August 24, 1997  
This Date's Issues: 1141 •1142  • 1143

Johnson's Russia List [list two]
#1143
24 August 1997
djohnson@cdi.org

[Note from David Johnson:
1. InterPress Service: Andrei Ivanov and Judith Perera,
RUSSIA: 'Rigged' Privatisation Row Will Not Die Down.
2. InterPress Service: Andrei Ivanov and Judith Perera,
RUSSIA: Teaching The Privatisers An Expensive Lesson.
3. Chicago Tribune: James Warren, RUSSIAN: DON'T AMERICANS 
KNOW MEN, WOMEN ARE DIFFERENT? 
4. Newsday: Heller McAlpin, FROM PARIS TO SIBERIA (Book review
of DREAMS OF MY RUSSIAN SUMMERS by Andrei Makine).
5. Vladivostok News: Best of the press.
6. Interfaks-AiF: Vladimir Razuvayev. "The Art of Kompromat."
7. Reuter: Kiev joins exercises but keen not to offend Moscow.
8. Reuter: Russia's Chernomyrdin defends union with Belarus.]

********

#1
>From InterPress Service

RUSSIA: 'Rigged' Privatisation Row Will Not Die Down
By Andrei Ivanov and Judith Perera

MOSCOW, Aug 20 (IPS) - The Russian government is still considering
legal action to reverse what one Moscow daily called ''the
obviously rigged'' sale of the state's 38 percent stake in the
giant Norilsk metals combine, the world's largest producer of
nickel.

The sale rounded off Russia's recent dishonourable history of
careless privatisation of state assets, as the cash-starved
Russian government first mortgaged the firms to Russian banks,
then had to stand by powerless as the banks then sold them off to
themselves.

Russia's powerful Oneximbank, which held the Norilsk stake for
the government in trust against a 1995 loan, organised an auction
and then sold the stake at near half price to its own subsidiary,
having ruled out serious competition from the bidding.

Oneximbank officials were part of the auction's tender committee;
the government were powerless to stop them.

Now the prosecutor-general's office, on the government's behalf,
is being pressed to dispute the results in court, a draft
presidential decree is being prepared to prevent such deals from
happening again and the responsible official, Alfred Kokh, deputy
head of the State Property Committee, has resigned.

''Sales of big state stakes will be governed by presidential
decrees, which will approve not only the fact of sales, but also
their terms and rules,'' president Boris Yeltsin's deputy chief of
staff, Alexander Livshits, said last week.

The decree draft also says that companies linked to the
organisers of an auction will not be allowed to participate. ''In
cases where a deal has taken place and it emerges that such links
existed,'' he said, ''then this is a case for the office of the
prosecutor-general to challenge, and there the game stops...''

Too late, say critics of the country's discredited privatisation
campaign. All this amounts to shutting the stable door after the
horse has bolted. And it was the prosecutor-general who allowed
the auction to go through in the face of an order to the contrary
from prime minister Viktor Chernomyrdin.

''In a series of amateurish and obviously rigged auctions,''
snapped a Moscow Times editorial, ''state stakes in Russia's
biggest industrial companies were handed over in trust and then
sold outright to insider banks at a fraction of their market
price.''

Kokh's critics accused him and his boss, deputy prime minister
Anatoly Chubais, of allowing Oneximbank president Vladimir Potanin
a free hand with the cobalt, copper and nickel giant, which
produces a fifth of the world's nickel and 90 percent of Russia's
supply.

Officials have said Potanin's similar purchase of a 24 percent
stake in the AO Svyazinvest national telecoms giant was fair and
raised 1.87 billion dollars for the state. But the Norilsk sale
may have raised no more than 77 million dollars for the
government.

''Such work will not do,'' Yeltsin said after Kokh's resignation.
''The scandal around Svyazinvest and Norilsk Nickel is connected
to the fact that some banks are likely to be closer to Kokh's
soul. Everything must be honest, open and legal''.

The government says it will now start to sell its property in
fair, transparent auctions, where the prime consideration will be
to raise the maximum amount of cash to ensure the federal budget
can guarantee pensions and cover the massive wages arrears bills
in remaining state concerns.

Yeltsin has ordered the government to pay off 7.7 trillion
roubles (1.3 billion dollars) in unpaid salaries to state
employees by 1998, including 5.2 trillion roubles to the armed
forces alone before Sep. 1.

Potanin's next target is Rosneft, an oil company that could be
worth up to a billion dollars and the sale of another 24 percent
stake in Svyazinvest.

''Privatisation should be honest, effective and open,'' Kokh's
successor Maxim Boiko told a news conference on appointment. He
said the privatisation process should make sure that ''tender
rules are known in advance and all potential participants are
properly informed,'' the Russian news agency Interfax reported.

Boiko defended the government's recent sell-offs and said the
cash proceeds from Svyazinvest sale were already in the federal
budget account. Igor Lipkin, the head of the State Property Fund,
told Interfax that a final payment of 737 million dollars should
be transferred to the budget by Oct. 13.

