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Johnson's Russia List


March 26, 1998  
This Date's Issues:    2119  • 2120   

Johnson's Russia List
26 March 1998

[Note from David Johnson:
JRL will be on vacation this weekend. Not to worry.
1. Owen Johnson: Darrell Hammer dies.
2. Fred Weir: Dev Murarka dies.
3. Dmirtyi Mikeyev: Yeltsin manipulated? 
4. St. Petersburg Times editorial on Chernomyrdin.
5. The Moscow Tribune: John Helmer, THE SOROS RIDDLE.
6. Reuters: Ex-Russian PM vows to shake up party, seeks allies.
7. Reuters: Lawrence Sheets, Impoverished Armenians to pick president.
8. Peter Mahoney: eXile.

10. Reuters: Tycoon Berezovsky Endorses Kiriyenko.
11. Los Angeles Times: Carol Williams, Yeltsin Firings Shaping Up as a 
Boost to Reform.

12. New York Times: William Safire, You're All Fired!
13. Interfax: Moscow Mayor Submits Proposals to Acting PM.] 


Date: Thu, 26 Mar 1998 06:22:05 -0500
From: "Owen V. Johnson" <>
Subject: Darrell Hammer dies

Darrell Hammer, a recently retired political scientist at Indiana
University and a frequent contributor to JRL, died yesterday, of cancer, at
the age of 67. He is survived by his wife Louise, a daughter and a son.
Funeral arrangements are pending.

Owen V. Johnson, Indiana U.


Date: Thu, 26 Mar 1998 18:25:10 (MSK)
Subject: dev murarka

Attn: David Johnson
From: Fred Weir in Moscow

Hi David. Well, this very sad task falls to me. Regards,
* * * *
Dev Murarka, probably the longest continuously working
foreign journalist in Russia, died Thursday morning at his Moscow
home of an unknown ailment. He was 67.
Murarka, an Indian who had lived many years in Britain,
arrived in the Soviet Union as correspondent for the Times of
India in 1964, just a few days after the fall of Nikita
Khrushchev. Over the subsequent 34 years he covered virtually
every key shift in Soviet -- and Russian -- political life
for the Times of India, later for the London Observer and, at his
death, for India's Economic and Political Weekly. He was also an
active contributor and enthusiast of Johnson's Russia List.
As a Russian-speaking Indian, Murarka found it easier to
move around Soviet society than most Western correspondents, an
advantage that shows well in his accumulated work. His exhaustive
political biography, Gorbachev: The Limits of Power (1988),
remains one of the best accounts of the early stages of
Murarka was enthusiastic about the liberating potential of
perestroika, but like many of his Russian friends he grew bitter
and pessimistic as the post-Soviet economy collapsed and politics
returned to what he regarded as familiar authoritarian ways. At
the time of his death he was preparing the chapter outlines for a
political profile of Yeltsin's Russia.
Though he was a diabetic, and had recently been diagnosed
with a benign prostate problem, Murarka apparently died of
complications from a recurrent daily fever that doctors had been

unable to explain or effectively treat.
He is survived by his wife Nora, their 30-year old son
Girilal and 29-year old daughter Yamini and many, many friends
who will miss him very much.


Date: Thu, 26 Feb 1998 00:35:45 -0500
From: "Dmirtyi Mikeyev" <>
Subject: Yeltsin manipulated? 

David, in April I will be moving to Moscow to teach macroeconomics in a
School of Management. Please keep sending your material, though. Here is
my reaction to the latest flurry of speculations.
God, what a refreshing piece of common sense from Harvard,(JRL 2119)!
Joshua Tucker writes “Perhaps we should be careful about falling into
comfortable "myths" of Russian history in our explanations for
contemporary events, especially when those myths exempt current leaders
from responsibility for their actions.” 
He is too generous toward the reptilian thinkers, though. All these
stamps and stereotypes of Byzantine politics of the Kremlin! Are they
more Byzantine than in Washington where presidential aids commit suicide
and go to jail? I would like to state categorically because I studied
the subject in depths, using the latest from cognitive psychology. It is
impossible to manipulate Yeltsin; influence his decisions by presenting
good information, yes, but not manipulate. The last person who had
inordinate influence on Yeltsin was Gennadi Burbulis. However, that was
a different time, the time of revolutionary change. Yeltsin routinely
uses six-seven sources of information and listens to the same number of
advisers from different camps. He is an avid and very fast reader. Talks
about single or “collective Rasputins” manipulating him, particularly a
body guard, or a cunning Jewish banker acting through a daughter, are
too ridiculous to talk about. I wouldn’t have bothered if not for the
fact that even our most acclaimed “political analysts” fall into this
trap, for example, Steven Cohen and Dmitry Simes, the other night. I
urge the colleagues to stop for a second and ask themselves, if Yeltsin
has been manipulated, how come that all these manipulators have
manipulated themselves out? Bravo, Joshua and welcome! Dmitry Mikheyev,


