August 3, 1997  
This Date's Issues: 1111 • •

Johnson's Russia List
#1111
3 August 1997
djohnson@cdi.org

[Note from David Johnson:
This is the last issue of JRL until we return a week
from today. The separation will be good for both of us.
1. Fred Weir in Moscow on the privatization fandango.
2. Reuter: Yeltsin ill, not drunk, in Ireland incident--
report.
3. Sunday Times (UK): DRUNK ON POWER. Nobody was closer 
to Boris Yeltsin than his bodyguard, Alexander Korzhakov. 
In his shocking memoirs, he portrays the Russian president 
lurching through crises, glass in hand. Extracted from the 
book "Boris Yeltsin: From Dawn to Sunset."
4. Interfax: IMF Sees Talks With Russian Side As Extremely 
Successful.
5. Komsomolskaya Pravda: Nemtsov Cited on Relations With 
Yeltsin, Chubays.
6. Komsomolskaya Pravda: Lebed Comments on Army Reform, 
Svyazinvest Affair.
7. The Sunday Times (UK): Mark Franchetti, Russian fat cats 
buy a touch of British class. 
8. Intefax: Duma Speaker Says Corruption Accusations A 
Provocation.]

********

#1
From: fweir.ncade@rex.iasnet.ru
Date: Sat, 02 Aug 1997 21:17:59 (MSK)
For the Hindustan Times
From: Fred Weir in Moscow

MOSCOW (HT) -- Russia's ruling elite is splitting apart as a
harsh struggle over as yet unprivatized former Soviet state
assets heats up, and some analysts warn the resulting wave of
accusations, invective and lawsuits among leading financial
interests could escalate into full-blown political crisis.
"The system of power in Russia is in danger of flying out of
control because layers of corruption and dirty-dealing are being
exposed by warring groups," says Andrei Piontkowski, director of
the independent Centre for Strategic Studies in Moscow.
"The handful of financiers who created the power system in
this country are now battling each other for control, and this
could continue to the point of mutual destruction."
Recent weeks have seen top bankers accuse one another of
building their financial empires by embezzling state funds on a
grand scale, rigging auctions of public property to their own
advantage and conniving with government officials to divide up
public property at rock bottom prices.
And in defending the government, first deputy prime minister
Boris Nemtsov -- widely regarded as President Boris Yeltsin's
heir apparent -- last week obliquely admitted that much of what
the squabbling bankers are saying about each other is true.
"From the semi-gangsterish accumulation of capital the
country is moving to more or less normal, civilized operating
conditions," Mr. Nemtsov told the daily Komsomolskaya Pravda.
"Either the authorities will be at the service of semi-shadowy
capital, or we will establish rules that lead to the
normalization of the situation in the country."
The first wave of privatization in Russia produced a handful
of huge criminalized financial-industrial groups, closely linked
to corrupt official circles, which by last year reputedly
controlled up to 50 per cent of Russia's gross domestic product.
In early 1996 the heads of seven of those business empires
gathered in Davos, Switzerland, to offer their combined support
to re-elect market reformer Mr. Yeltsin against a strong
challenge from a Communist candidate.
According to an interview given by one of the tycoons, Boris
Berezovsky, to Britain's Financial Post, the group agreed to
install pro-Western politician Anatoly Chubais to head Mr.
Yeltsin's election campaign and afterwards to cooperatively
divide up the fruits of political victory among themselves.
The seven business empires include Mr. Berezovsky's
diversified LogoVAZ company, the octopus-like financial-
industrial concern Uneximbank, the media and oil giant Bank
Menatep, the media conglomerate MOST Bank, Alfa Bank, Stolichny
Bank and Inkombank.
Mr. Yeltsin won the election. Mr. Chubais became the
President's powerful Kremlin chief of staff and, this Spring, was
awarded the post of first deputy prime minister in charge of the
country's finances. Mr. Berezovsky was appointed deputy chief of
the Kremlin's top advisory body, the Security Council. Vladimir
Potanin, head of Uneximbank, Russia's third-largest investment
house, was given a 7-month stint as deputy prime minister.
Since then the major banks have managed to peacefully divide
up many of Russia's most profitable industries, chiefly oil and
metals, among themselves at cut-rate prices. But in recent weeks
the process has turned ugly.
"In the first stages of privatization there seemed no end of
valuable state property to be parcelled out, basically for free,"
says independent analyst Nikolai Zyubov. "It was easy for a few
top tycoons to make sweetheart deals. But now there are only a
few really desirable assets left, and there are too many banks
after them. The battle for the last few is going to be vicious."
The current storm centres around the auction of a 25 per
cent stake in the former Soviet economy's crown jewel -- the huge
communications firm Svyazinvest, which owns most of Russia's
telephone networks, broadcast facilities and satellite links. A
consortium led by Uneximbank, Russia's third largest investment
house, surprised everyone by winning the stake with a bid of
$1.9-billion -- well above the starting price. 
But the auction was passionately attacked by media outlets -
- including Russia's only independent TV network and leading
daily newspaper Segodnya -- belonging to the losing bidder, MOST
Bank, which had offered $1.7-billion for the shares. 
"The gentleman's agreement under which state property has
been divided up was violated," says Mr. Zyubov. "It was the turn
of MOST bank to step up to the trough and get its share. But they
were cut out of the deal, and they are very, very angry."
The weekly Obshaya Gazeta described a Kremlin meeting last
week in which the offended bankers traded furious insults with
Mr. Chubais and accused him of violating the secret pact made
between them at the time of President Yeltsin's re-election
effort. The newspaper said that the collapse of solidarity among
Russia's top tycoons means unbridled warfare among them "until
one or more of them has been crushed completely."
Media organizations controlled by Uneximbank, including the
major dailies Komsomolskaya Pravda and Izvestia, lashed back by
charging MOST bank with past corruption and political blackmail.
In his interview with Komsomolskaya Pravda, deputy prime
minister Mr. Nemtsov argued the Svyazinvest sale was Russia's
first open and honest auction, and that it had raised much-needed
cash to help the government meet its urgent social debts,
including unpaid back wages for millions of workers.
But Prime Minister Viktor Chernomyrdin ordered a government
investigation into the auction's legality and implied that it
could be reversed.
"The various financial interests have their sponsors in
government," says Mr. Piontkowski. "Chubais is in bed with
Uneximbank, while Chernomyrdin is with Berezovsky and MOST. . .
"The Russian state has become essentially corrupt. Our
politics are little more than wars between rival financial
interests. And this is undermining the stability of the whole
country." 