''Kokh's sacrificial removal is clearly an attempt to defuse some
of the controversy surrounding recent privatisation deals,'' said
the Moscow Times.

Boiko, it noted, though a close ally of Chubais, was ''not
tainted in the same way as Kokh by personal involvement in the
loans-for-shares shambles.

For others it was not the incompetent Kokh but the rapacious
Potanin that was the problem. ''Today, more and more crudely, the
relations between one of my former colleagues and the government
are crossing acceptable boundaries,' media tycoon Vladimir
Gussinsky said last week in a comment clearly targeted at Potanin.

''Openly and directly some politicians are helping him to obtain
economic goals. When one player is in a more advantageous
position, and part of the government is cooperating with him for
political ends, then that is oligarchy.'' 

***********

#2
>From InterPress Service

RUSSIA: Teaching The Privatisers An Expensive Lesson 
By Andrei Ivanov and Judith Perera

MOSCOW, Aug 20 (IPS) - Russia's powerful Oneximbank held a 38
percent stake in metals giant Norilsk Nickel in trust against a
1995 mortgage, but this month sold it off to its own subsidiary at
its own auction -- having ruled out other serious buyers.

Oneximbank officials were part of the auction's tender committee;
even the prime minister's personal order failed to stop the deal
going through. The price paid by Oneximbank for the metals giant
was far below the shares' market value.

Ironically Norilsk Nickel's staff and management welcome the
purchase and endorse the changes wrought by Oneximbank since it
took over in 1995; pay arrears have been largely met, production
is up and financial management is making sense of the company
prospects.

The furore surrounding the sale has forced president Boris
Yeltsin to draft a decree limiting the freedom of Moscow bankers
to plunder state assets without fear of competition or legal
controls. In the meantime Oneximbank are waiting to hear whether
the government will press the state prosecutor general to try to
reverse the Norilsk deal in court.

Sergei Vetchinin, head of Norilsk Nickel's press service says the
company does not fear any lawsuits that may be filed by the
prosecutor on the government's behalf, ''as long as they lie
within the field of the law''.

Oneximbank had held the shares in trust since November 1995, when
they were mortgaged to the bank as security for a 170.1 million
dollar loan to the government. The bank, announced plans to
auction off the government stake in Norilsk Nickel on Jul. 7.

Foreign firms had been excluded from the auction. One, Britain's
Trans-World Group, led calls for a postponement and a review of
the auction conditions. Others who appealed to the prosecutor
general to halt the sale included Mikhail Kuznetsov, an opposition
member of parliament, Yevgeny Yasin, the Russian minister in
charge of economic reforms.

Gennady Seleznyov, speaker of the State Duma, wrote to Yeltsin
asking him to intervene. The Duma's Accounting Chamber had
scrutinised the procedure under which the shares were placed in
Oneximbank's charge, revealing what he claimed were ''a number of
serious legislative irregularities''.

On the eve of the actual auction, prime minister Viktor
Chernomyrdin gave in and ordered the auction to be postponed.
However Kokh, who was also a member of the tender commission, said
both the committee chairman and the prosecutor-general Yuri
Skuratov had decided that there was no point in persisting with
attempts to defer the sale.

The sale went ahead. Swift, a representative of Oneximbank, bid
236.18 million ecu (252 million dollars) for the shares, more than
111 million dollars more than the auction starting price of 131.6
million ecu (140.8 million dollars).

Since Norilsk Nickel's present market capitalisation is more than
1.4 billion dollars, analysts say Oneximbank should have paid at
least another 275 million dollars more for its shareholding.

The only other bid came from a Russian company called Advanced
Industrial Technology (PPT), representing a number of foreign
trade associations and industrial companies, which offered 182
million dollars. Spokesman Sergei Barbashov told local media he
had no complaints about the auction.

According to the Russian State Property Fund, legally there was
nothing wrong with the auction. Fund chairman Igor Lipkin says the
winner's offer was 80 percent above the starting price -- a record
for such sales, both in the first loans-for-shares auctions in
1995 and in the recent re-sales of the shares themselves.

Oneximbank undertakes to set aside 200 billion (34.5 million
dollars) to settle Norilsk Nickel's debts to the pension fund, and
to invest the same amount in social infrastructure and utilities
for its work force. It is also setting aside a deposit of 300
million dollars to bring the Pelyatkinskoye gas condensate field
on stream.

At the current stage of Russia's economic development, Oneximbank
president Vladimir Potanin says it is safer to lend money to
enterprises under its control. Poor legal and accounting standards
make unsecured third-party loans a risky business. ''We want to be
sure that the money we invest will be properly managed,'' he told
the London Financial Times this week.

