Georgia: Former Separatist Officials in South Ossetia Turn Against Regional Leader

Four months after Georgia attempted to forcibly reassert its authority over South Ossetia, the leader of this self-proclaimed republic is facing a new challenge. Former separatist officials now based in Russia have launched what resembles a public campaign against Eduard Kokoity's administration. At stake is control over Moscow's post-war financial aid to South Ossetia.

Russia had pledged at least 10 billion rubles ($360 million) to the war-ravaged region, saying more money will be available if the situation warrants. Those emergency funds will come on top of the billions of rubles in grants and subsidies previously earmarked for South Ossetia in 2008.

Signs of the smoldering internal feud emerged a month ago, when South Ossetia's Osinform official news agency carried a purported independent Georgian report exposing the existence of an alleged US-Georgian scheme to foment social unrest in Tskhinvali with a view to ousting the Kokoity administration. The report -- which Georgian commentators dismissed as a fabrication by Tskhinvali -- claimed the putative plan involved several former separatist officials and identified Ossetian-born Russian businessman Albert Dzhussoyev as its formal leader.

Dzhussoyev is the president of Stroiprogress, the Gazprom contractor that has been building a pipeline designed to reduce Georgia's energy grip on South Ossetia by directly shipping natural gas to Tskhinvali from the neighboring Russian republic of North Ossetia. He also owns South Ossetia's only private bank and has helped restore the region's Kvaisa lead-zinc ore deposits. A Russian economic newspaper recently described him as South Ossetia's "patron" and "biggest entrepreneur."

Dzhussoyev, who before the war was generally described as being close to Kokoity, earlier in December publicly stated his opposition to the separatist leader in a couple of media interviews. In the first one, which appeared in the December 5 issue of Russia's Vremya Novostei daily, he accused the Kokoity administration of hijacking Russian funds meant for South Ossetia and claimed the region was on the brink of a "social catastrophe."

In the second interview, which appeared three days later in the Russian edition of the SmartMoney business magazine, Dzhussoyev said that although he was not interested in politics he was ready to lead South Ossetia "should someone ask [him] to do so."

"I have a very clear picture of the situation [in South Ossetia]: people cannot stand Kokoity," he added.

SmartMoney correspondent Ilya Zhegulyev says that when he met Dzhussoyev in his Moscow office two former prominent members of the Kokoity administration -- Anatoly Barankevich and Oleg Morozov -- were present. The alleged Georgian report carried by Osinform identified both men as being part of the alleged anti-Kokoity plot.

Morozov led the South Ossetian cabinet of ministers from 2005 until August 18 of this year, when Kokoity dismissed his government. He then returned to Moscow to join Stroiprogress as a vice-president.

Retired Russian Army Colonel Barankevich was appointed South Ossetia's defense minister in 2004, then in 2006, South Ossetia's Security Council. Following his resignation in the aftermath of the August war, he worked briefly for Russia's Regional Development Ministry -- the federal body in charge of South Ossetia's reconstruction -- before resigning after being told he was on Kokoity's blacklist.

Barankevich says he fell into disfavor with Kokoity because, unlike the separatist leader, he remained in Tskhinvali during the war to organize the resistance to the Georgian offensive. SmartMoney quoted him as saying that he sees Dzhussoyev as an alternative to the current South Ossetian leader.

On December 4, Barankevich gave Russia's Kommersant daily an unflattering portrait of Kokoity and questioned his loyalty to Moscow. He also suggested separatist officials had misappropriated humanitarian aid and building material Russia had sent to the region after the war, thus impeding reconstruction efforts. "I'm concerned there might be a social explosion in two or three months," he said, adding: "There's no room for such a president."

Morozov has brought similar charges. In remarks carried in the December 5 issue of Kommersant, the former prime minister claimed that some 100 million rubles ($3.6 million) Russia had transferred to South Ossetia before the war mysteriously disappeared from the vaults of the national bank. He also accused the serving administration of colluding with a Samara-based industrial group with a view to supplanting Dzhussoyev on the regional market. "There has been a usurpation of power," he said.

Representatives of the Kokoity administration dismiss the allegations. "Those cheap tricks aren't going to work," South Ossetia's Moscow envoy Dmitry Medoyev told Russia's RIA Novosti news agency.

Adding fuel to the controversy, Kokoity told Russia's Rossiiskaya Gazeta official daily on December 4 that Tskhinvali had received none of the post-war funds pledged by Moscow, accused Chechenstroi and other Russian contractors involved in the city's reconstruction of grossly inflating their price estimates and "blackmailing" his administration by threatening to halt work amid the onset of winter. "Who authorized you to make such estimates, I don't know, but we will sort that out," Kokoity reportedly told Chechenstroi representatives at a December 13 government presidium meeting.

South Ossetia's presidium was set up in the wake of the August cabinet reshuffle, ostensibly to improve the administration's efficiency. Yet, Morozov claims the new structure, which is chaired by Kokoity, allows the separatist leader to manage the region's financial resources without government control.

Kokoity's opponents say they believe concerns over this new power arrangement is what prompted Russian regional official Aleksei Panteleyev, South Ossetia's recently appointed finance minister, to resign from his post in early December. They also claim that Aslanbek Bulatsev, the North Ossetian tax official whom Kokoity appointed prime minister after much lobbying from Moscow, has no real influence in South Ossetia's affairs.

Whether the anti-Kokoity campaign is part of a struggle between rival clans for control over Russian money or, as some Russian commentators suggest, indicates Kremlin disaffection with the separatist leader is unclear.

Thus far, Moscow has given no indication that it is considering withdrawing its support to Kokoity.

Russia's Regional Development Minister Viktor Basargin visited Tskhinvali on December 16 on a fact-finding mission to gauge the progress of the reconstruction process. He told South Ossetia's Res news agency Kokoity's grievances were "perfectly justified."

Thus, the embattled South Ossetian leader has apparently won a battle. Whether he will win the war against his opponents remains to be seen.