July 13, 1997   

This Date's Issues:   1039 •1040  1041 1042

Johnson's Russia List
#1039
13 July 1997
djohnson@cdi.org

[Note from David Johnson:
1. AP: Charged in Moscow Subway Bombing. (DJ: Veteran JRL
recipients may recall my speculation a year ago about the
utility of this bombing for the Yeltsin election campaign.
Clarity approaches?)
2. Interfax: Chernomyrdin, Luzhkov Deny Rift in Relationship.
3. Itar-tass: US Team Reaches Urals To Compete With Russian 
Task Force.
4. The Times (UK): ST PETERSBURG FILE by RICHARD BEESTON.
5. Reuter: Yeltsin plays tennis but not boom-boom Boris yet.
6. Reuter: US defence secretary says E. Europe needs arms.
(Cohen in Ukraine).
7. Interfax: Russian Policy Toward Ukraine As Short-Sighted.
8. Interfax: Russia To Focus On Denver Agreements, Yeltsin 
Spokesman Says.
9. MSNBC: Preston Mendenhall, Spinning the news, Kremlin style. 
(DJ: Let me express my admiration for how NBC is making use of
it's Russia correspondents on MSNBC. Perhaps the other TV networks
might be able to find such outlets for their people.)
10. New York Times: Michael Gordon, Yeltsin Plan to End Russia's 
Housing Subsidies Provokes a Storm. (DJ: A long article!)
11. The Sunday Times (UK): Mark Franchetti, Kremlin draws up 
blacklist of foreign press.
12. Washington Post letter: Henry Kissinger, NATO: Russia's De Facto 
Veto.
13. Vilnius' ELTA: Lithuanians 'Puzzled' by Clinton Choice of 
Ambassador. (DJ: Sestanovich. Anyone care to jump into this stew?)]

**********

#1
Charged in Moscow Subway Bombing
July 11, 1997
MOSCOW (AP) - Security agents arrested two men Friday in connection with the
June 1996 bombing of a Moscow subway that killed four people and wounded 12. 
The Federal Security Service gave no details about the suspects. 
The attack, which took place just before the first round of Russia's
presidential elections, was followed by two separate bus bombings in the
Russian capital. 
At the time, the subway bombing was widely believed to be related to the
election, but now there is speculation that it involved rebels from the
breakaway southern republic of Chechnya. 

**********

#2
Chernomyrdin, Luzhkov Deny Rift in Relationship 

MOSCOW, July 10 (Interfax) -- Russian Prime Minister Viktor
Chernomyrdin and Moscow Mayor Yuriy Luzhkov have denied rumors of disputes
between them published in the mass media. Chernomyrdin said that such
rumors had emerged "frequently" over the five years the two had served in
their respective posts.
"It looks like some individuals want us to have reasons to quarrel,"
he told Interfax during a visit by the two leaders to the Luzhniki Stadium
reconstruction site.
Disputes do not exist and "nobody will succeed in sparking a quarrel"
between the Russian and Moscow leadership, Chernomyrdin said. Both the
city and the federal governments have their own problems to worry about, he
said. "On several matters the positions of the Moscow and federal
authorities would certainly differ. We must meet to resolve such
disagreements," he said. However, "it does not make sense" to
artificially provoke an internal conflict.
The Moscow Government is ready to compromise with the federal
government on all disputes, Luzhkov said.
"Naturally, points of view held by Moscow and the Russian government
do not always coincide," he said. In particular, Moscow authorities did
not agree with "the young members of the Russian Government on housing and
utilities reform," Luzhkov recalled. Moscow wants to make the changes
smoother and President Boris Yeltsin "made a wise decision to grant Moscow
the right to implement the reform on our own schedule," he said.
At the same time, city authorities will not ignore unfounded claims of
"several members of the government," the mayor said. Luzhkov once again
dismissed a statement made by First Deputy Prime Minister Boris Nemtsov on
the high cost of constructing a highway around Moscow. Luzhkov said
Nemtsov might not be familiar with the relevant documents and estimates.
Luzhkov said he and Chernomyrdin "have withstood the media in the
course of many years. There were numerous rumors, fabricated stories, but
thank God the attempts to cause a rift have failed," Luzhkov said.
Disagreements between the city and the federal leadership need not be
tackled in the mass media, Chernomyrdin said. In the event a problem comes
up, "we must get down to it and resolve it; this is our job," he said. "I
oppose public accusations on any trifle," he said. The sometimes sharp
public discussions get an exaggerated importance among Russians and
Moscovites, he said. "It is a pity we spend time on that," he said.