Potanin has told Norilsk staff that the bank viewed the share
acquisition as a strategic investment and was not contemplating
selling the shares to anybody in the future. He said 1998 would be
a year of substantial investment in Norilsk Nickel, including the
company's ore base, production capacity and social infrastructure.

Norilsk Nickel employees favour continued cooperation with the
bank. Union leaders said, in a letter circulated by the Norilsk
Plant, Norilsk Nickel's core subsidiary, had improved its economic
and social performance indicators in the first half of 1997.

Pay at the plant has been issued regularly, and pay arrears have
been reduced from 1,000 billion roubles (172 million dollars) at
the start of this year to 307 billion roubles (53 million
dollars).

Meanwhile the huge Norilsk Plant, core enterprise of Arctic
mining and smelting giant Norilsk Nickel, has continued to
increase its production and exports and promises to be a major
player on the world metals market in the coming years.

It has beaten this year's January-July production targets for
electrolytic nickel and cobalt by 1.9 percent and 3.2 percent
respectively. And despite a major fire on 17-18 July it has also
beaten its electrolytic nickel and cobalt targets for that month
alone by 0.8 percent and 5.6 percent.

Whereas in the past the company sold all its production to the
state, since 1994 the company has been allowed to market its own
production for export; sales office have been established in
London and New York.

Commodity-grade output rose 11 percent as the company's core and
subsidiary divisions all increased production. Sales of nickel
were 168,900 tonnes (up 1,900 tonnes on 1995), of which exports
were 104,900 tonnes, up 20 percent.

Sales of copper were 342,900 tonnes, up 12,000 on 1995, and
exports of this metal rose 120 percent to 241,400 tonnes. Exports
rose to compensate for slack domestic demand. 

**********

#3
Chicago Tribune
August 24, 1997
[for personal use only] 
RUSSIAN: DON'T AMERICANS KNOW MEN, WOMEN ARE DIFFERENT? 
By James Warren. 
Dateline: LEXINGTON, Va. 

Watching intense Petr Orlov watching American women being verbally abused
by American men last week, one could revel in the Cold War being long over.
Without fear of espionage charges, Orlov, a reporter for Russia's
privately owned TV network, NTV, drove three hours south of Washington to
join American media comrades ingesting history at the Virginia Military
Institute.
He was welcomed no less wholeheartedly by a well-prepared school staff
than local scribes from Richmond and Roanoke. The staff members' solicitous
and forthcoming manner reflected a yearlong effort, aided by a New York
public-relations specialist in crises, who primed them in case things went
awry as they had at The Citadel with Shannon Faulkner in 1985.
Orlov looked onto the humongous parade grounds, replete with enough TV
satellite trucks to cover World War III, and himself was testament to a media
mandate that crosses all national, racial and ethnic boundaries:
No matter how big or where the story, get a local angle.
In Orlov's case, the arrival of the first 30 women at the 158-year-old
military school meant pursuit of Yulia Beltkova, a Russian who is improbably
in their midst. She was a high school exchange student in Virginia last year
and has been transformed into a full-scholarship "rat," the charming
appellation for first-year VMI students.
Like all the guys and gals, Beltkova had her hair mostly shorn. But the
women bore scant resemblance to even a lipstickless Demi "G.I. Jane" Moore.
There is military austerity and, then, there is Hollywood military austerity.
Beltkova and 454 classmates confronted the "rat line," the start of a
six-month, proudly politically incorrect initiation ritual. That means that
upperclassmen will yell at her, boss her around, force her to the ground to
do pushups and, in similarly subtle ways, test her mettle.
Wednesday's much-reported highlight--or lowlight, for those who wonder why
this stuff still goes on in 1997--was instantly dispatched across the land by
the media horde: the eight-minute opening of the ritual.
The freshman class marched into a gray, bleak barracks right out of a
1930s chain gang flick and was welcomed, gulag-style, by a stern senior.
"Rats, look at the men who stand before you. . . . They will teach and you
will learn!" said the senior, attired in black-trimmed gray jacket and white
duck trousers and whose role might have been suitable for a young Jimmy
Cagney.
For sure, there was wariness among the male drill instructors who then
heeded tradition and dispersed to hector the rats on the courtyard floor of
the four-tier barracks. They did not make a beeline to the women, albeit with
a few exceptions, including Beltkova.
She stood her ground, didn't flinch and made it through the first day just
fine. Orlov, her chronicler, seemed professionally content with, if not
necessarily admiring of, the general scene.
"This is not especially American," Orlov, 35, said. "It's pretty
military."
"All in all, it's how the French Legion, the Russian Special Forces and
others start off. Pretty military. And for me, as a civilian, it's pretty
disgusting."
With that lack of equivocation, the Russian newsie opined on the American
pressies surrounding him and the spotlight on VMI and related issues of women
in the military.
"The female person in the Army is a big story here, and the coverage is
pretty sensitive," Orlov said. "But this male-female thing is very American.
I find the press coverage exaggerates the issue, with the whole
public-relations thing, trying to create an impression that there's no
difference between men and women.
"I also find a certain touch of hypocrisy. There is a difference between
men and women. An obvious physical difference. So all this Pentagon-speak
about men and women is pretty funny," he said, alluding to the military's
groping to deal with the whole matter.
With somber, Eastern European resoluteness, Orlov said, "There is a man
and there is a woman, and there is a difference. But if you say that in this
country, you are politically dead."
I'm sorry I didn't have time to amble up to the Lee Chapel at Washington &
Lee University, where Robert E. Lee sleeps in marble effigy.
What would Lee, the messiah of the Confederacy, have thought about all
these women primed to defend the Union?

