Center for Defense Information
Research Topics
CDI Library
What's New
CDI Library > Johnson's Russia List

Johnson's Russia List


December 10, 1997  
This Date's Issues: 1422  1423 

Johnson's Russia List
10 December 1997

[Note from David Johnson:
1. Eva Segert-Tauger: Yeltsin.
2. The Times (UK): Yeltsin aides hoard cash in secret 
accounts. Cash corruption scandal involves ministers and 
generals, writes Richard Beeston.

3. AP: Russia, US want Spy Case Resolved.
4. Irish Times editorial: Tragedy in Siberia.
5. the eXile press review: Abram Kalashnikov, How to Take 
Credit for Really Dull Work.

6. AFP: Nearly half of Russia's coal mine will be shut down 
next year.

7. AFP: Russian private banks set to lose government cash.
8. Interfax: Luzhkov Comments on Socialism at Moscow Socialist 

9. Itar-Tass: Baburin Addresses Congress of Russian 

10. NTV: Russia's Nemtsov Trails Second in Latest Poll.
11. The Independent (UK): Lenin's guards to honour soldier's 

12. Reuters: Yeltsin, patriarch discuss millennium celebrations.
13. New York Times: Michael Gordon, Siberia's Latest Challenge: 


Date: Tue, 09 Dec 1997 17:02:25 -0500
From: "Eva Segert-Tauger" <MTAU@WVNVM.WVNET.EDU> 
Subject: Yeltsin

My first reaction to your "Resignation" piece in JRL #1397 is "bravo." I
agree with your views, but then start to wonder whether blaming Yeltsin isn't
too convenient. Is it just Yeltsin, his cronies and the outside governments
(especially the U.S.) that support him that are responsible for the state of
Russia today, or is the problem deeper? Under communism, the people who
advanced were not the most competent ones necessarily, but the ones most
capable at playing the political game within party, securing a mentor, etc.
Already under Brezhnev corruption was becoming a way of life, in spite of
attempts to deal with it, intensified under Andropov and Gorbachev. Isn't the
state of Russia today also the result of political and economic decline that
started two decades ago and intensified once the collapse of Russia destroyed
the party's attempts to keep a cover on how bad things were getting? Now
that it is no longer necessary to preserve lip service to the idea of
the Russian elite, socialized to follow a doctrine, are trying to be good
"capitalists" in a rather vulgar way, without any contrary ideology to
restrain them. If Yeltsin were to resign, as you suggest, would the person
who took his place be any different, given the bad press communism is getting
these days? It's ironic, given Yeltsin's attack on nomenklatura privileges
(1987?) that he and is cronies are enjoying a lifestyle that the most corrupt
officials in the old days would not dream of in their wildest dreams. At
he's giving lip service to helping those less fortunate, in contrast to the
neo-social Darwinism practiced in the U.S. by opponents of welfare, etc.


The Times (UK)
December 10. 1997
[for personal use only]
Yeltsin aides hoard cash in secret accounts 
Cash corruption scandal involves ministers and generals, writes Richard 

THE Russian ruling elite was plunged into another potentially damaging 
corruption scandal yesterday after details emerged about secret bank 
accounts held by dozens of senior figures in government. 
In the wake of last month's scandal, which led to the dismissal of four 
prominent reformers who received large advances for an unpublished book, 
a Moscow newspaper has revealed how more than 70 people, including 
ministers, generals and diplomats, held hundreds of thousands of pounds 
in a shady Moscow bank. 
According to Moskovsky Komsomolets, which acquired a copy of the list 
from the prosecutor's office, the compromising evidence was discovered 
after investigators searched the offices of the chairman of the Rato 
Bank and found the names of account holders in a safe deposit-box. 
"The investigators were dumbfounded to see the names and sums 
deposited," wrote Aleksandr Khinstein, an investigative reporter who 
broke the story. 
"Many of the people were household names in Russia. They give interviews 
to the media on how to improve the situation in the country and receive 
medals from the President. They are ministers, close assistants to 
President Yeltsin, generals of the Federal Security Service, and even 
one Deputy Prime Minister." 
Among the depositors listed were General Anatoli Kruglov, head of the 
State Customs Committee, who with his wife held more than £75,000; 
Vasili Vinogradov, chief of the consular department at the Ministry of 
Foreign Affairs and now the Ambassador to Australia, with more than 
£25,000; Valentin Kovalyov, the former Justice Minister, dismissed over 
a sex scandal in June, with £160,000; and General Starovoitov, chief of 
the Federal Communications and Information Agency, who with his wife had 
There was no evidence to suggest that the amounts in the accounts were 
obtained illegally, but the sums were large in a country where Cabinet 
ministers are paid only about £600 a month. 
The accounts also raised suspicions because they were held in secrecy. 
Depositors never actually visited the bank and only one highly trusted 
employee was charged with dealing with the account holders. 
Vitali Rats, a spokesman for General Kruglov, admitted the existence of 
the account, but insisted nothing was improper. "He put a certain amount 
of money in this bank account for two years and received interest. The 
leadership is aware of the situation and thinks that it is perfectly 
legal," Mr Rats said. 
President Yeltsin may take a different view. Earlier this year, in an 
attempt to root out corruption, he forced top officials to disclose 
their personal wealth. In September he repeated his pledge to crack down 
on graft and bribery, which is so common that the country recently came 
top in the world league of corrupt states. 
The military, where theft and corruption are rampant, has been the main 
target of the Government's efforts and several generals and admirals 
have been punished. 
The first real sign of action in the Kremlin came last month when Mr 
Yeltsin dismissed four senior figures in his Government for "unethical" 
behaviour in accepting £55,000 each from a publisher, owned by one of 
the country's largest banks. 
While at the time the move was applauded as a blow against corruption, 
the latest evidence suggests that the sums involved were relatively 
small compared with what other officials at every level of government 
have been quietly amassing. 


