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Johnson's Russia List
25 March 1998
[Note from David Johnson:
1. Rossiiskaya Gazeta: YELTSIN DISMISSES GOVERNMENT, REAFFIRMS.
COMMITMENT TO REFORM. PRESIDENT YELTSIN'S ADDRESS.
2. Reuters: Russia shakeup-for greater good or cash and power?
3. Jerry Hough: broader meaning in Yeltsin's action.
4. Matt Bivens: some more comments on eXile, in light of the
5. Moscow Times: David McHugh, Duma Likely to Accept Premier.
6. Financial Times (UK): Berezovsky: Tycoon aims to pull Kremlin
7. The Times (UK): Richard Beeston, Troika of Kremlin insiders
plotted the downfall of Yeltsin's Cabinet.
8. Sydney Morning Herald: Neela Banerjee, Russians stunned by
9. The Moscow Tribune: John Helmer, YELSTIN AND IVAN--A TERRIBLE
10. Reuters: U.S.-Russia military ties on track - Cohen.]
>From RIA Novosti
March 24, 1998
YELTSIN DISMISSES GOVERNMENT, REAFFIRMS COMMITMENT TO REFORM
PRESIDENT YELTSIN'S ADDRESS
Dear fellow-countrymen, I have signed today a decree
dismissing the Government. Viktor Stepanovich Chernomyrdin is
going too. It's always hard to part with old associates. We
have worked together for more than five years. Viktor
Stepanovich has done a great deal for this country. I value him
for his soundness and reliability. I have never doubted his
loyalty and commitment to the cause of reform and his honesty.
The 2000 elections are of great importance for us. They are, so
to speak, the future of Russia. I have instructed Chernomyrdin
to concentrate on political preparations for these elections.
Dear Russians, the resignation of the Government does not
mean change in the line of our policy. It is rather the desire
to make economic reforms more dynamic and effective, to give
them an additional push, a new impetus. The renewal of power is
a natural process. There are no unchangeable governments. The
present Cabinet of Ministers on the whole has accomplished the
tasks assigned to it, but, unfortunately, it has failed to cope
with a number of key issues. True, we have made some progress
in the economy, but we are still lagging far behind in the
social sphere: people have not yet felt that things are
changing for the better. I think that lately the Government has
clearly been lacking in dynamism, initiative, new concepts and
fresh approaches and ideas. And without this it is impossible
to make a breakthrough in the economy.
In short, this country needs a new team, capable of
achieving real, tangible results. I think Members of the
Cabinet should focus more on concrete economic and social
problems and engage less in political activity. For some time
before a new prime minister is appointed I shall act for him.
I shall announce my candidate for this post shortly. I am
convinced the deputies share my position. The Government must
work more resolutely and energetically. I hope they will
support my candidate.
Dear Russians, I count very much on your understanding
and support. Very soon this country will have a new, strong
Russia shakeup-for greater good or cash and power?
By Peter Henderson
MOSCOW, March 24 (Reuters) - President Boris Yeltsin said he fired Russia's
cabinet to improve the lot of the average man, but analysts asked on Tuesday
if tycoons might benefit most from the change.
Yeltsin's sudden decision has been lauded for ending speculation that he was
not in control of the government, but some insiders say a businessman toppled
the prime minister for approving the wrong conditions of a major oil company
Speculation that Russian tycoon Boris Berezovsky was behind the government
sacking raised the question of whether reforms would steamroller ahead or
whether "crony capitalism" and backroom dealing had resurfaced to cloud
Former First Deputy Prime Minister Anatoly Chubais, who has crossed swords
with Berezovsky in the past, told journalists late on Monday that the tycoon,
a former senior Kremlin official, had dealt prime minister Viktor Chernomyrdin
the final blow.
"(Yeltsin) was not ready for a decision. He thought that there were still a
couple of weeks," Chubais said, with a nationwide protest expected on April 9.
Asked if Berezovsky convinced Yeltsin to make his move, Chubais replied, "Yes.
U.S. billionaire George Soros said earlier this month that Russian
businessmen, known as "the oligarchy," were still fighting over state assets
for sale, though regulators were moving to stop the wrangle.
Analysts said it would be clear in the coming weeks whether the new
was for the good of the many or the few.
Russia opened bidding on Tuesday for the Rosneft oil group -- the last major
oil stake in state hands -- and will decide early next month who should lead
national electric company UES <EESR.RTS>, whose reform is crucial to Russia's
Pavel Teplukhin, chief economist at Troika Dialog investment bank in Moscow,
said Berezovsky wanted a slim majority of the stake sold. This compares with
the 75 percent demanded by other businessmen such as Vladimir Potanin, head of
the Unexim financial industrial group which was seen an ally of Chubais.
"If the rules change...as Berezovsky wanted, I would start to worry,"
Chubais said on Monday he would consider taking a position at UES, which
Berezovsky opposes. This marks another test for the government, which has
"The real thing is whether the integrity of Yeltsin's political will is
intact," said Christopher Granville, director of research at United City Bank
The fight for a new prime minister, replacing Chernomyrdin after a five-year
tenure, may also yield glimpses of horse-trading as the Duma lower house of
parliament uses its right to approve the premier.