********

#2
Yeltsin ill, not drunk, in Ireland incident--report
August 2, 1997
LONDON (Reuter) - Russian President Boris Yeltsin left Irish Prime Minister
Albert Reynolds stranded on an airport tarmac in a 1994 diplomatic incident
because he was too ill to get off his plane, Yeltsin's former top bodyguard
says in his memoirs. 
The fiasco happened at Ireland's Shannon Airport when Yeltsin failed to
appear during a stopover and a deputy was sent instead. 
Yeltsin was accused by critics at the time of being drunk but Alexander
Korzhakov, his friend, bodyguard and adviser for 11 years, said the Russian
leader had suffered a heart attack or mild stroke. 
Excerpts from Korzhakov's memoirs were published in the London Sunday Times
under the headline: ``Revealed: Yeltsin's sober excuse for Irish fiasco.'' 
Korzhakov said he was woken by Yeltsin's wife Naina and told that he had got
up in the night while flying over the Atlantic to go to the lavatory. But he
then collapsed. 
Doctors treated Yeltsin, who feared there would be a diplomatic scandal if he
did not greet Reynolds. 
``Yeltsin was shouting so loudly that he must have been heard outside ...
Every time he stood up, he fell over,'' Korzhakov wrote. 
Yeltsin, physically restrained by aides, was quoted as telling Korzhakov
after the bodyguard ordered a Kremlin aide to meet Reynolds in the
president's place: ``You have disgraced me in front of the whole world by
doing this.'' 
Afterwards, Korzhakov said, Yeltsin aides concocted a story about the
president suffering from jet lag. 
``Naturally the president was assumed to have been drunk. The speculation was
wrong but it was hardly unjustified,'' he wrote. 

*******

#3
Sunday Times (UK)
3 August 1997
[for personal use only]
NEWS REVIEW  

DRUNK ON POWER
Nobody was closer to Boris Yeltsin than his bodyguard, Alexander Korzhakov. 
In his shocking memoirs, he portrays the Russian president lurching through 
crises, glass in hand 

Extracted from the book Boris Yeltsin: From Dawn to Sunset by Alexander 
Korzhakov to be published in Russia this week 
•Alexander Korzhakov was Yeltsin's bodyguard, friend and adviser for 11 
years. He became one of the most powerful men in Russia before he was 
sacked in June 1996. 

'Alexander, Alexander . . ." In my sleep, I heard the panicked whisper 
of Naina Yeltsin, the president's wife, and leapt out of bed. 
"Boris has fallen and wet himself. He got up, probably wanting to go to 
the toilet, and is lying there, not moving. Do you think he's had a 
heart attack?" 

Naina had rushed straight to me without waking the doctors because the 
situation was so delicate. But nearly all the necessary specialists and 
equipment were on board the aircraft: an artificial resuscitator, a 
therapist, a nerve pathologist, a neurosurgeon, nurses. "Get the doctors 
quickly," I barked at Naina. 

I went into the president's suite. He was lying motionless on the floor, 
his face pale and lifeless. I tried to lift him. But Boris 
Nikolayevich's inert 23 stone frame was too much for me. I managed to 
raise him slightly, and lifted him from below. Slowly, I crawled with 
his body to the bed. 

It was pitch-dark outside and the ocean was below us as the doctors went 
to work: drips, injections, artificial respiration. Naina paced about 
the cabin wailing: "That's it, he's had a heart attack. What are we to 
do?" 

