July 9, 1997   

This Date's Issues:   1027  • 1028

Johnson's Russia List
#1027
9 July 1997
djohnson@cdi.org

[Note from David Johnson:
1. Steve Blank: Rendall.
2. Dmitri Gusev: Re Blank on Pipes et al.
3. Novoye Vremya: Kostikov's Book On Leadership Reviewed.
(Yeltsin's former press secretary).
4. New York Times letter: Henry Kissinger, NATO Enlargement 
Dilutes America's Leadership Role.
5. New York Times: Michael Specter, Hungry for Cash, Moscow 
Wants to Gamble on a Lottery.
6. RIA Novosti: THE USA IS TOUGHENING EXPORT CONTROL WITH REGARD 
TO THE RUSSIAN ORGANISATIONS. THE RUSSIAN FOREIGN MINISTRY REGARDS 
THIS STEP AS A DOUBLE STANDARDS POLICY AND A REPETITION OF COLD WAR 
TIMES THINKING.
7. Moskovsky Komsomolets: IVAN RYBKIN ON RUSSIA'S GLOBAL ROLE.
8. AP: Moscow Held Nuke Military Exercises.
9. RIA Novosti: HOWEVER GENEROUS, WESTERN AID CANNOT COPE WITH 
RUSSIAN SCIENCE'S MONEY PROBLEMS, SAYS MINISTER.
10. RIA Novosti: BORIS NEMTSOV TELLS RUSSIAN PRESIDENT ABOUT 
GOVERNMENT PROPOSALS ON SOURCES OF MONEY TO PAY OFF ARREARS TO 
PUBLIC EMPLOYEES.
11. Interfax: Ilyukhin: Attempt To Blow Up Statue in Moscow 
'Provocation.'
12. NTV: Businessmen Accuse Western Press of Creating Negative 
Image.
13. ITAR-TASS Interviews FBI's Moscow Bureau Chief.
14. ITAR-TASS: Yeltsin Aide Explains Division of Powers With 
Regions.]

********

#1
Date: Tue, 8 Jul 1997 16:35:09 -0400
From: blanks@carlisle-emh2.army.mil (Steve Blank)
Subject: rendall

I think Matthew Rendall has misunderstood what I was saying. I fully 
support Sea Breeze and the like and it does not mean we are 
undertaking a NATO commitment to Ukraine. Might I remind him that 
Russia and the U.S. signed a treaty in 1994 guaranteeing the integrity 
of Ukraine and that the Russian army, still unreformed, for all the 
talk, is barely in condition to hold Moscow, let alone invade Ukraine. 
Nevertheless with a stubborness worthy of a better cause, Moscow, 
until the recent treaty, continued to make revisionist threats about 
the border and Crimea or to wink at others' such threats. It still 
does so with regard to the Baltic sates. Such policies are not 
Gaullist or strategically inspired, rather they are recipes for 
disaster and if NATO had not made clear that it would sign with Kyiv, 
as it is doing today, Moscow would have had little reason to do so. 
As Ellendea Proffer suggested earlier, deterrence has its benefits and 
conceding a sphere of influence to Moscow lest the big bad wolves in 
the Kremlin get upset is worse than a crime it is a mistake. It only 
encourages them. Imperial nostalgia is not solely the possession of 
the brass hats or elements thereof (and I well know Deborah Ball's 
work) but of civilians like Primakov, Tuleev, and many others. What we 
need vis-avis Russia is policy not therapeutic social work or bad 
psychiatry.

********

#2
Date: Tue, 08 Jul 1997 16:57:33 -0500
From: dmitri gusev <dmiguse@cs.indiana.edu>
Subject: Re: Blank on Pipes et al.

I would like to respond to Steve Blank <blanks@carlisle-emh2.army.mil>,
who wrote,
"Nonetheless the Kremlin has with deliberate purpose 
inserted its troops abroad in the pursuit of strategic goals in 
Moldova, Abkhazia, and Tajikistan. That the strategy, as in Chechnya, 
may not be well thought out and that officers and troops have tended 
allegedly to act on their own (a very hard accusation to prove by the 
way) there was a strategy and D. Gusev ought to know better as well as
impugning Pipes' intelligence."

I did not question Pipes's intelligence, nor did I claim that
officers and troops acted on their own when they went to
Moldova, Abkhazia, and Tajikistan. I still insist that
there was no common strategy or common deliberate purpose,
much less were these moves part of a plan to restore
the empire. Just like recent American military operations 
in Bosnia, Somalia, and Haiti were not part of a strategic
plan aimed at taking over the world. Pipes also alleged
that the Russians had incited Abkhazs to rebel against the
Georgians so that they could move in as peacekeepers, and
this allegation is plain false and ludicrous. Everyone
knows that it was the rebel Chechens who helped the Abkhazs
to regain control after the Georgians attempted to abolish
Abkhazia's ethnic autonomy and sent their troops in.
What I saw was an attempt at falsification of recent history,
there is nothing wrong with Prof. Pipes's intelligence.