"The communist-dominated Duma is going to milk the situation -- weeks and
weeks they'll drag it out, exacting concessions, taking it to the brink,"
The fight may show the political colours of acting Prime Minister Sergei
Kiriyenko, 35, if he is nominated.
Kiriyenko could find himself wooed by gas monopoly Gazprom <GAZPq.L>,
Chernomyrdin's major supporter.
Teplukhin said Kiriyenko, new to politics, had also managed to make ties in
his previous job as Energy Minister.
Berezovsky is believed to control Sibneft<NYGS.RTS> oil group, which merged
with YUKOS <YUKO.RTS> to form Russia's number one producer, YUKSI, with
"Who won out of YUKSI?" Teplukhin asked. "Berezovsky."
Date: Tue, 24 Mar 1998
From: "Jerry F. Hough" <email@example.com>
Subject: broader meaning in Yeltsin's action
It seems to me that analysts need to think about scenarios of
broader meaning in Yeltsin's action so that we can begin to think about
One possibility is that Yeltsin's mind really is muddled, that he
thinks he can replay the past. His response in the economic crisis in
1992 and 1993 was to create a political diversion--a conflict with the
Congress that would distract attention from economics so that things
could, hopefully, work their way out. (Gorbachev had a similar thought
in the fall of 1986 when he didn't want to face up to the costs of
economic reform and didn't want to lose the reformer mantle.) If so, he
will want a confrontation with the Duma. It need not lead to new
elections, but to a drawn-out crisis.
The advantage of this strategy is that it leads to a situation in
which there is no premier to succeed if the president becomes
incapacitated and may stay the hand of those wanting to declare him
incapacitated. The disadvantage of this strategy is that it
leads to a situation in which there is no premier to succeed. It gives
opponents no alternative but a military coup, and it is hard to believe
that the military will tolerate the kind of prolonged chaos of 1992-1993.
In the old days it would be clear that something else was
happening. When a Gorbachev spoke about "western civilization," one
knew that this was a profound ideological signal indicating major change
was coming. As Myron Rush emphasized, there were various estoteric
signals that insiders and, often, foreigners, could interpret. If this
were the old days, one could say with some confidence that Stroev will be
appointed premier, that he will be quickly approved by the Duma, and that
he will change policy in a Chinese direction, beginning with the
agricultural reform he is eminently qualified to lead. Glazyev has been
on the staff of the Federation Council and presumably would come back.
There have been signals galore on your pages that this would happen.
Yeltsin repeatedly has spoken about a greater role for government, Stroev
has backed off his earlier emphasis on the regions and calls for a strong
government, Zyuganov (who worked for years with Stroev in the Orel obkom,
but at a lower rank) has been emphasizing China and Deng, Shokhin has
called the Communist social democrats and therefore legitimated their
entry into government.
The problem is that nothing that Yeltsin has said for eight years
could be trusted. There have been thousands of subtle signals that
showed only Yeltsin was a populist who said what was useful. This time,
however, I suspect the signals matter. The combination of the
short-term debt about which Moody's warns and the fall in the price of
oil makes a financial crisis in the near term very likely, and I would
judge that Yeltsin's old Sverdlovsk allies, Lobov and Petrov, who fought
against Gaidar in the 1991 and 1992 and against Chernomyrdin from May
1993 to September 1993 have persuaded Yeltsin they were right and that it
is wise to act before the financial crisis rather than be blamed for it.
Moreover he must turn around the economy quickly if he is to have any
hope in 2000, and there is no hope with present policy.
The United States needs to act with caution. Foreign policy has
been too much dominated by the Treasury Department, which has had
complete, almost religious faith in the globalization of the economy and
free trade. As Evelyn Davidheiser demonstrated in her dissertation, it
was precisely exposure to the world economy that helped facilitate
support for fascists and Communists in Europe early in this century.
Events in Indonesia, Malasia, and India show that Asia too must be very
careful in regulating the speed of exposure to the world economy.
America can live with a great variety of models of capitalism. The
Asian has been associated with a very benign foreign policy. We have no
national security interest in the IMF model, as opposed to the World Bank
model. On the contrary, our national security interest is to deter
Hitlers and Khomeinis from coming to power, not to try to deter them
afterwards, and we should be supporting economic models that serve this
The problem with the Lobov model (which I describe in my chapter
in my Brookings book on the fall of 1991) is that it implies stronger
integration of the countries of the former Soviet Union, perhaps
excluding the Baltics. As Russia raises its tariff walls, the other
republics must decide to be inside or outside, and few can remain
outside. Even Estonia with its 1 million Estonians will find it hard to
be without privileges in a booming St. Petersburg with 5 million Russians
60 miles away. As State Department takes back control of foreign
policy, it needs to think about how to make integration benign as it is
in Western Europe. The natural deal has always been to bring all the
Catholics and Protestants together in NATO and to allow Russia to have an
integrated, democratic confederation in the Orthodox and Moslem world.