*********

#3
US Team Reaches Urals To Compete With Russian Task Force 

MOSCOW, July 10 (Itar-Tass) -- A US team has arrived at the Urals
military district (UMD) to participate in competitions with special task
force detachments of the Russian armed forces.
Major-General Yuriy Tanayev, the deputy chief of the UMD, told
Itar-Tass today that the official opening ceremony of the championship of
military scouts will be held on July 16. However, the US armed forces team
comprising 13 members, has flown in early to adapt itself to local
conditions, as well as to train itself in using Russian arms.
Army scouts from the United States and Slovakia will for the first
time take part in the Russian armed forces special task force championship
together with 17 Russian teams, which will be held in the Sverdlovsk
region's Beloyar area and last one week.
The championship's program, according to General Tanayev, envisages
landing and collection of groups, firing, 10 kilometre sprint march and
forced crossing of mountainous watery obstacles, using whatever means one
can lay hands on.
The scouts will also be required to search for secret hiding places
and perform other tasks, which special task force detachments have to
resolve in all armies in the world. However, the most rigorous endurance
test awaits the scouts, when they will be required to cover 30-50 kilometre
hilly terrain on foot.
This event will be held towards the concluding stage of the
competition. The General refrained to predict as to who will win in the
championship, but said the best specialists of special task forces have
come to Urals, many of whom already have experience of combating in
mountainous terrain.

*********

#4
The Times (UK)
12 July 1997
[for personal use only]
ST PETERSBURG FILE
by RICHARD BEESTON 

Treasure house of art offers war booty deal 
Big Brother is watching your sofa 
New life for a baroque relic 

WHEN President Yeltsin recently declared that St Petersburg should 
assert itself as Russia's cultural capital, he never expected the city 
to take him so seriously. 
After decades of struggling to overcome Moscow's domination, the 
beautiful but dilapidated Tsarist capital is finally begining to shake 
off its provinciality and do things its own way. 
Certainly that was the message this week from Mikhail Piotrovsky, 
the director of the Hermitage Museum, Russia's 
greatest cultural treasure, who boldly entered the political minefield 
surrounding the fate of "trophy art". 
Russia has so far steadfastly refused to return any of the estimated 
200,000 art treasures plundered by Soviet troops after the Second World 
War. The fate of the booty, worth billions of pounds, is currently being 
decided by President Yeltsin, who has the final say on a Bill calling 
for all art treasures to be declared Russian property. 
"Frankly, the issue will never be resolved if we leave it up to the 
politicians," said Mr Piotrovsky, who advocates a compromise between the 
former belligerents. "We will never get anywhere if we have the 'I won, 
you lost' mentality." 
Under his plan, the fate of the war booty would be negotiated over two 
or three years with the aim of dividing the treasures in half and making 
ownership final and legally binding. 
"Privately many Germans have told me that they would be prepared to 
divide the art 50-50, and this seems to be the only fair arrangement," 
he said. Not surprisingly, the Hermitage would do well out of such a 
deal. It received several hundred priceless works from its share of the 
booty, including scores of French Impressionist paintings, revealed in a 
stunning exhibition two years ago. 
The proposal, while based on the principle of compromise, is also a 
product of St Petersburg's more assertive attitude. The Hermitage, which 
once depended on shrinking government handouts for survival, now raises 
a third of its annual budget through fundraising, much of it from 
foreign sponsors. 
Similarly, while Moscow's Bolshoi Theatre is struggling to survive and 
maintain its sinking reputation, the Kirov's ballet and opera companies 
in St Petersburg have gone from strength to strength. 
While it may be too early to predict the city's rehabilitation after 
decades of Communist neglect, a new and energetic Mayor in St Petersburg 
and a sharp increase in outside investment suggest that the city may be 
returning to its former glory. 

Big Brother is watching your sofa 

ST PETERSBURG'S best 24-hour live soap opera will come to a close next 
week, when fans will pay their final visit to the Simpo furniture shop 
and say goodbye to Sergei and Natasha. 
The good-looking young couple have been the centre of attention since an 
advertising company offered to give them all the furniture in the shop 
window ­ worth more than £3,000 ­ if they became live displays for a 
fortnight. 
Although the lavatory is out of sight and the couple's large double bed 
is discreetly hidden behind a screen, everything else they do is in full 
view of passers-by on Savushkina Street. 
While attracting mild curiosity at first, the couple's activities turned 
into a political issue when 20 Bolsheviks picketed the shop, protesting 
against "this disgusting show, which debases intimate relationships and 
contradicts the moral standards of the Slavs". 
The controversy became a sensation when it was revealed that the couple 
were not newlyweds, as claimed. Indeed, Sergei was married to someone 
else ­ a spectator on the street. 
In spite of the disclosure, the couple stuck it out as furniture 
shoppers, journalists and friends streamed through their living room, 
testing out sofas, asking personal questions and helping themselves to 
cups of coffee. 
Naturally, the advertisers who arranged the display are delighted and 
the city is already waiting for the arrival of the next couple.(Top) 

New life for a baroque relic 

EIGHTY years after it was appropriated by the Bolsheviks, a small corner 
of St Petersburg that is forever British may finally be returned to its 
rightful owners. 
The Anglican church, situated appropriately on the English Embankment, 
is an 18th-century baroque masterpiece built to serve the once thriving 
British community, living in the then Tsarist capital of Russia. 
In spite of the indifference of its Communist owners, and the threat to 
its survival during the bloody siege of Leningrad by the Germans, the 
church has pulled through intact with the original altar, font and even 
the organ still in place. Although the building is currently being used 
as a souvenir shop, the first service in eight decades was held there 
last year by a Royal Navy chaplain and there are moves to retrieve it 
permanently. 

