‘Another way to demonstrate loyalty’

Meduza unravels the Kremlin’s pricey ‘patronage’ scheme for rebuilding the Donbas

In May, Putin’s First Deputy Chief of Staff Sergey Kiriyenko announced that Russian regions would serve as “patrons” responsible for rebuilding cities and towns in the Donbas. Kiriyenko, whose portfolio now includes both domestic and Donbas policymaking, underscored that this decision came from the president himself. Meduza special correspondent Andrey Pertsev sheds light on how this “patronage” system is supposed to work and why most Russian regions were less than eager to be a part of it.

“The president has decided that Russian regions will take patronage over the districts [and] municipalities of the Donetsk and Luhansk people’s republics,” announced Sergey Kiriyenko, the Kremlin’s domestic policy czar and point man in the Donbas, on May 19.

Two sources close to the Presidential Executive Office told Meduza that this really was Vladimir Putin’s idea. One source noted that the concept of “patronage” is familiar to the president from Soviet times — when enterprises or collective farms were, as a rule, expected to help kindergartens, nursing homes, and orphanages. Kremlin spokesman Dmitry Peskov did not respond to Meduza’s questions prior to publication.

Following Kiriyenko’s announcement, regional heads made back to back declarations of their intent to rebuild and support settlements in the Russian-controlled territories of the Donbas, promising to build housing, roads, and schools. By Meduza’s count, at least 42 of Russia’s federal subjects have made public announcements about becoming “patrons.”

As the two sources close to the Putin administration explained, the “client territories” in the Donbas were distributed among the regions by Putin’s envoys to the federal districts. Who had received instructions from the Kremlin on which municipalities could be offered to the regional authorities.

“Moscow [and] St. Petersburg had the right to choose. The governors of the regions adjoining them could also choose. For the rest of the regions, [their] area of responsibility is determined from above,” one of Meduza’s sources said.

Russian regions whose authorities had themselves volunteered to “support the Donbas” received their “client territories” first. “They understood that this was a way they could draw the attention of the president, who is interested in this agenda. Another way to demonstrate eagerness and loyalty,” the source explained. As an example, this person pointed to St. Petersburg Governor Alexander Beglov, who has undertaken to rebuild Mariupol — a city that Russian forces effectively destroyed in a nearly three-month siege.

Initially, however, few regional governors jumped at the opportunity. By the end of June, only 18 Russian regions had announced their “patronage” over municipalities in the Donbas. The Kremlin wasn’t pleased.

“At first patronage was voluntary, now it’s ‘voluntary-compulsory.’ The governors are being made to understand that it’s time to decide on a territory,” underscored a Meduza source close to the Putin administration. This was corroborated by another source close to the Russian Cabinet of Ministers.

Most governors who had no desire to take part were “brought to heel sooner or later,” one regional official (whose region is a “patron”) told Meduza on condition of anonymity. The official speculated that the first regions to join the scheme might be better off, since they snapped up “municipalities that have long been in the ‘republics’.” These areas, he said, are “just in shambles, but not war-ravaged” — unlike the areas recently captured by Russian troops.

At the same time, Meduza’s sources close to the Putin administration said that the Kremlin plans to exclude small and heavily subsidized Russian regions from the “patronage” scheme. Regions with “social tensions” are another exception, especially those that are set to hold elections in September.

State funds and slush funds

As yet, there isn’t even a rough estimate of how much the Russian regions plan to spend on rebuilding the Donbas (but presumably it will cost billions of rubles). RBC tried to find out where the necessary funds will come from, but the press offices of most regional governments ignored requests for comment. However, the Kursk region explained that the money would come from its reserve fund, and the Bryansk region and Bashkiria said that the funds could come from “extra-budgetary sources.”

A source close to the St. Petersburg authorities told Meduza that Governor Beglov plans to use funds from the municipal budget to rebuild Mariupol — and that he’s fundamentally opposed to involving big business. “He [Beglov] doesn’t want to depend on anyone [or] be indebted to businessmen,” he said.

However, sources close to the Putin administration stressed that this is exactly what many regions are counting on — an influx of cash from major businessmen who are loyal to the authorities and dependent on state contracts. “There are such slush funds in the regions, for example, for holding elections. Road workers or builders who receive state contracts are easy enough to organize. If they want to continue working [with the authorities], they’ll also work in the Donbas at their own expense,” one source said.

At the same time, a Meduza source in the leadership of one federal subject noted that due to the ongoing economic crisis, regional governments expect to be short on cash. “In other words, where will there need to be cuts — if it’s to infrastructure projects in the region, that’s okay. But no one is going to cut the salaries of government employees. This means aid [for the Donbas] will be small,” he explained.

The Kremlin’s new talent pool

Under the “patronage” scheme, Russian regions are also obliged to dispatch middle- and lower-level functionaries to the Donbas. According to Meduza’s sources close to the Kremlin, the country’s top brass doesn’t trust officials from the so-called Donetsk and Luhansk “people’s republics.”

“Right now, there’s a change-over of officials in the top leadership of the DNR, LNR, [and] Kherson and Zaporizhzhia regions,” one source close to the Putin administration explained (Ukraine’s Kherson and Zaporizhzhia regions are partially occupied by Russian troops). “No one is going to trust locals with the hundreds of billions of rubles that will go into restoration. And there must also be people at the bottom who understand that this money can’t be pilfered every which way. [People] who understand how the Russian vertical [of power] works.”

Both regional and municipal functionaries are being recruited to work in the Donbas. Each region is expected to provide several dozen recruits — large regions are expected to find more than a hundred.

Several Meduza sources in the Putin administration and in regional administrations assured that there are people who are eager to work in the Donbas. Incentives include higher salaries and bonuses, as well as the opportunity to climb the career ladder.

A Meduza source close to the Putin administration even said that officials with experience in the Donbas would make up “the Kremlin’s new personnel pool” for future appointments. “Putin sees the new [talent] pool as the Donbas pool,” he underscored.

Story by Andrey Pertsev

Abridged translation by Eilish Hart