Steve Blank writes, "There is little doubt that the government in 
Moscow still has neo-imperial fantasies of reintegration around 
Russia as its main goal, even if it cannot materialize them. 
And it does so despite the lack of interest of the Russian people."

Okay, there may be people in the government who have such
fantasies, yet I do not believe that this government as a
whole considers the reintegration of the empire as its main
goal, and I totally disagree with Pipes, who claims
that the groundwork is being laid by the Russian generals
to restore the empire, and that Yeltsin's government
supports them. That claim is simply not true, and
whether it was made with deliberate purpose and suits
someone's strategic goal, I cannot tell for sure. I do
not like it when prominent analysts lie so blatantly,
that's all there is to it.

*********

#3
Kostikov's Book On Leadership Reviewed 

Novoye Vremya, No. 22
June 8, 1997
[translation for personal use only]
Review of Vyacheslav Kostikov's book Roman s
Prezidentom (Vagrius Publishers, 1997) by Andrey Kolesnikov:
"Kostikov's Dissonance. How the Former Presidential Press
Secretary Came To Know the True Value of Apparat
Pragmatism" 

[passage omitted] One-third
of the book is uninteresting. This is when Vyacheslav
Kostikov faithfully described the course of events well
known to every resident of Russia, let alone the
politicized, mainly Moscow, reader, for whom the 10,000
copies of Roman s Prezidentom are intended. There are not so
many piquant details, which are in effect the whole point of
political memoirs. [passage omitted] 
Vyacheslav Kostikov is thorough and therefore verbose.
His bombastic style is known from the endless statements by
the presidential press secretary, which were the main tool
of the struggle against Ruslan Khasbulatov. [passage
omitted] 
The president is capricious, willful, fond of drinking,
pitiless, authoritarian, kind, courteous, polite, and
democratic. Kostikov tries not to pass judgment; he condones
some of the president's acts post factum, mainly attributing
them to Yeltsin's "Russian soul." The author of Roman s
Prezidentom is apparently precise in his assessments of the
president's political behavior and the motives of his
actions. Vyacheslav Kostikov makes the following very
important conclusion, even if with certain provisos: power
is Yeltsin's main passion and primary ideology. "While
taking the loss of his political friends lightly enough, he
could not envision the loss of power... he could not (maybe
even did not want to) keep his cohorts around him...."
Hence, the ex-press secretary and ambassador to the Vatican
concludes, Yeltsin's strange attachment to his bodyguard.
[Korzhakov] [passage omitted] 
The book is written in an amazingly neat and
noncommittal style. Neither Korzhakov nor Barsukov can be
called negative characters. The actual -- not as presented
in the book -- Korzhakov and Barsukov have no reason to bear
a grudge against Kostikov. Quite the contrary, their
characters reveal not only "human, very human" qualities,
which is natural for the circle accustomed to crude
entertainment and constant political struggles, but even
humane qualities. They should be grateful for this to the
former press secretary. Having written 11 printed sheets, at
the end of the day he did not wash dirty linen in public.
Even the author's cautious attitude toward, say, Viktor
Ilyushin or Viktor Chernomyrdin is several pages later
offset by his unequivocally positive assessment of their
performance. Herein lies a certain dissonance, as well as an
aspiration, quite typical of a responsible apparatchik, not
to harm the common cause. Even when the president's
entourage in the persons of the main players signed a letter
to Yeltsin, written by Kostikov, containing some unpleasant
conclusions about the "leader's" political conduct, the
press secretary and the chief speechwriter, Lyudmila
Pikhoya, persuaded Satarov and Baturin not to sign the
letter -- so that after the possible dismissal of the
signatories a liberal core would remain in the
administration. For the same reason, it seems the
intellectuals-in-power did not relinquish their chairs after
the breakout of the Chechen war. True, they turned into
people who justified the use of force. Such is the price of
apparat pragmatism. 
....A certain woman, who met Kostikov in the street
after his dismissal from the position of press secretary,
told him sympathetically: "It is your guardian angel who is
leading you away from the Kremlin." Indeed the Kremlin is a
bad apartment [allusion to M. Bulgakov's book "The Master
and Margarita" and the apartment that was occupied by
Satan]. True, had the author not found himself behind the
Kremlin wall, in the shadow of bluish fir trees, there would
have been no book--a poor one perhaps, but the most coherent
journalistic testimony of recent years about the life of the
top leadership. 

**********

#4
New York Times
July 8, 1997
[for personal use only]
Letter
NATO Enlargement Dilutes America's Leadership Role

