‘Don't confuse me with some Kremlin project’ Meduza interviews Pavel Grudinin, the Russian Communist Party's presidential candidate

Russia’s upcoming March 18 presidential election doesn’t exactly promise a grab bag of surprises. One of the few unexpected developments is that the Communist Party isn’t running Gennady Zyuganov, its leader, but Pavel Grudinin, the 57-year-old general director of the Lenin State Farm in Moscow. A former member of the country’s ruling political party, Grudinin is a millionaire. In fact, he’s not even a card-carrying Communist. Meduza special correspondent Ilya Zhegulev met with Grudinin in mid-February to discuss Russia’s upcoming election.

Party, elections, and deception

At your rallies, they’re showing a film about you that was filmed last summer. Does this mean you were planning your campaign that far back?

Of course not. It came as a surprise even to me. The Presidium [of the Communist Party’s Central Committee] decided the matter on December 23 — it was a democratic procedure. Some people were for me, and some were against. The film was made for a totally different purpose: We just wanted to make a movie about socialism with a human face — about a turn to the left. And later the footage was simply edited this way, and we got this cut.

In early December, I had no idea I would be running. If I'd known, at the very least I wouldn't have opened the [foreign] accounts. What point is there in opening accounts in March only to close them in December? Zyuganov decided to nominate me as a candidate, and it was an unexpected decision.

Seriously?

There are all kinds of different people [in the Communist Party]. Each of them is an individual. Who knew the whole Central Committee Presidium and then the Plenum would pick me? In our country, we have one party [the Liberal Democratic Party of Russia] that consists of the leader alone. The two others have no leader at all. A party needs to nominate its own candidate, but Just Russia and United Russia did not put anyone forward, and the person they support [Vladimir Putin] did not deem it necessary to run as their nominee. So they are not parties but fakes. This would spell political death in any civilized society. If a party doesn't contest elections, it's toast.

This isn't the first time you’ve run for election. For instance, in the last State Duma elections, you lost to someone from United Russia in a single-seat district.

Make no mistake: I didn't lose the elections. Losing is one thing. Winning but not getting the result placed on record is quite another. Everybody knows when you win.

In other words, you won, but the Central Election Commission inflated the other candidate's share of the vote?

Exactly.

If that’s been your experience, why run again now? Why talk about your chances of victory?

Okay, say you've got a girl, and she betrays you. You’ll still be thinking the next girl will be faithful.

A good example. But the problem is that it's the same girl.

No. These are different elections.

I thought your girl was a reference to the Central Election Commission.

Well, back then, we had the wizard [Vladimir] Churov [who headed the commission from 2007 to 2016]. Now we have a new, honest person [Ella Pamfilova], and she said, “I’ll sort things out.” I'd like to think that this will end one day. After all, everybody hopes that the authorities will stop stealing. Sooner or later, they have to stop. And everybody is waiting for this to happen. Maybe it’s naïve. But you hope for the best.

Lenin, Stalin, and Chubais

Is it true that the Lenin bust in the Lenin State Farm’s head office came from the Kremlin?

No. But in my office there is a socialist-realist painting that did indeed come from the Kremlin. A very good and well known person — who I think was working at the [presidential] administration at the time — saw that they were going to throw it out, and he brought it to us.

What's your view of Stalin? Was he a tyrant and a murderer, or a good crisis manager? Can you build a country on blood?

Didn't Peter I build St. Petersburg on blood? Why does he have to be pure good or pure evil? I was talking with some Chinese people and they say that Mao was 60-percent right and 40-percent wrong. There were excesses there, too, and all kinds of other stuff. But this is our history. There's no denying that Stalin was a very great man, and the country won the war thanks to his iron will.

You have also called him a real leader.

It's not for nothing that 58 percent of people today rank Stalin number one on their list of great people in Russian history. Surely that tells you something?

