Naginskiy at Spetsstroy

The dust’s settled a bit on this story . . . in a 22 April decree, President Medvedev replaced Nikolay Abroskin as Director of the Federal Agency for Special Construction (Spetsstroy), putting Deputy Defense Minister Grigoriy Naginskiy in Abroskin’s place.

Grigoriy Naginskiy

What does the change at the top of this large, government-financed construction firm — nominally under Defense Ministry control — indicate?

Ending Abroskin’s 13-year tenure in the Spetsstroy empire took four years. According to Kompromat.ru, Defense Minister Serdyukov’s wanted Abroskin out from beginning, but, unlike in other personnel situations, it took him a while to win out.

The media says the anti-Abroskin operation was methodical.  On his 60th birthday, four-star Army General Abroskin was dismissed from the Armed Forces, but left in his civilianized post.  This created the convenient precedent to have another civilian succeed him.  Then Medvedev dismissed Abroskin’s long-time deputies and allies. 

According to Kommersant, Spetsstroy’s annual collegium in late March was a solemn affair, devoted mainly to talk about order, discipline, and anticorruption efforts.  But the Main Military Prosecutor wouldn’t tell Kommersant whether it was investigating Abroskin or anyone else at Spetsstroy.  Then the final stroke on Abroskin came three weeks later.

Spetsstroy’s a semi-militarized agency with ranks and, until this spring, conscripts, under formal Defense Ministry control, but traditionally and generally acting as an independent federal agency.  As its name suggests, Spetsstroy is responsible for special government construction projects – in the Soviet and Russian past, it built secret industrial, defense, and specialized facilities, but has also built more mundane military housing, bases, garrisons, road, and electrical power projects.  It also builds major state infrastructure like hydroelectric stations, dams, and bridges. 

Most of Spetsstroy’s work is no longer for the Defense Ministry.  Kommersant says only 26 percent of its 2010 work was for the Defense Ministry.  A Defense Ministry official told Vedomosti the territorial divisions of Spetsstroy, in particular, work essentially like private construction firms and contractors.  Kompromat put its 2009 revenue at 67.7 billion rubles, making it a large company, even a market leader, by Russian standards.

Its most recent controversy revolves around the alleged “Putin palace” on the Black Sea.  According to Newsru.com and other media outlets, Spetsstroy is building a billion-dollar residence for Prime Minister Putin’s personal use.  The money for the elaborate Italianate mansion allegedly came from Putin’s rich business cronies.

Now about Naginskiy . . . you remember his arrival at the Defense Ministry in early 2010 to be Serdyukov’s deputy for housing and construction.  The 52-year-old Piter native’s a construction magnate who got rich renovating nuclear power plants, and then entered politics.  He joined United Russia in 2002, and served in the Leningrad Oblast assembly before representing his region in the Federation Council.

According to Forbes, he’s the richest official in the Defense Ministry, but he’s only 45th on the list of millionaires in government service.  His family income was over 100 million rubles in 2009.  Finans places him as the 163rd richest Russian. 

But Argumenty nedeli makes the point Naginskiy didn’t exactly cover himself with glory while directing military housing acquisition.  An unnamed Defense Ministry official tells Argumenty:

“The state program to provide housing to all officers and retirees is 15-20 percent complete.  Billions have been absorbed, but more and more are needed.  Deputy Minister Naginskiy, who directed it [military housing] last year, during construction site visits by the president and prime minister vowed and swore that everything would be done on time.  Now instead of the planned 2011 when they promised to provide housing, the authorities are forced to talk about the end of 2013.”

Recall also that Naginskiy went without portfolio starting in mid-2010, and his colleague Deputy Minister Shevtsova found housing in her lap.

All the good journalistic coverage of the Spetsstroy story agrees on one, well two, things.  Getting rid of Abroskin was all about controlling an agency that was too independent and, more importantly, controlling its money.  As Kompromat concludes, it’s natural for Serdyukov to want his man to have his hands on these large “financial flows.”  Kompromat suggested Serdyukov may have also had his eye on selling some of Spetsstroy’s expensive Moscow real estate. 

But this isn’t all there is to the story . . .

  • Argumenty makes the point that Serdyukov has holes in his top management team.  Six months without a main finance officer has left the Defense Ministry behind on placing armaments contracts (again threatening a bad year for GOZ fulfillment).  And now Serdyukov’s lost First Deputy Defense Minister Popovkin to Roskosmos.  Popovkin’s replacement will be a huge story.  Even if Shevtsova has the housing issue, Serdyukov absolutely has to replace Chistova and Popovkin.  And Nezavisimaya gazeta suggests Serdyukov will soon appoint a new deputy primarily responsible for establishing aerospace defense (VKO).
  • Ruslan Pukhov tells Vedomosti the whole situation proves Serdyukov still has carte blanche from the country’s leadership, and NG claims Serdyukov’s political position has never been stronger.
  • Kommersant makes a point of saying that Abroskin doesn’t appear on the list of Russia’s richest bureaucrats, suggesting of course that this career serviceman might have amassed a fortune, but can’t report it because it was obtained through graft.  Perhaps the paper’s larger point is that appointing a wealthy executive from a private firm is the only chance for avoiding corruption in a high-level post.
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