***********

#4
Newsday
August 24, 1997
[for personal use only]
FROM PARIS TO SIBERIA / Andrei Makine explores a family's life on the 
edge of the abyss
By Heller McAlpin. Heller McAlpin is a free-lance critic.

DREAMS OF MY RUSSIAN SUMMERS, by Andrei Makine. Translated by Geoffrey 
Strachan. Arcade, 241 pp., $23.95.

EVERY ONCE IN a while, if you're lucky, you come across a new book that 
is so special you want to immerse yourself in its world for far longer 
than it takes to read it from cover to cover.

I am not the first to extol the beauty of Andrei Makine's evocative tale 
of a boy growing up in the Soviet Union under the enlarging influence of 
his French-born grandmother's stories of a richer, freer world. First 
published in France in 1995 under the far less resonant title "Le 
testament francais" ("The French Testament" or "The French 
Inheritance"), Makine's fourth novel is the first by a non-Frenchman to 
win the coveted Prix Goncourt, and also the first book ever to win both 
of France's top literary awards, the Goncourt and the Prix Medicis. 
Makine was born in Siberia in 1957 and lived in an industrial town on 
the Volga River until he sought political asylum on a trip to Paris in 
1987. He has been hailed as a Russian Proust and a French Chekhov and 
likened to Boris Pasternak. None of these comparisons is as farfetched 
as one might think.

"Dreams of My Russian Summers" manages to be at once a biography of an 
extraordinary character, Charlotte Lemonnier, born in France in 1903 and 
trapped in Russia in 1921 during the chaos of the revolution; an 
overview of the harsh history of Russia in this century, with its 
revolutions, wars, famines, repression and unforgiving cold; a portrait 
of Soviet life in the 1960s and 1970s, and a sensitive tale of one boy's 
search for identity.

The young narrator visits Charlotte, his maternal grandmother, every 
summer in the town of Saranza on the edge of the vast Russian steppe. It 
is a town stripped of "architectural excesses" in which a "decapitated 
church" has been converted into a cinema. Charlotte has settled here 
because it is where her beloved husband, Fyodor, is buried. It is a 
place where one can live in a manner Makine characterizes as most 
Russian, "very mundanely on the edge of the abyss."

The narrator and his older sister - a character with a curiously minor 
role in the book - spend warm summer nights listening to their 
grandmother's tales, in French, of Nicholas and Alexandra's royal visit 
to Cherbourg in 1896, the Paris flood of 1910 and the death of the 
French president Felix Faure in the arms of his mistress in the Elysee 
Palace. 

These tales of Belle Epoque France, reinforced by an album of old family 
photographs, "pierced the iron curtain, which was then almost 
impenetrable." They also heighten the duality of the narrator's life, 
the jarring sense of otherness he feels especially acutely when he 
recollects the lavish menu at the state dinner in Cherbourg while 
waiting in interminable lines for food rations. Frenchness - both the 
language and the culture - "throbs" within the narrator and his sister 
"like a magical graft implanted in our hearts." This sense of being 
different becomes a source of pain during his adolescence, when blending 
in becomes so important. But it also leads the narrator to ponder the 
nature of language, literature, memory and identity, explorations that 
enrich Makine's novel.

Charlotte's tales of France gain a stranglehold on her grandson's 
imagination, but it is her dramatic life story that captivates the 
reader. Her early childhood was spent traveling back and forth between 
France and Siberia, where her father, Norbert, went to practice medicine 
but quickly perished. Her distraught mother, Albertine, fell on hard 
times and became addicted to morphine, yet could never quite bring 
herself to leave "the snowy immensity of Russia" permanently. Charlotte 
set off from Paris to bring her home as soon as she could after WWI, 
leaving behind a French lover for what she hoped would be just a brief 
separation. She "braved the country's endlessness" and survived the 
chaos of civil war, famine, hard labor and rape by a horde of bandits in 
the desert. She eventually marries a Russian, and then survives his 
arrest and loss. With a survivor's agility, she becomes not just 
resigned to her Russian life, but oddly accepting of it - without, 
however, losing her Frenchness.