Russia, US want Spy Case Resolved
9 December 1997

MOSCOW (AP) - A telephone call between Vice President Al Gore and Russian
Prime Minister Viktor Chernomyrdin expedited the release of an American
accused of spying, officials said Tuesday.
Richard L. Bliss was freed from jail Saturday on a written guarantee from his
U.S. employer that he would stay in the southern Russian city of Rostov-on-
Don, where he was arrested, and be available for questioning.
On Tuesday, NTV television showed him leaving the intelligence agency's
regional office.
Bliss refused to answer questions, but said he wanted to tell his family that
he was OK and that they did not need to worry about him.
Igor Shabduralsulov, a government spokesman, said Gore and Chernomyrdin spoke
by telephone Friday. The conversation ``helped invigorate the two countries'
diplomatic efforts and facilitate Russia's decision to release Bliss from
custody,'' he told the Interfax news agency.
Bliss was arrested Nov. 25. Russian intelligence officials accused him of
surveying sensitive sites using satellite receivers brought into Russia
``We are asking the Russian authorities to act as quickly as possible to
resolve this case,'' U.S. Embassy spokesman Richard Hoagland said Tuesday.
``As we said earlier, there is no credible reason for charges of espionage to
be made against him.''
A Russian Foreign Ministry spokesman, Valery Nesterushkin, told Interfax,
believe the investigation of the Bliss case should be brought to an end to
clarify the matter.''
But, he said, everything depends on the Russian security service's
U.S. officials have warned that the arrest could harm relations and set back
efforts to improve trade between the two countries.
Nesterushkin said the case should not be tied to trade or U.S. investment.
'`From our point of view, there is no direct link between the two matters,''
he told Interfax.
Bliss, 29, is a field technician employed by Qualcomm Inc., a San Diego firm
working with a Russian company to install a cellular phone system.
U.S. Embassy officials say Bliss is in good health following his release and
spends most of his time watching videos, resting and eating.


Irish Times
December 3, 1997
Tragedy in Siberia 

It has been a commonplace to describe Russians as fatalistic. They have, 
after all, borne in comparative silence their 26 million dead in the 
second World War, a further 10 million in their own civil war and the as 
yet uncounted casualties of the Stalinist terror. In this context the 
tragedy which took place yesterday in the coal mine in Novokuznetsk in 
western Siberia might appear of little consequence. But the pictures of 
the dead being carried out of the pit, the television images of wives 
and families waiting tensely for news of husbands, fathers and loved 
ones, have brought the grim realities of life and death in the mines of 
the Kuzbass into the comfortable living rooms of western Europe.
To older people and those in middle age these images may have triggered 
memories of similar scenes nearer to hand, in the mines of England and 
Wales, in darker days before safety regulations were enforced with any 
real severity. This comparison brings some political and historical 
lessons to the forefront. There were few groups in the western society 
of the past to whom communism was more attractive than to miners. They 
saw themselves, rightly, as oppressed and exploited to the extent that 
their very lives were put at risk. In the capitalist west the pressure 
applied by the miners' unions and a growing enlightenment among the mine 
owners led, gradually, to a situation in which such tragedies became 
fewer and farther between.
East of what was known as the Iron Curtain the attitude was different. 
Mineworkers were, paradoxically, exhorted to Stakhanovite levels of 
production in order to defeat capitalism even if their own safety was 
imperilled in the process. Not surprisingly when, in the 1980s and 
1990s, Mr Boris Yeltsin, then an up and coming politician, offered 
capitalism in place of communism, the miners of Siberia and the Don were 
his strongest and most active supporters. They attended massed rallies 
whenever he called for their aid. They threatened to bring the Soviet 
Union to a standstill and their actions were reported with enthusiasm in 
the United States and western Europe. Their political clout also brought 
them, briefly, to wage levels which were far superior to those in other 
From the introduction of economic reforms in 1992 onwards, 
disillusionment set in. Mr Yeltsin is certainly not the miner's hero in 
today's Russia. Colleagues of the men who died in such awful 
circumstances yesterday have, throughout the Russian Federation been 
waiting, stoically as usual, for several months to receive their wages. 
In the presidential elections of last summer western Siberia and the 
Kuzbass mining region reverted to supporting the communist leader, Mr 
Gennady Zyuganov, after years of strong allegiance to Mr Yeltsin. In 
recent weeks Russia's first deputy prime minister charged with economic 
reform, Mr Anatoly Chubais, has intimated that Mr Yeltsin's promises to 
pay long-standing wages to industrial workers may not be fulfilled. The 
tragedy is likely further to erode support for Mr Yeltsin and his team. 
The fact that Mr Chubais's exhortations towards belt-tightening have 
been accompanied by a scandal in which he has been accused of receiving 
$100,000 for a book he has not yet written is likely to antagonise the 
unpaid workers even further. 