Ukraine is a problem, but we could always propose a referendum in Uniate
Ukraine on whether the Stalin-Hitler line should be repudiated and they
become an autonomous province in Poland or stay with Ukraine. But the
lesson of the last decade is that a community from Vladivostok to
Vancouver requires that memories of the Ottoman Empire and the old
Orthodox-Catholic conflict be taken into account. Autonomy seems
necessary for closer relations.
But whatever our preferences, Yeltsin's sudden decision of dismissing
all warring reformist leaders just as Clinton left for Africa has the
earmarks of a signal as dramatic as Litvinov's replacement by Molotov.
If we have to react to a situation not of our liking, we need to think
about how not to make it worse and how to make it most congenial.
We need to think of our national security interests and not be guided by
what has been our new ideology.
Date: Tue, 24 Mar 1998
From: Matt Bivens <firstname.lastname@example.org>
Subject: some more comments on eXile, in light of the Cabinet sackings
I'm sending a slew of recent articles from The St. Petersburg Times (see
below) that I thought your readers would find interesting.
I also wanted to offer my two cents on Matt Taibbi & eXile. I was
frequently reminded of the eXile press review and the Johnson's List
furor around it when reading the Western coverage of the Cabinet
sackings -- which, with some trepidation, I will take my own crack at
First the eXile. On the one hand, there are the eXile fans, who say the
quality of the journalism they find in mainstream media is a huge
* Gary Kern, JRL #2106: "I think the eXile is great ... telling us the
real lowdown about Russia -- without respect for authority, with
occasional gutter language, with gut-wrenching realism ... there is a
chance he is keeping some of the more elite reporters honest ... Today
our so-called reporters are a pack of millionaire celebrities, every man
jack of them wearing a trench coat and standing in front of a government
building, reading a cue card. It makes you sick."
* Matthew Roazen, JRL #2106: "It's hard to imagine on what basis a
reader could find fault with the substance of these reviews. Perhaps the
style is a bit profane, but the message is clearly and forcefully
written -- much of the reporting by Westerners in Russia is weaker than
it should be."
Then there are the critics -- and even they concede that the eXile's
work is valuable.
* Mark Whitehouse, JRL#2106: "Some of the serious stuff is good."
* Kathy Lally, JRL #2112: "We can all use some help keeping on our
* Adrian Helleman, JRL #2113: "I occasionally appreciate the eXile's
attempt at serious journalism." (This from someone who nevertheless
calls on you to keep ALL eXile material off the Johnson's List.
Apparently only a select few can handle the right to "occasionally
appreciate" the eXile's work.)
Critics and fans agree in complaining about the way Taibbi treated Fred
Hiatt of The Washington Post and Martin Nesirsky of Reuters in a recent
As Taibbi documented it, Nesirsky and Reuters literally rewrote history
to favor Chubais: It turns out that the allegations of Uneximbank bribes
were manufactured by media "hostile" to Chubais -- apparently the entire
affair was merely over some book royalties perceived by envious
communist losers as too generous. As eXile noted, Reuters and Nesirsky
are repeat offenders when it comes to twisting the truth to protect the
reputation of Chubais.
In the second, Hiatt offers something less vulgarly embarrassing, but
actually more insidious: A subtle account in The Washington Post of
"baby billionaire" Vladimir Potanin and his fresh young hopes for a
bright future free of Communist Dumas. This is an account that
conveniently leaves out the background that the baby got to be a
billionaire only thanks to theft -- skimming off budget money, handing
out bribes to be handed possession of entire industrial sectors. But as
Potanin once put it, shrugging, "It is part of our history," and Hiatt's
take is no different: "A new Duma will be elected next year. Mr. Potanin
hopes it will have a better 'understanding of the modern world' ...
Businessmen like [Potanin] will be working toward that goal, he said."
(C'mon, Fred, what's that about?)
Taibbi lays all this bare, and then closes by noting that either of
these accounts in a Russian newspaper would automatically be dismissed
as a zakaznaya article -- written-to-order, in return for money.
That probably would have been fine -- subtle enough to make a strong
statement about the failings of Western media coverage here. But then
Taibbi asks Hiatt if he wrote what he did in return for a bribe,
presumably from Potanin, and when Hiatt denies it, Taibbi says he still
doubts his answer.
Over the top? Certainly.
For one thing, it's a shame we're suddenly talking about the journalist
ethics and tactics of a fringe publication like eXile -- and not the far
more significant failures, ethical and otherwise, of international media
like Reuters and The Washington Post. When Taibbi takes a nasty slap at
Hiatt, the Moscow press and think-tanky corps is aghast and outraged;
but when REUTERS, for Chrissakes, publishes OUTRIGHT FALSIFICATIONS to
serve one of RUSSIA'S MOST POWERFUL POLITICIANS, it seems like no one
except Taibbi cares. But when he and the eXile point out what's going on
-- and their Western press critiques are among the best things they've
done -- nothing seems to change. My friend Taibbi is left wondering: Why
did I just burn all those bridges in my chosen career of journalism?
