Why Putin's Party Can't Lose

Clever Local Alliances And Back Scratching Have United Russia Under The Kremlin

(CBS)  This story on the upcoming elections in Russia was written by Moscow-based CBS News producer Alexei Kuznetsov.

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"Just a few years ago, employees would walk through the main plant's checkpoint openly carrying string bags full of booze. This is how their working shift would begin," says Gennady, an employee at the Magnitogorsk Iron and Steel works.

Gennady and his friend Sergei are sitting at a table in a cafe across the road from the high, barbed wire-topped, concrete wall surrounding the production area.

They have just finished work and are sharing a small bottle of vodka over a plate of pancakes with minced meat. They are regulars here - a place frequented by workers after their shifts.

But unlike in previous years, stopping for a quick shot is more of a years-long tradition than a chance to get drunk.

"Today, everything is different here," explains Gennady. "You cannot even climb over the fence without being caught, to say nothing about showing up drunk for work. See, we need to finish drinking as early as possible tonight, to be sober for work tomorrow morning."

Indeed, over the past several years quite a few things have changed in Magnitogorsk, an industrial town of 420,000 about a 1,000 miles east of Moscow built around Russia's biggest steelworks - widely known as "Magnitka".

Not so long ago, a foreman would be covering up for a delinquent worker for fear of the whole team losing their bonuses. Today, with new management in place and the plant prospering, there is competition to get a job at Magnitka. So employees have learned to value their positions.

With Russia's economy developing as petrodollars pour in, Magnitka has found an increasing demand for its steel products both domestically and internationally. With the economic boom came prosperity, and long-awaited social changes.

These changes have become a powerful tool in the hands of the plant's top management, and the government, on the eve of parliamentary elections slated for Dec. 2.

President Vladimir Putin has announced his decision to spearhead the election campaign of the pro-Kremlin United Russia political party, and party officials now view the coming elections as a "referendum on the confidence in Vladimir Putin's course."

Magnitogorsk is a clear model of how the Kremlin plans to procure the votes needed to maintain power.

United Russia offered to make Magnitka's Chairman of the Board Viktor Rashnikov, seen on the right side of this photo meeting with Putin, one of the public faces of its campaign. Rashnikov is not a member of United Russia and is not planning to take a seat in Parliament even if United Russia wins a landslide victory.

But his widely-recognized face on United Russia's election posters is expected to do the trick.

The practice is popularly known in Russia as "parovoz", or steam locomotive. The reputation of a pop-star, a famous athlete or a powerful local bigwig, such as Rashnikov, will tow a party's list of unknowns and secure the maximum possible number of seats in Parliament.

Besides being a household name in Magnitogorsk, Rashnikov possesses one more highly useful asset for United Russia; He practically owns the city's financial engine. Having started at the Magnitka plant as a mechanic 40 years ago, Rashnikov has worked his way up the ranks and now owns 85-percent of company stock.

"The concentration of shares in one person's hands makes it possible to manage the capital and the plant more efficiently," argues Andrei Morozov, a close associate of Rashnikov, who is running for the State Duma on a United Russia ticket. "We have deliberately worked toward attaining such a high concentration of shares. It simplifies the decision-making process."

It also makes running the town easier. To this day, having survived the economically disastrous years of perestroika and Yeltsin's equally disastrous 1990s, Magnitka remains an industrial monster. The plant employs 55,000 people and its taxes account for about 40-percent of regional revenue. Whoever runs the plant, runs the city.

When the Kremlin needs to get problems solved in Magnitogorsk, there is no need to deal with a wide range of political forces. There is Rashnikov, with his 85-percent of the plant's shares. All other issues can be solved locally.

So when Rashnikov was offered a place on United Russia's ticket, no one was surprised.

Over the past few years, Magnitka's management and the city government that lives off the plant's taxes have invested unprecedented sums of money in improving living standards.

The city financed projects that would have been unthinkable in previous years: a new skating complex, playgrounds for kids, renovation of school buildings, free vacations for children, free vitamins for students, and improving working conditions for Magnitka employees.

The list goes on. The average monthly wage at Magnitka, about $900, is double the average wage in the region. A flexible system of benefits and bonuses for expectant mothers has been introduced. Hundreds of millions of dollars have been invested over the past decade in emission reduction measures. In fact, Magnitka has become so rich, it is planning to invest about a billion dollars in building a steel plant in Ohio.

"The plant's management has really begun to care about the people," says Irina Valova, a neonatal specialist at a local maternity ward.

"Pregnant women are immediately transferred to non-hazardous production facilities. The plant has purchased brand-new state-of-the-art equipment for medical clinics. So ordinary people simply cannot feel but that the plant is there to take care of their needs," Valova says.

