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DE RUEHMO #0468 0360642
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FM AMEMBASSY MOSCOW
TO SECSTATE WASHDC 7154

C O N F I D E N T I A L MOSCOW 000468 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: DECL: 02/02/2017 
TAGS: PINR PGOV RS
SUBJECT: BIO NOTE: YURI MOLCHANOV, ST. PETERSBURG VICE 
GOVERNOR FOR PROPERTY AND LAND ISSUES, INVESTMENTS, 
STRATEGIC PROJEC...

C O N F I D E N T I A L MOSCOW 000468 SIPDIS SENSITIVE SIPDIS E.O. 12958: DECL: 02/02/2017 TAGS: PINR PGOV RS
¶1. (SBU) The following message was drafted by St. Petersburg CG Mary Kruger. Begin text:
¶2. (C) During the November 2006 inauguration of the newly-opened premises of the St. Petersburg State University School of Management, an American academic long associated with the school told CG about Vice Governor Yuri Molchanov's "sinister" presence in their dealings.
¶3. (C) The Haas School of Management at U.C. Berkeley has nurtured the development of a new St. Petersburg School of Management since 1993. In addition to academic exchanges and curriculum development, representatives of the Haas school led a unique fund-raising campaign which collected $6.5 million in private U.S. and Russian funds to entirely renovate a dilapidated building for classroom use. As steward of the funds, which included a whopping $1 million from U.S. citizen Arthur B. Schultz, the Haas School kept close tabs on all expenditures. At one point in the early 1990s, when lenders were sought to renovate the old building, Vice Governor Molchanov's private construction firm placed a bid. As the only local bidder and as a close associate of the now Dean of the School of Management, Molchanov apparently expected to win the tender. He did not. This provoked an angry response in which he demanded compensation from the Haas School representatives for the costs of preparing his bid. While the Haas School did not comply with his demand, they did find a way to mollify the Vice Governor, who "was always present at all our discussions", according to the American source. "He gave me the creeps." Although the source did not describe any specific intimidation, it was clear that the Americans experienced some degree of fear - a not unreasonable reaction in 1990s Russia.
¶4. (C) Vice Governor Malchanov is widely rumored to be corrupt, enjoying a convenient intersection of interests between his construction company and his position in the city government. He played a very visible role in the School of Management inauguration alongside Governor Valentina Matviyenko and President Putin.
BURNS