To the Editor: 
Zbigniew Brzezinski and Anthony Lake (Op-Ed, June 30) dispute arguments, 
which I have made, that the agreements accompanying NATO enlargement 
dangerously dilute the alliance. 
They contend that Russia is in the antechamber but not in the meeting 
room of the NATO Council; that European security crises need not be 
discussed first in the Permanent Joint Council (consisting of the NATO 
members plus Russia); that NATO would formulate its own position in such 
crises before consulting Russia, and that since an aggressive Russia 
would render the Permanent Joint Council impotent, Russia would be 
cooperative. 
The writers' interpretation of the Founding Act seems to me to be 
strained to the point of unrecognizability. I will not debate the legal 
fine points; if the diplomats in Brussels need a legal adviser every 
time they meet, my point regarding the dilution of the alliance will 
have been made. 
The Permanent Joint Council is defined in the Founding Act as the 
principal venue of consultation and the one NATO agrees to consult 
"promptly" in a time of crisis. Whether this means first or last, NATO 
discussions will be overshadowed by the knowledge that the Russian 
ambassador will participate in the discussions. 
Experience with NATO deliberations suggests that in all but the most 
extreme cases the deliberative role of NATO will be overshadowed by the 
Russian in the anteroom (if indeed this is where he stays). America's 
role in holding the alliance together will be severely weakened. 
Finally, Russian statements have been consistently hostile to NATO. The 
Russian member in the Permanent Joint Council is bound to have a 
dramatically different attitude than those of the 16 NATO members. There 
is not a shred of evidence that fostering cooperation from NATO is a 
Russian objective. 
The Founding Act seeks to graft a system of collective security on top 
of an alliance system. 
This has never worked, no matter how cleverly the legal points are 
argued.

HENRY A. KISSINGER
New York, July 3, 1997 

*********

#5
New York Times
July 8, 1997
[for personal use only]
Hungry for Cash, Moscow Wants to Gamble on a Lottery
By MICHAEL SPECTER

MOSCOW -- In his own sorry way, Andrei Maganov is in serious pursuit of 
the new Russian's most cherished dream: instant, effortless wealth. 
Every day -- sometimes more than once -- Maganov finds a way to come up 
with the rubles he needs to buy a few lottery tickets. 
Slipping his hand into a jacket pocket, the 37-year-old laborer eagerly 
produced a fistful of worthless chances. "That was last week," he said, 
shrugging and flashing a nearly toothless smile. "This week will be 
better. They can't take my money all the time." 
Actually, they can. It's a bold assertion to make, but most law 
enforcement officials say that lotteries, all of them privately run, 
have become the biggest fraud in Russia. The people love them and so 
does the mob. In this country, where love of gambling is claimed proudly 
as a fundamental national trait, as many as 65 million people -- more 
than half of all adults -- will buy a lottery ticket this week. 
Even for many of the winners, that money might as well be burned. For, 
until now, what the people of Russia have got for their trouble (and for 
a little less than a dollar) has been the chance to take part in scores 
of crooked, unregulated numbers games often run openly by organized 
crime gangs. 
As any police officer on the street will tell you, the tickets lying on 
hundreds of card tables in most cities are usually fake. Often more than 
one with the same number can be bought from the same vendor. 
"Since we gamble to no purpose," Dostoyevsky wrote in "The Gambler," the 
brilliant novella that doubled as a psychological portrait of the 
Russian people, "we tend to be losers." 
The cash-depleted, tax-poor government has finally come to understand 
that as well as everyone else, and it has decided the time has come to 
stake a claim on the $1 billion in annual revenues that a legal lottery 
might bring. 
"This government is scrounging everywhere for money," said Alexander 
Pochinok, the recently appointed chief of the federal tax service. "We 
have no money, and the tax revenues are not good enough. A national 
lottery is not going to solve all our problems. But it can help." 
Another senior finance official -- one who refused to be identified -- 
put it more bluntly. "Why should the mafia get this money? We can run a 
lottery just as well as they can." 
Soon Russia may find out. A bill now before Parliament would create a 
national lottery that one operator, Yuri Rakhlevsky, who runs the 
enormous and apparently legitimate Rossiyskiye Lotterei, calls "the 
world's biggest pot of gold." 
There are at least 300 lotteries operating in Russia today, but fewer 
than 50 are registered. Some, like Rakhlevsky's, are large -- the 
Rossiyskiye Lotterei sells more than $10 million worth of tickets each 
month. But a national lottery, run by the government and coordinated 
through satellites and radios from one end of Russia to the other, would 
dwarf them all. 
Perhaps that is why so many current lottery leaders are fighting it. 
"This is the first time the mafia and the government have battled it out 
for the same turf," said Rakhlevsky. He added that while it is necessary 
to drive criminals from the lottery business, the government is not 
necessarily the group to do it. "The government thinks it can just step 
in and set up a lottery. It is not that easy. You need expertise and 
employees. The money doesn't just walk to the bank by itself." 
The history of lotteries is older even than Russia. Archeologists have 
found evidence of lotterylike games dating back to the Pharaohs. They 
helped pay for the Great Wall of China, Harvard University, and the 
Revolutionary War. In the 19th century, the era's biggest such contest 
-- the Louisiana Lottery -- was distributed by pony express. Soviet 
leaders starting with Stalin permitted occasional lotteries. 
But these days the biggest lottery in the world is the one run by 
Britain. It grosses more than $150 million a week in sales. 
"We could easily do more than that," said a spokesman for the Russian 
tax department. "Easily." If only the Parliament will let them. 
The government's proposed national lottery has been meeting resistance 
from some legislators. Most of the lobbying against it has been done by 
current operators, and they have a lot to lose from a new contest as 
envisioned by the Kremlin. 
At least 90 percent of Russia's lotteries today are instant -- the type 
that involves scratching to reveal a number on a piece of paper or 
ticket. 
"They are the biggest rip-offs that exist on earth," said Sgt. Pavel 
Dyanbenko, a Moscow police officer, adding that dozens of people 
complained every day of having been cheated. Since there are few laws 
regulating lotteries, it is difficult for the police to act. "You can 
buy the whole table's worth of tickets and you won't win a penny," he 
said. 
Recently a couple of reporters for a Moscow newspaper did just that. 
They said they bought every ticket for a local Moscow lottery -- there 
are dozens of such contests -- and didn't buy a single winning number. 
A national lottery could change all that. 
"You have to take the historical view," said Robert Rendine, vice 
president for corporate communication at Gtech, Inc., the American 
company that is by far the world's biggest lottery vendor. "It was only 
back in the 1960s that all the numbers rackets in the United States were 
run by organized crime. The lotteries started in many parts of America 
as a way to rid the field of the mob. And it worked. 
"Illegal numbers operations in many of the states with big lotteries are 
almost gone now." 
This notion warmed Russian politicians to Gtech, which is hoping to bid 
for any national lottery that emerges this fall, and to other such 
companies. Gtech or one of its rivals would wire the country, bring in 
computers and run the lottery through as many as 20,000 retailers. 
The company would have to pay to set it up, and the cost could be $100 
million. But the payoff for Russia would be worth it. As Rendine put it: 
"Obviously it could turn out to be the world's greatest lottery." 
At the moment the Russian lottery thrives more on the desperation of the 
Russian people than on the certainty of a payoff. 
"It's not worth it to play because everything you win you play away 
again," said Svetlana Harkova, 20, a medical student. 
Not surprisingly, Galina Serotkina, 58, has a more positive view of the 
current lotteries, since she works for one, Russian Lotto, the winning 
number of which is picked on television by an audience each week. 
"This is the only game that is played fairly," she said, "because it is 
the people from the audience who pick the numbers. If people play 10 
times and win once, they get some kind of hope." 

