Oligarchs

Nets Owner Prokhorov Wants to Be Moscow's Mayor


Nets Owner Prokhorov Wants to Be Moscow's Mayor

Photograph by Sergei Karpukhin/Reuters

It’s a little early to declare his candidacy for a 2015 election, but that’s not stopping Russian billionaire Mikhail Prokhorov. The owner of the Brooklyn Nets has just announced he wants to run for mayor of Moscow. Prokhorov, who made his fortune in nickel and gold mining, ran for president against Vladimir Putin in March. He won 20 percent of the vote in Moscow itself, a respectable showing.

Moscow is technically a region, and regional bosses have long been appointed by the Kremlin. In April, Putin allowed direct elections in cities and regions once more, so Prokhorov jumped in. Moscow’s city hall could even prove to be a steppingstone for the presidency. The billionaire is setting up a new party, Civil Platform, that will field candidates to run for office in Russian cities and regions on a pro-business, pro-democracy agenda, and so secure political power at the grass-roots level. “For that to happen, you have to work here and now,” he says.

Prokhorov gathering signatures to back his March presidential bidMitya Aleshkovsky/Itar-TassProkhorov gathering signatures to back his March presidential bid

Moscow’s biggest problem, in Prokhorov’s view, is that Russians from all over want to live there. According to government statistics, 1.3 million Russians come to Moscow and stay for three months or more each year. The result is an unwieldy, fast-growing metropolis of 11.5 million. In one sense that’s good: Moscow accounts for almost a quarter of Russia’s $1.6 trillion economy, thanks to a thriving consumer market and corporate tax receipts from major Russian companies headquartered in the city.

Yet air pollution from traffic is a serious problem, and open green spaces are scarce in the city center. More than 45 percent of drivers in the capital reported getting stuck in traffic jams exceeding three hours, or almost 2.5 times the average for the 20 cities examined in IBM’s (IBM) Commuter Pain Survey last year. Goldman Sachs (GS) Chief Executive Officer Lloyd Blankfein said last year that traffic is the biggest obstacle to Moscow’s ambitions to be a global financial center.

Prokhorov’s solution is to drive up housing prices by restricting the availability of lower-cost apartment buildings. The city’s housing should become “very expensive, to stop a lot of people coming to Moscow,” he says. Affordable apartments would be rented to migrant workers who would sweep the streets, drive taxis, and do other menial tasks.

Prokhorov proposes turning part of a 400-hectare site occupied by the former ZIL car factory in Moscow into parkland. He wants to charge motorists a fee for driving downtown during peak hours. More ring roads would divert the freight trucks that now cross the city.

Prokhorov says his wealth will keep him honest: In the March election, “ordinary people came up to me and said, ‘We’ll support you because we know for sure that you won’t steal.’ ” The mayor for 18 years, Yuri Luzhkov, was ousted in 2010 after state media accused him and his real estate developer wife of corruption, which both denied (there has been no trial). Putin’s former chief of staff, Sergei Sobyanin, then took the job: His term expires in 2015, when he may run for mayor, too.

The question is whether Putin’s party would ever yield control of the capital. “Moscow is too important a region to give it away to an opposition figure,” says Dmitry Orlov, director general at the Moscow-based Agency of Political and Economic Communications, which advises the government. He predicts that Putin will allow Prokhorov to run but not win.

Others think a Mayor Prokhorov could fit into Putin’s plans. Putin, who faced mass protests in major cities after allegations of fraud in December’s parliamentary elections, wants a “loyal, liberal opposition” to defuse resentment to his rule, according to Sergei Markov, a former lawmaker from the ruling United Russia party. Prokhorov, whom Putin praised in March as a “serious person and a good businessman,” is even seen by the president as a potential successor, says Gleb Pavlovsky, a former Kremlin adviser who helped run Prokhorov’s presidential campaign. Prokhorov, says Pavlovsky, wouldn’t be an “enemy” to Putin once he steps down.

The bottom line: Mikhail Prokhorov has set up a political party to build grass-roots support by contesting regional elections in Russia.

Meyer is a reporter for Bloomberg News in Moscow.
Arkhipov is a reporter for Bloomberg News in Moscow.

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