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. Last Updated: 07/27/2016

Behind The Parties, Bankers Loom Large

The slick television ads, the glossy posters, the campaign trips across this vast country - much of Russia's first real election campaign is being financed by a newly emerging economic force: the commercial bankers.


Although both the parties and their financial backers are secretive about who pays what to whom, many of the 13 blocs and parties running for the Dec. 12 election are relying on private campaign financing, most of which is coming from banks.


Government restrictions on private campaign financing have loopholes big enough to drive a truck through and do not require disclosure, giving bank and company directors a free hand in buying influence in the new parliament.


Bankers insist they are not buying candidates, but merely supporting reformers in their competition against conservatives who could harm their businesses if elected.


The bankers also say that they are spending a fraction of what their colleagues in the West distribute during election campaigns. But analysts say the secrecy surrounding the donations could set a worrying trend for future polls.


"I was struck by how much of their budgets have come from private sources, especially banks", said Michael McFaul, consultant of the National Democratic Institute funded by the U. S. government to promote democratic reforms in Russia.


Private donations make up more than half of the budget for most parties, with the pro-reform blocs of Russia's Choice, headed by First Deputy Prime Minister Yegor Gaidar, and Yavlinsky-Lukin-Boldyrev leading the pack, McFaul said.


"They have vested policy interests in having people like Gaidar in parliament. They want them to win", he said of the banks.


Private financing is still more influential in the regional elections for seats in the parliament, according to McFaul, because donors support one particular candidate against a few rivals, rather than an entire party.


"Industrial groups there are in fact buying their candidate", McFaul said. "In a lot of places they sort of picked who would run".


Although leaders of three large parties have promised glasnost on their campaign finances, only two of the eight major parties and blocs have declared their incomes and only one has named any of its donors. One bloc, the Agrarian Party, denied receiving any private funding at all, while three said their donors had given money on condition of anonymity.


As election regulations do not require public disclosure of campaign finances, the true influence of banks and companies on this brief campaign may never be known.


Similarly, banks are anything but open about their political activity.


"Our bank does not mix with politics", said a spokeswoman of Alfabank. "We do not support any party".


But the bank's president is Pyotr Aven, a former foreign trade minister and No. 16 on the ballot for Russia's Choice. Aven told The Moscow Times that the bank did support his party, but would not say how much it had donated.


At best, banks are willing to reveal only whom they support, not by how much. Most banks contacted said they supported several pro-reform candidates to keep conservative and communist candidates from gaining a majority and voting in restrictions on private banking.


Others have donated to parties across the board to make sure they have friends in parliament no matter who wins, McFaul said, adding: "They're hedging their bets".


This holds true for the Association of Russian Banks. This powerful lobby has thrown its support behind the moderately reformist Party of Russian Unity and Accord, but supports other pro-reform parties as well.


"The party programs of the democratic movements differ very little", said Sergei Yegorov, president of the association. Parties can propose candidates for funding, and then the association recommends certain candidates to its members, he said.


The Most Group, owner of Most Bank and co-owner of the Segodnya newspaper and the private NTV television channel, also funds candidates suggested by three pro-reform parties, said Tatyana Brilyakova, spokeswoman for Most. She declined to say whom the bank supported or by how much.


While election regulations limit total donations to parties to approximately 150 million rubles ($121, 000), they also allow donations to candidates.


A party like Russia's Choice, with 212 candidates running for 225 seats, could more than triple its budget by raising another 1. 5 million rubles per candidate.


Donors, whether to a party or to its candidates, can pay into only one account for each party. Cash donations are not allowed. But donations in kind are not mentioned in the regulations.


Taking advantage of the vague distinctions between state and private property in Russia, blocs such as the Agrarian Party can rely on local supporters in government, farms and industries to host them free of charge.


First Deputy Prime Minister Yegor Gaidar used government transportation on his first campaign trip for Russia's Choice. Nationalist candidate Sergei Baburin toured his constituency of Omsk in a truck provided by a local newspaper.


Russia's Choice stepped a little too far when it dubbed over a privatization advertisement paid for with U. S. government aid money, making it a campaign ad for the party.


Leonid Konov, finance director for Yavlinsky's bloc, said that both the Most and Menatep banks had provided his party with xerox machines, faxes and office supplies.


Valery Bagin, in charge of finances at the Central Election Commission, is apparently not too worried by the free-for-all.


"There will be violations", he said recently. "But there is not enough time for many violations". A special subcommittee will look into accusations of serious breaches, he said.


Although some parties list budget estimates that far exceed the official ceiling of 150 million rubles, they are still spending only a fraction of Western-style campaign costs.


Nikolai Travkin's Democratic Party of Russia, for example, estimates it will spend about 500 million rubles on campaign promotion, Moscow News reported Wednesday. A single U. S. Congressman would have to spend many times that to get elected.