************

#6
THE USA IS TOUGHENING EXPORT CONTROL WITH REGARD TO THE RUSSIAN 
ORGANISATIONS. THE RUSSIAN FOREIGN MINISTRY REGARDS THIS STEP AS A 
DOUBLE STANDARDS POLICY AND A REPETITION OF COLD WAR TIMES THINKING
MOSCOW, JULY 8. (RIA NOVOSTI CORRESPONDENT ALEXEI MESHKOV).
The presidential instruction signed a few days ago in Washington
toughens the US export control with regard to selling American
goods of double designation to a number of foreign
organisations, including the Russian Atomic Energy Ministry,
Arzamas-16 and Chelyabinsk-70. This step arouses disappointment
and regret of the Russian side. This is said in a report of the
department information and press of the Foreign Ministry handed
over to RIA Novosti.
This action of the American administration, says the
document, puts in doubt all positive things that have been
achieved by our countries for the development of bilateral
economic relations. "It is a repetition of the cold war times
and COCOM thinking."
The Russian foreign ministry stresses that the words of the
official US representatives about the spirit of partnership and
cooperation on a bilateral basis and in the international
mechanisms of export control are at variance with such
decisions. "This is a policy of double standards which we
categorically reject."
The Russian side declares that it cannot but take into
account the decision of Washington when determining its position
and will act on the basis of reciprocity as far as the export
control policy is concerned."

*********

#7
>From RIA Novosti
Moskovsky Komsomolets
July 8, 1997 
IVAN RYBKIN ON RUSSIA'S GLOBAL ROLE

Madrid is to host NATO leaders and the presidents of those
specific nations, which have been requesting NATO membership
for about five consecutive years, today.
Russia has been excluded from that joyful "feast". The men
in Moscow can watch the solemn Madrid ceremony, e.g. the
official invitation to join NATO that will be extended to
Russia's three neighbors, on TV alone.
Russia's National Security Council Secretary Ivan RYBKIN
talks to Moskovsky Komsomolets on the eve of the Madrid summit.