Being good friends with the Kremlin has its benefits for people like Viktor Rashnikov. It makes doing business in Russia a much more pleasant, and safer process.

It guarantees top positions on lists of beneficiaries for federal money lavishly pumped by the Kremlin into so-called "national projects", carried out in Russia's provinces.

The projects, announced by President Putin in 2005, were designed to demonstrate the federal government's interest in the daily needs of the people. Hence the choice of spheres: education, healthcare, housing and agriculture.

Now that Moscow has solidified its grip on power and President Putin has the right to fire top regional administrators, personal loyalty to the Kremlin and United Russia are probably the only two factors determining the political longevity of regional leaders. No wonder, then, that 65 out of almost 90 regional governors in Russia are members of the pro-Kremlin party.

Rashnikov is not alone. Many big-businessmen have followed suit and expressed their support to United Russia and its informal leader, President Putin.

Voters are expected to view all the social improvements as gifts, not the fruits of their own labor. A leaflet distributed to voters by the United Russia headquarters in Magnitogorsk ascribes many of these positive changes directly to the party.

Some politically active citizens, including Pyotr Svechnikov who heads the regional division of the Communist Party, believe that such an approach is wrong.

"The political situation in Russia is very strange. Very often you see a road being built - and right next to the construction site there is a huge poster saying that this road is being built by United Russia," he says. "I am a taxpayer - it is also with my money that this road is being built. So what right do they have to claim that this is United Russia's project?"

But most Russians, who learned bitter lessons during the monetary reforms and galloping inflation of the mid 1990s, and the 1998 default, don't seem bothered by United Russia's monopoly on local government.

"At the end of the day," says Gennady's friend and co-worker Sergei, "I do not care who owns the plant, how much money the top managers make, or which political party is in power in Russia. We are tired of chaos. What really matters to me is stability. Unlike five years ago, I get paid every month, and I can see that something is done for people like me."

At a lively intersection in downtown Magnitogorsk, there is a billboard with a public service announcement urging people to vote in the upcoming elections. "Magnitka, make your choice!" it reads.

Almost touching it is a second billboard suggesting what is apparently the only correct choice: Vladimir Putin and Viktor Rashnikov wearing hard hats and looking into the distance with very earnest faces, implying that Magnitka has made its choice already.

So come Dec. 2, foreign observers are not likely to see ballot-stuffing or fraudulent vote counting, because it won't be necessary. People will be casting their votes freely and openly, and those in power are confident that the majority will vote for United Russia.

Nowhere in Russia is this truer than in Magnitogorsk, where the people are compelled to support the party whose local figurehead essentially owns 85-percent of the local economy, and can finance everything - from building a plant in Ohio to free vitamins for schoolchildren.

[agnim]

Long live leaders of Putin stripe who seek to bring fulfillment for their citizens.

Some fake leaders would rather sacrifice the young citizens of their nation in worthless, UNPROVOKED wars to slaughter humans and steal resources, instead of bargaining for other people''s resources.

[tbweb]

If Putin really believed in the new Russia, he would step down from power as the Russian Constitution calls for and not just transfer the current power he now enjoys to the Prime Minister Post that he plans to occupy soon! Same political b.u.l.l.s.h.i.t in a new package!

[ilyasib]

You are so right!!!! I wish those guys in Washington could finally wake up and stop all the *** going on here.
Putin is a great leader. He did a miracle. He got a broken and corrupted country in 2000. But he managed to clean it from oligarchy and corruption and get the economy booming again. These guys like Berezovsky in London now try to get some power back cause their accounts are lack of Russian money i guess. Russia is flourishing these days and finally people over there saw good life that they really deserve.
Maybe Washington will stop one day this %u201Ccold war%u201D against Russia and realize that Russians will be strong and powerful no matter if somebody wants it or not.

[prinzowhales]

This is part of the success of a New Russia now that the oligarchs are being tamed by President Putin. The Anglo-American financiers can only rage and with Berezovsky in London try to subvert the New Russia and intimidate her with the forward move of NATO into eastern Europe.

Americans! While Bush and the oligarchs in America waste our resources on thankless wars for Oil, Israel and Opium, Russia is devoting its resources to rebuilding from the ravages of the evil oligarchs and the ''Communism'' financed by Western banking elites.

The oligarchs wanted to seize the energy assets of Russia--just as they have seized those of Iraq and have their eyes set on those of Iran. We need not bleed and pay through the nose for energy-- Its time to "Putinize" the American oligarchy! Time to stop subsidizing with tax expenditures the capitalists who
reward themselves lavishly while closing plants and stealing retirement funds from their workers.