From: "Matt Taibbi" <>
Subject: eXile press review
Date: Wed, 10 Dec 1997 03:36:58 +0300

Dear David,

Enclosed is the press review from our last issue.

Thank you again,
Matt Taibbi

How to Take Credit for Really Dull Work
By Abram Kalashnikov
the eXile

I helped a friend of mine build a dacha this summer. It was pretty
monotonous work-- I blew at least two weekends kneeling in the mud and
laying bricks in the back of the house. My friend got the more interesting
job painting the lattice work in the front.

It never occurred to me to sign my name to those bricks. It was my work,
sure, but...bricklaying is not the kind of thing you want to stick your
Abram Hancock on, if you know what I mean.

My colleagues in Moscow's Western press bureaus don't worry about those
kinds of distinctions. They'll stick their name on anything, even a story a
lab animal—or a Russian bricklayer—could write.

Editors of straight-press publications are great sticklers for form. Like
the great cane-bearing matrons who pace the halls of English grammar
schools, they are inevitably horrified if one of their charges wears his
schoolyard knickers at vespers or allows his hair to grow a quarter-inch
below the regulation level at the ear. In journalism, the rules pertain not
to clothes, but to article types, of which there are only three acceptable
species in the straight press: straight news articles, "readers," and op-ed

Because the reading public is assumed to be disinclined to think for
itself, articles which appear in Western—and particularly
American—publications are divided up into these rigid categories so that
the reader knows where to look if he is seeking opinion, entertaining copy,
or pure information, and, more importantly, where not to look if he wants
to avoid any of those things. For this reason, informational "straight
news" pieces must never display characteristics of opinion pieces,
entertaining "readers" must never break news, and so on. These rules of
engagement were drawn up ages ago, in the Hearst era, and editors have been
expecting, and getting, strict adherence to them ever since.

The human urge toward critical and creative writing has been so adulterated
in "straight news" pieces over the years that it's a wonder any reporter
would sign his name to one, just as it would have been strange if I had
signed my bricks. Yet wire-service soldiers like Timothy Heritage of
Reuters and Dave Carpenter of the Associated Press are still routinely
asked to accept the humiliation of having their bylines stuck on the
robotized, formulaic pieces their grim editorial masters force them to lay
on the public.

To get a better picture of how much of straight news pieces are based on
formulae and how little of them are borne of the reporter's own initiative,
let's look at one closely. A very typical example of the genre is Timothy
Heritage's recent piece entitled "Russia basks in the glory of rare
diplomatic success."

"MOSCOW, Nov 21 (Reuters) - Russia basked on Friday in the glory of staging
a rare diplomatic coup on the world stage by negotiating a way out of the
crisis between the United Nations and Iraq. "

Heritage in his first sentence answered the only three questions that
matter in the world of straight news lead etiquette. They are: 

WHAT IS THE DATE? Heritage: "on Friday..." Check. 

WHAT, IN ONE SENTENCE, HAPPENED? Heritage: "Russia...negotiating a way out
of the crisis between the United Nations and Iraq." No second sentence
here. Check. 

Because, as Heritage writes, it is a "rare diplomatic coup." Check, next

One should never forget that wire articles, like any other product, are
items that have to be sold to its buying audience, and that the first
sentence always contains the pitch. That pitch might be a "scandal that
imperils the reform effort," a "series of crimes that has shocked the small
southern Russian city of Rostov," or a "story that has warmed the hearts of
people—and elephants—all across Southeast Asia," but it has to be there. 

"Rare diplomatic coup" is a phrase that does the job, since it might have
been written by the hundred thousand or so other reporters in this last
century who were ably taught to have faith in alarmism and conflict as the
most surefire and profitable pitches of all.