QUESTION: Mr. Rybkin, you had admitted that you knew very
little about NATO, after joining the National Security Council
in October 1996. Has your attitude to NATO improved since
October 1996, all the more so as you have gained a more
profound insight into that bloc? Perhaps, many
misunderstandings between Moscow and Brussels can be explained
by the fact that the Russian leadership didn't know very much
about NATO?
ANSWER: It would be inexact to say that I didn't know
anything about NATO. I had a chance to visit NATO's Brussels
headquarters in the past and to negotiate with the then NATO
Secretary-General Willi Klaas. And I had tackled such issues in
a professional manner even before that. As OSCE Vice-President,
I had taken an interest in all structures, NATO included,
during the adoption of the security charter at the OSCE
parliamentary assembly's Stockholm session. I had addressed the
session on that issue back then (early in July 1996). One
always seems to have insufficient knowledge for the appropriate
decision-making process; and one always wants to know more.
Such knowledge is usually attained later on.
NATO is expanding nowadays. We regard this to be a
mistake. I was interested and somewhat surprised to read an
appeal to the US President that was signed by prominent
American politicians and journalists. They, too, are talking
about a fatal mistake. In their words, Russia can't be left
outside the common-security demarcation line, e.g. the
Vladivostok-Vancouver peace belt. They believe that NATO's
expansion plays into the hands of the opposition, objectively
serving to reduce our democratic forces' maneuvering room.
Naturally enough, the Russia-NATO Founding Act removes many
(but not all) our concerns.
QUESTION: Apart from NATO, Europe has yet another
defensive organization, namely the Western European Union. It's
an open secret that the Western European Union was conceived in
1948 by the very same countries that had founded NATO in 1949
(together with the United States and Canada). The Western
European Union had been dwarfed by NATO for a long time. Right
now, Europe wants to reduce the influence of America, which
still continues to dominate NATO. Consequently, the Western
European Union structure is now being filled with real content.
That organization is to be overhauled in March 1998. Why
doesn't Russia make an unexpected diplomatic move and state its
desire to join the Western European Union? Russia would obtain
enormous diplomatic benefits as a result.
ANSWER: We are in no mood to weaken the positions of the
United States, Western Europe or China. We would like to
strengthen our own positions. All those, who think that
anyone's positions can be strengthened by weakening somebody
else, are wrong. Newton's third law, e.g. the law of preserving
political energy, is not always observed here.
Russia strives to join all Western European and
international organizations without exception. It ought to be
mentioned in this connection that the United States had stated
(right after the Helsinki summit) that it would facilitate
Russia's integration into trade and economic organizations, as
well as the G-7's evolution into the G-8. Besides, the United
States had voiced its intention to facilitate the
transformation of NATO, which now unites 16 countries, into a
17-member bloc. 
QUESTION: Does this mean that Russia is joining NATO
today?
ANSWER: In essence, we are now taking part in the work of
NATO's political organization. Russia also helps to make quite
a few decisions (as is evident from the Founding Act that was
signed in Paris).
QUESTION: Some people think that Berlin would play the
lead role in a united Europe, which, in turn, would become a
new global superpower. Is it true that European integration
amounts to Germany's peaceful expansion?
ANSWER: We maintain very good relations with the Germans.
Russia had facilitated the demolition of the Berlin Wall and
German reunification. 
Nonetheless, it goes without saying that each European
country is a sovereign state. Besides, not a single European
nation, be it great or small, will tolerate anyone's hegemony.
A united Europe presupposes a combination of all
countries' interests; apart from that, a united Europe is
called on to heed such interests time and again (so that
everyone has no misgivings about European integration).
Consequently, Great Britain, France, Spain, Italy, Germany
and Russia amount to purely historic and geopolitical
communities. 
In my opinion, not a single global and regional problem
can be resolved without Russia today. This is well-nigh
impossible. Those, who think that such problems can be easily
resolved without Russia, are not right. On the contrary, the
world is now evolving into a multi-polar entity. Every
country's interests must be taken into account; and this is
seen as a mandatory pre-condition here.
QUESTION: They say that real threats to Russian security
now emanate from the south, rather than from NATO and the West.
The Chinese population's density along the Amur River exceeds
similar Russian statistics 35-fold. Not only does China have a
rather impressive birth rate, but it also continues to raise
popular living standards. The Chinese will be hard pressed for
natural resources, once they throw away their bicycles and
acquire swank limousines. Don't you think that Russia will have
to defend Siberia some time in the future?
ANSWER: Let's take a look at the map. China boasts a huge
territory, which can accommodate even its current population.
In my opinion, Japan has the highest population density. You
mention some far-fetched "southern" threats. Still there are
various real threats at this stage. 
The Afghan war presents such a threat today. That war
attracts many soldiers (Russian soldiers and border guards
included) to the southern CIS perimeter. The list of other
threats includes the Chechen conflict, the Georgian-Abkhazian
conflict and the unsolved Nagorny-Karabakh issue. In the
meantime Turkey continues to suppress the Kurdish movement,
striking out against northern Iraqi Kurds and trampling upon
Iraq's sovereignty all the same. This, too, presents a threat.
Such are the genuine threats to our "peace belt". 
QUESTION: Taliban leaders have repeated the other day that
they don't intend to export their doctrine into the CIS. Many
people think that Taliban alone can restore peace in
Afghanistan. In their opinion, the situation would gradually be
stabilized (just like in Iran), with life returning back to
normal. As a result, Afghanistan would become a prosperous
country. Why does Russia support Afghanistan's northerners, who
are responsible for the current civil war?
ANSWER: We don't display any prejudice toward all Afghan
belligerents. One doesn't have to be a good expert on conflicts
to see that the conflicting parties can nearly always
compromise just about anywhere (with some rare exceptions).
Suppression tactics simply don't work in any country of the
world. See for yourself -- the Tajik opposition is now joining
that republic's coalition-government bodies. All weapons must
be shelved; this seems to be the most important thing. As I see
it, one can also establish a similar coalition government in
Afghanistan. We don't reject contacts with any side.
QUESTION: Why did you mention that Vladivostok-Vancouver
"peace belt" time and again? As far as I know, Russia and the
United States have a common border in the Bering Straits.
Therefore one has every reason to say that the entire northern
hemisphere constitutes such a peace belt.
ANSWER: We can also connect Tokyo and Vancouver. That
colorful formula was conceived by an American President many
years ago. We now have an unprecedented chance of turning that
region into a veritable "peace belt", which should have a
pretty good "buckle" (just like any belt does). Russia is seen
as such a buckle. Russia should be included into that belt,
which will otherwise become unbuckled time and again, causing
some problems.
Transcript by Yuri ZAINASHEV. 