It's no wonder he slipped into a frustrated attack on Hiatt and
Nesirsky. And at first glance, it seems to have backfired on him -- by
opening the door to criticisms like that of Mark Whitehouse, who quite
reasonably chides Taibbi for using "the tried and true 'accusations
denied' trick" to suggest that Hiatt and Nesirsky are on the take. As
Whitehouse writes, "If, for example, a journalist wants to suggest that
the Queen of England is a child abuser ... it is very easy to call the
Queen's press service, pose the question, then write a big story about
how the Queen denied being a child abuser." (Of course, Taibbi offers
more evidence of wrong-doing on the part of Hiatt and Nesirsky than just
their denials; we've got their reporting. To stretch Whitehouse's
analogy, consider a journalist who makes that call to the press service
because he's noticed that the children who visit Buckingham Palace
emerge with bruises on their faces.)
Anyway, we Johnson's List readers are supposed to be profound thinkers
-- why else would we force ourselves to wade through all that boring
crap about NATO David keeps serving up? (David: No more NATO articles,
please!). And when I step back -- from my cordial relations with Taibbi,
with Mark Whitehouse, with Fred Hiatt -- to look at the larger picture,
I think the press review and eXile are useful and necessary, warts and
In fact, I think Taibbi has probably single-handedly forced some
reporters to re-examine their writing.
Reuters, for example, is suddenly this week offering the truth in its
background accounts of Chubais -- instead of p.r. spin for "the
energetic young reformers" (for that matter, what the hell is up with
THAT overused phrase? Does no one at the major U.S. media understand
that that is advocacy, not journalism?)
A digression to split a hair: I thought the allegation of bribery
against Hiatt was going too far, but I don't share the horror of
colleagues like Mark Whitehouse at the idea of Taibbi calling Reuters
London to complain about the coverage. Look, if Mr. Nesirsky (whom I've
never had the pleasure of meeting) had been caught making up vox pops
quotes on the street -- which would be lazy and repugnant, but more or
less harmless ("TheyÕre all bandits," said Ivan Ivanov of the Kremlin,
sucking in disgust on a Belomor) -- all would agree he ought to be
rebuked or sacked. If you worked with him and knew he did that, you
might have some sleepless nights wondering whether to tattle to the
boss, and you'd be wringing your hands over the ethics of it all.
But he shills for the government -- the Russian government, and the U.S.
government, which is entwined with Chubais -- and gets caught at it --
and suddenly he's a martyr?
No, we still need the eXile press review. Next week's might start with
David Hoffman's coverage of the Cabinet sackings in The Washington Post
-- where, once again, in a mere three paragraphs, "reformer" Anatoly
Chubais is subtly exonerated for all of his evils and mistakes:
"Chubais's ouster had been rumored for months, and he said he asked
Yeltsin to allow him to leave in early February. He was recently offered
a top job at Russia's Unified Energy Systems, an electricity giant, and
he hinted today he would take it.
"Chubais was a lightning rod for complaints about the economy. He
oversaw Russia's privatization program, but was blamed for the poverty
of millions of Russians. He also clashed with some major businesmen over
his efforts to reduce their influence in government and their
throttlehold over the auction of state-owned enterprises.
"In a valedictory to reporters today, Chubais took pride in the changes
in Russia's economy. 'What was achieved cannot be destroyed,' he said."
* No mention that Chubais was corrupt (the $3 million interest-free loan
"to build civic society"; the $90,000 Uneximbank "book advance");
* No mention of the openly rigged major privatizations Chubais oversaw,
from Norilsk Nickel to Svyazinvest, which together constitute the theft
of billions of dollars from Russia;
* No mention of how Yeltsin fired Chubais once over those auctions, and
nearly fired him a second time;
* No mention that "reformer" Chubais has never once publicly taken a
stand against the war in Chechnya, the illegal Gazprom privatization,
the illegal ORT privatization;
* No mention of Chubais's chronic habit of saying one thing and then
contradicting himself calmly a week or a month later. (Foreigners can
participate in this privatization auction!/Of course foreigners can't
participate in this privatization auction! The National Sports Fund
exemptions must go or I go!/Oh, here, let me sign that extension for you
for the National Sports Fund exemptions!)
* No mention that Chubais was the No. 1 recipient of U.S. AID's millions
of dollars in aid to Russia.
Instead, he's a lightning rod -- and as we know, lightning rods are
objects that sacrifice themselves to protect others, for the greater
good -- who oversaw privatization "but" was blamed for the widespread
poverty. He's a "reformer" who fought major businessmen "to reduce their
influence in government and their throttlehold (whose throttlehold?)
over the auction of state-owned enterprises." A man who "in a
valedictory(!?)" "took pride" in the changes he had wrought.
Get back to work, Taibbi. And I think you'll be safe in taking the
advice of your old friend and self-confessed press review groupie David
Filipov (JRL# 2108), who says, "As Fred Hiatt said, let the writing
speak for itself (and by the way, how can you accuse him of taking
money?). I think you can criticize the way we do our jobs (heartily)
without trying to ruin our lives ..."
Of course, you may have to ruin your OWN life in the process, but I
guess that's how it goes. I feel like I've just ruined mine. I'm from
Maryland; I may want to work someday at The Washington Post. It's where
my mother wants me to work; she's tired of me being in Russia, and once
a month or so she gathers up my clips, staples them to a five-year-old
resume and MAILS THEM TO THE POST'S EDITORS, with orders that I be hired
IMMEDIATELY. She's not going to be happy if she ever sees me
complicating her plans for me in this way ...