When you have all of these things to worry about in one sentence alone,
things like writing style and individual commentary go out the window.
Therefore you get sentences like "Russia basked in the glory of staging a
rare diplomatic coup" when you could have had "Russia basked in the glory
of a rare diplomatic coup." And when he gets down to the business of
analyzing what happened, Heritage's editors quickly crack the whip and
start him dragging a drozhky full of borrowed opinions:

"Russian media, used to lamenting Moscow's weakness in international
diplomacy since the Soviet Union collapsed in 1991, for once praised 
foreign Minister Yevgeny Primakov for his mediation. 

"But some newspapers cautioned that the crisis over U.N. arms inspectors
could still turn nasty and analysts said Moscow would remain far short of
influence it had in Soviet times."

The last two graphs are classic j-school formula work in another sense:
they provide "balance." No assertion can be made without a
counter-assertion. That's why nearly every straight-news piece contains at
least one and usually two paragraphs that begin with "but." 

The "balance," however, is usually a sleight-of-hand trick, like a magician
forcing a card. He holds out two hands, but one a little more prominently.
The well-trained reader knows that the post-"but" assertion weighs a little
more in a straight news article than the pre-"but" one. In this piece, the
disturbing and very real and current news that Russia had actually shown up
the west in the international diplomatic arena is successfully qualified by
a reference to invisible "analysts," who in the end reassure Reuters
readers with the purely argumentative and untenable yet soothing future
scenario of a Russia unable to regain its former influence. 

For some reason the latter is given as much play as the former in the
Heritage article. Editors would call that balance, but it might just as
easily be called stroking your customers. Either way, this is a formula at
work, not a human being called "Timothy Heritage."

In fact, the only statements Heritage makes without referring directly to
analysts are a pair of background sentences in the middle of the piece:

"Ending the sanctions would clear the way for Iraq to start repaying Moscow
billions of dollars in Soviet-era debts."

"Russia has shown signs of envying the U.S. role as the only superpower.
Washington remains vital to Moscow's foreign policy but Russia has seemed
keen to diminish U.S. influence over Europe and is developing ties with the
Far East and Middle East."

Hadly daring stuff. And in the entire piece, there is only one—count 'em,
one—qualititative judgement that Heritage makes on his own, and even that
he screws up. It comes in paragraph 11, when he describes the newspaper
"Izvestia" as "influential":

``Geneva is our little triumph. More exactly, it is Primakov's triumph,''
the influential Izvestia newspaper said.

Izvestia as an independent press organ is not influential, since it doesn't
exist as an independent press organ. What it is is the mouthpiece of an
influential bank, Oneximbank. Calling "Izvestia" influential is akin to
calling a gun homicidal. It deflects attention from the operator.

As far as straight-news writing goes, Heritage did all of the right things.
In the interests of not scaring off dumb readers, he didn't write any
paragraph longer than two sentences, with more than 75% containing just
one. He made his pitch, upheld the illusion of "balance," and successfully
avoided providing anything resembling either a narrative personality or his
own opinion. Most importantly, he was willing to attach his name to the
series of hackneyed fill-in-the-blank phrases and systematic constructions
that made up the entire article, allowing Reuters to leave readers with the
impression that its articles are written by flesh-and-blood people, not
automatons bending to a formulaic will. 

Why did he do it? For the same reason he used the word "influential"—he
wants more leeway to use adjectives without interference. More than one
word's worth of leeway, anyway. Would that make him feel better? We'll see
what he has to look forward to when we look at "readers" in the next issue
of the eXile.


Nearly half of Russia's coal mine will be shut down next year 
December 9, 1997

MOSCOW, Dec 9 (AFP) - Russia plans to shut down 86 of its 200 coal mines 
next year, the Economics Minister Iakov Urinson told Interfax agency 
Urinson did not say how many of the 500,000 miners would be affected by 
this measure, but he promised the leaders of Russia's main mining trade 
union, Rosugleprof, that the government would be particularly attentive 
to the social issues involved. 
The announcement of the closures comes just 9 days before the World Bank 
decides whether to grant a 500 million dollar loan to the Russian 
coalmining industry. 
The decision depends on whether the government ends the state monopoly 
and privitises the industry, World Bank representants in Moscow said. 
But the President of Rosugleprof, Vitali Budko, said the possibility of 
finding a buyer for the Russian coalmines was very small. 
Most pits are as dangerous as the one near Novokuznetsk in western 
Siberia were 67 people died last week in an explosion, Budko added. 
The World Bank granted in 1996 a 525 million dollar loan to Russia's 
down-ridden coal-mining industry. 