From: matt <>
Date: Thu, 26 Mar 1998 18:16:36 +0300
Organization: The St Petersburg Times
Subject: another st. pete times editorial

Here is the editorial for this issue of The St. Petersburg Times. 
I'd particularly welcome any comment from your readers on the hypothesis
(and the math) about what Russia would have been like if the industrial
wealth had been divvied up equally among everyone.

Matt Bivens
The St. Petersburg Times

*** "We congratulate Viktor Chernomyrdin on his new lease on life. He is
now a rich, free and sovereign man." *** -- Galina Staravoitova, Duma

No doubt it is nice for Chernomyrdin to be rich. But should we really be
***congratulating*** him on it? After all, he's not supposed to be rich.
According to an infamous income declaration he once filed, for example,
his entire 1996 earnings amounted to $7,800. (There's something to brood
upon as you fill in your own tax declarations this year).

But of course Chernomyrdin ***is*** rich -- and his wealth was earned
unethically at best. (Unlike Mikhail Gorbachev, for example,
Chernomyrdin has never lectured abroad or written books or starred in
Pizza Hut commercials.) Le Monde last year estimated Chernomyrdin's
wealth at a staggering $5 billion. When Izvestia reprinted that article,
Chernomyrdin was enraged; under pressure Le Monde retracted, and
Izvestia was punitively crushed.

Few doubt that Chernomyrdin benefited enormously from the insider
privatization of Gazprom, a company he once headed. In fact, in a
(frustratingly unsourced) report this week, The Times of London claimed
President Boris Yeltsin told Chernomyrdin on Sunday night that he had
proof he had profited from Gazprom and on those grounds demanded his

A little background: When Yeltsin introduced the voucher privatization
program, he said that Soviet-built property would be divided up equally
among the entire population. If Gazprom had been privatized in this way,
Russia might today be an entirely different place. Consider: The
standard estimates of Gazprom's immense wealth range from $250 billion
to $950 billion. The government could have divided Gazprom among the
nation's 148 million people, one Gazprom share per person. Assume that
the stock value indeed reflected the company value (which is the way it
is supposed to work in the textbooks, even if real life is less
predictable), and each voucher would have been worth somewhere in the
range from $1,700 to $6,400.
For a family of three, that would have been from $5,100 to $19,200 in
stock, to say nothing of dividends -- just from Gazprom! Now imagine if
the same approach had been rolled out through the other crown jewels --
the massive oil companies like LUKoil and Yukos, the metals giants like
Norilsk Nickel, the telephone giants like Svyazinvest, the diamond mines
and the gold mines. Assuming a truly liquid trade in shares on a vibrant
stock market, the world would no longer have been looking at Russians
with pity, but with envy. Russia would have overnight created a middle
class, whose consumer appetites would have fueled an economic revival.

Back in the real world, Gazprom was privatized secretly, with the
company managers getting a huge cut. Today the government owns 40
percent, management owns 35 percent and ownership of the remaining 25
percent is, as The Moscow Times recently put it, "unclear." Chernomyrdin
has long been coy about his Gazprom ties. In the fall of 1995, when the
prime minister was being questioned by parliament, one deputy asked him
how many shares he owned in Gazprom. Chernomyrdin paused, then said with
a smile, "Next question."

So why is it again that we are congratulating Chernomyrdin on his


Date: Thu, 26 Mar 1998 16:26:46 +0300 (WSU)
From: (John Helmer)

>From The Moscow Tribune, March 24, 1998
>From John Helmer in Moscow

What is so small that it's not needed, or so big that it's illegal?
That's the Soros riddle which Finance Minister Mikhail Zadornov says he
is investigating right now. 

Former deputy prime minister Vladimir Potanin, the head of Uneximbank, first
revealed in late July 1997 that George Soros had been lending money to the 
Russian treasury. Potanin didn't say how often or how much. He did say the 
money was to reduce the budget deficit between Eurobond issues. When asked 
this week, Potanin's spokesman Sergei Chernitsin tried to claim Potanin
didn't disclose anything at all. 

Soros himself claimed recently that in June 1997 he loaned the Russian 
government "several hundred million dollars" for one week. His explanation
was the money was needed to help pay wage arrears.