**********

#8
Moscow Held Nuke Military Exercises
July 8, 1997
MADRID, Spain (AP) -
In a military exercises that involved nuclear forces,
Russia tested its command-and-control
facilities against a hypothetical NATO attack in late March and early April. 
The exercise did not provoke a confrontation with the United States. ``We
did
not see this as a challenge,'' a Clinton administration official said
Tuesday, confirming the substance of an account in The Washington Times. 
The exercise involved Russian planes carrying nuclear weapons and also some
troops, said the official, speaking on condition of anonymity. 
Russia's aim was to see how its command-and-control system and
communications
might function in the event of a military conflict. 
A Pentagon spokesman, Navy Capt. Michael Doubleday, declined to comment ``on
information from intelligence sources.'' 
Doubleday added that NATO officials have been working hard to counter the
perception among some in Russia that the alliance is hostile to it. 
``NATO is a defensive alliance, and any perception that NATO is going to be
aggressive against another country is absurd,'' he added. 
The exercise came to light as NATO decided to invite Poland, Hungary and the
Czech Republic to join the alliance in 1999. 
Russia, itself, has been granted stronger ties with NATO but no direct
involvement in alliance military decisions. 
The Times, quoting a Pentagon intelligence report, said the exercise
simulated attacks invading NATO, Lithuanian and Polish military forces and
counterattacks with nuclear weapons. 
The exercise was viewed by many Pentagon officials as a sign the Russian
military continues to regard NATO as its key threat and primary enemy,
despite the agreement reached at the summit in Helsinki, Finland, in March
outlining Moscow's cooperation with NATO, and Western assurances that no
nuclear weapons would be placed in the new NATO states, the newspaper said. 
The Russian maneuvers began a few days after the summit between President
Clinton and Russian President Boris Yeltsin in Helsinki. 

**********

#9
HOWEVER GENEROUS, WESTERN AID CANNOT COPE WITH RUSSIAN SCIENCE'S MONEY 
PROBLEMS, SAYS MINISTER
PARIS, JULY 8 (from RIA Novosti's Vitali Dymarsky) -
Desperately underfinanced, Russian researchers welcome Western
aid--but, however generous, it cannot cope with all their
problems, as it amounts to an annual US$200 million, or 10 per
cent of federal allocations, Vladimir Fortov, federal Minister
for Research and Technologies, said to RIA.
Last year's federal research allocations amounted to a
billion dollars, 0.36 per cent of the gross national product,
against $30 billion (2.5% of the GNP) in France. This year's
Russian budget doubles these allocations and makes them immune
to an upcoming expenditure sequestration, but this is not enough
to cure the matter, so Russian research workers seek other
employments en masse. Their number has recently shrunken by half
to a million, pointed out the minister. Even despite this
personnel shrinkage, every researcher can aspire to a miserly
annual average $2,000--salaries plus research expenditures.
Mr. Fortov visited Paris to take part in a session of the
Carnegie Group of the G-8's ministers of science, which has just
finished. He did not describe it because of the customary
secrecy of this arrangement. The interviewee only said that the
Russian delegates were eager to get information about other
countries' research support.
He mentioned a batch of documents being drafted in Russia
to stipulate a government support pattern imitating the American
practice during the Great Depression. The minister described its
essence as follows: when federal bodies are short of cash, they
pass property into research centre disposal as a reliable
financial source.
Mr. Fortov also cited the French practice of sales taxation
at 1.5 per cent of profits, with the revenues channelled to
research and education, and German welfare programmes
implemented shortly after World War I to ease impoverished
professors' plight. 

