Chelsea Owner Escapes Politics

President Dmitry Medvedev on Thursday accepted the resignation of Roman Abramovich, the Kremlin's most loyal oligarch, as governor of the far eastern Chukotka autonomous district, a job Abramovich has long made clear that he wanted out of.

All the same, the announcement that the multibillionaire owner of the Chelsea football club was leaving came as a surprise, in the form of a tersely worded presidential statement on the Kremlin's web site.

Why the Kremlin finally allowed Abramovich to leave the post is sure to be a topic of speculation after having refused his previous attempts to step down.

Medvedev's spokeswoman declined to comment on the decision, saying those Kremlin officials authorized to discuss the matter were out of Moscow.

This is not the first time that Abramovich, 41, has attempted to resign.

In December 2006, Abramovich, who makes his home in London and is best known for dividing his time among the Chelsea football club, his yachts and young socialite Darya Zhukova, publicly submitted his resignation, saying he had done all he could to help the isolated region. Then-President Vladimir Putin rejected the offer in February 2007.

Abramovich, whose relationship with Putin dates back to the late 1990s, when both were introduced to the close circle around President Boris Yeltsin by since-exiled tycoon Boris Berezovsky, was first elected governor of Chukotka in 2000. Putin then appointed him to the post in 2005, after direct elections for regional leaders were abolished.

Chukotka is one of the country's most isolated areas, with half of its territory lying above the Arctic Circle. Before Abramovich took over, the region's primarily mining-based economy was in near collapse and the mostly indigenous population was impoverished, surviving on a traditional subsistence economy of hunting, fishing and reindeer breeding.

The economic transformation under Abramovich has been labeled a miracle.

In 2007, Abramovich secured $2 billion of federal investment over a 12-year period to boost gold mining and other industries in the region. He himself bought the region's Dvoinoye gold deposit through his investment vehicle, Millhouse Capital.

From 2000 to 2006, per capita GDP in the region grew fourfold to 223,000 rubles ($9,500), and total capital investment climbed sixfold to reach 4.512 billion rubles ($192 million), according to documents supplied to The Moscow Times by Abramovich's spokesman, John Mann.

Abramovich, who made his fortune as the head of oil giant Sibneft, is worth an estimated $23.5 billion, making him the 15th-richest man in the world, according to Forbes Magazine. That his personal taxes were paid to the region provided a significant economic boost.

The representative office of the Chukotka district administration in Moscow declined to comment on Medvedev's decision and referred all questions to Mann.

Mann denied that Abramovich's decision to step down meant that he planned to leave the region.

"It's very important for people to understand that his stepping down as governor in no way means that he is disengaging, that we are disengaging, from Chukotka," he said.

Mann pointed to the billions of dollars in investment and the development of local infrastructure, like schools and health care centers, as a sign of the success in rehabilitating the region.

"He came in as a crisis manager," he said, "and that mission has clearly been accomplished."

Oleg Safonov, presidential envoy to the Far East Federal District, praised Abramovich's work in the region Thursday, Interfax reported.

"Roman Abramovich contributed a great deal of investment to the development of Chukotka, and this course will be continued," he said.

Roman Kopin, who had been the head of the Chaunsky district administration in Chukotka's northwest reaches, has been named acting governor. By law, Medvedev has a month to nominate a candidate for the regional legislature to approve for the post.

Abramovich's resignation could have serious repercussions for the region if he stops paying his taxes there.

Mann would not comment on Abramovich's tax plans but said the real contribution he had made was from the investment he attracted and the resultant taxes paid by large firms there.

Sergei Mikheyev, an analyst with the Center for Political Technologies, said earlier attempts by Abramovich to quit had been thwarted because Putin was trying to avoid making any serious personnel moves while ensuring a smooth transition of power to his successor.

But with Abramovich's business and personal interests mostly located abroad, it made no sense to make him stay.

Further, he was no longer needed in the role of Kremlin piggy bank that he began playing in the late 1990s, said Nikolai Petrov, a political analyst with the Moscow Carnegie Center. This became particularly clear after he sold the Sibneft oil company to Gazprom in 2005 for over $13 billion, he said.

"After this deal, Abramovich's involvement with Chukotka became a burden for him," Petrov said.