The St. Petersburg Times
For more articles from The Moscow Times, check out their website at
March 25, 1998
Duma Likely to Accept Premier
By David McHugh
The State Duma is unlikely to block President Boris Yeltsin's choice of
prime minister because they fear if they do Yeltsin will dissolve the
lower house, deputies and analysts said Tuesday.
On paper, the Duma, parliament's lower house, must confirm Yeltsin's
nominee to replace the fired Viktor Chernomyrdin by a majority vote. But
refusal could backfire painfully: If the deputies refuse Yeltsin's
choice three times, under the Russian Constitution they face dissolution
and having to run for their seats over again in early elections.
And that is something the majority of deputies do not want.
"We must not leave the president without the Duma for a single day,"
said Speaker Gennady Seleznyov after meeting with acting Prime Minister
Sergei Kiriyenko, a possible Yeltsin choice.
Seleznyov said if the Duma provoked Yeltsin into dissolving it, the
president would rule by decree in the months leading up to the
elections. "The Duma would be letting the president run everything by
decrees, and I believe the deputies do not want this," he said.
But political analyst Vladimir Prybylovsky, an expert on Duma politics
and president of the Panorama think tank, said there was an additional
reason why the Duma would not want early elections. And that is that
elections would threaten the two dominant groups in the Duma:
Seleznyov's Communists and ultranationalist Vladimir Zhirinovsky's
Liberal Democratic Party of Russia.
At early elections, the Communists would lose seats to more hard-line
leftists, while the LDPR might disappear entirely, squeezed out among
nationalist voters by the more moderate People's Republican Party
movement of General Alexander Lebed.
"The Communists just say they won't vote for [Yeltsin's choice],"
Prybylovsky said, "but then they'll stop and think. They don't want
dissolution. Zhirinovsky could disappear completely, and in his place
Lebed's group would appear, and the Communists would not lose much, but
they would lose some seats, and next to them might appear competition."
Yeltsin may nominate First Deputy Prime Minister Boris Nemtsov, but he
is little loved in the Duma for his advocacy of free-market reforms.
Kiriyenko, whom Yeltsin unexpectedly named acting prime minister Monday,
would be unpalatable to the Communists because he is an associate of
Another ideologically unattractive candidate would be Grigory Yavlinsky,
head of the liberal Yabloko Party. Yavlinsky, has carved out a niche for
his group as the democratic opposition to Yeltsin, but at confirmation
hearings he would be made to pay for his bitter personal enmity with
many senior figures in the Duma.
But although these three are ideologically unacceptable, the threat of
dissolution makes it impossible to rule out the prospect of Nemtsov,
Kiriyenko or Yavlinsky winning confirmation by the Duma.
Yabloko Deputy Alexei Zakharov said he thought neither Kiriyenko nor
Yavlinsky could be approved but he acknowledged the power of the
dissolution threat. On a third-vote showdown, "the Duma would vote for
Yegor Gaidar or Jeffrey Sachs, for anyone," Zakharov said, referring
tongue-in-cheek to Gaidar, the free-market oriented politician, and
economist Sachs, an advocate of "shock therapy" transition to
"They'd vote for a bald devil, just to avoid dissolution," Zakharov
Other possible candidates that would be more acceptable include Yegor
Stroyev, the governor of the Oryol region and the speaker of the
Federation Council, the upper chamber of parliament; Moscow Mayor Yury
Luzhkov; and Ivan Rybkin, a former Communist who has evolved into a
Financial Times (UK)
March 25, 1998
[for personal use only]
Berezovsky: Tycoon aims to pull Kremlin strings
By Chrystia Freeland and John Thornhill in Moscow
In spring 1996, Boris Berezovsky was one of several financiers who came
together in a last-ditch attempt to keep the Communists out of the
Kremlin and secure President Yeltsin's re-election later that year.
This time around, Mr Berezovsky and his colleagues are trying much
earlier in advance to ensure the victory in 2000 of an acceptable
Before last Monday, Mr Berezovsky, who describes himself as an adviser
to Valentin Yumashev, the powerful Kremlin chief of staff, was urging Mr
Yeltsin to sack the government and begin grooming an electable
successor. In an interview yesterday with the Financial Times, Mr
Berezovsky said that this week his views "happily coincided" with those
of Mr Yeltsin, who stunned the nation on Monday by dismissing his entire
government, including its long-serving prime minister, Victor
Some observers have seen more than coincidence in this turn of events,
viewing the former mathematician as a modern-day Rasputin, secretively
manipulating the president and his family. Anatoly Chubais, the first
deputy prime minister who was another casualty of the sackings,
explicitly accused Mr Berezovsky of being the adviser who persuaded Mr
Yeltsin to make his move.
Mr Berezovsky denied charges of manipulation but admitted he offers
advice to Mr Yumashev and to Tatyana Dyachenko, the president's younger
daughter. "My job is as an adviser to the head of the president's
administration," he said. "With regard to my relations with Tatyana
Dyachenko, I know her well....I truly do have the opportunity to state
my point of view. I very much hope that my advice will prove useful."