********

#10
BORIS NEMTSOV TELLS RUSSIAN PRESIDENT ABOUT GOVERNMENT PROPOSALS ON 
SOURCES OF MONEY TO PAY OFF ARREARS TO PUBLIC EMPLOYEES
By RIA Novosti corr.
PETROZAVODSK, JULY, 8, RIA NOVOSTI - "No one need think
that we will agree to print additional money to pay wage
arrears," Russian President Boris Yeltsin said today at a
meeting with First Deputy Prime Minister Boris Nemtsov in his
residence Shuiskaya Chupa outside Petrozavodsk, where the head
of state is spending part of his holiday. 
Nemtsov said at the meeting that the Russian government
intended to get five trillion roubles by issuing Unified Energy
Systems bonds. 
This is only one of the cabinet's measures to tap sources
of finance to pay off wage debts to public sector workers. 
Another three trillion roubles is calculated to be derived
from a presidential decree on revoking so-called state oil
export programmes.
Yeltsin, at his meeting with Nemtsov, emphasised that this
decision was planned for almost five years, but "we could not
make up our minds". 
The First Deputy Prime Minister added that all this time
the oil exporters had been saying that part of their profits "is
used to support the disabled, pensioners, children and
veterans".
From now on the exporters will regularise oil sales and
will be paying off their debts to the budget, said Nemtsov. 
He also said that as part of a military reform the
construction and trading agencies were to be withdrawn from the
armed forces as their structural units. 
They will be corporatised and will be earning money on
their own. According to Nemtsov, this decision will save before
the end of the year about one trillion roubles, not counting
expected tax revenues from them.
Also, the government plans to hold "open cash auctions" to
obtain maximum possible profits from incorporating a number of
key enterprises and attract domestic and foreign investments. 
He emphasised that lower central bank rates on government
securities would make the bankers stop speculating on them and
force them to invest money into the economy. 
Concerning the fuel and energy complex, the First Deputy
Prime Minister expressed his conviction that "Sakhalin and the
shelf project" can alone attract more than 12 billion dollars in
foreign investment. 
"The money to implement the project will flow from all over
the world, with half of the produced oil remaining in Russia.
This is what is meant by the production-sharing arrangements",
emphasised Nemtsov.
He pointed to the prospects held out by the Pechora oil
fields and the Caspian project. 
All in all, believes the First Deputy Prime Minister, the
production sharing agreement may become a "locomotive of the
Russian economy".
Nemtsov explained that investors are obliged to place their
orders with Russian plants, and that is an "important additional
source of industrial growth".
Nemtsov pointed to good progress made in the work of the
provisional emergency commission in getting debts back. 
For example, he said, "while early this year we were
getting 150 billion roubles a month from vodka sale excise
taxes, the sum received in May was one trillion roubles". 
The President agreed to all the government's proposals to
clear up debts to public sector employees. 

**********

#11
Ilyukhin: Attempt To Blow Up Statue in Moscow 'Provocation' 

MOSCOW, July 7 (Interfax) -- An abortive attempt to blow up the Peter
the Great monument in Moscow looks more like "a provocation by the
authorities" against the left-wing opposition movement, Viktor Ilyukhin,
one of the leaders of the Russian Communist Party's radical wing, told
Interfax today.
Unidentified persons had planted bombs inside the monument sculpted by
Zurab Tsereteli last Saturday night, however, they did not explode. The
so-called Russian Revolutionary Military Council, claiming responsibility
for planting the bombs, explained the decision to call it off by the desire
to avoid casualties among the crowd around the monument.
Ilyukhin, who is in charge of the State Duma's Security Committee,
said that now when the left is heading for a nationwide action of protest
and unity in fall, "the authorities can use any pretext to crack down on
the opposition and not only use but create provocative situations."
Ilyukhin said he was convinced that "neither the president nor the
government will simply wait to see the left-wing forces unite." The fact
that an anonymous organization with revolutionary symbols is proclaimed
terrorist is not a trifle, he said. "Many actions totally unrelated to the
left movement's trend will be linked to it," Ilyukhin argued. He said it
was possible that evidence would be collected against the opposition so as
later to outlaw the Communist party as unconstitutional. [sentence as
received] "I do not rule out such actions on the part of government
structures at all," he said.
Ilyukhin regards as quite an important argument in support of his
prediction the fact that plastic explosive was used in the bombing attempt.
[sentence as received] "This is a very rare and costly material for the
civilian population," he explained.
Ilyukhin also noted that if the organization which had assumed
responsibility for engineering the blast is not a fake, it is a rather
narrow association, having nothing in common with the left- wing forces'
spirit and goals. "Otherwise, they would have long ago got in touch with
us," he explained.

*********

#12
Businessmen Accuse Western Press of Creating Negative Image 

NTV 
July 3, 1997
[translation for personal use only]
>From the "Segodnya" newscast

How to fight the extremely gloomy picture of Russia as a whole and
Russian business in particular now being painted in the West -- that was
the main theme discussed at the latest meeting of the Council on Foreign
and Defense Policy [SVOP] today. This public organization brings together
many representatives of the country's influential political and economic
bodies. A report drafted in the council entitled "Perceptions of Russia
and Russian Business Abroad" was delivered to businessmen, political
scientists, and economists. The gist of this document is that the larger
Western monopolies benefit from creating a negative image for Russia as a
country riddled by corruption from top to bottom and devoid of guarantees
for investment. They also benefit from the representation of Russian
industrialists and bankers as people laundering mafia money. In the
opinion of those present, this is being done to preempt Russian private
capital entering the West and to do as much possible to ease the expansion
of foreign companies across our market.
A number of magazines and newspapers that permit themselves such
articles more often than others were named at the meeting. These include
The Washington Times, Forbes magazine, and Le Monde.
[Begin recording] [Oleg Kiselev, SVOP member] Believe me, we're fed up
reading the dirt, the defamation which is spattered out over the pages of a
number of publications in the preliminary knowledge that this defamation is
well paid for in hard cash by our competitors.
[Unidentified correspondent] Of course, a black list cannot be drawn
up legally but if correspondents from publications which end up in this
list are subjected to a news boycott then...
[Kiselev, interrupting] I think that our Western colleagues will have
difficulty carrying out their professional duties on the territory of
Russia. [end recording]
On the other hand, the potential for lobbying for Russian interests in
the West was discussed. Incidentally, China has positive experience here,
flooding, for instance, the United States with its cheap goods. As they
said at the Council today, Chinese interests in the US Congress are
championed not just by anyone but by Henry Kissinger.
The draft of the document submitted to the Council for discussion is
not the final version. Experts have still to work on the report.

