novye Izvestia political observer Valery Vyzhutovich points out that if the new party is well-promoted, it could fill the vacant liberal-statist niche: “In other words, it would combine what has remained separate thus far: pro-Western attitudes and patriotic ideas.”

According to Vyzhutovich, the Kremlin has set the new party the task of demonstrating that the Russian political system has a right wing and boosting liberal voter turnout in federal and regional elections.

Establishing the new party may be a tactical objective rather than a strategic objective. Radio Liberty observer Mikhail Sokolov says that the SPS-DPR-Civil Force merger, along with reports of a new independent pro-democracy party involving Mikhail Gorbachev, may be just another of the Kremlin’s divide-and-rule operations. Sokolov maintains that it is intended to obstruct the opposition’s efforts to establish a United Pro-Democracy Movement.

According to Sokolov, there are two pieces of evidence to support this theory: “The first project’s proponents will include Anatoly Chubais, newly-appointed head of the Russian Nanotechnologies state corporation – the Yeltsin-era technocrat most hated by the deceived masses. And the second project will include Mikhail Gorbachev, another outstanding reformer who is extremely unpopular. Their participation will serve as a guarantee for the Kremlin that no matter what happens with the budget, neither the ‘independent party’ nor the ‘tame liberals’ will have any influence at all in Russian politics.”