Russian private banks set to lose government cash
By Dmitri Zhdannikov 

MOSCOW, Dec 9 (AFP) - The Russian government has begun closing its 
accounts in the country's big private banks under a presidential 
decision to transfer all state funds to the Central Bank by the end of 
the year. 
The purpose of the move, ordered by President Boris Yeltsin last May, is 
to stamp out corruption but critics say there is a risk it could 
undermine the stability of the national banking system. 
The process got underway only last week when the finance ministry closed 
its seven accounts at OneximBank. The state customs committee has 
announced that it will also shut its accounts with OneximBank and 
Mosbiznesbank by December 31. 
"It is obvious that the Central Bank is the best and most honest 
administrator of public funds, provided it is technically capable of 
handling all the state accounts," said Vladimir Petrov, the first deputy 
finance minister. 
For several years, the Russian government has used private banks to 
manage budget funds because the Central Bank, the successor to the 
Soviet era Gosbank, did not have the flexibility required for this type 
of operation. 
In 1995, the government drew up a list of "13 state operator-banks" 
whose activities included guaranteeing the Russian foreign debt or even 
financing the army from budget funds. 
This system came in for fierce criticism after several cases in which 
officials, mainly from the finance ministry, were implicated in illicit 
activities by the banks. 
Young reformer Boris Nemtsov, who was made first deputy prime minister 
in March, said then that he intended to put an end to "the squandering" 
of public money, by establishing a public treasury system to replace 
"Private banks live on injections of state cash. We must take the needle 
out. It has been clear for a long time that sooner or later they will 
have to be separated from the government. This will force them to launch 
out into traditional activities like loans to ordinary people and 
businesses," said Alexander Zhukov head of the parliamentary budgetary 
committee and member of the pro-government party Our House is Russia. 
Russia does not have a well-developed credit system and this is a major 
handicap for investment and the market for consumer goods. 
But experts said they doubted that Russian banks would push ahead with 
the development of a western-style loans system. 
"The private banks are far too used to making their profits from state 
funds and will only switch to credit -- the least profitable operation 
-- at the last minute and when they no longer have the choice," said 
Tatiana Maleva of the Carnegie centre. 
"The banks are sure to try to establish other connections to the 
government and the forthcoming privatisation of oil giant Rosneft or the 
telecommunications group Sviazinvest will demonstrate whether the 
government is serious about no longer associating with private capital," 
she said. 
Zhukov warned however that if the government withdrew its money from the 
big banks too fast, it could "put them in a delicate position, all the 
more so because the crisis affecting Russian financial markets has 
already brought several banks to the brink of bankruptcy". 
Experts said that via inter-bank loans, the government's decision could 
have repercussions for small and medium-sized banks and not just for the 
big banks accredited by the state. 
"This sytem has made the banks dependent upon each other. In this kind 
of situation, nobody is safe. It is also clear that the impact is always 
more painful and more difficult to overcome for a small bank than for a 
big one," said Sergei Aukutsyonek, director of the transitory market 


Luzkov Comments on Socialism at Moscow Socialist Congress 

MOSCOW, Dec 7 (Interfax-Moscow) -- Social ideas draw increasing
support in Russia, Mayor of Moscow Yuriy Luzhkov told Interfax in comment
on the results of the second congress of the Russian Movement for New
Socialism, held in Moscow Saturday [6 December].
"It's not the socialism built in 1936," Luzhkov said.
"Socialism should be viewed as a developing system benefitting the
absolute majority of the citizens, rather than an intermediate phase in
building communism," he added.
Amid economic recession, he continued, the socially vulnerable groups
cannot accept "the rhetoric on economic freedom."
He also said that social and economic problems are causing outbursts
of nationalism and even national-socialism.
He said he was concerned by the fact that extreme radical politicians
who come out for the restoration of pre-reform economy and the totalitarian
regime, and even for the establishment of new dictatorial regimes, are
becoming popular in Russia.
He said a realistic and pragmatic state that will benefit the
citizens, must be created.
He noted in this connection that "patriotism, spirituality, democracy
and a strong state system constitute the foundation of Russia's revival.
He said that Russian President Boris Yeltsin comes out for formulating
a national idea and that "without a national idea the nation will fall
"This task cannot be fulfilled without understanding the values shared
by the people, Luzhkov said.


Baburin Addresses Congress of Russian Nationalists 

St. Petersburg, 6 Dec (ITAR-TASS) -- Representatives of over 20
parties and movements convened at the 4th congress of Russian nationalists
in St. Petersburg today. The main aim of the congress is to overcome
friction between parties and set up a united nationalist opposition.
The traditional participants in such congresses--the National
Republican Party of Russia, the Russian National Unity, the People's
National Party, the Liberal Democratic Party of Russia, the Russian
Assembly, and the Black Hundred--were joined this time by the Anticommunist
Party, the Party of Democratic Capitalism, the Working Russia, the Alliance
of Rightwing Parties, the Russian Imperial Union-Order [Rossiyskiy
imperskiy soyuz-orden], and others.
Sergey Baburin, the first deputy chairman of the State Duma, addressed
the audience and wished them "success in uniting for the sake of resolving
common problems." Baburin said a fight is going on "not between capitalism
and socialism, but a fight to exterminate the Russian people." The most
disturbing sign of this process is that the population is shrinking. If
these trends are not reversed, then, Baburin believes, by 2010 the
population will have fallen by 20 million, whereas "our neighbors are
China, with its multibillion population, and Islamic countries, in which
the population is growing like a snowball."
Baburin believes the main aim of the nationalist opposition is to
introduce to parliaments of different levels as many nationalist deputies
as possible, so that "fundamental problems, including personnel issues, can
be resolved with parliaments' participation and not behind the scenes."
When asked by ITAR-TASS if he is prepared to lead the united
nationalist opposition, Baburin said he will if he is entrusted with this