********

#5
Yeltsin plays tennis but not boom-boom Boris yet
July 12, 1997
PETROZAVODSK, Russia (Reuter) - Russian President Boris Yeltsin said Saturday
he had indulged in his favorite sport tennis for the first time since he
underwent heart surgery last year and was swimming every day in a chilly
Karelian lake. 
A clearly delighted Yeltsin told reporters at his woodland vacation retreat
in the northwest Russian region of Karelia that he had headed on to the court
Friday. 
``I'm not up to competing yet,'' he quipped. ``But it's a start.'' 
Itar-Tass news agency reported earlier that Yeltsin had put in about 10
minutes ``active work with a tennis racket.'' 
Yeltsin, who is 66 and a year into his second term as president, has made a
strong political comeback in recent months since recovering from a quintuple
heart bypass operation and then pneumonia. 
His wife Naina appeared to have relented by allowing him back on court --
Tass quoted her as saying soon after they went on holiday last Sunday that
she had told him not to play tennis. 
Yeltsin, who looked tanned and relaxed, said he was swimming every day in
the
lake in front of his residence. 
He said the water was cold but he warmed up in a Russian ``banya'' steam
bath, wielding traditional twig switches to invigorate the blood circulation.

*********

#6
US defence secretary says E. Europe needs arms
By Charles Aldinger 
KIEV, July 12 (Reuter) - U.S. Defence Secretary William Cohen held security
talks with Ukraine's President Leonid Kuchma and government officials on
Saturday and defended American plans to help Eastern Europe modernise its
ageing Soviet-style armies. 
``I think it is the responsibility of military leaders to make sure that
their security is adequately protected,'' he told reporters when asked about
criticism that young democracies in the former Soviet bloc did not need to
spend billions to re-arm after the Cold War. 
``I find it somewhat curious that the countries that are suggesting that the
United States has any ulterior motive might be among the first who wish to
sell military equipment to the region,'' added Cohen, who is visiting Eastern
Europe to discuss bilateral security cooperation. 
Cohen did not mention any of those countries by name. He has urged Eastern
Europe to move carefully in buying jet fighters and other weaponary, but arms
makers from the United States, Britain, France, Russia, Sweden and other
countries are busily hawking their wares in the region. 
Cohen held 45 minutes of talks with Kuchma and later met Defence Minister
Olexander Kuzmuk, discussing a range of issues and praising Ukraine for
giving up its nuclear weapons last year and moving to establish a free-market
economy. 
Kuzmuk said Ukraine, which has shown no sign yet of applying for NATO
membership but is a strong member of the alliance's cooperative ``Partnership
for Peace,'' needed to modernise its forces in areas ranging from maintaining
military vehicles to air defence. 
``We hope to help the Ukraine military to reform, to prepare itself for the
future, and we will cooperate in every way we can to make that possible,''
Cohen told reporters. 
He noted that Kiev had made ``significant cuts'' in defence spending in
recent years and needed to spend more on military modernisation. 
The secretary said the United States stood ready to cooperate in information
and technology sharing, medical technology and in mapping techniques as well
as in helping Ukraine establish a professional non-commissioned officer
corps. 
Kuzmuk and Cohen have developed a warm personal relationship in only a few
months, and the two gave each other a bear hug at the end of a joint press
conference. 
``I am proud of our friendship. Our plans and ideas that we deliberated
together will become reality.,'' said Kuzmuk. 
``Today's military institutions provide an example of good relations for
other government departments. If there are good relations between military
institutions, there will be fewer problems in general.'' 
Cohen told reporters after the Kuchma meeting that he had expressed
gratitude
from the United States and the North Atlantic Treaty Alliance (NATO) for
Kuchma's attempts to form a free-market economy and for last year's final
transfer of all Soviet-era nuclear warheads back to Russia from Ukraine. 
The meetings came only three days after Kuchma and NATO leaders signed a new
partnership charter at a western alliance summit meeting in Madrid. It will
allow the former Soviet republic the right to call for consultations with
NATO if it feels threatened from abroad. 
``During the 45-munute meeting, I congratulated the president for signing
the
NATO-Ukraine charter,'' Cohen said. 
``In addition, I praised Ukraine for the example it set in resolving
long-standing issues with its neighbours. This is just another example of
Ukraine's commitment to peace and stability in Europe.'' 
Ukraine recently settled a major dispute with Russia over the Black Sea
Fleet
based in Ukraine and signed a treaty on relations between Kiev and Moscow. 