During a recent live broadcast, the well-known TV presenter Maxim Shevchenko had a fistfight with another well-known TV presenter, Nikolai Svanidze, because of an argument about Stalin. Afterwards, Shevchenko became a proxy for your campaign.

The next day, yes. I saw the incident. I'm sorry, but I’d have responded, too, if somebody started hitting me in the face. It was the normal reaction of a normal guy.

But he was the one who provoked the fight.

Well, [Svanidze] said, “I'm coming to get you,” and Maxim said, “Go right ahead.” What was he supposed to say? “No, don't? I'm scared of you?” I don't think arguments like this are at all appropriate or that they should be resolved this way, but [Svanidze] was simply asking for trouble.

Who in the current political establishment do you see as your main ideological opponent? Former Finance Minister Alexey Kudrin? Rusnano head Anatoly Chubais?

Hold on. Surely you realize they have no ideology?

What about the liberal ideology?

What liberal ideology? This isn’t liberal ideology — it's pseudo-liberal ideology. If it were liberal ideology, there'd be democracy, there'd be real elections, the rich would pay more, and the poor would pay less — period. But these pseudo-liberals say, “We must form huge numbers of unaccountable state corporations that spend insane amounts of money.” And they spend it like Rusnano.

These people aren't liberals — they're kleptocrats. It's a regime of thieves, a regime of people who refuse to answer for anything, who control the flows of government money, and who suck everything dry. That’s why I see only one real ideology: the socialist ideology. You can't describe all the rest as ideologies. What's the ideology of the liberal democrats, tell me?

Less state participation in the economy, I suppose…

Are you talking about [LDPR head Vladimir] Zhirinovsky?

More about Chubais.

Well, [Zhirinovsky's] party is called the "Liberal Democrats.” But there is no ideology. And take Chubais — what party does he represent? The party for cleaning everything out? That's what he did with [the electric power holding company] “RAO UES.” And now he's got his hands on Rusnano. You do something, then one of your factories goes belly up, and 13 billion rubles [$229.5 million] go down the drain, but you just pop in and say, “We need more money, so I'm going to raise your fees by 600 percent.”

But Rusnano is a state company. You're in favor of nationalizing resources, banks, and railroads. We already have huge state corporations like the Russian Railways, Rosneft, and Gazprom. Do you think they are run efficiently?

I don't think they are really state companies. When it comes to paying the managers, you see, they are in the private sector. But when it comes to protecting their interests and hiking fees, they are state companies. There is oligarchic capitalism in our country, and the state corporations are simply parasites by definition. In my view, either they are state companies (and their tariffs should be regulated by the state, which should also determine their salaries), or they are private businesses (which means they need to demonstrate their efficiency). But they’re treated as both and neither, at the same time. We have the worst possible system because it makes it possible to take in huge amounts of money without answering for anything.

We need to investigate and say, “Guys, just who are you?” We need to look at the Rosneft board of directors, which includes several foreigners. It's a state company, but the foreigners have more votes. They all generally vote the same way, of course. They have common interests.

The government has also been nationalizing our banks lately. Otkritie, Binbank…

Certainly not. They are being cleaned out, and the Central Bank is apparently letting this happen. Once the money is gone, the state steps in to rescue them. It's not nationalization. Call it what you like: financial rehabilitation, replacing private shareholders' money with state money, an attempt to stop the whole banking system from collapsing…

In Japan, there are private banks and state banks. Let's separate their functions. If you're at a state bank, please operate as a state employee, with the appropriate restrictions. Otherwise, you get a situation where I'm a state bank, but I can give one person a lifetime loan at 1 percent and another a loan at 20 percent. What kind of a banker are you when you can trade using state money, but nothing happens to you, whatever your losses? We need to change the rules.

Could your state farm be as efficient if it were state-owned and state-run?

You know, it certainly could. It depends on the manager. There are superb directors who did a lot for enterprises in Soviet times. The stimulation of economic activity always entirely supported sovkhozes and kolkhozes [state farms and collective farms]. It's just that there were some directors who worked poorly and some who worked well. It's more of an individual thing.