Russia's Nemtsov Trails Second in Latest Poll 

7 December 1997
[translation for personal use only]
>From the "Itogi-Introduction" newscast

Every week, the center for public opinion conducts opinion polls
asking the same question -- who would you vote for if the presidential
election was staged this coming Sunday? The latest poll gives us a picture
of the distribution of public sympathies between leading politicians.
Yabloko leader [Grigoriy] Yavlinskiy, who seemed to get ahead last
week, now returned to his previous position -- not 10 but only 8 percent of
the respondents would vote for him this week. The same happened to General
[Aleksandr] Lebed -- his rating fell from 12 to the previous 9 percent. 
Moscow Mayor Yuriy Luzhkov would command the same share of votes -- 9
percent, thus slightly, by 1 percent, improving his last week's position. 
[Russian First Deputy Prime Minister] Boris Nemtsov reclaimed the second
place. He received 13 percent of potential votes, against his 11 percent
of last week.
The first place, for two and a half months in a row, has been held by
Russian Communist leader Gennadiy Zyuganov. Twenty percent would vote for
him this Sunday, the same as last week.


The Independent (UK)
10 December 1997
[for personal use only]
Lenin's guards to honour soldier's tomb 

President Boris Yeltsin decreed the reinstatement yesterday of Russia's 
Honour Guard No 1, which used to keep watch over Lenin's tomb on Red 
But the new troop, which takes up its post on Friday when Russia 
celebrates its post-communist 1993 constitution, will not honour the 
mausoleum of the Bolshevik leader but the nearby Second World War 
memorial, the tomb of the unknown soldier. 
Mr Yeltsin, who originally floated the idea of reviving the guard in 
May, decreed that it would henceforth keep watch over the eternal flame 
and other war monuments in the Alexander Garden, below the Kremlin 
The original guard was created on 26 January 1924, to patrol the tomb 
where Vladimir Lenin was laid in state five days after his death. 
Yeltsin disbanded the unit four years ago after defeating an armed 
rebellion by the communist-era parliament. 
The embalmed body of the Bolshevik leader still lies preserved in its 
granite mausoleum, its eventual fate a bone of fierce contention between 
liberals and communists. 
It is guarded by soldiers during public opening hours. 


Yeltsin, patriarch discuss millennium celebrations

MOSCOW, Dec 9 (Reuters) - President Boris Yeltsin and Patriarch Alexiy, head
of Russia's Orthodox Church, on Tuesday discussed plans to celebrate the
2,000th anniversary of the birth of Jesus Christ, Itar-Tass news agency said. 
The patriarch heads a commission charged with preparing for the
anniversary in
the year 2000. 
The two men also discussed relations between church and state in Russia, Tass
Since the collapse of the atheistic Soviet Union in 1991 the Orthodox Church
has seen a strong revival and Russia's post-communist leaders, including
Yeltsin, have been keen to cultivate ties with the church. 
In September Yeltsin defied international opinion when he signed a
controversial law on religious freedoms strongly backed by the Orthodox
The law, criticised by human rights groups, the United States and the Vatican
as discriminatory, limits the rights of ``non-traditional'' faiths operating
in Russia. 
The Orthodox Church and many parliamentary deputies argue that the law is
necessary to counter dangerous religious sects they say have exploited
Russians' poverty or ignorance in the post-communist period. 
On Tuesday Patriarch Alexiy had been due to attend an award ceremony in the
Kremlin presided over by Yeltsin. 
However the president cancelled the ceremony at the last moment out of
for the scores of people killed last Saturday when a huge military cargo plane
crashed into an apartment block in the Siberian city of Irkutsk. 
On Tuesday two eight-year old girls were buried in Irkutsk, the first of more
than 80 probable victims to be interred. 
``Funerals are going on in Irkutsk right now and I believe we should get
together again a bit later. This will be the right thing to do, in a Christian
and simply human sense,'' Yeltsin told those attending the ceremony. 
Patriarch Alexiy has sent his condolences to the bereaved and the Orthodox
Church has pledged $50,000 to the survivors.