********

#7
Russian Policy Toward Ukraine As Short-Sighted

MOSCOW, July 12 (Interfax) - The director of the Institute for CIS 
Studies, Konstantin Zatulin, has said Russia is pursuing a short-sighted 
policy with regard to Ukraine. 
"The delight of Ukrainian diplomacy over the signing of the charter on 
special partnership between Ukraine and NATO has become possible due to 
obvious errors in the Russian policy," he said in a statement circulated 
in Moscow. 
"Having received from the Russian president the legal guarantees that 
Russia has no claims on [the Ukrainian city of] Sevastopol, the 
Ukrainian president rushed to announce his claims for special 
partnership with NATO and Ukraine's departure from the Eurasian space," 
he said. 
Ukrainian President Leonid Kuchma "is ready to renounce not only the 
ornamental partnership with Russia but also the previously official 
policy of nonalignment," Zatulin said. 
He said this was the impression he received from the Kuchma's statement 
in Madrid, which hosted the NATO summit on July 8-9, that "everything is 
changing in the world." The Ukrainian president made such a statement 
when commenting on relations between Ukraine and the North Atlantic 
Treaty Organization. 
Also, Ukraine is very active as far as military exercises with the 
participation of NATO member states are concerned, Zatulin said. 
Ukrainian paratroopers and 1,200 U.S. marines are currently training 
near Lvov, Ukraine, for possible actions against separatists, he added. 
"These lengthy exercises, which will end only on July 14, will be 
succeeded by large-scale exercises in the Black Sea which have caused a 
unanimous negative response from Russia's government and public," 
Zatulin said. In September, exercises involving airborne units of 
Ukraine, the United States and NATO at the Shiroky Lan training site in 
Ukraine will follow the Sea Breeze-97 exercises. 
"What is happening now shows clearly that Russia, having signed a 
camouflage document with NATO and the so-called "big" treaty with 
Ukraine, has pushed Ukraine toward NATO itself," Zatulin said. 

********

#8
Russia To Focus On Denver Agreements, Yeltsin Spokesman Says

MOSCOW, July 12 (Interfax) - Sergei Yastrzhembsky, Russian 
presidential spokesman and deputy head of the Presidential 
Administration, has said that during the second half of the year Russia 
will step up efforts to implement the agreements reached at the G-8 
summit in Denver in June. 
When drawing up plans for the second half of 1997, President Boris 
Yeltsin underlined that the Denver agreements must be carried out in 
full and must constitute a priority, he said in an interview with the 
Interfax-AiF weekly. 
"Preparations for Yeltsin's visit to Italy should be assessed within 
this context," Yastrzhembsky said. Yeltsin visit to Italy "is likely to 
become the Russian president's first foreign trip in 1998," he added. 
Russia's political elite are largely divided on domestic issues but are 
becoming more and more united on foreign policy matters, Yastrzhembsky 
said. "This is undoubtedly a positive factor working for Russia," he 
added. 
Among difficult foreign policy issues in the second half of 1997, 
Yastrzhembsky cited coming debates in the State Duma on the Russia-NATO 
Founding Act and ratification of the START- 2 strategic arms reduction 
treaty. "As regards the START-2, deputies are justifiably demanding more 
expert assessments, in particular from the Defense Ministry and the 
Foreign Ministry, and a profound analysis of possible consequences of 
the treaty's ratification," he said. The president has supported such a 
stand of the Duma, Yastrzhembsky added. 
Also, "during the second half of the year we will be working to make it 
possible to hold an informal meeting between the Russian president and 
the Japanese prime minister," he said. "Many foreign leaders will visit 
Russia during this period. By the way, the rising frequency of such 
visits is a sort of signal showing Russia's increasing role in 
international affairs," Yastrzhembsky said. 
"On domestic affairs," he said Yeltsin intended to make more trips to 
the Russian regions during the second half of the year. The president's 
plans to visit Ryazan region, Kuban and Siberia have already been 
announced, he added. 
"The president will continue to support the government in its intention 
to implement the program of reforms, especially within the bounds of the 
so-called 'seven-point program,'" Yastrzhembsky said. Yeltsin also 
supports the government's intention to cooperate with the parliament as 
closely as possible, he said. 
"As to the attempts of some part of the radical opposition to ignite 
social tension, I think it will fail to attain its goal during the 
second half of the year after failing to achieve it in the first half of 
1997," Yastrzhembsky said. "People have become wiser. The political 
experience of citizens multiplied by the self-preservation instinct and 
the positive results of the government's social policy are a guarantee 
that there will be no great shocks," he said. 
The Interfax-AiF weekly will publish the interview with Yastrzhembsky 
and the economic and social forecasts made by First Deputy Prime 
Minister Boris Nemtsov, Central Bank Chairman Sergei Dubinin, State Duma 
Chairman Gennady Seleznyov, Communist Party leader Gennady Zyuganov, 
Liberal Democratic Party of Russia leader Vladimir Zhirinovsky, former 
Russian Security Council Secretary Alexander Lebed and others in its 
next edition which will appear on July 14. 