Mr Berezovsky believes Mr Yeltsin's boldness is the only way to prevent
a re-run of 1996, when an anti-capitalist leader seemed on the verge of
seizing the Kremlin. "With regard to the Chernomyrdin government, it was
absolutely predictable for us that we were moving towards disaster. I
mean a political disaster. So, from the point of view of probability,
any change was an improvement," he said.
By his own admission, Mr Berezovsky has more of a vested interest in
Russia's troubled political succession than most. Although he hotly
rejects the view that a small corporate oligarchy rules Russia, he is a
strong advocate of "the consolidation of capital" and of "big capital's"
necessary role in Russia's political life.
To that end, Mr Berezovsky said that, Russia's tycoons are already
coming together and developing a collective election strategy.
The starting point for "Russian capital" is that, in contrast with 1996,
Mr Yeltsin is no longer a viable presidential contender. Mr Berezovsky
was full of praise for his political talents, calling him Russia's best
politician, but said he was physically too weak to run successfully
against new, more vigorous rivals, especially Yuri Luzhkov, Moscow's
In Mr Berezovsky's view, a Luzhkov victory would be a devastating blow
to Russia's reform effort. He named the Moscow mayor, together with
Alexander Lebed, the former general, and Gennady Zyuganov, the Communist
chief, as three presidential aspirants who could not continue reforms.
But he said that the leading pro-reform candidates, including Mr
Chernomyrdin, Boris Nemtsov, the acting first deputy prime minister, and
Grigory Yavlinsky, the leader of the opposition Yabloko party, were
For Mr Chernomyrdin, that could be a depressing verdict. Many western
analysts, and the ex-premier's political allies, argued that the sacking
would allow Mr Chernomyrdin to rally Russia's fissiparous democratic
forces behind his own presidential bid. But Mr Berezovsky took a rather
more Darwinian approach to the president's instruction that Mr
Chernomyrdin is now to devote his time to "concentrate on political
preparations for these elections". He said the test of being deprived of
a premier's prerogatives would establish whether Mr Chernomyrdin was
Mr Berezovsky appears to have succeeded in persuading the Kremlin
administration that the current government must go. But he and his
allies have now given themselves two years to find a candidate who is,
by their definition, both "electable" and "a continuer of reforms".
The Times (UK)
March 25 1998
Troika of Kremlin insiders plotted the downfall of Yeltsin's Cabinet
Richard Beeston reports from Moscow on a group of advisers, including
the President's daughter, who have Boris Yeltsin's ear
President Yeltsin's shock decision to sack his entire Government was
taken after close consultations with a group of shadowy Kremlin
insiders, including his daughter, a billionaire and his ghost writer.
As details of Monday's "bloodless coup" began to surface, it emerged
that the Government may have been surprised by its dismissal, but the
decision was not simply President Yeltsin acting on impulse. An
influential cabal played a decisive role in preparing the removal of
Viktor Chernomyrdin, the former Prime Minister, and his deputy, Anatoli
According to official sources, analysts and some Russian newspapers, the
decision had been carefully planned with the involvement of Tatyana
Dyachenko, the President's daughter and confidante, Valentin Yumashev,
head of the Kremlin administration and ghost writer of Mr Yeltsin's two
books, and Boris Berezovsky, a business tycoon and veteran Kremlin
Mrs Dyachenko's influence on Kremlin decision-making is hard to
underestimate. She entered politics two years ago to help her father's
re-election campaign and has become one of his closest aides,
particularly during his long spells of illness. During the present
political upheaval, a friend described her as being in the thick of it,
even though the publicity-shy mother of two has made no public comments.
Mr Yumashev, a former journalist, helped the Russian leader to write his
two volumes of memoirs and was promoted to the head of the Kremlin
administration last year. According to one analyst, he has since become
"the son that Yeltsin never had" and has been at the President's side
throughout the present crisis.
The third and most controversial player in the troika is Mr Berezovsky,
a businessman who is estimated to be worth about £2 billion, who is
heavily identified with the "crony capitalism" that emerged in Russia
after the collapse of communism.
Mr Berezovsky, who controls a large slice of the Russian oil, media and
airline industries, has been at odds with Mr Chubais since last summer
over a failed privatisation bid for a telecommunications company and a
similar dispute with Mr Chernomyrdin this year over an oil company.
Although he disappeared to Switzerland a few weeks ago, suffering from a
snowmobile injury, he re-emerged recently. In an interview published on
Friday he predicted that Mr Chubais had only "days left in government",
even though the Russian leader had promised to keep Mr Chubais in the
Cabinet until 2000. On Sunday, Mr Berezovsky returned and in a
television interview spoke of the need for "new faces in the Government"
only hours before Mr Yeltsin dropped his bombshell, dismissing 29
The daily Moskovsky Komsomolets said: "The next day Yeltsin seemed just
a man fulfilling all that Boris Abramovich Berezovsky told him the night
before." The headline was: "What sort of devil led Yeltsin astray?"