New York Times
9 December 1997
[for personal use only]
Siberia's Latest Challenge: Capitalism

NORILSK, Russia -- Hardship is second nature for the residents of this
Siberian enclave. Winter sends the temperature plunging to minus 45 degrees
Fahrenheit and drops the sun below the horizon for months at a time. 
It was Stalin who established this arctic city and dispatched hundreds of
thousands of political prisoners here to extract the metal ore from mines so
deep they seemed to run to the very center of the Earth. 
Later, Norilsk became a notorious example of wasteful communist planning, a
place in which the air and water were fouled with noxious chemicals that even
now make breathing a hazard. 
But today, the people of Norilsk face what many feel is their greatest
challenge: the new world of capitalism. 
Russia's most powerful bank has bought the gargantuan mining and
metallurgical complex that is the city's main employer and plans to slash the
company's enormous work force and move more than a third of the city's
residents to the south. 
The audacious plan illustrates a pivotal phase in Russia's shaky transition
to a free-market economy: whether the businessmen who have bought state
enterprises at fire-sale prices have the management expertise to reshape those
companies so they can be internationally competitive. 
At stake is not only the financial health of the companies but Russia's
long-deferred hopes for economic growth, already shaken by wild gyrations in
the international capital markets. 
"Norilsk will be changed completely," boasts Vladimir Potanin, the 36-year-
old head of Uneximbank, which has a controlling interest in Norilsk Nickel, as
the metal complex is known. 
But some experts remain dubious. 
"These new bankers are deal makers," said Anders Aslund, a former economic
adviser to the Russian government and a senior associate at the Carnegie
Endowment for International Peace. "They know something about finance. But
they know very little about management." 
From the start, Russia's development of Norilsk's vast ore deposits have
been a tangled tale of missed opportunities and ruthlessness. 
Lying on the remote Taimyr Peninsula, where Siberia meets the Kara Sea,
Norilsk lies in a forbidding and isolated zone. When workers here talk about
visiting the rest of Russia, they say they are going to the "continent," as if
Norilsk were not a sprawling city of 260,000 but an island separated by a
frigid ocean. 
This region contains more than a third of the world's nickel reserves and
two-fifths of the platinum-group metals. It also has significant amounts of
cobalt and copper. 
Russia's authorities ignored Norilsk's early prospectors. At the end of the
19th century, Kipriyan Sotnikov, a local constable who dreamed of wresting a
fortune from Norilsk's hills, sent a sample of copper ore to the czar's
treasury. The czar's men turned it away, complaining that the copper, needed
to make kopecks, was contaminated with nickel, cobalt, and platinum. 
But as World War II loomed over Europe three decades later, Stalin launched
a crash effort to tap the deposits. 
Political prisoners were hauled by boat to the arctic port of Dudinka, 60
miles to the west. They laid the rail lines, dug the mines, and manned the
factories, where the raw ore was turned into a liquid concentrate and then
smelted in huge furnaces. 
About 360,000 prisoners toiled away here from 1935 to 1956, according to a
report by the Institute for Contemporary Politics, a Moscow-based research
center. The institute estimates conservatively that 17,000 died. It is hard to
know precisely since Russian officials have yet to declassify most of the camp
records. Many of those who died were thrown into unmarked trenches, and their
bones are still unearthed by the annual spring thaw. 
Some of the former prisoners still hang on, like Vilis Traubergs, who
recounted his tales of prison life by the eerie glow of fluorescent lights on
the windowsills of his small apartment. Like other residents, Traubergs uses
the lights to grow vegetables and supplement the supply of food imported from
the "continent." In Norilsk's unforgiving climate, maintaining the traditional
Russian kitchen garden requires extraordinary measures. 
Many of Norilsk's current residents, however, were lured here after the
prison camps closed by promises of higher salaries, free vacations and early
They were workers like Alexandra Mironenko, who left the village of Stepnaya
in southern Russia with his wife, Lidiya, hoping to put away a nest egg so
that his family could start a new life in the south. 
His is a common story. Mironenko originally planned to stay no more than a
few years but has already lived here for 15 years. He earns 5 million rubles a
month (about $850) as a mechanic -- several times the going wage in the south
-- and still harbors hopes of moving back to the "continent" to build a new
Others consider themselves little more than economic prisoners. Their
savings were wiped out by the soaring inflation of the early 1990s even as the
cost of food and transportation rose. That, plus the difficulty in finding new
jobs, new housing and securing new residency permits have turned Norilsk from
a springboard into a trap. 
The elderly find it particularly hard to leave. They receive a higher
pension for their long years of service here only as long as they stay in
The hard times have spawned a new cottage industry. Norilsk is dotted with
small shops, where well-tailored businessmen with mobile phones buy the few
shares of stock that the workers received through privatization on behalf of
anonymous clients. The going rate: half the price at the Moscow stock
The question now is whether the doddering Soviet-style metal complex can be
run along capitalist principles and at what cost. 
Even with the best of intentions, transforming Norilsk is a herculean task.
Changing the mentality of the managers and the workers is a big part of the
problem. During Soviet times, all that mattered was production. To produce as