*********

#9
>From MSNBC
http://www.msnbc.com
July 12, 1997
Spinning the news, Kremlin style 
Yeltsin’s handlerstry to pump up his sickly image 
Tennis anyone? The Kremlin press service goes to extremes to depict 
President Boris Yeltsin as a hearty tennis player. 
By Preston Mendenhall 
Preston Mendenhall is a producer for NBC News stationed in Moscow.   

        MOSCOW — During the 70 years of Soviet Communism, the Kremlin 
press service mastered the art of misinformation and propaganda. Times 
have changed, but sometimes the Kremlin spin doctors are a little slow 
to follow.
        Boris Yeltsin is on vacation near Petrozavodsk, on the 
Russian-Finnish border. The presidential press office has gone into 
overdrive to portray Yeltsin as a fit, hard-working and manly president 
— especially in light of his health problems in the last year. 
        Here are a few recent examples:
On Yeltsin’s first day of vacation, a Kremlin spokesman said Yeltsin, a 
tennis fanatic, had already “hit a few balls” on the court. An hour 
later, Naina Yeltsina, the president’s wife, said she hadn’t allowed her 
husband near the court.
The press service is at pains to portray Yeltsin as an avid fisherman. 
His daily catch is reported with the urgency of high-level negotiations. 
According to the Kremlin, within hours of his arrival, not only had 
Yeltsin been on the tennis court, but he also caught a “pailful” of 
tasty fish. Although people who have known Yeltsin for years can’t 
remember him as an avid angler, the 66-year-old president has been 
pulling “huge pikes, perches, sanders, graylings and salmon” from Lake 
Ukshe, near which his vacation retreat is situated. A Moscow Times 
reporter in Petrozavodsk quoted local fisheries officials as saying that 
the lake had been closed to the public and stocked with about 10,000 
fish before Yeltsin’s arrival.
        Itar-Tass, the official government news agency, dutifully 
reprints daily Kremlin statements word for word. The fawning reporters 
also wax poetic about the local landscape and Yeltsin’s carefully 
planned excursions:
“Kizhi (a stop on Yeltsin’s vacation tour) boasts a famous architectural 
compound wholly made of wood by medieval masters.”
“Yeltsin has shown great interest in the activity of the Marine Club, 
having pledged support for its new projects.”
“It is warm and sunny today ... despite the bleak forecasts of the local 
weather service, the morning skies are cloudless.” Itar-Tass News Agency 
Interfax News Agency Newsgroup: alt.current-events. russia         
Probably the greatest target for the Kremlin press service’s 
spinmeisters has been Yeltsin’s poor health.
        During the 1996 Russian presidential campaign, Yeltsin suffered 
a major heart attack. The Kremlin called it a summer cold.
        Two months after his heart operation, in January 1997, Yeltsin 
came down with double pneumonia. Putting a red-blooded spin on a 
life-threatening illness, the press service said Yeltsin had gone 
hunting and shot about two dozen ducks — within a few hours — and had 
stayed outside too long.
        But an elderly man sitting in a duck blind in sub-zero 
temperatures for hours on end with a heavy-gauge shotgun butt pressed 
against the still fresh chest scars from quintuple bypass surgery was a 
bit too difficult to imagine.
        Apparently, the Kremlin thought so, too. The press service later 
revised its story and said Yeltsin caught pneumonia from his grandson.
      
*********

#10
New York Times
13 July 1997
[for personal use only]
Yeltsin Plan to End Russia's Housing Subsidies Provokes a Storm
By MICHAEL R. GORDON

