The Man Behind the Oligarch Union's Budget

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The biggest businessmen in Russia have rolled up their sleeves and hunkered down to the task of restructuring the Union of Industrialists and Entrepreneurs, which more and more is taking on the role of the "oligarchs' trade union."
Lobbyist Arkady Volsky set up the union in the early '90s. During the period of Yegor Gaidar and Anatoly Chubais' liberal reforms, the union was a conservative bastion — counting among its members the so-called red directors and the military heavyweights.
Last spring, the union was given new life. A bureau was established that included almost all the so-called "oligarchs:" Kakha Bendukidze, Oleg Deripaska, Alexander Mamut, Vladimir Potanin, Mikhail Fridman, Mikhail Khodorkovsky and Anatoly Chubais. They accounted for one-third of the 27 members of the bureau, with the other members divided between Volsky's old team and members selected by both parties.
The Kremlin was initially cautious, but later gave the project its blessing and accepted the union bureau as a fully legitimate body representing the interests of big business in Russia. When President Vladimir Putin met with members of the bureau last month, he promised that the meetings would henceforth be held on a regular basis.
Businessmen hope to turn their "trade union" into an effective organization for lobbying and protecting their interests. At their last meeting, they adopted a budget for the union similar in size to the average ministry, and agreed upon a finalized structure for the administrative apparatus.
Bendukidze, a general director of Uralmash-Izhora, a successor of Uralmash Zavody, has played a central role in developing the union's plans.

Q:
Your colleagues have said you are highly conscientious in your work on the bureau's structure and that you've spent many days at it.
A:
Well it didn't actually take that long. I sat down in front of my computer and put a budget together in Excel. I figured it would be quicker to do it this way, rather than telling others what to write. I spent a total of about three hours on it. It's just that the process had been dragging on for rather a long time. We spent a long time discussing all the details, and we came back to them frequently.

Q:
What sources will be funding the union's budget?
A:
Our budget will be formed from contributions for the most part, though not entirely. At our last meeting, we confirmed this year's budget.

Q:
What sort of amount are we talking about?
A:
About 80 million rubles [about $2.8 million].

Q:
How much of this will come from members' contributions?
A:
More than half.

Q:
Could you talk a little about how the union will be reformed?
A:
It will have a very simple structure. We don't want it to be a big body — literally only a few people in each department to organize the administration's tasks. The tasks themselves can be resolved by attracting other organizations. We want to outsource as much as possible, and we plan to have about 40 individuals on our staff. There will be seven departments, one of which will act as something along the lines of an administrative body for sorting out technical functions.

Q:
What will the other departments be doing?
A:
We have decided to create several: an international department, a public relations department, a department that will interact with the authorities — the parliament and executive bodies — a department for inter-corporate relations that will tackle issues within the business society and a legal department that will help write important laws affecting business. This should be one of the main areas of the union's activities. It should push the fundamental ideas, the big issues like taxation, tariff legislation, currency regulation and issues that affect all businesses. This should include education and labor legislation. We want each department to have its own budget, while a project budget should exist simultaneously for the implementation of special projects.

Q:
Such as?
A:
There could be all kinds — from updating the union Internet site (www.rspp.org) to questions connected with particular laws and the formation of a correct attitude in society toward particular laws and problems. A special curator chosen from the bureau's members will be responsible for coordinating these projects.

Q:
Have particular members been allocated to specific departments yet?
A:
No, we have yet to discuss this question.

Q:
How much of the budget will be spent on separate projects and how much on the administrative apparatus itself?
A:
About two-thirds — a third on projects and a third on the apparatus.

Q:
Does this mean that the administration will retain lots of unnecessary employees?
A:
There aren't that many people. There are a lot of so-called service personnel. We will put them in special structures so that they can offer their services to the union on a market basis. There are plenty of qualified individuals working at the union today. I wouldn't say no to working with them myself.

Q:
But you don't want to radically change the atmosphere, the spirit that currently exists there?
A:
I didn't wander around the union buildings looking to see who worked there, as Vedomosti has described. The bureau hasn't made any decisions as to whether the spirit should be changed or not. The union is a good organization. Journalists often write that it's sluggish. But no matter what one thinks, it's wonderful that one has an organization where for the past 10 years, the boss hasn't changed his telephone number. This is very important. Society cannot function normally if its institutions change twice a year. As a conservative, I believe that it makes sense to use institutions that already exist. It creates a tradition and establishes continuity in society.

Q:
A budget of 80 million rubles would seem to be quite enough for the union to perform all its various tasks, or do you plan to increase its duties in the future?
A:
All this work has to get going. We have to be convinced that we're working effectively. My opinion is that next year's budget could be significantly larger. The leaders of the business community must see that an organization exists that is truly lobbying for laws in the interests of business and is an important instrument for the entire business community. Their interest and, by extension, financing will depend upon this.

Q:
Could you say a little about the atmosphere at your meetings, with their broad mix of participants?
A:
Discussions are going very well indeed. Of course, one must understand that all members of the bureau are used to working according to their own convictions. Nonetheless, I am satisfied with this process. I believe that it's very important to consolidate business based on the most important problems.