quickly as possible, metal was skimmed from the richest ore and much of the
remaining metal content discarded as waste. 
Foremen never asked themselves if they could get by with fewer men, and many
still find the idea of downsizing offensive and even unpatriotic. Some
advanced technology was developed, but often little was spent to keep
equipment up to date and reduce labor requirements. 
"It is difficult to get used to the idea that labor is a commodity," said
Yuri Filippov, a longtime manager here. "People do not like idea of hired
labor. They think it means they are slaves." 
The Soviet system of state subsidies also encouraged the company to expand
into unprofitable sidelines, such as construction and furniture making. Two-
thirds of the company's workers are involved in these types of auxiliary
enterprises, despite the fact that it is more cost-effective to import goods
from the south. 
There were also persistent reports of corruption: metal shipments at cut
rate prices to trading companies controlled by some of the managers. 
Environmentally, Norilsk became a disaster area. The company's Nadezhda
plant spews clouds of sulphur dioxide into the atmosphere at levels that have
reached 50 times the permitted dose. Many Norilsk residents believe the
noxious fumes inoculate them against disease and flu. But local doctors report
a large number of respiratory ills and shortened life expectancy. 
Much of the area around the metal complex has become a dead zone of withered
trees, poisoned lakes, and scarred tundra. The fall of the Soviet Union also
saddled the metal complex with the responsibility for maintaining the city of
Norilsk, including the wages of thousands of municipal workers and the huge
expense of importing food. The cost of supporting the city was a hefty $327
million in 1995. 
Unable to meet all of its obligations, the company acquired a massive
backlog in back taxes and penalties. 
But then Norilsk Nickel found itself with a new owner: Potanin, the tycoon
who heads Russia's most politically potent bank, Uneximbank, and a man who has
already proved himself to be a masterful empire builder. 
He began his career at the Soviet Foreign Trade Ministry before going into
the banking after the end of Soviet power. When the Yeltsin government needed
cash, he pioneered a privatization plan under which banks loaned the
government money in return for control of choice state assets. 
Uneximbank used this procedure to acquire a controlling interest in Norilsk
Nickel in 1985. The final purchase price for all the company's shares was $250
million, making Norilsk Nickel one of the biggest bargains in Russian
But Potanin wants to be known as an industrialist and manager, not just a
buyer of undervalued state enterprises. Like his banking tycoons, he has
touted himself as a harbinger of economic reform, the free market's answer to
the "Red Directors" who ran Russia's industries during Soviet times. 
Potanin has promised to overhaul Norilsk Nickel, though some experts say he
has been slow to make good on that pledge. 
Potanin has already taken some steps to tighten financial controls and get
the company's books in order. 
The old communist-era managers are being replaced with younger ones who
worship the bottom line. Nonessential enterprises, like the ill-conceived
furniture factory, are bring shut down. 
Potanin also used his savvy to help the company during a short stint as a
top Kremlin official. He drafted a decree enabling companies to restructure
their tax debts and defer tax penalties. The broader aim, he says, was to help
Russian industry, but he acknowledges that the provision was very good for
Norilsk Nickel. 
"Of course I thought about Norilsk," he said. "I personally cannot be far
away from this problem. I started it and it is very important to me." 
In the meantime, Uneximbank has kept Norilsk afloat with $150 million in
credits at 12 percent interest, said Lev Kuznetsov, the youthful first deputy
general for finance who was installed by Uneximbank. Although Norilsk Nickel
lost some $260 million in 1996, financial analysts say the company can become
very profitable if Potanin's restructuring plan is carried out. 
But the toughest steps lie ahead. Potanin plans to reduce the 100,000-man
work force at Norilsk Nickel's main operating complex to some 65,000 over the
next five to seven years. 
To cut the crushing cost of maintaining Norilsk, 100,000 of the residents
are to be transferred to the south. To update aging equipment, $1 billion is
to be invested, much of which is to be raised form international investors and
by issuing new Norilsk Nickel stock. Still, critics say Potanin's plan is very
vague and occasionally wishful. 
For example, he is counting on World Bank help to subsidize the huge cost of
relocating more than a third of Norilsk's population. But the World Bank says
the Russian government has never asked it to undertake such a project and that
it has no plans to do so. The effort to raise $1 billion in funds for
overhauling Norilsk Nickel has also been hurt by the capital flight from
emerging markets, forcing the company to pare back a planned new stock issue.
Workers and midlevel managers say that Uneximbank has so far invested little
new money to streamline production or maintain equipment. 
"I cannot say I have felt any changes for the better," said Mikhail Knyazev,
a top manager at the copper smelter. "Maybe we have even less money." The
graffiti on the walls of his factory let visitors know what some workers think
of conditions at the plant. It reads: "Welcome to hell." Even veterans of the
company, however, say that change is long overdue. The most important reform,
they say, is psychological, to alter the way employees think. 
"In the past, the only goal was to produce 100 times more metal," said
Filippov, the senior production official. "Now the metal is not a goal in
itself. Efficiency is the goal. We have to get used to that because we used to
work for a state company." 


Return to CDI's Home Page  I  Return to CDI's Library