MOSCOW -- The burning issue for Russians these days is not NATO expansion 
or President Boris N. Yeltsin's health. It is Yeltsin's plan to end 
housing and utility subsidies. 
In a politically risky move that has galvanized much of Russia, Yeltsin 
is pressing to phase out the enormous subsidies by 2003. The logic is 
clear. Six years after the Soviet Union collapsed, Russia has emerged 
with an economy that is part free market and part socialist. 
Prices for food and clothing have soared, often exceeding those in the 
West. But most Russians still pay a pittance for shelter, leaving 
cash-strapped local governments to pick up most of the tab. 
Housing subsidies, geared to apartment size, benefit the emerging middle 
class more than the poor. At the same time, they eat up scarce funds 
that could used to pay back wages, retrain displaced workers or improve 
the nation's dismal health care. 
Utility subsidies have spawned an almost palpable disdain for energy 
conservation. Russia is still a land where tenants compensate for 
overheated radiators by throwing open the windows, leave water taps 
running and think nothing of leaving on the lights when they leave the 
room. Water and gas meters for apartments are rare, though electricity 
meters are common. 
"In Russia we consume five times more heating oil or natural gas to heat 
a square meter of housing than they do in northern Europe," fretted 
Boris Nemtsov, the youthful first deputy prime minister, who has played 
a lead role in promoting the plan. 
The plan would phase out the subsidies by 2003 except for subsidies to 
the poor and lower-middle-income tenants. It also calls for taking 
maintenance services away from the government and allowing private 
companies to bid for them. 
But this is an issue that turns as much on politics and psychology as on 
economics. Populist politicians have already had a field day attacking 
the plan. Regional leaders who privately back it have often been loath 
to endorse it publically. 
Accustomed to cheap rents and battered by high prices in other sectors 
of the economy, many Russians view the projected fourfold increase in 
housing and utility costs more as a sign of government indifference to 
them than as an act of reform. 
Like many of her neighbors in Moscow, Tanya Yesin has nothing but 
contempt for the economic reformers who say Russian families are not 
paying their fair share. 
The three-room apartment she shares with her husband and two daughters 
in a working-class area of south Moscow is definitely on the cozy side. 
But it is bright, well heated, close to transportation -- and cheap. 
Three-room apartments in her building run about 140,000 rubles a month 
(about $24). And as a military officer, her husband receives a 50 
percent discount. 
Including utilities, the family spends only 6 percent of its income on 
shelter. But she has little patience for Yeltsin's plan. 
"It is absolutely absurd," she sniffed, as she offered a cup of steaming 
tea and black currant jam to a visitor. "They have to raise our wages 
and salaries if they want us to pay more." 
The stolid tracts of housing that dominate Moscow's skyline provide a 
grim reminder of Russia's long tradition of government-subsidized 
housing. 
Faced with chronic housing shortages and an increasingly urbanized 
population, the Soviet Union erected buildings with its trademark 
disregard for individuality and taste. There is no dispute that housing 
was cheap. The average Soviet citizen paid a mere 8 percenrt to 10 
percent of his income for housing and "communal services" like utilities 
and garbage removal. 
By and large, people got what they paid for. Apartments were cramped. 
Soviet officials measured comfort by the square meter and privacy was 
often a luxury. 
Several generations of families were often compelled to live together as 
they worked their way up long waiting lists for apartments to become 
available. Unhappy couples put off divorce rather than join the vain 
quest for new living quarters. 
Entrance ways, courtyards and other public spaces were dirty, dark and 
neglected, reflecting the ethic: what belongs to everybody belongs to 
nobody. Housing maintenance required an outsized bureaucracy. The Soviet 
ruling elites as usual, received the largest and most comfortable 
quarters. 
When Mikhail S. Gorbachev become the Soviet leader in 1985, Stanislav 
Shatalin, the pro-reform economist, described housing as the least 
efficient sector of the economy. 
The collapse of the Soviet Union in 1991 transformed much of Russian 
life. But the system of government-supported housing has lumbered on 
largely intact. Some 40 percent of the apartments throughout Russia are 
still owned by municipal governments or by former Soviet enterprises 
that provide housing for their workers. 
The tenants who rent them pay a fraction of the actual rent. They cling 
to the apartments even after they have moved out of them to get married 
or retire in their countryside dacha, passing them on to their children 
like rare heirlooms or subletting them to wealthier Russians or foreign 
businessmen at enormous mark-ups. 
Russians who privatized their apartments captured about 25 percent of 
the housing. In general, they paid a token fee for processing the 
paperwork, providing the state with little profit for general 
maintenance or major repairs on its own apartments. 
Another 10 percent of the apartments are cooperatives, in which each 
tenant is responsible for his or her own unit and ownership of the 
common space is shared. 
The final 25 percent of housing is a result of private construction and 
largely consists of wooden houses in the countryside. 
In general, Russians pay about 6 percent of their income for housing and 
utilities, according to the Urban Institute, an American public policy 
group, which is advising the Russian government on housing reform. 
Americans, in contrast, pay an average of 17 percent. 
The subsidy money is not paid directly to the tenants. Instead it is 
paid to municipal or private landlords and utility companies. The 
overall figures are staggering. Russia spends more than 3 percent of its 
gross domestic product on housing and utility subsidies, far more than 
it spends on its bedraggled military. 
There are indirect costs, as well. To help keep bills low for tenants, 
utility companies have charged Russian industry substantially higher 
rates. That has depressed economic growth at a time when the government 
is trying to turn the economy around.

