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. Last Updated: 07/27/2016

Sakhalin Governor Latest to Resign

VedomostiMalakhov
Sakhalin Governor Ivan Malakhov has submitted his resignation, as required, as part of his application to the presidential administration for a second term in office. The Kremlin on Tuesday accepted the resignation, putting Malakhov out of a job.

The government's decision followed sharp public criticism from President Vladimir Putin over Malakhov's handling of the aftermath of an earthquake last week that killed two people and left more than 2,000 homeless.

The resignation was the second by a high-profile governor in less than a week. Putin appointed Alexander Khoroshavin, a local mayor, as acting governor.

While analysts say Malakhov's difficulties with big businesses operating on Sakhalin may have played a role in his departure, it seems the poor handling of the earthquake's aftermath was the final straw.

"The local authorities just didn't do their job," said a Kremlin source, who asked not to be identified. "Two thousand people were displaced and were only given the necessary shelter and medical attention when the Emergency Situations Ministry arrived."

The source said the criticism from Putin led directly to the unexpected resignation.

But in a statement posted on the Sakhalin regional administration web site Tuesday, Malakhov said he had not wanted to quit at all.

"I didn't submit my resignation. I submitted the necessary documents in order to be reappointed, which included the formula 'I lay down my authority and ask for a confirmation of your confidence,'" Malakhov said.

But Economic Development and Trade Minister German Gref said Tuesday that the resignation had been expected, Interfax reported.

"I don't know how much this is related to the earthquake, but this is not a spur of the moment decision," Gref was quoted as saying. "As far as I know, this has been in the plans."

In televised comments Monday, Putin singled Malakhov out for attention while questioning Emergency Situations Minister Sergei Shoigu.

"Why did people end up sleeping at night with their children on concrete?" Putin asked. "Where were the local authorities? Why did the governor not appear on time? Did he even go there with you?"

The quake, with a preliminary magnitude of 6.4, struck a fishing town on the southern tip of Sakhalin, just north of Japan, Thursday morning. It was followed by a second quake of a magnitude of 5.9 a few hours later.

Witnesses reported hundreds of people pouring into the streets, concerned their buildings would collapse.

Sakhalin, with a population of 700,000, is one of the country's most seismically active regions, lying on the fault line where the Eurasian and Pacific plates meet. The plates' constant shifting sometimes causes earthquakes.

Sergei Markov, a Kremlin-connected political analyst, saw nothing unusual in the resignation and brushed off suggestions from other analysts that the presidential administration wanted to get its house in order ahead of State Duma elections in December and the presidential election in March.

"It's absolutely clear. The local government's reaction to the aftermath of the earthquake caused colossal worry in the Kremlin," Markov said.

But Vladimir Pribylovsky, head of the independent Panorama think tank, said there was more behind the decision than recent events.

"If Malakhov were close to the Kremlin, he would never have stepped down, even if the number of earthquake victims were doubled," Pribylovsky said.

Pribylovsky pointed out that Malakhov had only become governor after his predecessor, Igor Farkhutdinov, died along with 19 other regional officials in a helicopter crash in Kamchatka in 2003. Malakhov, as Farkhutdinov's deputy, took over as acting governor, and was subsequently sworn in.

Malakhov is the fifth regional leader to resign since Putin signed a law abolishing the election of governors in January 2005. He follows those in Kabardino-Balkaria and North Ossetia in 2005, Dagestan in 2006 and Novgorod, where Mikhail Prusak left office last week.

Prusak, one of the country's longest serving regional leaders, quit Friday after a presidential envoy criticized him for turning a blind eye to corruption.

The Novgorod region legislative assembly unanimously approved Putin's candidate, Sergei Mitin, as the new governor Tuesday.

Under his new powers, Putin has fired two governors: Alexei Barinov, of the Nenets autonomous district, and Vladimir Loginov, of the Koryak autonomous district.

Not all governors who have come in for strong criticism from Putin have lost their jobs, however.

The president blamed regional authorities for not doing more to prevent deadly ethnic clashes that erupted in the Karelian town of Kondopoga last year. Putin said he tried to call Karelia Governor Sergei Katanandov, but was unable to reach him. Nonetheless, Katanandov remains in office.

Markov said there were no discernable trends in the hiring, firing or resignation of regional governors because "all of the governors are loyal to the Kremlin anyway."

Pribylovsky added that oligarchic clans inside the Kremlin were battling for control of the country, a battle that is inevitably intensifying ahead of the elections.

Control of natural resources has also been a high-profile battle on Sakhalin, which is thought to contain around 14 billion barrels of oil and 2.7 trillion cubic meters of natural gas.

The state has large stakes in the huge oil and gas reserves around the island through Gazprom and Rosneft, while foreign firms have come under pressure to hand over a greater share of offshore projects.

Gazprom this year took control of the $20 billion Sakhalin-2 oil and gas project from Shell and two Japanese companies after several months of state pressure over charges of environmental violations.

Rosneft has a 20 percent stake in ExxonMobil-led Sakhalin-1, the last remaining Russian offshore oil and gas project led by a foreign firm. Gazprom insists that gas produced from field should be sold inside Russia and not exported to China, as Exxon had hoped.

Rosneft also leads the Sakhalin-4 and Sakhalin-5 offshore projects, with BP holding a 49 percent stake in each of these.

Stanislav Belkovsky, a political analyst and one-time Kremlin insider, said Malakhov fell out of favor with Rosneft, the company Belkovsky said helped the governor take the helm of the region.

"Malakhov wasn't persistent enough in the battle against foreigners," said Belkovsky, citing what he said were well-connected sources.

Malakhov forged ties with the foreign companies operating on the island instead of lobbying for Rosneft's interests, he said, adding that any new candidate will be Rosneft friendly.

Rosneft spokesman Nikolai Manvelov denied the company had anything to do with the resignation. "We don't get involved in politics, we deal with oil," he said.

Gazeta.ru reported that a battle between Gazprom and Rosneft over Sakhalin oil and gas riches was the real cause of Malakhov's departure.

Khoroshavin, the new acting governor is close to Rosneft, and he and Rosneft head Sergei Bogdanchikov have known each other for a long time, Gazeta.ru reported. They worked together at the Okhaneftegazdobycha oil company in early 1980s, it said.

Khoroshavin is the mayor of Okha, a town of 30,000 on Sakhalin Island, which is also home to a major Rosneft office.

"You could say that Rosneft won a tactical victory over Gazrpom in Sakhalin," political analyst Rostislav Turovsky was quoted by the news portal as saying. "Now it will have an advantage in the dispute over Sakhalin-3 and Sakhalin-4 deposits."

Georgy Chizhov, deputy head of the Center for Political Technologies, said the government needed a safe pair of hands as energy production builds up on Sakhalin.

"The optimization of governance includes making preparations for massive extraction and exports," said Chizhov. "In this particular case, the interests of the state and those of Rosneft dovetail -- or at least you'd hope they did."

Staff Writer Svetlana Osadchuk contributed to this report.