We had a meeting at Shannon airport in Ireland in just three hours. It 
was September 1994 and we had arranged a 40-minute stopover with Albert 
Reynolds, the Irish premier, en route from Washington to Moscow. But it 
was not only impossible for Yeltsin to leave the plane ­ in his 
condition, it was dangerous to move. Total peace and quiet was 
essential. 

I could always tell when Yeltsin's good moods were about to evaporate 
and turn into a vulgar jocularity that he could not control. At a meal 
in Washington with President Bill Clinton the day before, the wine had 
flowed freely, although no spirits were served. 

Everyone knows that at state meetings you drink a toast, taking just a 
sip, and then put your glass down. Yeltsin ate only a tiny piece of meat 
and drained several glasses. The wine went straight to his head and he 
began to crack terrible jokes, which seemed to me to fall completely 
flat. The interpreter tried desperately to find the words that would 
convey humorously all his obscenities in English. 

Clinton realised his visitor was behaving oddly but tried to maintain 
the jolly atmosphere and pretend that everything was okay. He obviously 
sensed that the meal could end in an ugly scene that would be damaging 
to him. I was crimson with fury. 

I was only able to relax once we had reached the airport. We were flying 
on Mikhail Gorbachev's old plane, which was surprisingly badly laid out 
given his fondness for comfort and luxury. The presidential suite was 
modest: a cramped lobby, a bathroom and toilet, two narrow beds and a 
little fold-away table. 

The stewardess brought drinks and everyone congratulated Yeltsin on his 
diplomatic "victory". He knew I did not like to flatter. When we were 
alone, he would grumble, "I know that you hate me. I never hear a good 
word from you, only criticism." Yeltsin toasted his team of 
speech-writers and advisers, but he sensed something was wrong. He was 
excessively emotional and depressed and we all went to bed early. 

When Yeltsin woke up he was surrounded by doctors, all peering at him. 
He tried to sit up without support, but was in too much pain. He fell 
back on the pillow. Seeing me, he said: "Get me dressed. I have to get 
ready for the talks." 

Naina handed him his shirt, but he did not have the strength to button 
it. He sat in a pitiful state and frightened us by saying: "I am going 
to the talks. I will go to the talks. Otherwise there will be an 
international scandal." 

The doctors were afraid to approach him, but Yeltsin demanded: "Make me 
normal and healthy. If you're not capable of that, then go to hell!"I 
have always admired the patience of our doctors. 

At last we landed at Shannon airport. Ten minutes went past, but nobody 
emerged from our plane. We looked out of the windows. A distinguished 
welcoming party was outside. The Irish prime minister was there too, and 
it was obvious he was getting nervous. In a doom-laden voice, Yeltsin 
asked: "Who will go then?" 

We had prepared for this while the president was unconscious. We could 
not put Russia in a position where not one member of the official 
delegation could attend the talks. "Oleg Soskovets [the deputy prime 
minister] will go in your place," I replied. 

"No, I command him to stay. Where is he?" Yeltsin asked. 

The freshly-shaven, elegant Soskovets approached the president. "I am 
here, Boris Nikolayevich." 

"I order you to stay on the airplane. I will go to the meeting myself." 
Yeltsin was shouting so loudly that he must have been heard outside ­ 
the doors to the cabin were already open. But he could not possibly meet 
Reynolds himself. Every time he stood up, he fell over. How could he get 
down the gangway? He would almost certainly mortally injure himself. 

I took a difficult decision, thankful that Mikhail Barsukov, the head of 
Kremlin security, was there to support me. "Oleg, get out there," I 
said. "We have already been standing here for 20 minutes. Go, I beg you. 
I won't let him off the plane." 

Oleg went out and smiled, as if everything was just marvellous. As soon 
as he was down the gangway, I shut the door and said: "That's it, Boris 
Nikolayevich. You can sack me, even put me in prison, but I will not let 
you out." 

Yeltsin sank into his cushion, in his underpants and shirt, and burst 
into tears. His fresh shirt was already bloodstained from the injections 
he had received. He began to moan: "You have disgraced me in front of 
the whole world by doing this." 

"You're the one who nearly disgraced Russia and yourself," I retorted. 

The doctors put him to bed, gave him tranquillisers and the president 
slept until we reached Moscow. Shortly before landing he summoned me in 
an agitated state. "What are we going to do? How will we explain what 
has happened?" he asked. 

"Boris Nikolayevich, you must say that you were very tired," I replied. 
"The flight was difficult and you had jet lag. You fell soundly asleep 
and your bodyguards would not allow you to be disturbed. They said that 
the peace and quiet of the president was more important than protocol ­ 
and you will punish them without fail for insolence." He agreed and 
repeated the formula almost word for word to the press. Naturally enough 
the president was assumed to have been drunk. The speculation was wrong, 
but it was hardly unjustified. 

The year before, when the White House parliament building was shelled 
into submission and dozens of civilians lost their lives, Yeltsin ended 
the most difficult day of his presidency having a party with his aides 
in the Kremlin, drink in hand. 