It is interesting and oddly fitting that Makine chose to write in his 
"grandmaternal tongue," the language of Proust. And it is also 
noteworthy that when he at first had difficulty getting published, he 
gained acceptance by pretending his manuscripts had been translated from 
the Russian. Like Proust, whom Charlotte recalls seeing playing tennis 
in the Neuilly of her youth, Makine focuses repeatedly on specific 
events or emotions in his determination to extract their essence. 
Geoffrey Strachan's translation captures Makine's often incandescent 
descriptions of this complex land. An early childhood memory of "silvery 
lines crossing the blue density of the air" turns out to be barbed wire 
around a prison camp. It is a country that the author and his characters 
feel doomed to love, despite, or perhaps because of, its "endlessness" 
and its "continual heartbreak." "Dreams of My Russian Summers" manages 
to evoke nostalgic yearnings even in readers who have never been to 
Russia. It is an extraordinarily beautiful and moving book. 

**********

#5
Vladivostok News
August 21, 1997
Best of the press
Aug. 15 to Aug. 21 

Moscow Jubilee ... overseas
The widely advertised celebration of the 850th anniversary of Moscow 
failed to excite people beyond the Sadovoye Koltso boundaries [Moscow 
center]. Obviously, there is no all-Russia event happening. It is 
difficult to share in the joy of the Muscovites, if you live for 
instance, in Zabaikalie or Primorye and haven't gotten your salary for 
months. Under such circumstances, any holiday seems like a feast during 
a plague.
Utro Rossii, Aug. 15

Health care for foreigners: Russian medicine
When one American student had toothache in Vladivostok, he did not 
really care. He was even glad. For this young man, tired of the boring 
perfection of his motherland, it was a chance to learn a new nuance of 
our surrealistic reality, widely advertised in the West. 
"My father can be proud of me," said the brave American after the health 
marathon. "I came through a Vietnam." 
Novosty, Aug. 15.

Chechnya fighters awarded and... convicted
The status of a Chechen fighter does not guarantee a priority with 
getting jobs in the city of unemployed. No wonder the former soldiers 
get into criminal troubles. One received a suspended sentence for fight 
and theft, another one was sent to jail, although both were given high 
state awards for courage. The third one is under investigation. 
The Vladivostok, Aug. 15

Credit cards: where, and what's the price?
It looks like recently the market for credit cards became most active. 
Almost every month there are events effecting the situation here. The 
main event of the last week was unprecedented: Incombank decreased the 
interest rates for all the issued cards. 
Zolotoi Rog, Aug. 19

Capitalism in an isolated village in the north of Primorye looks nice
...Plastun, a small village on the coast, looks too well taken care of, 
after garbage and the road chaos of Vladivostok. [There's] smooth 
asphalt of the roads with new clean Jeeps and even one Mercedes on them, 
a small cozy airport, new hotel in the center, friendly people... One 
could hardly believe that this is Primorsky krai, famous for its strikes 
and emergencies... 
The Vladivostok, Aug. 19

Primorye bees: new generation of emigrants from Russia
One hundred Primorye queen bees were flew across the Pacific to settle 
in American Green Island by New Orleans [Louisiana]. Each queen was 
accompanied by five-six working bees in order to feed it during the long 
way. 
Novosty, Aug. 19

Who will buy the airplane?
Artyom City Court scheduled public sales of Orient-Avia's property for 
August 19. The first item offered is the airplane IL-62M for 132 
passengers. The initial price is 6 billion rubles. According to the 
Artyom court, there was not a single application to buy the plane. 
Konkurent, Aug. 19-24

Far and close connections
Mass media widely covered the Days of La Perouse – a holiday dedicated 
to 210th anniversary of French Navy officer Jean Francois Galot de La 
Perouse's landing on Primorye coast. This festival was another link of 
historical communication between France and Primorye. During preparation 
for the holiday, new historical materials were found -- evidence of 
quite wide and diverse Franco-Russian relationships. 
Utro Rossii, Aug. 20.

Acfes to be sold by auction?
It seems like the epoch of Acfes is declining. The symbol of the new 
Vladivostok business became unstable and is ready to collapse at any 
minute. 
This situation will hardly leave anybody indifferent. We are not talking 
about a ordinary bankruptcy of an average commercial firm. Acfes is one 
of the first joint stock companies in Primorye, a powerful and 
respectable organization, which boosted Vladivostok's economy with its 
success. 
Novosty, Aug. 20.

