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By John Helmer, Moscow

It’s in the nature of arbitrage transactions that if you are buying an asset cheap, you try to avoid the risk of failing to find someone to buy dear. Naturally, noone really enjoys gambling if the risk can be avoided. The knack of Russian arbitrage is to cover that risk by arranging for a state bank loan to finance your buyer, and for you, your asset buyer, and your banker to rig the valuation and share the spread. Arranging with a friend at a state enterprise to do the buying with budget money comes to the same thing. Nice hedge; a trifle wrong.

Political arbitrage is much rarer because it’s riskier, and it’s harder to rig the spread in advance. It happens when a politician leaves one job before he’s sure he will be elected (or appointed) to a more powerful one. When a politician suddenly announces to his voters that he’s resigning, but doesn’t tell them why, it’s regarded as a case of disloyalty, at least in democracies. Also, it’s usually not supposed that the resigning politician would run the risk of unemployment — unless something worse than that was in the offing for him.

Senator Mikhail Margelov (above) is an experienced Russian politician with fourteen years of distinguished service in the Federation Council. This week he announced he is resigning as senator for the Pskov region, and leaving his post as chairman of the Federation Council Committee for Foreign Affairs. He didn’t give a reason.

The state news agency RIA-Novosti broke the news on July 30 after receiving from Margelov’s office a release. Margelov’s office is not exceptionally talkative as Russian senators go, as can be seen from this archive. The official announcement happened after another newspaper reported one of Margelov’s fellow senators and committeemen as revealing that Margelov’s name had not been included in the list of candidates running for the elections scheduled in Pskov on September 14.

vasily_margelovPskov, said Margelov in his press release, “was, and still is for me, my native land. It’s the earth that has been an important part of the life of my grandfather [general of paratroops Vasily Margelov, right].” Margelov added that he will shortly turn 50, and though he isn’t feeling tired by his service to the voters of Pskov, he feels obliged to ask himself: “Do you keep going almost to the end of the life of your course, or can you try something new.” That’s a “now or never choice”, Margelov said. “I feel the strength to start anew: for new businesses, new directions, and new challenges. About what exactly I intend to do, I will tell in the autumn.” Meantime, it’s midsummer, and he “needs time to reflect on the various proposals.”

Kremlin sources say that this August in Moscow may prove to be less a time for calm reflection than one of anxiety and uncertainty for many ranking Russian officials, elected and appointed both. It’s possible Margelov has been told privately that he’s in the running for a promotion in the event President Vladimir Putin decides on a reshuffle of his government ministers.

On Moscow radio those who don’t wish Margelov particularly well have recommended him for jobs like Russian Ambassador to Washington, where noone of importance is likely to talk to him for the foreseeable future; and the post of a deputy foreign minister, which would be a demotion from the rank Margelov is used to as the Special Plenipotentiary of the President of the Russian Federation for cooperation with African countries.

Less charitable observers believe Margelov’s exit is a matter of loyalty, and that what is coming in August is a push to replace those officials in the intelligence, security, and diplomatic services who — judged now in retrospect — failed to detect or predict what the United States and the NATO allies have already done, and are planning to do. “The reason for the Margelov resignation,” speculates the internet medium Zaks, is “his cautious attitude to the developing conflict between the United States and Russia. Not accidentally Margelov has become almost the only senior parliamentarian, for which no sanctions have been imposed.”

Cautious is the calculated adjective. Margelov is one of only two Federation Council senators to own assets on US territory; the other senator is Leonid Lebedev of Chuvashia. Margelov may be the only Russian senator with multiple homes in the US. In February of 2013 an investigation of local property records identified Margelov as the proprietor or co-proprietor of two apartments in Miami, Florida, and maybe a share in a detached house in Danville, California. None of these assets has been identified in the property disclosures of the Federation Council senators.

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