The conflict between the president and the Supreme Soviet had been 
brewing since 1992. At first, it was waged privately. But it soon became 
clear that Ruslan Khasbulatov, the Speaker of the Russian parliament, 
was gathering supporters around him who were openly critical of 
Yeltsin's economic reforms. 

In March 1993 the parliament tried unsuccessfully to impeach Yeltsin. 
The president had no intention of giving up power, particularly as the 
Russian people had supported him in a referendum. Fed up with the 
continual sniping at his leadership he issued his famous decree to 
dissolve the parliament on television on September 21, 1993. 

The plan had been worked out carefully beforehand at his country retreat 
outside Moscow. I was there with Pavel Grachev, the defence minister, 
Barsukov and other advisers. Nobody thought Yeltsin's actions 
unconstitutional or extremist. The Supreme Soviet's stand-off with the 
president had reached a climax. 

As soon as the deputies heard about the dissolution of parliament, they 
barricaded themselves inside the White House. A ragtag army of 
supporters sprang up, huddled around campfires, vowing to defend the 
building from the president and troops. 

It was clear the deputies were not going to pack up and go home. But how 
were we going to enforce the decree? Grachev kept assuring the 
president: "We are prepared. All is ready, all is planned." But it just 
was not true. 

I went down to the White House with Barsukov to see the situation for 
myself. We wore civilian clothes and carried only sidearms. We headed 
for the underground station where a crowd had gathered to support the 
deputies. Suddenly a cry went up. "I know him, that's Yeltsin's 
bodyguard," a woman shrieked, pointing at me. The insults began to fly, 
but the police and riot guards were soon at our side. We scoffed at the 
idea that people like this could present any danger. On October 3, 
however, the crowd broke through the police cordon and streamed into the 
White House to help the deputies. Barsukov and I headed past the 
parliament on our way to the Kremlin. A traffic policeman warned us not 
to go any further. "Anything could happen," he said. 

We went on anyway, edging our way through the crowd. Demonstrators began 
pounding on the car with their fists. But the Volga had tinted windows 
and they could not see who was inside. I kept my automatic machinegun on 
my lap, just in case we had to get out and fight. When we finally made 
it to the Kremlin we phoned Yeltsin at his dacha on the outskirts of 
Moscow and begged him to impose a state of emergency on the capital. 

"Okay, okay, go ahead," he replied, "I'll be there soon." 

The president's helicopter flew in at about 6pm. People were panicking 
and Grachev was in a flap. There were reports that his defence ministry 
was to be stormed. Yeltsin was livid when he found out that Kremlin 
troops had been sent to protect the building. "Don't you know that 
Kremlin troops should be protecting the president, not the defence 
ministry?" he shouted. 

He had a point. The whole country was in uniform, yet the defence 
ministry did not even have the troops to defend itself. The basic 
military command structure had simply collapsed. Officers were too 
scared to take decisive action, just as they had been in the 1991 coup 
against Gorbachev. 

At 11pm Yeltsin went to get some sleep in the back room and asked me to 
stay at his post. I was left in charge of the presidential hotline. If 
you pressed a certain button, the person at the other end of the line 
would answer: "Yes, Boris Nikolayevich," and assume they were talking 
directly to the president. I sat there almost all night, taking in 
reports, giving out orders and gathering information ­ not all of which 
conformed to reality. 

Shortly after midnight Gennady Zakharov, my deputy, came in and said he 
had a plan to storm the White House with 10 tanks. It was obvious by now 
that there was not going to be a peaceful solution. The opposition had 
spilt the first blood in mob violence that day and we would have to 
answer in kind. Zakharov was convinced there would be few casualties ­ 
the tank fire would scare off the rabble and crack troops could then 
take the building. 

We woke up the president and agreed to head for the defence ministry 
where we found Grachev, sitting alone in the gloom of his office, 
wearing his slippers and a sailor's shirt. He kept saying calmly that 
everything was okay. There were troops in Moscow. But the traffic police 
insisted the troops had not moved from the outer ring road. There was 
not a single army unit in the centre of town. 

We called in the generals. "What can we do?" Yeltsin asked. There was a 
dead silence. The president wanted to know about Zakharov's suggestion. 
"Have you got 10 tanks?" he asked the chief of staff. 

The general shook his head. "We have tanks, but no tank drivers." The 
president demanded to know where they were. "They are picking potatoes," 
he replied. 

Yeltsin exploded. "The whole Russian army, and you can't find 10 
drivers? Let the officers drive the tanks." 

He gave the terrified general 10 minutes to sort things out and ordered 
that the tanks arrive at the White House at 7am. 

We returned to the Kremlin and I sat down to "run the country" again 
while Yeltsin slept. Soon, however, we had a new problem. The crack 
troops who were supposed to storm the White House were now saying they 
did not want to: it was unconstitutional. We had to wake Yeltsin again. 
I made him shave and get dressed properly before we went to address the 
officers. 

"Comrade officers," Yeltsin greeted them and gave a short speech. "Now 
will you fulfil the president's orders?" 