STORY CAN END HERE. OPTIONAL MATERIAL FOLLOWS=

The subsidies also raise the basic issue of fairness. 
By and large, income is not taken into account, although in Moscow the 
very poor receive additional subsidies and the few Muscovites who have 
more than one apartment are expected to pay the full cost. 
In her apartment in the Moscow suburb of Mitino, a sprawling stretch of 
almost indistinguishable high-rises that bracket the road to 
Sheremetyevo airport, Alla Mikoliouk is the first to acknowledge that 
her utility payments are absurdly low. 
She and her husband, the director of a private pension fund, enjoy a 
comfortable middle class life style. 
An entire wing of their apartment building was purchased by her 
husband's company five years ago. Many apartments were sold to company 
employees at the discounted price of $10,000 to $15,000 and have since 
gone up several times in value. Her husband was one of the lucky, 
original buyers. 
Their three-room apartment is well-appointed. The study is filled with 
expensive exercise equipment. They have a computer, fax and a telephone 
answering machine. The electrical appliances are almost too numerous to 
count: three televisions, a satellite dish, video tape player, washing 
machine, dishwasher, refrigerator, stove, microwave and a bread maker. 
The monthly charges, however, are minimal. The electricity for lighting 
the apartment and operating the appliances is a mere 25,000 rubles a 
month (about $4.30). Hot water, heat, garbage removal and general 
maintenance cost another 100,000 rubles a month (about $17.20). 
Mrs. Mikoliouk says her husband does not discuss his salary or 
investments. But she receives about $1,000 a month from renting out her 
former apartment and working as a language teacher. Each month she takes 
a small book to a government-owned bank to make the payments. 
"I can't understand why we pay so little for electricity," she said. 
"For us, it is simply nothing. But for pensioners or teachers earning 
500,000 it's a lot." 
Housing and utility payments are more of a worry for Hadezhda Inshev. 
She and her husband, Leonid, a driver, never had an apartment of their 
own to privatize or the savings to buy one when the prices were cheap. 
After getting married 13 years ago, she moved in with her husband, who 
had a room in a communal apartment near the Moscow River. When the 
elderly woman in the room next door died, the new couple expanded into 
that room, as well. 
They petitioned the Moscow authorities for a place of their own after 
the first daughter was born. But the two rooms they lived in provided 
one square meter too much to win a place on the waiting list. 
Now, they and their two daughters make do. Their cramped corner of the 
communal apartment even accommodates the piano the girls use for their 
music lessons. The bathroom and kitchen down the hall are shared with 
three other tenants. 
Mrs. Inshev pays a minuscule 8,544 rubles (about $1.50) in rent. But 
heat, gas, electricity, the hook-up for her Sony television to the 
building's antenna and garbage removal fees drives the cost up to about 
200,000 rubles (about $35). 
That is only 7 per cent of the family's monthly income. But Mrs. Inshev 
says she needs the rest for food and clothing, the fees for her 
children's music lessons and the extra tuition she pays to send them to 
a government school, which teaches French. 
When her husband's wages are delayed or things are tight, she knits 
clothes in the evening. 
''I guess it must be this way," she said fatalistically about the 
government's plan to end subsidies. "But it would really affect our 
lives. We would have to look for a cheaper place." 
But it is economics, more than fairness, that has forced the issue of 
housing to the top of the political agenda. 
Low-cost housing has brought a measure of social stability by cushioning 
the shock of delayed wages, rising prices and the widening gap between 
rich and poor. But it has also become an enormous drag on the economy. 
"A major part of local budgets is going to housing subsidies," said 
Yegor T. Gaidar, the former prime minister and economic reformer who is 
advising the Yeltsin government. "The result is the crisis in education 
and health care." 
About a fifth of Moscow's budget, for example, is spent on housing and 
utility subsidies. Some municipalities devote a third of their budget or 
even more to such subsidies. 
There are hidden costs as well. Because of subsidized rents, some 
tenants live in larger apartments than they need and might otherwise 
afford. This has contributed to a housing crunch and encouraged 
unnecessary construction. 
Economists warn that the burden on local governments may soon increase. 
In their struggle to make a profit, former Soviet enterprises are 
divesting themselves of apartments and other social services and 
transferring them to local governments. 
Gaidar said that many municipal governments understand that they cannot 
afford the subsidies, but do not want to take the political heat for 
reducing them. 
The Yeltsin government can also use the threat of withholding payments 
to local governments to enforce its will, Gaidar says. Currently, 80 out 
of Russia's 89 regions receive more funds from the federal government 
than they provide in taxes. 
In Moscow, the pugnacious mayor and presidential aspirant, Yuri Luzhkov, 
has assailed Nemtsov as a dreamy reformer detached from the day-to-day 
worries of the working poor. He insists that Moscow is taking a far more 
gradual approach, and will not phase out the subsidies until 2006, three 
years later than under the Kremlin plan. 
But facing economic reality, Luzhkov's city government has quietly moved 
to raise rents and utility payments. City planning documents indicate 
that Luzhkov is planning to recover virtually all costs by the year 2003 
-- just as Nemtsov proposed. 
Luzhkov's objection "is simply a case of populist politics," said 
Raymond Struyk, an Urban Institute expert who advises the Moscow 
government. "When you look at his concrete plans, there is no material 
difference with the federal program." 

***********

#11
The Sunday Times (UK)
13 July 1997
[for personal use only]
Kremlin draws up blacklist of foreign press 
IT IS a measure reminiscent of the darkest days of the cold war. The 
Kremlin is drawing up a blacklist of foreign newspapers which it claims 
are guilty of tarnishing the image of Russia, writes Mark Franchetti in 
Moscow. 

