St. Petersburg Governor reassigned to shipbuilding industry he has no idea of 

St. Petersburg Governor reassigned to shipbuilding industry he has no idea of
Ex-Governor was displeased with the offer to take charge of the United Shipbuilding Corporation Photo: The CrimeRussia

The surprising resignation of the St. Petersburg Governor thrust the political life in the city into chaos. Politicians are hastily drafting budgets for the forthcoming election campaign. But the main question is: what are the reasons behind the departure of Georgy Poltavchenko? The CrimeRussia was figuring out: was it just politics or corruption and his inability to oppose law enforcement clans?

First alarm

Rumors about the inevitable termination of Georgy Poltavchenko have been circulating since 2016. They became especially intense after a leaked statement of a high-ranked official claiming that Poltavchenko “had rushed with the decision on Saint Isaac's Cathedral without consulting with supreme political powers”. People in Smolny Palace started panicking; the administrative staff was demoralized. Everybody had waited for a call from Moscow summoning the Governor on the carpet. Another political heavyweight – Varsonophiy, Metropolitan Bishop of Saint Petersburg and Ladoga, – has also contributed to that story. He said that the landmark decision of the Governor has spoiled the entire cathedral transfer project and caused a public stir adverse for the diocese.


The scandal around Saint Isaac's Cathedral affected Poltavchenko

But the danger has passed, and the Governor continued his work. Rumors had circulated that he would be dismissed quietly. But then a terrorist attack was committed in St. Petersburg. The circles of power decided not to replace the Governor amid the tragedy. However, in summer 2018, some media announced that Poltavchenko won’t participate in the gubernatorial elections this fall.

The Governor was skeptical about all these speculations and had no intention to resign. His campaign office was preparing for the electoral competition.

But on October 3, 2018, the St. Petersburg Governor has resigned following a proposal from Vladimir Putin. The President suggested Georgy Poltavchenko to change jobs on the evening of October 3, during a meeting with him and Aleksander Beglov, Presidential Plenipotentiary Envoy to the Northwestern Federal District, in the State Hermitage Museum before the negotiations with the Chancellor of Austria. Instead of the Governor’s chair, Poltavchenko was offered to take charge over the Board of Directors at the United Shipbuilding Corporation (USC) whose headquarters are located in St. Petersburg. The political circles were shocked. Everybody knew that Georgy Poltavchenko has no idea of the shipbuilding industry.


Meeting of Vladimir Putin, Poltavchenko, and Beglov

Numerous versions of this high-profile resignation have immediately popped-up, including Governor’s “passivity”, “tolerance to corruption”, and “inability to oppose powered-up law enforcement structures”.

Everything for the family 

Nobody accuses Poltavchenko of corruption directly. But the business circles harbor no illusions about the spectacular enrichment of his son Aleksei Poltavchenko. As early as in 2014, he has surpassed by wealth the son of previous Governor Valentina Matvienko by 200 million rubles ($3.1 million).


At year-end 2017, Aleksei Poltavchenko was ranked the 117th richest person in the billionaire’s rating of St. Petersburg. His wealth is estimated at 3.5 billion rubles ($53.4 million).

During the first gubernatorial term of his father, Poltavchenko junior was a co-owner of Alekseevskie Bread Factories, Stolichny Mul'tiservis, Estate & Co. real estate agency, TSG freight traffic company, and PrimeCom advertisement company. During the second term of Georgy Poltavchenko, Aleksei became a cofounder of two major developers of St. Petersburg – Peterburgstroy Limited Liability Company and InvestBugry Limited Liability Company. In May 2018, he became a co-owner of Monolit-Stroy Limited Liability Company, one of the largest timber processing plants in Siberia. In 2018, the company’s revenues amounted to 1.8 billion rubles ($27.4 million).


Aleksei Poltavchenko

In addition, persistent rumors had circulated about the plans of Poltavchenko junior to participate in the construction of waste processing plants in the northern part of St. Petersburg and invest 2 billion rubles ($30.5 million) into the industrial technopark construction in Bugry.

Costs and investments 

The story of ill-fated Zenit Arena stadium – one of the most corrupt construction projects in Russia over recent years – has also contributed to the resignation of Georgy Poltavchenko. 

Unprecedented embezzlements, inefficiency, and the crazy cost of the project – 43.8 billion rubles ($668.2 million) – had international resonance amid the forthcoming 2018 FIFA World Cup. The championship was successful, but power brokers in the Kremlin haven’t forgotten that scandal. The subsequent arrests of officials and ex-Vice Governor Marat Oganesyan haven’t smoothed the situation – but further escalated it.