There was a terrifying silence. They sat with faces of stone. "You have 
to obey the president," Yeltsin snapped. Then he added reassuringly: 
"Don't worry. There will be no repercussions." 

In the end they only agreed to do what they were told when Barsukov 
promised them armoured personnel carriers. But they were still reluctant 
to fight even when they got to the White House. It was only when one of 
their officers was killed by a sniper that their doubts vanished and 
they went into action. 

I entered the White House with Barsukov and helped the soldiers to 
search the floors. The place stank ­ the water had been turned off and 
there was rubbish everywhere. On the fifth floor I found the 
ringleaders, Alexander Rutskoi, the former vice-president, and 
Khasbulatov, surrounded by a group of deputies. I ordered the rebels 
into buses and we shipped them all off to Lefortovo prison. 

When Barsukov and I finally got to the Kremlin from the prison at 6pm, 
filthy and tired, we could not find the president in his office. 
Instead, we found him in the banqueting hall. I was astonished. I 
realised that the victory party had started long before the actual 
victory had been won, and that the party was drawing to a close. The 
waiters told me they had been drinking for hours ­ while we did the 
dirty work. They filled our vodka glasses and we joined in the 
celebrations, but our hearts were not in it. 

Yeltsin never apologised to those he insulted. Whenever we argued about 
something and he felt he had behaved badly, he would simply invite me 
for a drink or a meal and pretend that nothing had happened. 

One of the worst incidents I can recall occurred on his state visit to 
Germany in August 1994. We had come for a special ceremony to mark the 
withdrawal of Russian troops from the German Democratic Republic's old 
territories. 

That morning, a worried doctor rushed to see me. "Alexander, you must do 
something," he said. "It's still early, but the president is already 
'tired' and wants to 'relax' more before the ceremony." 

Yeltsin was tense and upset, feeling that after all the battles of the 
second world war the Russians were quitting Germany in shame. Naina 
assured me that she had only "given him beer", but I soon discovered 
that he had helped himself to other drinks that she knew nothing about. 

Boris Nikolayevich really did look "tired". At my request, the doctors 
gave him ammonia, which stimulates and revives someone who is a bit 
drunk. We sent for a hairdresser, who washed his hair and massaged his 
face. It seemed as though all these things helped to sober him up, but 
on the 15-minute drive to the withdrawal ceremony, he was overcome by 
inertia again. 

Helmut Kohl greeted Yeltsin warmly. He tended to treat him like a 
younger brother and always seemed to be genuinely glad when they met. It 
was touching the way he said, "Borees, Borees" and slapped him tenderly 
on the shoulder. 

Of all the foreign leaders, Kohl was the closest to Yeltsin. He caught 
on immediately to his condition and embraced him Russian-style. He could 
tell by my expression that the president needed support ­ literally. 
Kohl put his arm gently around Yeltsin and set off with him to the 
Monument to the Liberation in Berlin. 

I had only one thought: would the president get through the occasion or 
not? Slowly, in the baking heat, the two leaders climbed the high, 
narrow steps and made it safely to the top. Yeltsin's mood improved 
considerably when he saw the superiority of the Russian troops over the 
Germans ­ in fact, it became positively excellent. During lunch he drank 
so much red wine that the German waiter could hardly keep up. He talked 
absolute nonsense and gesticulated wildly, while I sat opposite him 
dying of shame. 

We then set off to lay flowers at the Soviet war memorial in a special 
Mercedes minibus, which had a kitchen and cosy little bar on board. 
Yeltsin immediately wanted to try every drink on offer. At the monument 
he decided to address the crowd of "grateful" Germans who had gathered 
nearby, failing to notice that they were angry fascist demonstrators 
waving banners and placards. 

"Boris Nikolayevich, you absolutely musn't go near those people," I 
warned. "They're fascists. There'll be an outcry if you're photographed 
with them." 

This was a red rag to a bull. "So what, I'm going," he replied, 
pointedly walking towards them. 

We had to block the road. Yeltsin turned nasty, grabbed me by the tie 
and made a run for it. To this day, I cannot understand how the 
journalists missed this amazing shot. Only my guys ­ the rest of the 
bodyguard ­ noticed the "duel". I took off my ripped tie and went back 
to the bus. 

I emerged from the Mercedes to find that the president of Russia wanted 
to "make music" with Berlin's police band. Yeltsin is a lousy conductor, 
but this did not stop him mounting the stand and grabbing the baton from 
the astonished conductor. He swayed to the music and waved his arms with 
such emotion that he could have been taken for its composer. Brandishing 
the baton he decided to sing a couple of refrains from Kalinka Malinka, 
a Russian folk song. He did not know all the words, so he bellowed a few 
isolated phrases. Kalinka Malinka is often accompanied by spoons, but 
fortunately he did not have any to hand. 

The spectators, musicians and journalists had a marvellous time. They 
had never seen anything of the kind before, and almost certainly never 
would again. The president took all the whoops and howls as admiration 
for his conducting skills. 

