Medvedev Fires Moscow Mayor Luzhkov After Conflict

Dmitry Medvedev fired Moscow Mayor Yury Luzhkov after 18 years in office, opening the way for the Russian president to put his own person in charge of the capital as the country prepares for national elections next year.

Luzhkov was removed after three weeks of headlines accusing him of corruption and favoritism toward his wife, billionaire developer Yelena Baturina. After returning from a week-long vacation, Luzhkov yesterday refused to step down in the face of Kremlin pressure. He denies any wrongdoing.

Medvedev cited a “loss of confidence” in Luzhkov as the reason for the dismissal in a decree posted on the Kremlin’s website today. He named Vladimir Resin, a Luzhkov deputy, as acting mayor.

Luzhkov, 74, is the last long-serving regional leader to be ousted as Medvedev and Prime Minister Vladimir Putin increase the power of the central government. His departure comes as Russia prepares for parliamentary elections next year and a 2012 presidential contest in which Putin, 57, may seek to return to the Kremlin at the expense of Medvedev, his protege.

A former chemical engineer, Luzhkov established “absolute financial and administrative power” in Moscow after the late President Boris Yeltsin picked him to replace Gavriil Popov in 1992, said Nikolai Zlobin of the Washington-based World Security Institute.

Photographer: Dmitry Astakhov/AFP/Getty Images

The president named Luzhkov's deputy, Vladimir Resin, seen here, as acting mayor. Close

The president named Luzhkov's deputy, Vladimir Resin, seen here, as acting mayor.

Close
Open
Photographer: Dmitry Astakhov/AFP/Getty Images

The president named Luzhkov's deputy, Vladimir Resin, seen here, as acting mayor.

‘Monopoly on Power’

“He was a good mayor when he succeeded Popov,” Zlobin said in an interview. “But a monopoly on power corrupts even good men.” The firing is an “epochal event” that may undermine stability in the capital as the new mayor grapples with a machine that Luzhkov built over two decades, he said.

Putin said Luzhkov is a “significant figure” and “did a lot” to develop Moscow, “but it’s utterly obvious the Moscow mayor’s relationship with the president didn’t work out.”

“The mayor is subordinate to the president, not the other way around,” Putin told reporters on a trip to Syktyvkar in northern Russia today. “So the necessary steps should have been taken in a timely fashion to smooth out this situation.”

Putin said he and Medvedev would discuss possible candidates to replace Luzhkov.

The new mayor will inherit a city with a budget of 1 trillion rubles ($32.8 billion) and that accounted for about 24 percent of Russia’s gross domestic product in 2008, according to government data. National media have focused on a handful of possible successors, including Deputy Prime Minister Sergei Sobyanin and Emergency Situations Minister Sergei Shoigu.

Luzhkov Ally

Resin, a 74-year-old Luzhkov ally, will run the city until Medvedev nominates a permanent replacement, Timakova said. The president is preparing a list of candidates for the post, which must be approved by the Moscow city council. Putin eliminated direct elections for governors and mayors of the biggest cities in 2004, when he was president.

Luzhkov’s dismissal is the first time Medvedev invoked his power to remove a governor in whom he has lost confidence.

“I don’t rule out the possibility that such cases may happen again,” Medvedev, 45, said in Shanghai. “It depends on the specific situation.”

Changing mayors now will give Luzhkov’s successor time to build his own power base before the elections, said Dmitry Orlov, director of the Moscow-based Agency for Political and Economic Communications.

Luzhkov consistently delivered Moscow for the Kremlin at election time, including 71.5 percent for Medvedev in the 2008 presidential ballot, when the city’s almost 7 million registered voters accounted for 6.5 percent of the national total, according to the Central Election Commission.

No ‘Angel’

Luzhkov “revived” Moscow after the economic collapse that accompanied the demise of the Soviet Union in 1991, said Alexander Khinshtein, a United Russia lawmaker in Russia’s lower house of parliament.

“He isn’t a saint or an angel,” said Khinshtein, who describes himself as “close” to the mayor. “But I wouldn’t wish the task of replacing Luzhkov on anyone, because they’ll always be compared with him. He’s a rare national politician who has maintained the luxury of having his own position.”

Standard & Poor’s said Luzhkov’s firing will have “no immediate effect” on Moscow’s BBB credit rating. The ruble was little changed at 30.5463 per dollar as of 4:56 p.m. in Moscow, compared with 30.5358 late yesterday.

Luzhkov entered city government in 1987. As mayor he won re-election three times. Luzhkov was named to a new four-year term in 2007 that was scheduled to end next year.

Architectural Heritage

As mayor, Luzhkov oversaw a construction boom that transformed Moscow with new highways and a proliferation of high-rise office and residential buildings, such as developer Don-Stroi’s 264.3-meter (867-foot) Triumf-Palas apartment tower reminiscent of Soviet-era skyscrapers.

He also faced accusations of destroying the city’s architectural heritage and favoring Inteco, his wife’s development company.

Billionaire Alexander Lebedev, a Luzhkov critic, said the mayor and Baturina’s main asset was the power “to permit or deny permission” for projects in Moscow.

Baturina has denied getting special treatment from her husband’s government. Inteco won only one city building tender and was forced to abandon it because local authorities didn’t meet their obligations. All of Inteco’s other deals were with the federal government or private people, she said in an interview published on Sept. 20 in news magazine The New Times.

‘Independent Figure’

Luzhkov said on Sept. 18 that he had never given preference to Inteco and that Baturina would be “even richer” if she hadn’t been the mayor’s wife, RIA Novosti reported.

Even critics of the mayor such as Sergei Mitrokhin, a leader of the opposition Yabloko party, admit that he improved the lives of many Muscovites during his tenure, particularly by developing welfare benefits for veterans and the elderly.

“I’ve always opposed Luzhkov, but at least he was an independent figure who was elected several times,” Mitrokhin said. “The next mayor won’t be dependent on the people, and this is unacceptable. Moscow can’t be ruled by the Kremlin’s marionette.”

To contact the reporters on this story: Ilya Arkhipov in Syktyvkar at iarkhipov@bloomberg.net; Lyubov Pronina in Shanghai at lpronina@bloomberg.net

To contact the editor responsible for this story: Willy Morris at wmorris@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.