New borders on Khanka Lake
...From the 1960s until now, there have been only 27 spots on the 
largest Primorye body of water earmarked for fishing. But during last 
few years, the number of registered organizations fishing here grew over 
50. No wonder that there are no real owners of the spots, and the 
fishing goes on with cruel violations of the law... 
Poachers (well-known people in the area) were not afraid of putting 
their nets in front of the station of the ichthyologist and the ranger 
of Khankaisky Reserve, and the reserve management threatened the krai 
administration staff which dared interfere. 
The Vladivostok, Aug. 20

Supergirl from Vladivostok
Anya Mancheva, an 18-year-old student at Far Eastern State Technical 
University and Southeast University of Juneau (USA), was announced the 
most beautiful girl of the state of Alaska. 
Novosty, Aug. 21

Russia and Japan: testing vigilance
After a temporary quiet on the Russian-Japanese border, fishing boats 
from the country of the Rising Sun are again trying to come into 
Russia's territorial waters, testing the patience of the Pacific border 
guards. Early in August a group of Japanese boats intruded Russian 
territorial waters and left it only after warning maneuvers of the 
border patrol ship. This was the 17th case since the beginning of the 
year. 
Argumenty i Facty, Aug. 21

*********

#6
Use of 'Kompromat' in Politics Viewed 

Interfaks-AiF, No. 7-28
July 7-13, 1997
[for personal use only]
Article by Vladimir Razuvayev: "The Art of Kompromat"

Techniques

The use of compromising materials as a weapon in a 
political campaign has been borrowed by Yeltsin's Russia
from Soviet Russia.
That Is the Way It Was...
The matter was started in the Stalin epoch. The 
appropriate data were reported personally to the boss, and
then everything depended on his plans and moods. In one
case the repressive machine went into action and a person
disappeared--for a long time, or forever. In another--
Stalin summoned the person who was hooked and informed him
of the existing materials, and then said: "Work." 
Sometimes the NKVD [People's Commissariat of Internal
Affairs] did this. There is an episode in the reminiscences
of Pavel Sudoplatov when the terrible secret police
protected from repression even the extremely garrulous
cousin of a valuable manager of an atomic project. With
only one demand: "Work!" There are no known cases where
this wish would not be followed. 
This was "postponed kompromat" [compromising material]
that made it possible to keep a person in fear for his 
entire life. It is practically certain that it was employed
in the epoch of Leonid Brezhnev. The former business
manager of the Council of Ministers of the USSR, Mikhail
Smirtyukov, surmised that the general secretary kept KGB
Chairman Yuriy Andropov firmly under his thumb: "There was
something bad in Andropov's past. Moreover, Brezhnev knew
about this and kept him on a short leash. Something dirty
in his biography. Brezhnev generally liked people on whom
there was compromising material. It was much simpler to
manage them and to apply pressure easily at any moment, if
the need arose. Brezhnev almost never nominated anyone with
a clean biography for high posts." The reminiscences of
those who to one degree or another were close to Brezhnev
and Andropov do not contain any conjectures about the ins
and outs of their relationships. Nevertheless, it is 
interesting how a very experienced official discusses the 
possibility of employing this method in Brezhnev's time.

It Happened This Way

After the adoption of the current Constitution a new
system of "checks and balances" began to be created, this 
time primarily within the framework of executive authority.
The key role in this process was played by the special
services and the MVD [Ministry of Internal Affairs].
Associated with this, for example, was the temporary
advancement of Aleksandr Korzhakov, former member of the
Presidential Security Service, into the foreground of
Russian policy.
The frequency of use of the principle of "postponed 
compromising material" in the past several years since 1994
is beyond calculation. However, it can be assumed that this
method is used rather often in political practice.
Depending on his world outlook and access to information,
it is up to the reader to judge the reason for this--the
peculiarity of the political situation, or the demand of
the period for the initial accumulation of capital.
However, it should be taken into account (in order not to
surrender to the demon of denunciation of one's own
country) that the use of compromising material was and
remains a long-standing tradition in all states.
The approaches of the possessors of such information
to its use turn out to be different each time. While Sergey
Stepashin, former director of the FSB [Federal Security 
Service], as a rule preferred to turn over "departmental
compromising material" acquired by his employees to the
managers of the "delinquents," for example, Korzhakov, who
was more skillful in intrigues, operated more rationally
from a bureaucratic and political standpoint, frequently
employing information to weaken or even remove one or
another politician. It was possible to do this with acting
Procurator General Aleksey Ilyushenko, who was accused of
corruption and arrested, and who remains under arrest to
this day. An unsuccessful attempt to use compromising
material was undertaken in 1995 against Vice Premier
Anatoliy Chubays. The then director of the State Property
Committee, Vladimir Polevanov, who came out with the
exposure of "privatization according to Chubays," remembered
by many, was used as a "mouthpiece."
The Korzhakov group dealt even more severely against
Chubays after the end of the first round of the 
presidential elections in 1996. At that time they tried to
prove that money collected by Boris Yeltsin's preelection
headquarters was simply stolen. During the course of a
sensational operation, Arkadiy Yevstafyev and Sergey
Lisovskiy, who worked in this headquarters together with
Chubays, were apprehended together with $500,000 in a box
near a Xerox machine. Colonel Valeriy Streletskiy, former
deputy director of the Presidential Security Service, is
convinced that the attack would have been successful if
Premier Viktor Chernomyrdin had not unexpectedly supported
Chubays at a critical moment.