The list, which is expected to name a dozen international publications, 
will be circulated among Russia's political and business elites with a 
strong recommendation to ostracise those mentioned. They are not to be 
granted interviews and should not be given information. 
Top of the list are Forbes, the American business magazine, the 
Washington Times, Le Monde, the French daily, and La Repubblica, the 
Italian daily. 
"We are putting an end to an aggressive foreign media attack on the 
image of Russia and on the standing of Russian business," said Andrei 
Fyodorov, a former deputy foreign minister and one of the main figures 
advocating the need for an official blacklist. 
The decision was taken at a special meeting of the Council on Foreign 
and Defence Policy, an influential group of Russian businessmen, media 
editors and politicians which advises President Boris Yeltsin. They 
unanimously agreed that Russia suffered from a negative image abroad and 
this was due partly to a foreign press campaign to damage Russian 
business interests. 
Sergei Yastrzhembsky, Yeltsin's spokesman and the man widely tipped as 
Russia's next foreign minister, and Yuri Baturin, secretary of the 
Russian Defence Council, are both consultants to the group and were 
present at the meeting held 10 days ago. 
The measure provoked widespread criticism. It coincides with growing 
pressure on Russian newspapers to control the flow of information. Last 
week Igor Golembiovsky, the editor of Izvestia, the Russian daily 
newspaper, resigned, saying he no longer felt free to decide the paper's 
editorial line. 
"It is a classic case of Soviet-style intimidation," said Jean Batiste 
Naudet, the Moscow correspondent of Le Monde which fell foul of the 
Kremlin last March after it claimed that Viktor Chernomyrdin, the 
Russian prime minister, had amassed a personal fortune of $4 billion. 
The prime minister announced on Friday that his total wealth is less 
than $50,000. 
"They claim that they are seeking to improve Russia's image but are in 
fact destroying it. No democratic country would draw up such a 
blacklist. But we will not be intimidated," said Naudet. 
Forbes magazine was accused of seriously damaging the business interests 
of Boris Berezovsky ­ one of Russia's first dollar billionaires and 
deputy secretary of the Russian Security Council ­ after it published a 
hard-hitting piece under the headline "The Godfather of the Kremlin" 
last December. 
La Repubblica was singled out because of a 1991 article by its America 
correspondent depicting Yeltsin as a drunken bear. 
"Russia will defend itself," said Fyodorov. "We have eyes and see what 
these papers are doing. Don't think that we are just going to sit back 
and take it passively. We have enough forces to strike back." 

**********

#12
Washington Post
12 July 1997
[for personal use only]
Letter
NATO: Russia's De Facto Veto

In his June 27 op-ed column, "Fear Not for NATO," Ambassador Robert 
Hunter takes exception to my contention that the Founding Act 
accompanying NATO enlargement dangerously dilutes NATO [op-ed, June 8]. 
He argues that Russia does not have a veto, that the agenda of regular 
meetings of the Permanent Joint Council have to be jointly agreed and 
that the agreement does not subordinate NATO to the European Security 
Conference (OSCE).
I will not dispute legal points with the ambassador except to point out 
that Russian President Boris Yeltsin claims he does have a veto and that 
the Permanent Joint Council makes decisions by consensus -- a euphemism 
for veto. Also, the Founding Act describes the OSCE as the "inclusive 
and comprehensive organization for consultation, decision-making and 
cooperation in its area." Mr. Hunter also claims that the new NATO 
members are not second-class citizens because restrictions on them were 
imposed unilaterally. This explains the origin, not the content of their 
status.
All of this misses my central point, however. Experience with NATO 
deliberations suggests that in all but the most exclusive cases the 
deliberative role of NATO will be overshadowed by the Russian in the 
ante-room (if indeed this is where he stays). America's historic 
function in holding the alliance together will be severely weakened.
Finally, Russian statements have been consistently hostile to NATO. The 
Russian member of the Permanent Joint Council is bound to have a 
dramatically different attitude from the 16 NATO members. Not a shred of 
evidence exists that fostering NATO cooperation 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 
legal points are argued.

HENRY A. KISSINGER
New York 

*********

#13
Lithuanians 'Puzzled' by Clinton Choice of Ambassador 

Vilnius ELTA in English
July 10, 1997

US President Bill Clinton appointed last month a new ambassador to the
former Soviet republics who is to solve among the rest NATO related
problems of the Baltics. The conservative daily Lietuvos Aidas insisted,
however, that the appointment was rather surprising as the new ambassador a
political science authority Stephen Sestanovich had made his name in the
press as an opponent of NATO expansion. According to the daily, the
Lithuanian politicians are puzzled at the decision of the president who has
declared NATO expansion one of the main goals of his foreign policy.
The Sestanovich candidature has yet to be approved in the US Senate
and a campaign was launched by Baltic allies there to prevent the approval
of the candidature. According to the Chicago journalists the US Secretary
of State Madeleine Albright and Security Adviser Samuel Berger decline to
answer when confronted with the question but it still may arise on their
weekend visit to Lithuanian capital.

********