Alas, it was impossible never to give Yeltsin vodka. Even after strict 
doctors' orders, Naina continued to give her husband cognac. Although I 
had forbidden the president's cook to keep any alcohol in the kitchen, 
Yeltsin always knew how to get around my ban. 

If he really needed a drink, he would invite one of his most trusted 
friends for an "audience". The meetings with Viktor Chernomyrdin, the 
prime minister, always ended in an obligatory bout of "weakness". 
Occasionally the president would summon one of the concierges (he would 
always choose a "pushover") and order them to "go and buy some". 

The employee would then come running to me: "Alexander Vasilievich, what 
should I do? The president has given me $100 and asked me to get him 
some vodka . . ." 

I would send the poor man to change the money and sort out my own 
homemade brew for Yeltsin. The Moscow criminal police had given me the 
right equipment for putting seals on bottle tops and there I would be, 
sitting in the Kremlin, busily faking some vodka. I would take a clean 
bottle and fill it almost to the brink with drinking water, then add a 
tiny bit of decent vodka. I would quickly seal the bottle and hand it to 
the young chap with the words: "Give the president his change and say 
this was the only kind they had." 

Fortunately, Yeltsin was not very discerning about "white" spirits. If 
he complained that it was weak, I would quickly reassure him that it was 
"just smooth". 

At the beginning of last year, Yeltsin went to France on an official 
visit. At the time the French press were writing a lot about President 
Jacques Chirac's youngest daughter, Claude, who had become her father's 
image-maker. Yeltsin's advisers, including Boris Berezovsky, the 
business tycoon, and Anatoly Chubais (now the deputy prime minister) 
decided the helper-daughter partnership was worthy of imitation. They 
had long needed a person near the president who was ambitious, 
semi-professional and easily influenced, from whom the boss would never 
distance himself. Tatyana Yeltsin was the ideal candidate. 

I first met Tatyana in 1986, when I drove Yeltsin from work to his 
dacha. Everyone liked her then ­ she was a gentle and smiling, 
down-to-earth young woman. One bodyguard could not resist chatting her 
up. We had to advise him not to destroy his career and to choose another 
woman. 

In the Yeltsin family she was considered an extraordinary child. Boris 
Nikolayevich often singled her out for praise in front of guests, never 
realising how damaging this was to Lena, his elder daughter. When she 
was young, Tatyana never boasted of her father's high position and did 
not use his influence to boost her own career. But if her husband, 
Alexei Dyachenko, ever needed to sort out a problem, he would warn: "By 
the way, I'm Yeltsin's son-in-law." 

Tatyana treated work in the Kremlin as if it was as humdrum and natural 
as her previous employment. One day she turned up wearing trendy 
trousers. I am no stickler, but protocol is protocol, and women should 
walk around the Kremlin's corridors in skirts of a respectable length. 
She blushed, pouted and looked hurt. But after that she dressed 
appropriately: "You see, Sasha, I took your lesson seriously." 

If only she had learnt more from me. Everyone knew that Tatyana was 
dependent on Berezovsky and Chubais for advice. She saw some of the 
governing group as naughty little boys, and others as handsome princes, 
as in a fairy tale that had come true. To her the American consultants 
that Chubais brought to Russia were foreign princes, of course. On their 
advice Yeltsin went to Rostov during the recent presidential elections 
and was supposed to prove he was young at heart by dancing a little jig. 
That day he felt awful. Even though he looked desperately tired and 
pale, Tatyana still encouraged him to go on stage. "Go on, daddy, you 
can do it," she said. 

The musicians struck up a catchy tune and Yeltsin wore himself out, 
trying to do something resembling a "shake". Naina started to hop 
around, too, at a tactful distance from him. The boss had never been 
able to dance, but none of us was hoping for miracles. We were just 
praying that the presidential candidate would not drop dead in full view 
of the startled audience. 

After the dance, Tatyana rushed up to kiss Yeltsin, crying, "You're so 
great, daddy. You're amazing. What a feat!" 

I asked Tatyana, "What are you doing to your father?" 

"Sasha, you just don't have a clue," she replied. It was then that I 
realised Tatyana was just a piece of fluff whose role was simply to 
convey other people's ideas to Yeltsin and send him memos, all with the 
same childish message: "You're great, dad, keep it up." 

Once I told Tatyana I no longer loved her father. Her eyes narrowed and 
she gave me an evil look. "Goodbye," she hissed, and backed away. I knew 
she would convey my words to her father. A rift with the president did 
not frighten me. For the first time, I realised I had never really loved 
Yeltsin. To begin with I had just worked for him. Then I admired him for 
standing out from the rest of the communist "nomenklatura". After the 
1991 coup, power had fallen into his democratic hands and the whole 
country was thirsty for change. 

Yeltsin could have used this marvellous opportunity to carry out 
reforms, flush out corruption and improve the life of millions of 
Russians. But Boris Nikolayevich was ruined shockingly quickly by all 
the attributes of absolute power: flattery, material goods and a 
complete lack of self-control. 