The state farm, corporate raiders, and secrets

You're very critical of Chubais. Wasn't it thanks to privatization that you became the owner of your state farm?

Nonsense. Chubais has absolutely nothing to do with us. We were in state hands until 1991. Then we were forced to become a KSP — a cooperative agricultural enterprise. They said, “Right, here's an edict for you: leave state hands.” So we left. Then we were told: “Okay, sovkhozes and kolkhozes must finally be reorganized.” And we were forced to become a joint-stock company.

When was this, 1995?

Yes. They kept grilling us, and then they said, “Okay, there are some corporate raiders after you. Consolidate your shares, or we’ll destroy you.”

At that point, you were working simultaneously at the state farm and as a member of its auditing commission?

That's always how it works. The council of the auditing commission must work at the sovkhoz. At one point, we discovered that the sovkhoz was simply being cleaned out. I took the documents we’d found [to former director Petr Ryabtsev], and there was certainly enough for five criminal cases. The director was signing these documents, transferring the incorporation capital and creating an enormous agrobusiness. The sovkhoz would get a five-percent stake, but the director would get 30 percent of the intellectual property. What intellectual property? This was property being stripped from the sovkhoz, and the director signed the documents.

Another example: [Ryabtsev] and the chief accountant guaranteed a line of credit to a firm that sold gasoline. Then the firm vanished, and the sovkhoz had to pay a 300-million-ruble [$5.3-million] guarantee to the bank. And so on.

Ryabtsev has complained that the decision to convert the state farm into a joint-stock company was made in his absence, and in the absence of another dozen staffers. And they say they never got their stakes, after the restructuring.

We didn't have stakes — we had a joint-stock company. You must realize you cannot simultaneously be a stockholder and a stakeholder. [Ryabtsev] knew perfectly well that he signed all the papers, but he kept silent until 2006. And when the limitation period for lawsuits was over and another corporate raider attack had begun, they came out of the woodwork. All the courts have long since acknowledged that we didn't have stakes — we had collective, joint lands, as confirmed by all the documents. But as soon as the elections come around, they come out and start playing mind games. It always stops as soon as the elections are over.

Many other agricultural enterprises sell produce from other countries under their own brand. But you don't.

We took a different path: We only grow our own. We’ve developed a system that makes it possible to keep workers busy all the time. As soon as the strawberries are over, the vegetables begin. And as soon as the vegetables are over, vegetable grading begins. And soon as grading is over, we start processing what we’ve got in storage. We buy nothing — that’s our credo. And we don't sell stuff from any one else. We sell our own produce.

Your sovkhoz does a lot of social spending. For example, your grade school cost more than 1.5 billion rubles ($26.5 million). Where did you get the money?

Our first priority is to pay wages and taxes — these are things we simply must do. And clearly, wages must not be lower than last year. Two things are unavoidable in life: death and taxes. [...] All the rest is investment in production and investment in social infrastructure. You sit there and think: “How can we leave some kind of a nest egg to ensure that people aren't stuck without money in the event of force majeure?” And then you simply work toward this. You take out loans or you grow with what you’ve got.

You must have some incredible revenue, because there are a lot of projects: the school, a kindergarten, a dairy plant — all opened within a year.

Of course. Because we invested a great deal of money. We began to construct apartment buildings, for instance, and made money from selling the apartments we had invested in. “TT Development” paid us large sums, we got large amounts of money from them, and then we invested in the school and kindergarten.

According to accounting documents, “TT Development” lost 500 million rubles ($8.8 million) in 2016. Where did they get the money to pay you?

There’s no such thing as “unprofitable.” If your firm isn't making any money and it has an asset, then ultimately you’ve got to sell that asset. That brings in significant income that you channel entirely into the social sphere.