********

#13
ITAR-TASS Interviews FBI's Moscow Bureau Chief 

By ITAR-TASS correspondent Olga Semenova

Moscow, 4 Jul -- The outcome of three years of work by the official
FBI office in Moscow is represented by 260 investigations and the
sentencing of the convicted thief Yaponchik as an indicative example of the
successful cooperation between the intelligence services of Russia and the
United States. The bureau chief, Mike, who asked for his second name not to
be given in print, said this in an interview given to an ITAR-TASS
correspondent. It is not usual for Americans to publish the names of their
operatives, of which Mike is one.
His functions in Russia go far beyond straightforward office duties,
although there is plenty of paper work for Mike and his colleague to do (so
far there are just two of them in the FBI office in Moscow). During the
past three years they have taken part with Russian colleagues in
investigating such prominent cases as the grenade-launcher attack by
unknown terrorists on the US consular office building, the murder of the
American businessman Paul Tatum, the search for the journalist (Jean
Schuman), who went missing during the fighting in Chechnya, and naturally
the famous Yaponchik case. [passage omitted: opening of the office and
visit of FBI director to Moscow in 1994]
Mike completely shares the positive views of his boss after completing
three years work in Russia. "I have a very high opinion of my Russian
colleagues," he said. "They may lack equipment and supplies, but the
professionalism and qualifications of the Russian operatives is very high."
As an example, Mike cited the investigation into the murder in Moscow
of the well-known American businessman Paul Tatum, who was shot in Moscow
on 3 November 1996 in a pedestrian underpass near Kiev Station. Mike said
that his Russian colleagues are doing everything possible to investigate
this case and keep him continually briefed on the progress of the
investigation. Since this is apparently a contract killing, however, the
probability of success is very slight. Although the FBI and US
law-enforcement agencies, as Mike stressed, have a much richer experience
of dealing with killers, the clear-up rate for contract murders in America
is low.
FBI officers, Mike added, have for years been sharing their experience
of investigating murders, including contract murders, with their Russian
colleagues and have been holding seminars and inviting officers on
attachments.
Talking about his assignments in Russia, Mike particularly stressed
that the official office in Moscow concentrates entirely on cooperation
with the Ministry of Internal Affairs, the Federal Security Service, and
the Prosecutor's Office in combating various forms of crime and has
absolutely nothing to do with that area of the FBI's work that deals with
counterintelligence.
Mike also said that the FBI office has contacts with the Russian
Federal Security Service in the areas of fighting terrorism and economic
crime, but that these contacts are not as permanent or well established as
those with colleagues from the Ministry of Internal Affairs. "This process
is only just establishing itself," he said. "The FBI's three years in
Moscow is not such a long time."

*******

#14
Yeltsin Aide Explains Division of Powers With Regions 

MOSCOW, July 4 (Itar-Tass) -- Russian President Boris Yeltsin has
signed 29 agreements with 31 constituent members of the Russian Federation
and 150 related documents.
The presidential commission for agreements on division of competence
spheres and powers is considering 24 draft agreements and about 200 related
documents. Work on draft documents to agreements with four constituent
members of the federation is being done, deputy head of the presidential
administration Sergey Shakhray said at a news conference on Friday.
He said that the agreements have become a regular legal way of
division of powers and responsibility between Russian authorities. The
agreements implement a constitutional principle of equality of constituent
members of the federation and "level territories and regions with republics
of the Russian Federation," Shakhray said.
He said there are three circumstances. First, a principle of equality
of all federation constituent members is implemented. Second, there is an
absolutely new tendency in the agreements -- competence spheres and powers
are passed over by regions into joint competence and not distributed from
"above."
Shakhray believes that this proves that the agreements "actively work
for unification of Russian lands and consolidation of the federation." The
constituent members of the federation get a possibility to draft and
fulfill federal programs together with the federal authorities, and ensure
their joint financing. The federal authorities have a possibility to make
laws on these issues and control their fulfillment.
Agreements on division of competence spheres solves complicated tasks
of state building, including normal relations between regions and
autonomous districts within them, create conditions for "enlargement" of
federation constituent members, temporarily fill gaps in federal
legislation, help to create efficient federal laws and control observation
of the constitution and federal legislation.
Today, the president signed another five agreements of the sort, and
worked with governors from eleven more regions, Shakhray said.

********