**********

#4
IMF Sees Talks With Russian Side As Extremely Successful

MOSCOW, Aug 2 (Interfax-FIA) - The talks between Russia and the 
International Monetary Fund that finished in Moscow Friday were 
extremely successful, the head of the IMF office in Moscow, Martin 
Gilman, told the Interfax Financial Information Agency. 
The IMF mission, which arrived in Moscow on July 22 to assess the 
implementation by Russia of the 1997 economic program for the second 
quarter, was greatly impressed by the professionalism and resolve of 
Russian officials with regard to economic reforms, he said. 
Russian officials want to improve the economic situation in the country, 
Gilman said. 
The IMF mission led by Jorge Marques-Ruarte, deputy director of the IMF 
Second European Department, was extremely satisfied with Russia's 
achievements in the area of the monetary-credit policy and in particular 
the achievements of the Central Bank which has reduced inflation further 
and increased foreign reserves, he said. 
At the same time, the IMF mission recognized the existence of 
difficulties in the tax-budget sphere, Gilman said. The difficulties are 
likely to remain until adoption of the new tax code and new provisions 
regarding the tax administration, he said. However, the IMF mission was 
on the whole satisfied with the moves taken by the Russian government in 
this area and its moves pertaining to structural policy. 
The analysis of the indicators for the second quarter of the year under 
the 1997 program and the conclusions drawn by the mission give reason to 
believe that the mission's report to the IMF board will be positive, 
Gilman said. The 1997 program is being financed to the tune of $2.8 
billion out of the three-year Extended Fund Facility loan totalling some 
$10.1 billion. 
If the IMF board gives a positive conclusion on the report Russia will 
be able to receive the regular quarterly tranche of the EFF loan 
standing at about $700 million before the end of September 1997, Gilman 
said. 

*********

#5
Nemtsov Cited on Relations With Yeltsin, Chubays 

Komsomolskaya Pravda
July 31, 1997
[translation for personal use only]
Report by Aleksandr Bushev, Nikolay Dolgopolov, Nikolay Yefimovich,
Viktor Sokirko, and Aleksandr Khokhlov on phone-in session with Russian
First Deputy Prime Minister Boris Nemtsov under the "Direct Line" rubric: 
"Boris Nemtsov: I Met Heydar Aliyev in White Pants. Because It Was
Summer"

[passage omitted] [Caller Ostrovskiy] Is it true that Nemtsov is the
only high-ranking official who can afford to argue with the president
himself? This is Sergey Ostrovskiy questioning you from Saratov.
[Nemtsov] It can happen that I argue, but rarely. An argument arose
recently over questions of clearing wage arrears. I endeavored to explain
to the president that it is impossible to resolve within just two or three
months a problem which has built up over years. A deadline of 1 January is
needed. The president is a hard man to convince, and serious arguments are
needed. At the same time one argument is plainly insufficient. But if the
arguments are weighty, Boris Nikolayevich consents. Admittedly, he reacts
with no special enthusiasm.
[Ostrovskiy] Do other officials at your level debate with Boris
Nikolayevich?
[Nemtsov] This has never happened in my presence. But when I am not
there, maybe someone makes a tough defense of his own position.
[Caller Semenov] Good day, Boris Yefimovich. This is Igor Semenov
troubling you. Are people right in saying that you have fallen out with
Chubays?
[Nemtsov] There are no problems. I can say that we sometimes hold
different positions. But this is fine. If everyone held just one
viewpoint, we would never adopt a considered, correct decision. I believe
that Anatoliy Borisovich and I cooperate well and work honestly. He is a
good organizer and has tremendous experience of administrative, managerial
work, which I lack. There are things to learn from Chubays. [passage
omitted]

*********

#6
Lebed Comments on Army Reform, Svyazinvest Affair 

Komsomolskaya Pravda
July 31, 1997
[translation for personal use only]
Report by Dmitriy Sergeyev under the "Who Do You Think You Are?"
rubric, plus text of Aleksandr Lebed letter to Komsomolskaya Pravda
Editorial Office: "Lebed 'Collides' With Berezovskiy"

Aleksandr Ivanovich Lebed was somewhat late giving a news conference
on Army reform. But he gave it yesterday after all. While all the time
emphasizing that he was not "attacking" Defense Minister Sergeyev, Lebed
nonetheless made many unflattering assessments of reform Sergeyev-style.
Therefore Lebed's replies to general political questions attracted far
greater interest. With regard to the sale of shares in Svyazinvest A.I.
cautiously replied that "the regime is in its death throes, and all the
participants in the auction to buy shares are doomed both to be together
and to fight one another." Then Lebed "put down" Berezovskiy by saying
that this "most worthy representative of our fellow citizens" (a quotation)
had a reason for taking up the second-rate post of deputy head of the
Security Council. According to A.I., the prime reason was his desire to
"conceal" his business sins in the Chechen war. Lebed once again recalled
how Boris Abramovich had come to him and advised him not to end the war: 
"What does it matter that a few people are being killed if business is so
good?" [Sergeyev report ends]
To the Komsomolskaya Pravda Editorial Office
What can I say about the scandal associated with the purchase of
shares in Svyazinvest? I can say that I am no shrewd specialist either in
the communications sphere or in the privatization sphere. But in my
unenlightened view, if there is a commodity, it is more logical to sell it
to someone who is prepared to pay more than to someone with a greater
desire to buy it. It is silly to take offense at the salesman. He too has
his own interest. It is possible to understand Gusinskiy and Berezovskiy
in a human way. They feel hurt. They have their own television channels
and want also to own the means of transmitting them. But I believe that
Mr. Berezovskiy, for example, has something to console himself with:
Russian Public Television, Logovaz, and Aeroflot are not such modest pieces
of former state property.
I do not faint at the word "privatization." I only believe that, when
it is a question of enterprises which virtually have the monopoly of their
own sector, the controlling package must remain with the state.
[Signed] Aleksandr Lebed