The Media--Weapon of the Authorities

Besides employment of the method of "postponed 
compromising material," the media is used on an extremely
broad scale in practically all cases when the press becomes
a weapon in behind-the- scenes duels between groups of the
Russian elite. A certain high- ranking person once
recounted these lines for the author on the widespread
Kremlin practice of familiarizing the President with the
"contentious" statements of one or another member of his
"close circle." They simply place a newspaper on the table
for the head of state with the highlighted quotation or
articles compromising one of the "close associates." And
await his reaction. Boris Yeltsin's memoirs, by the way,
contain an episode in which he was brought a recording of
an "incorrect" television speech by Aleksandr Rutskoy. The
reaction of the President, judging by the accounts, usually
does not appear immediately, and it does not always appear.
However, the frequency of use of this method is indicative
of its effectiveness.
The members of the "Kremlin team" understand the 
"machinations" of surprise attacks in the press very well.
For example, the "operation" to remove Vladimir Kvasov,
former head of the government apparatus, was started as
early as the spring of 1994 with the publication of his
inevitable retirement. Journalists were even told the name
of his successor--Valeriy Katukov, who held the post of
deputy chief of administration. It is typical that such
"leaks" were not at the time evidence of the President's
intentions, or especially of the prime minister. The
"Kremlin remedy" of the bureaucratic rivals was used
against the head of Chernomyrdin's apparatus.
Later in July, also 1994, Boris Yeltsin, with an 
assist from someone from his own circle (Kvasov himself is 
convinced that these were representatives of the
Presidential Special Service), announced that it was
necessary to have an understanding with the director of the
governmental apparatus. Photographs immediately appeared in
newspapers of Kvasov's dacha in Aprelevka. The protests of
the head of the government apparatus, who had only a state
dacha, did not appear in the press, and then came the
retirement. In other words, a media campaign directed
against one or another official is usually initiated by his
political rivals. It is exactly this that in many ways
compels Kremlin bureaucrats to attentively follow how the
media throw light on their activity. 
It is also not surprising that the most serious attack
in this respect against Anatoliy Chubays was undertaken by
MK [Moskovskiy Komsomolets]; that is, the most popular 
newspaper in the capital. I am talking about the sensational
interpretation of the audio tape of the conversation of
Anatoliy Chubays with Viktor Ilyushin, Yeltsin's first
assistant, and another interlocutor regarding the arrest of
Arkadiy Yevstafyev and Sergey Lisovskiy. Chubays kept
silent at that time, but in the end the matter was dropped,
certainly only with the blessing of the President--the
principal reader of compromising materials published in the
Russian press.
In general, in a super-presidential republic, which 
Russia is today, the role of the head of state in this
specific sphere of political struggle is frequently
decisive. For example, in 1993 when workers of the
Interdepartmental Commission on the Fight Against Corruption
under the President of the Russian Federation, which
feverishly collected compromising material on everyone who
could become dangerous for their chief, tried to strike a
blow against the Moscow mayor, the head of state reacted to
this with disapproval, to put it mildly. At that time they
brought and placed on his table something concerning
corruption in the capital. According to eyewitnesses
testimony, the President unexpectedly completely suspended
the problem, declaring in an irritated manner something
like "Do not touch Moscow."
Also remarkable is the situation around the analytical
material that appeared in the press claiming that allegedly
young reformers in the government were preparing to remove
Rem Vyakhirev from the post of chairman of the board of the
RAO [Russian joint-stock company] Gazprom. As could be 
expected, a dispute between the premier and his first deputy
did not occur--it requires something more than someone's 
impudent remarks on a pressing subject. On the other hand, a
scandal flared up around the person of Sergey Kurginyan,
who was named by the "Itogi" program as the hypothetical
author of the sensational analytical note. At the same time
it was clearly said that the real target of the attack was
not Kurginyan himself but Vice Premier Anatoliy Kulikov, to
whom the analyst was allegedly giving advice. The charges
against the political scientist, judging by everything,
became the original warning to the head of the MVD on the
part of his opponents.
From time to time compromising material is "slipped"
into the media by power departments which for various 
reasons cannot or dare not act against one or another 
influential official. It is assumed that this is exactly how
the destruction of Minister of Justice Valentin Kovalev as
a political figure began. Usually a detailed breakdown of 
recordings of reprehensible conversations of one or another 
official are turned over to the press. For example, the
publication of the telephone conversations of former acting 
Procurator General Aleksey Ilyushenko with Petr Yanchev,
head of Balkar-Trading.
In the epoch of the market economy, demand creates 
supply. Groups of people specializing in the collection and
even the preparation of compromising materials have
appeared in Russia. As far as is known, they have not yet
achieved any particular success; however, the very fact
that the desire has surfaced not only to make money in this
sphere but also to advertise this business is extremely
significant for contemporary Russia.