Officials of the International Monetary Fund (IMF) and the World Bank
were monitoring the government's debts and borrowings that month very closely.
The IMF had authorized the release of almost $700 million to Moscow on
May 23, and in June it successfully pressured the government to extract
$2 billion in back tax from Gazprom. That, said Alexander Livshits, the 
president's economic advisor, amounted to 41% of the tax revenue that
rolled into the treasury in June. Livshits added at the time that the
Gazprom payment was the big factor helping to clear a pension arrears
debt of $477 million on June 25.

Actually, the month of June 1997 was one of the best the Finance Ministry
had all year. With Gazprom's help, tax revenues reached 99% of target. 
The financing of the budget deficit through short-term bond (GKO) issues
ran at an average of over $4 billion a week during the month, the peak for
the year. Demand for GKO's was so high, the interest rate was brought down
to the 15%-17% range, the lowest for the year.

At the Central Bank, reserves were climbing very nicely. Deputy Chairman
Sergei Alexashenko announced that by the start of June gross reserves
were $19 billion. By July 4, he said they were up to $24 billion. In
short, dollars were pouring in. First Deputy Finance Minister Alexei
Kudrin announced on June 18 he had "no specific worries" about meeting
the government's obligations. He expressed confidence the treasury could rely 
on long-term international debt issues, and wouldn't have to resort to
short-term foreign borrowing. When asked this week to explain his part in 
borrowing from Soros, Kudrin took twenty-four hours to consider the question,
and then refused to answer.

At the World Bank that month, Washington sources say they knew a great deal
about the government's borrowings, because the Bank was in the process of
preparing its own big structural adjustment loan for Russia. The World
Bank also knew that the IMF knew about the Soros loan -- so officials 
remember now -- but noone now is exactly sure when. 
Supposing the IMF and World Bank knew about the Soros loan, and also supposing
they believed the money was, in the words of one official, "to help them when
they were in a crunch," the IMF and World Bank aren't saying why the Russian 
treasury needed a secret, emergency bailout from Soros? Officials think
the sum wasn't big enough to violate the legal limit on borrowing. But if it 
was small, they claim not to have the faintest idea why the government needed
Soros's help at all.

IMF and World Bank officials acknowledge that before June 1997, 
whenever the Finance Ministry faced a small "crunch", it could transfer 
precious metals from state stocks to the Central Bank, in return for cash. 
Livshits himself had recommended just such a palladium "swap", worth about 
$500 million, in October 1996. Nine months later, there was no shortage
of palladium to match Soros's offer. 

All it would have taken was the signature of Finance Minister Anatoly
Chubais on a paper transferring the metal to the Central Bank, and another
signature from the Central Bank agreeing to "buy" it, and the money would
have been transferred to the treasury. No cost, no obligation. Chubais
refuses to explain what he did, or why.

Officials at the State Duma, who try to oversee treasury borrowing, and who
write foreign borrowing limits into law, said this week they are in the dark.
Boris Fyodorov, the Duma deputy who authorized transfers of gold and diamonds 
from state stocks to cover short-term funding emergencies when he was Finance
Minister, says he knows nothing about this one.

So here again is the Soros riddle: either the June 1997 loan was too small to 
be necessary; or it was so big it violated IMF and domestic borrowing limits;
or the money was for another purpose entirely. Forget about pensioners and
the budget deficit, perhaps the Soros money was used to buy the government's
favour. Perhaps it was used specifically to help buy state assets for
the Uneximbank group.

Remember what assets were up for grabs. In May, Uneximbank thought it
had won control of the oil company, Sibneft, but was pipped by Boris
Berezovsky. In June, Berezovsky thought he would take Svyazinvest,
but on July 25, it was announced he had been out-bid by Uneximbank.
Soros, it was publicly revealed, provided the largest share of the $1.875
billion price. Then on August 5, Uneximbank won again, taking control
of Norilsk Nickel in a share auction Prime Minister Victor Chernomyrdin
tried to halt.

According to Valery Mishalkin, the chief inspector of the Accounting Chamber,
Soros's money was used by Uneximbank to fund its takeover of Norilsk Nickel.
According to the company and to the tender announcement, Uneximbank had to
pay $300 million to Norilsk Nickel for an investment in new gas resources.
Its winning bid for the state shares was $250 million, but subtracting an 
earlier loan and commission for organizing the tender means its payment in 
real money was less than half that figure.