Yesterday the Kremlin was adamant that Mr Berezovsky's remarks and his
return to public life were simply coincidences and rejected suggestions
that he had once again been shaping Kremlin policy.
Despite the denials, few doubt that Mr Berezovsky was involved in the
sackings and is now lobbying furiously to ensure that the next
government is stacked in his favour and that the Prime Minister is an
One idea, reported in a newspaper Mr Berezovsky controls, suggested
yesterday that he may seek a Cabinet position himself. Officials also
said that he was pressing for the appointment of Ivan Rybkin, a former
Deputy Prime Minister, whom Mr Berezovsky once served on the Kremlin's
Nevertheless, Mr Berezovsky's influence has its limits and destroying
the old Government may be easier than forming a new one, particularly
when every interest group in Russia is lobbying the Kremlin for its
candidate to become Prime Minister
Sydney morning herald
March 25, 1998
[for personal use only]
Russians stunned by Yeltsin sackings
By NEELA BANERJEE, Herald Correspondent in Moscow
Continuity. The new buzzword peppered the speech of Boris Yeltsin and
his loyalists as they explained to their stunned countrymen the
President's decision to fire his entire Cabinet.
Mr Yeltsin promised continuity in economic policy and continuity before
the presidential elections in 2000. But the sackings have destroyed
continuity in the few reforms his Government initiated and in the
fragile political truce which had settled over Russia.
Pointing to heightened political risk, economist Christopher Granville,
of brokerage MC Securities, said: "In the worst case, these events may
reflect the dislodging of what has been the cornerstone of Russia's
reform successes to date: that is, Yeltsin's political will and the
extraordinary intuition that underlies it."
After receding into the political background in recent months due to
illness, Mr Yeltsin swung the axe to show the country and political
rivals he still runs the show. But as with his previous dramatic moves
to assert his command over Russia, such as the shelling of parliament in
1993 or the invasion of Chechnya in 1994, this could have frightening
For starters, Mr Yeltsin's health is still frail. His brief address to
the nation on the sackings was heavily edited, and he appeared tired and
Under the Russian Constitution he must nominate the new prime minister
and Cabinet within two weeks for approval by the Duma, the lower house
of parliament. If the Duma rejects a candidate and the process drags
out, Russia could be without a prime minister for some time.
Should Mr Yeltsin's health take a turn for the worse, there would be
no-one to replace him, since the Constitution calls for the prime
minister - not the acting prime minister - to succeed the president
before new elections.
Some politicians fear the approval process could destabilise the
Parliament. Led by the Communist Party MPs, who are the biggest single
party, the Duma could reject the President's nominee for prime minister.
The Communist Party leader, Mr Gennady Zyuganov, has already made it
clear that Mr Sergei Kirienko, the 35-year-old former energy minister
named as acting prime minister, is an unacceptable candidate for the
If the Duma rejects the President's nominee three times, he can appoint
his own prime minister, dismiss parliament and call early elections.
For the next week or so, the politically powerful will engage "in a lot
of infighting and intrigue as the ministries get divided up", said one
veteran Western diplomat.
Mr Yeltsin has promised the new Government will push for further
reforms, but will offer greater social protection to the millions
disadvantaged by the move to market forces. A year ago, he named this
outgoing Cabinet of pro-reform ministers.
Most observers expect the opposite this time around. "The one thing you
won't get from this scenario is a government that is more pro-Western,
pro-US, pro-IMF reforms," said the diplomat.
Without a strong economic team in the Cabinet, Russia's economy, after
achieving a measure of stability, looks headed for trouble once more.
A tough finance minister, for example, would have influence over the
President and be able to refuse the special interest groups, from ailing
factories to the bloated defence ministry. He would also wring badly
needed revenues for the Budget out of the corporate tax cheats.
The widespread scepticism about the future stems not just from Mr
Yeltsin's action but from the forces people believe are behind it. Many
see in this decision the hand of Boris Berezovsky, a powerful Russian
businessman with close ties to Mr Yeltsin's daughter and his
Like many in Russia's business elite, Mr Berezovsky would like to see
the economic and political conditions tilted in his favour - and with a
weak new government, this becomes ever more likely.
Date: Tue, 24 Mar 1998
From: email@example.com (John Helmer)
The Moscow Tribune, March 26, 1998
YELSTIN AND IVAN -- A TERRIBLE PRECEDENT
It was this time of year in 1533 that Tsar Ivan IV (the Terrible) fell
dangerously ill. Fearing he would die, Ivan made arrangements for his
boyars and court to swear allegiance to his infant son, Dmitri. But the
child died after three months, and Ivan recovered.
It took another year before the tsar could father another son, Ivan
But he too died in 1581, struck on the head by his father in a jealous
rage. Three years later, Ivan himself died, leaving no heir and Russia
in a shambles.
What President Boris Yeltsin did in the late hours of Sunday night was
to kill off a healthy heir, and demand allegiance to a political
infant with a life expectancy of less than a month.