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#7
Kiev joins exercises but keen not to offend Moscow
By Rostislav Khotin 

DONUZLAV NAVAL BASE, Ukraine, Aug 24 (Reuter) - As Ukraine's navy spruced up
this Soviet-era base for this week's Sea Breeze 97 exercises with NATO and
other forces, officials were trying to limit the potential damage to
relations with Moscow. 
The event, a mock-up humanitarian operation rather than a combat mission, has
annoyed Russia because it is being held with NATO and, in part, on Ukraine's
Crimean peninsula, where 75 percent of the population is ethnic Russian. 
Furthermore, local people say the exercises -- which bring together U.S.,
Turkish, Bulgarian, Romanian, Georgian and Ukrainian ships -- could harm the
lucrative tourist trade. 
Officials disagree, and seem to have gone to some lengths to tone down the
operation to avoid a rift with the Russians. 
``These exercises aim to improve the life and health of the people,''
Ukrainian Defence Minister Olexander Kuzmuk said last week. ``There should be
no impact on the tourist season because ships cannot be seen from the
beaches.'' 
Colonel Borys Rekuts, a Donuzlav base commander, explained in an interview
the idea behind the exercise: ``It's the Orange republic and it's had an
earthquake and we're trying to bring humanitarian aid to help people.'' 
The Ukrainian armed forces chief of staff, Colonel-General Olexander
Zatunaiko, said last week Ukraine would hold joint military exercises with
Russia in Crimea in October. 
``It's clear that Ukraine wants to maintain a balance between Russia and the
West,'' said Serhiy Zgurets, a military commentator at the influential Den
daily. 
The Ukrainian Defence Ministry sent Sea Breeze invitations to the Russian
Black Sea fleet based, under a 20-year leasing deal between Kiev and Moscow,
not far from Donuzlav. 
Moscow agreed to send observers only last week, after rejecting not just the
invitation but the very idea of exercises with NATO involvement in Crimea,
where three quarters of the population is ethnic Russian and which for
centuries was the subject of rivalry between Russia, Turkey, Britain and
France. 
``Russia still does not agree with the idea of holding the exercises and has
no plans to participate in them,'' Russia's Foreign Ministry spokesman Valery
Nesterushkin told Intefax news agency last week. 
``Crimea is a mountain of difficult memories. Everything here is historically
very sensitive,'' Leonid Grach, leader of Crimea's Communist Party, told
Reuters. 
``It's better not to touch the past and not to hold these exercises,'' added
Grach, whose party has headed the campaign of public opposition to Sea
Breeze. 
The area saw bloody battles during Germany's World War Two occupation. In the
1950s, Kremlin leader Nikita Khrushchev ceded Crimea from Russia to the
then-Soviet republic of Ukraine. 
Communists in Crimea plan a march on Monday from a monument devoted to the
Red Army attack of Yevpatoria in 1944 to the city centre where a rally is
planned near the Lenin monument. 
Russia objects to NATO's eastward enlargement -- although Ukraine has no
plans to join the alliance for now -- and views the exercises as a precursor
to a NATO presence in Crimea, a strategic location jutting into the Black
Sea. 
Ukraine has been an enthusiastic participant in NATO's Partnership for Peace
programme of military cooperation. 
Originally, Ukrainian foreign and defence ministry statements said the
exercises were to be only in Crimea. 
But the timetable showed this was changed. Only sports events and ceremonies
marking six years of Ukraine's independence were being held in Donuzlav on
Sunday after the arrival of foreign vessels on Saturday. 
On Monday, the ships will travel some 200 km (120 miles) from Crimea to the
southern Mykolayiv region and then to the port of Odessa where the exercises
will take place. 

*******

#8
Russia's Chernomyrdin defends union with Belarus

ZHUKOVSKY, Russia, Aug 24 (Reuter) - Russian Prime Minister Viktor
Chernomyrdin said on Sunday that recent incidents in which two Russian
television crews were detained in Belarus should not harm the countries'
loose union. 
``Russia needs the union with Belarus and will do everything to reinforce
it,'' Chernomyrdin told reporters during a visit to international air fair
outside Moscow. 
The union agreement signed in April does not commit Russia and Belarus to a
single state or affect their sovereignty. It is generally supported by a
majority of the population in both countries. 
But liberal Moscow politicians and media have denounced the deal as dangerous
for Russia's fledging democracy and harmful for its struggling economy. 
Public criticism of the union grew in Russia when Belarus detained seven
journalists working for Russian ORT state television in two separate
incidents this month, accusing them of trying to illegally cross the border
with Lithuania. 
Sergei Yastrzhembsky, spokesman for Russian President Boris Yeltsin, warned
Belarus on Thursday the incident could threaten the union. 
Belarus's hardline President Alexander Lukashenko reacted angrily but four of
the journalists, all Russian citizens, were freed the next day. One had been
freed earlier. 
Two ORT journalists who are Belarus citizens are still in custody facing
charges punishable by up to five years in prison. Lukashenko insists they
should face the court. 

******