Geopolitics

In Russia's Race For President, Can Anyone Exploit Putin’s Weakness?

Analysis: In the aftermath of his party's poor showing in parliamentary elections, Vladimir Putin is focused now on his race to return to the Russian presidency. Though he is still strongly positioned, Putin now faces a new dynamic where he can &

Communist party candidate Gennady Zyuganov (Mika Stetsovski)
Communist party candidate Gennady Zyuganov (Mika Stetsovski)
Maksim Ivanov

MOSCOW - The recent parliamentary elections in Russia were a major embarrassment for Vladimir Putin's party, United Russia. They have galvanized a protest movement throughout the typically acquiescent populace. But will the changes translate at the polls in next year's presidential election?

The recent parliamentary results can be attributed to several things: Putin's declining popularity, a lackluster campaign from United Russia, and a reasonable campaign on the part of at least one major opposition group.

United Russia "didn't make many mistakes in terms of commercial spots," choosing the high road, asking for votes from all those who believed in "stability and a bright future," according to Igor Mintusov, from the consulting firm Nikolo M. But that same advertising campaign was short on originality and ideas, just "the sight of the same old faces, over and over again."

The only exceptions, according to Mintusov, were a few ads featuring "simple soldiers' telling the audience what United Russia had done for them. According to political scientist Sergei Polyakov, when voters are constantly bombarded with information about United Russia, a few extra commercials is not bound to inspire. More generally, experts say people no longer believe United Russia's slogan "Only Forward."

United Russia has it's base: state employees and the elderly, who were able to climb out of crushing poverty thanks to Putin's policies, but who are still very dependent on the government, and who are willing to tolerate a relatively low standard of living and high levels of corruption and bureaucracy, according to Leonty Byuizov, a researcher at the RAN Sociology Institute in Moscow.

Byuizov estimates the party's support at 35% to 40% of the electorate, but said it is confined solely to "those who are connected to the party by economic interests."

The opposition parties were successful in the parliamentary election as much thanks to United Russia's declining popularity as to the opposition's successful campaigning. "It was like a big auction of protest votes, which were then divided up between the four parties," says Polyakov.

Of those four parties, the most effective was Just Russia. It's success "was obvious even two weeks before the elections," says Byuizo, who cited it as the only party with fresh faces.

Alekcei Makarkin, vice president of the Politechnical Center, says that Just Russia was "able to attract liberal voters, who did not have their own usual parties," and its slogan "against cheats and thieves' caught on across the electorate.

The Communist party kept its reputation as the most vocal segment of the opposition. Their base electorate is about 8-9% of voters, often those people who think that Yeltsin and Putin are one and the same, or as Byuizov puts it, "convinced old grumblers."

New elections, new conditions

Now attention turns to the March presidential elections, where the opposition parties are mostly going to be competing among themselves. For example, Gennady Zyuganov, the Communist candidate, will be fighting to keep his status as the "opposition leader," according to Mikhail Vinogradov, head of the Saint Petersburg Politics fund. "It doesn't bother him to come in second to Putin."

But now there is another candidate for "opposition leader." During the parliamentary elections, invalid ballots, as well as votes for parties that didn't get enough votes to be represented, are divided among the winning parties. But in the presidential elections, those votes won't go to anyone, meaning that opposition parties could suffer from the "fed up with everyone" vote. That should prevent Putin from reaching the 50 percent threshold to win outright in the first round. But it also means that alternative candidates, like Mikhail Prokhorov, have to really personify protest.

The fact that people have become more "activist" has become a problem for Vladimir Putin. "How do you run a campaign when you can be booed at any moment? Will he only appear on television?" asks political scientist Dimitry Oreshkin. We didn't see a Putin 2.0 on December 15, says Oreshkin, which means he does not have anything left to offer citizens.

In Oreshkin's view, that means that Putin's reputation has only one direction to go: down.

Read the original article in Russian

Photo - Mika Stetsovski

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Economy

Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.


Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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