Yeltsin apparently didn't know who Sergei Kirienko was when he taped his
speech dismissing Victor Chernomyrdin, Anatoly Chubais, and the rest of the
government. When he met Kirienko at the Kremlin on Monday, Yeltsin wasn't
even able to feign the emotion to be expected of a president entrusting a man
with the most important task in the country -- the formation of a new
The plethora of interpretations by Russian politicians and the journalists
who are close to them, is so great, so contradictory, and so lacking in any
direct evidence, one thing is clear: noone, least of all Yeltsin, knew what
would happen next after the Sunday night massacre began. This was no single
plot, masterminded from start to finish, by Boris Berezovsky or anyone else,
although doubtless he, the Communist Party leadership, and Grigory Yavlinsky
are the immediate beneficiaries.
Berezovsky gains from the removal of Anatoly Chubais and his rivals for
the takeover of Rosneft next month. The Communists gain from the best chance
they have had since 1991 to establish themselves in a coalition cabinet
headed by their candidate for prime minister, Yegor Stroyev. Yavlinsky gains
from the possibility that Berezovsky, the government deputies, and the
Zhirinovskyites in the Duma can agree to vote him into the prime minister's
But the beneficiaries were not the schemers of last Sunday's plot. That was
an improvisation on an ailing man's mind, compounded by paranoia,
forgetfulness, rage, and disinformation. Berezovsky may have started the
process, possibly to get rid of Chubais and Boris Nemtsov, possibly to
isolate Yeltsin, and ultimately get rid of him too. But the reaction from
Chubais (who evidently didn't have much sleep on Sunday evening) and from
Nemtsov produced a compromise caretaker whom everyone regards as a
convenient, if temporary stooge. Not for nothing has the lesson of Yegor
Gaidar been learned, though. A weak acting prime minister isn't going to
be the solution of this crisis.
The reaction from the Duma opposition -- the Communists and Yabloko --
indicates their conviction that there is a real chance for bargaining now that
the protective circle around Yeltsin has been breached for the first
time in years. Chernomyrdin and Chubais have finally followed in
the footsteps of Gennady Burbulis, Mikhail Poltoranin, and Alexander
Korzhakov. With the possible exception of Sergei Shakhrai, there is
noone left in Yeltsin's inner circle who can bargain with the political
world outside the sanatorium. And Yeltsin is a much sicker man now
than he was in earlier times. Who is there in Russian politics who
believes the president's promise can be trusted, if Chernomyrdin or
Chubais isn't there to assure it? If Berezovsky has moved into this
position, through Tatiana Dyachenko, then the promise that was broken
last year over Svyazinvest will now haunt everyone. There is no trust
left in Russian politics.
Thus, there is a political crisis in Russia, and it's now out of anyone's
control. The longer it goes on, the more dire the financial consequences
will be. Whoever hatched the Sunday plot wasn't thinking that far ahead. Now
it is the turn of the opposition to oblige Yeltsin and the government he just
despatched to twist slowly, painfully, mortally in the wind.
U.S.-Russia military ties on track - Cohen
By Charles Aldinger
WASHINGTON, March 24 (Reuters) - The sacking of the Russian cabinet by
President Boris Yeltsin will not slow the improvement in military ties between
Washington and Moscow, U.S. Defense Secretary William Cohen said on Tuesday.
Cohen also told reporters he had information Yeltsin planned to keep Defense
Minister Igor Sergeyev, Foreign Minister Yevgeny Primakov and senior adviser
Andrei Kokoshin in their jobs when the political dust cleared.
"My information is that Minister Sergeyev along with Primakov and Andrei
Kokoshin, a principal adviser to President Yeltsin, will remain in office," he
said in response to questions at a Pentagon photo opportunity with Georgia
Defense Minister Vardiko Nadibaidze.
"So I do not anticipate it will have an impact on our relationship. And I
don't think it will have any bearing on the ratification of START-2" strategic
arms reduction treaty by the Russian Duma, Cohen added.
He would not say where his information had come from, but stressed that
Monday's sacking was, as Yeltsin said, aimed at boosting flagging economic
reforms in Russia.
Cohen and Nadibaidze signed a defense cooperation agreement between the
States and Georgia under which Washington will increase military cooperation
with the former Soviet state and provide $1.35 million in foreign military
financing this year.
Cohen said Georgia, an active participant in NATO's "Partnership for Peace"
(PFP) military cooperation program with former communist states, would use the
funds to buy military radios for an infantry company that will take part in
Nadibaidze told reporters his ministry also believed Yeltsin intended to
Sergeyev and Kokoshin on the job in the Russian cabinet.
In Moscow, Yeltsin himself made clear on Tuesday he wanted to keep his
and foreign ministers, but otherwise seemed to be giving Acting Prime Minister
Sergei Kiriyenko a free hand to select a new cabinet.
Yeltsin, asserting his authority after a week of illness, surprised
the international community by ditching Viktor Chernomyrdin as prime minister
and sacking the entire government.
A Kremlin spokesman confirmed Yeltsin had met Sergeyev and Nikolai Kovalyov,
head of the FSB domestic intelligence service, on Monday soon after dismissing
By meeting Sergeyev in the Kremlin before returning to his Gorky-9 residence
on Monday, the president had already underscored his support for the defense
minister and his vital task of reforming the demoralized armed forces.