You don't know the full scope of our operations, but it sounds like you’re trying to draw certain conclusions based on partial information.

Because you're not telling us the rest.

Please, have you not heard of commercial secrets? If you reveal all your commercial secrets, corporate raiders will turn up at your door... In our harsh world, you can’t reveal everything about your enterprise. You know why? Because the state is the worst corporate raider of them all. And if it knows absolutely everything there is to know, you're at risk of being seized. Period. So you journalists may be good people, of course, but you shouldn’t know everything. I alone must know everything. And my shareholders.

You're beginning to stray into inappropriate territory. “How often do you sleep with your wife?” That’s not what matters here. Can you see what I've achieved? What does this make you feel, irritation or respect?

Respect.

Well, then end of story. I can't tell you how we do this.

Publicity, the governor, and hierarchy

Despite all your commercial secrets, your sovkhoz has been quite accessible to the mass media, and you yourself have a visible public profile as a businessman. Has this helped?

You know, business in Russia is 40-percent PR, 40-percent state support, and only 20-percent market success. What is publicity? It helps make it possible to defend yourself more easily from corporate raiders. On top of that, you become a kind of expert, which also matters quite a lot. Moreover, we have a wide range of products: milk, berries, apples, processing, vegetables, a plant nursery — we have everything that grows in the Moscow region. It's handy for your colleagues: If they want, they can stop by and film everything in one go.

And how has this helped you?

When raiders or some kind of law enforcement agency attacks you, they think: “What are the risks to our reputation?” If journalists often visit this person, maybe it's better to leave him alone, because the cat could get out of the bag.

There was one time the fire service tried to shake us down: They wanted us to renegotiate the contract for servicing the fire-alarm system. They simply tried to blackmail us, saying, “We'll shut down the enterprise for 90 days.” So I mentioned this on a single TV program, and they were in shock. Suddenly it had emerged on network television that they were — how to put this — a bunch of wreckers. So they backed down.

What kind of government relations lobbying have you had?

It helped until 2009, and then it was the opposite. [In 2010, Grudinin left United Russia.] We really started getting the cold shoulder. If you want to speak the truth, you have to realize that the authorities will start putting pressure on you. Having said that, their reputational risks are also great, but we experienced the full range of pressure from law enforcement and the government, and we’re still experiencing it.

From which agencies?

An order simply went out — specifically from the governor, from [Moscow Governor Andrey] Vorobiev. Everybody knows he was the one who ordered the sweeping inspections of the farm. It went against all kinds of executive decrees and laws, but he just wanted to see the sovkhoz trampled. Vorobiev is simply destroying the Moscow region. Whoever comes next — no matter who it is — will have enormous problems, because it's easy to destroy things, but very hard to build them up again afterwards.

So there’s nothing stopping you from competing with Vorobiev? It’s said that you have your sights on his job.

There is nothing stopping me from competing with [St. Petersburg Governor Georgy] Poltavchenko. Some people say, “You're running in the election so you can then become a minister or a governor.” Nonsense.

So you're not counting on—

What's the point? Don't you know how decisions are made? The only person who can become Moscow governor is the one handpicked by the president. That’s the system. Elections don’t exist. All the municipal filters, sidelining of candidates, and arrangements between parties make it impossible for just anybody to contest elections. So why think about this?

Nevertheless, you’ve got to plan a second step after taking the first step. There was [2012 independent candidate and billionaire] Mikhail Prokhorov, who—

No, he was very definitely a Kremlin project. Don't confuse me with someone who was a total Kremlin project. I'm completely different. My whole life — both before and after [the election] — is totally different from Prokhorov's. I think it's actually a bit insulting to compare us.

What I meant was that he promised to stay in politics after the elections. But nothing came of it.

That comparison is meaningless. As you know, the structure of executive power is such that you have to be part of the hierarchy to do something. But if the hierarchy is rotten at the top and at the bottom, you do something in the middle.