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. Last Updated: 07/27/2016

A. Kokh, A Court And the Kremlin

APAlfred Kokh
Two weeks ago, Alfred Kokh unexpectedly won a seat in the upper house of parliament. But his appointment, now facing a challenge in a regional court, has yet to be confirmed -- and there are indications that the force opposed to Kokh's posting is the Kremlin.

Kokh, the former head of Gazprom-Media and one of the most colorful and controversial figures in Russian business and politics, was elected Feb. 26 by the Leningrad regional legislature as its representative to the Federation Council.

The vote came as a shock to many local politicians -- chief among them, Leningrad region Governor Valery Serdyukov, who had nominated his security adviser Oleg Safonov for the job.

Addressing the Legislative Assembly after winning 29 of the body's 48 votes, Kokh said his top priority would be developing the region's transportation infrastructure, including the faltering Ust-Luga port project, in which Kokh has significant financial interests.

"I want domestic ports to profit Russia. The Baltic states shouldn't be getting these profits," Kokh said.

A week later, however, two regional officials, lawmaker Oleg Petrov and top prosecutor Yury Prokofyev, filed legal suits to annul the election, claiming it had involved procedural violations such as invalid voting and improper paperwork on Kokh's income.

The hearings in the case opened Wednesday at the Vyborg city court, but were quickly postponed after witnesses for the plaintiffs told the court that one of the lawmakers, Alexander Vernikovsky, had mistakenly cast his vote for Kokh instead of a different candidate, Interfax reported. Hearings are to resume Monday.

A source close to the presidential administration said Wednesday that Kokh was fighting a losing battle, since he decided to run for the Federation Council seat and lobbied the vote on his own, without consulting the Kremlin.

Speaking on condition of anonymity, the source said that when officials from the presidential administration found out about the election, they "got very angry."

"He is going to be kicked out of the Federation Council," the source said.

Vyacheslav Nikonov, head of the Politika think tank, described this scenario as feasible. "The Kremlin watches the formation of the Federation Council very closely," Nikonov said. "Not even a fly can pass by unnoticed, much less a big bird like Kokh."

Kokh confirmed in a telephone interview that the decision to run for the seat was his own. "This region is not alien to me, I thought I could represent its interests," Kokh said, speaking cautiously, without his trademark bravado.

He acknowledged it was possible that the Kremlin might want revenge for his surprise move.

"There is such an opinion," he said, declining to elaborate. "If it [the Federation Council] is formed by the Kremlin, the Kremlin should go ahead and do it. What's the point then of all these staged shows with deputies voting?"

An official from the St. Petersburg Legislative Assembly claimed Kokh had paid deputies for their votes.

"People here name different figures, from $5,000 to $20,000," the official said on condition of anonymity.

Kokh denied the allegations.

He said he was interested in boosting the region's status as a Baltic gateway. Reiterating remarks made last month, Kokh said that he and investors he brought in have pumped $10 million over the past two years into Ust-Luga Co., the general contractor responsible for developing the Ust-Luga port, some 150 kilometers west of St. Petersburg on the Gulf of Finland. He said he would give up his seat on the company's board of directors when approved as a senate member.

However a spokeswoman for the port called Kokh's figures part of "his public-relations campaign."

"Kokh is one member of the board, which includes many other people," spokeswoman Olga Bedikova said in a telephone interview. "There are other members who take care of financing, especially Vladimir Yakunin," the board chairman and a deputy railways minister.

The Ust-Luga port project has been plagued by funding problems and ownership conflicts almost since its inception in 1996 when the Transportation Ministry and the Leningrad regional administration thought up the project as a way to divert the flow of Russian exports from ports in the Baltic states.

The port is to include a terminal with zones for loading and unloading coal, iron ore, oil, mineral fertilizers, cargo containers and lumber, as well as ferry services for cars, trucks and trains.

The first section of the complex, where coal will be loaded for export, opened in December, but no shipments have gone through it -- in part, because of a battle for control at the company responsible for building the section, Rosterminalugol, which is state-controlled. Earlier this month, a special government commission headed by Deputy Prime Minister Viktor Khristenko replaced Rosterminalugol general director Andrei Simonov -- considered a supporter of the government's opponent in the battle, the Sokolovskaya holding company, which holds a 45 percent stake.

"Who would ship their cargo if the ownership issues have not been resolved yet?" said Bedikova.

The Ust-Luga Co. has eight shareholders. The major stakes are held by the Leningrad region (24.95 percent), the Obyedinyonnaya Finansovaya Kompania and Interalonzo Holding Ltd. (20 percent each). Bedikova said most of the shareholders are offshore companies, but could not say who controlled them.

The company previously announced plans to complete the port in late 2004 or early 2005 and estimated it would have a loading capacity of 35 million tons per year.

However, experts have been skeptical.

Yelena Beloglazova, a St. Petersburg-based sea shipping analyst, said the Ust-Luga project doesn't look that promising.

"It's hard to talk about Ust-Luga since this is not a usual port," she said. "Not much works there as of now and a lot of spending is required just to make it possible to deliver cargo to the port.

"Besides," she added, "coal is such a low-budget cargo that even the St. Petersburg seaport is trying to get rid of it. It brings little profit and is bad from an ecological point of view."

Kokh made it clear Wednesday that the port project was very important to him.

"I think the port infrastructure in the Russian Baltics is underdeveloped and we are losing a lot of money when we export our goods through the ports of the Baltic states and Finland. We could have saved a lot of money, increased our profits and created jobs," he said.

The Federation Council was supposed to confirm Kokh's appointment Wednesday, but has postponed the hearing until March 27.

Fatima Tazartukova, an official with the chamber's procedural commission, said Kokh's confirmation hearing was first postponed because the necessary paperwork from St. Petersburg arrived only one hour prior to the commission's meeting on March 7, and another required document -- proving that Kokh had resigned from his previous job -- had not arrived at all.

"One cannot say that [the suit in Vyborg] had a direct effect on the decision," Tazartukova said. "But it is our practice that in cases when courts begin looking into the election procedure, the commission postpones its decision-making. After all, why hurt a person over and over again?"

She also said that if the court rules against Kokh, he can appeal the decision. If his election is struck down and he is nominated again by either the chairman or one-third of deputies of the regional Legislative Assembly, he has the right to stand for election again.