********

#7
The Sunday Times (UK)
3 August 1997
[for personal use only]
Russian fat cats buy a touch of British class 
by Mark Franchetti 
Moscow 

FIRST they bought fast cars, expensive jewellery and sumptuous mansions. 
Now they want to buy class. Tired of their image as brash vulgarians, 
Moscow's "new Russians" are aspiring to join the British aristocracy in 
an attempt to bury their humble roots. 
Determined to purchase the respect of their peers, rich Russians are 
paying thousands of pounds to buy British manorial titles to pass 
themselves off as aristocrats. 
Since the downtrodden descendants of the once-glittering Russian 
nobility are largely ignored in their own country, Russia's social 
climbers show no interest in buying into the Russian aristocracy ­ 
foreign titles carry more cachet. 
Several Irish and Scottish baronial titles have already been bought by 
Russians and more are expected to be sold to them at an auction to be 
held in London in two months' time. Catalogues listing coats of arms and 
dilapidated properties in Britain are already doing the rounds in 
Moscow. 
"I have always wanted a title," said Eduard Ushanov, a 41-year-old 
Moscow businessman. "I don't mind how much it costs. I'll pass it on to 
my children who will become British aristocrats." 
Roman Sarkisov, a young Russian who works as a title broker in Moscow, 
says he has several rich clients on his books, including two members of 
the duma, the Russian parliament. 
"They have more money than they can spend and a title seems a good 
asset, especially because it is British," he said. "They will use their 
coat of arms on their stationery and business cards and introduce 
themselves as baron such-and-such. They'll be the envy of their 
friends." 
Buyers are entitled to apply for a coat of arms, wear baronial robes and 
in some cases acquire fishing rights on the land they buy. They also 
receive the right to display armorial bearings and to use their title 
officially. 
Upon becoming a baron, new Russian aristocrats will become members of 
the 1,600-strong Manorial Society of Great Britain, which organises 
social events including an annual nobility conference at Christchurch, 
Oxford, drinks at parliament, and a Valentine's Day ball at which 
members wear their manorial insignia. The title is not a peerage, 
however, and does not entitle the owner to a seat in the House of Lords. 
"New Russians are desperately trying to get rid of their inferiority 
complex," said Tatyana Boykova, a society journalist. "Their poor taste 
is the butt of endless popular jokes. By buying a British title they 
hope to cancel all trace of their poor and sometimes murky past. They'll 
do anything not to be labelled new Russians." 
Dmitri Ivanov, a young Moscow banker, is prepared to pay £15,000 for a 
Scottish title because he believes it will inspire confidence and 
authority when striking business deals. 
"It is high time that people stopped throwing mud at new Russians," he 
said. "It's time the image changed. 
"We are not all mafia-connected thugs. Some of us have a good higher 
education and have spotless business reputations. That to me is more 
important than money and that is why I want a title rather than a flashy 
car to show off. It's a question of prestige." 

*********

#8
Duma Speaker Says Corruption Accusations A Provocation

MOSCOW, Aug 2 (Interfax) - Russian State Duma Chairman Gennady 
Seleznyov has said the accusations levelled at him by Chairman of the 
Duma's Committee for the Struggle against Corruption Vladimir Semago 
(Communist) are a provocation. 
The accusations are "clearly provocative and aimed at stirring up a 
scandal inside the house," Seleznyov said in an Interfax interview 
Saturday. 
"In Semago's revelations, every word is libel," he said. "Were he not a 
deputy, he would have to answer for his lies before the court," 
Seleznyov said. 
Semago, at a press conference yesterday, said that he thought the 
suspicion that the Duma's leading figures, including its chairman, were 
involved in corruption was well- founded. One sign of this, he said, is 
the links between the Duma and a number of commercial banks, which offer 
it interest-free loans. Semago also said that Seleznyov exceeded his 
authorities, allowed himself numerous trips around the country and 
abroad without any sanction from the parliament and spent huge amounts 
of money. Semago however did not give journalists any convincing proof 
of the possibility of corruption in the Duma. 
Seleznyov said Semago's empty accusations had convinced him anew of the 
need to set up a watchdog commission for deputies' ethics. "I am sure 
that such a commission will be set up in September," Seleznyov said.

*********