Ill-fated Zenit Arena

According to sources, Poltavchenko has been accused of short-sightedness for hiring such a notorious deputy as Oganesyan. The Governor has approved his candidacy for the Vice Governor of St. Petersburg for Construction despite being aware of a thick file of compromising materials against him. In addition, the stadium construction was marred by officials’ intrigues. Sources claim that Smolny Palace had used every trick to replace the contractor with another one loyal to the municipal authorities. Such replacements have cost the budget a vast deal of money. This could not pass unnoticed in Moscow. 

Another sad episode in the governorship of Georgy Poltavchenko is linked with activities of Irina Babyuk, Chairperson of the Investments Committee of the Government of St. Petersburg. Her actions have directly affected the investment climate of St. Petersburg. Take, for instance, the loss of 1.8 billion rubles ($27.4 million) allocated for the construction of the Center for Contemporary Arts within an old architectural ensemble on Konyushennaya square. The investor – Ilim Group – was willing to develop the entire area around the Saint Petersburg Manege of the Horse-and-Carriage Department, including construction of an underground parking lot and reconstruction of the former taxi depot. The Center for Contemporary Arts was supposed to compete with the current cultural dominants – the State Hermitage Museum and State Russian Museum. However, the concession agreement fell through due to unprofessional behavior of Irina Babyuk.


Irina Babyuk

The restoration of the Saint Petersburg Manege of the Horse-and-Carriage Department in the center of St. Petersburg has been a headache for the municipal authorities since 2010. According to some information, the failure of negotiations with the investors was a direct result of Babyuk’s incompetence and Poltavchenko’s passivity. Vice Governor Igor Albin had reportedly tried to dismiss Babyuk – but David Adamia, Head of the Governor’s Executive Office, saved her.


David Adamia

The previous team of ex-Governor Poltavchenko is currently investigated for corruption. A few days ago, Aleksander Beglov, Interim Acting Governor of St. Petersburg, has terminated Yulia Osipova, Head of the Legal Department of the Government of St. Petersburg. Her deputy Irina Zolotovskaya shared the same fate. According to the media, these terminations are linked with a swindling case instituted against unidentified persons at the Legal Department of Smolny Palace by the Main Investigations Directorate in St. Petersburg of the Investigative Committee of the Russian Federation (ICR). Searches have already been carried out in the department. The investigation believes that budget funds had been illegally allocated to private companies for various expert assessments – while these assessments were, in fact, performed by the personnel of the Legal Department. 

Law enforcement escalator 

According to our sources, Poltavchenko has also been accused of inability to oppose powerful clans in the law enforcement structures. For instance, he failed to protect Vladimir Garyugin, Head of Metropoliten (Subway) Federal State Unitary Enterprise, from prosecution. Many experts believe that the criminal case against the official launched in 2015 was just an attempt to ‘appropriate’ the budget of his institution totaling 9 billion rubles ($137.3 million). Garyugin was suspected of inflicting damages to the city budget in the amount of 466.5 million rubles ($7.1 million). Later the criminal case against him was dismissed, and defense attorneys for Garyugin are currently examining the possibility to seek in court his rehabilitation and compensation from the state for illegal prosecution.


Vladimir Garyugin

It is necessary to note that Smolny Palace had neither criticized the performance of Vladimir Garyugin nor required to compensate the allegedly sustained damages. Poltavchenko had reportedly abstracted himself from that problem and failed to extend a helping hand to the Head of Metropoliten. Concurrently, the city continues demanding Metropoliten to commission new subway stations on overloaded Frunzensky radius in due time.

In addition, some sources claim that the Governor was unable to resist the ever-increasing influence of billionaire Dmitry Mikhalchenko in the city.

Unlike Poltavchenko, his predecessor Valentina Matvienko had openly launched a war on Tambovskie gang and, in fact, neutralized its leader – Vladimir Barsukov-Kumarin.

Old new faces 

But the main point of interest for the St. Petersburg beau-monde is: who is going to run in the forthcoming elections? The sources expect a quiet battle between two heavyweights – Rotenberg and brothers Kovalchuk. These persons are supposed to determine the finalist of the gubernatorial elections this fall. 

Other potential successors to Poltavchenko include Nikolai Tsukanov, Presidential Plenipotentiary Envoy to the Ural Federal District; Nikolai Vinnichenko, Deputy Prosecutor General of the Russian Federation; Aleksander Beglov, former Presidential Plenipotentiary Envoy to the Northwestern Federal District and current Interim Acting Governor of St. Petersburg; Maksim Sokolov, Minister of Transport; and Sergei Naryshkin, Chairman of the State Duma of the Russian Federation.

Our sources believe that after working for some time at the United Shipbuilding Corporation, where Georgy Poltavchenko is going to replace Denis Manturov, Minister of Trade and Industry, as the Chairman of the Board of Directors, the ex-Governor would either join the Council of the Federation or investigative authorities.



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