A banker at one of the American investment banks which holds a small 
shareholding in Norilsk Nickel believes the Accounting Chamber is right.
Soros funded Uneximbank to take Norilsk Nickel. But if his part in the 
Svyazinvest purchase was public knowledge, why keep the Norilsk Nickel
transaction secret? 

Mishalkin of the Accounting Chamber was asked if the money Soros loaned the
treasury might have been deposited at a treasury account in Uneximbank?
He says tracing the money Uneximbank used to acquire Norilsk Nickel was up 
to the Procurator-General, the Ministry of Interior, and the Federal 
Security Service. They failed to do it, he adds.


Ex-Russian PM vows to shake up party, seeks allies
By Timothy Heritage 

MOSCOW, March 25 (Reuters) - Viktor Chernomyrdin, sacked this week as Russia's
prime minister, launched his new political career on Wednesday by vowing to
overhaul the party which could hold the key to his presidential ambitions. 
Chernomyrdin said he still supported President Boris Yeltsin, even
though his
old ally sacked him on Monday, and called for ``democratic'' parties to join a
coalition to contest parliamentary elections due at the end of 1999. 
``The president took a decision. That is his right. For us this is a
test,'' Chernomyrdin told a meeting of his centrist Our Home is Russia (NDR)
``I am sure of one thing -- the movement must not and cannot go on in
the same
condition as it is now.'' 
Vowing to revamp the party before the election to the State Duma, the lower
house of parliament, Chernomyrdin held out an olive branch to like-minded
The so-called democratic parties' failure to unite in the last election in
1995, despite often similar platforms, helped the Communist Party become the
biggest single force in the Duma. Our Home finished in second place. 
``The NDR appeals to all reformers, to all democrats -- let us put aside
our disagreements, let us get together, combine our resources and ideas, our
strengths in society, government and parliament. Otherwise it will be too
late,'' he said. 
Yeltsin has put Chernomyrdin in charge of the Kremlin's preparations for
presidential election in the year 2000, but has not said whether the former
prime minister will be the candidate. Many analysts rule that out, saying he
has clearly fallen from grace. 
Our Home could offer Chernomyrdin a platform for launching his own
presidential campaign, but discussions at Wednesday's meeting did little more
than confirm the party had problems and that its members wanted to put them
A party official had promised on Wednesday that Russians would see a new
Chernomyrdin at the meeting. 
The 59-year-old former head of Russia's natural gas monopoly Gazprom was
relaxed, laughed frequently and at times spoke forcefully and with conviction.
But, as usual, much of his speech was rambling and lacked the spark he will
need if he wants to be a serious contender for the presidency. 
At a news conference, Chernomyrdin declined to say if he planned to run for
Our Home was set up in 1995 to challenge the Communist Party but won
only just
over 10 percent of votes in the parliamentary election in December of that
Its links with the government are now all but severed, making a mockery
of its
nickname -- ``party of power.'' Although strong in Moscow, its ability to
muster votes outside the capital and other big cities is questionable.


FEATURE - Impoverished Armenians to pick president
By Lawrence Sheets 

GYUMRI, Armenia, March 26 (Reuters) - Armenians, victors for now in a war with
oil-rich Azerbaijan but mired in poverty at home, pick a new president on
Monday in a poll which may decide the future of democracy in their former

Soviet republic. 
The winner of the run-off between Prime Minister Robert Kocharyan, the
president, and Karen Demirchyan, a Soviet-era leader, will control peace talks
with Baku over the enclave of Nagorno-Karabakh and grapple with the economy. 
The magnitude of mountainous Armenia's plight is summed up by a visit to
Gyumri, formerly Leninakan, the epicentre of Armenia's huge 1988 earthquake
which killed 25,000 people. 
The grim, windswept city, perched high on a plateau at 1,500 metres (5,000
feet) above sea level, is a living museum to the horrors of the calamity.
Half-wrecked apartment blocks dot every street, and people have much on their
minds apart from voting. 
In the inconclusive first round of the election on March 16, international
observers blamed Kocharyan's backers for fraud and irregularities. Western
diplomats say Armenia risks further damaging its reputation without a clean
The Karabakh conflict hangs ominously over the election and, beyond
that, the
development of Azerbaijan's nearby Caspian Sea oil reserves, into which
Western companies are investing billions of dollars. 
A ceasefire has kept the front lines generally quiet since 1994 after huge
Armenian territorial gains. Karabakh is inside Azerbaijan but the majority of
its people are ethnic Armenian. 
Battlefield successes have not translated into relief from grinding
and at home many people have their minds as much on butter as guns. 


In Gyumri, a large church in the central square still lies in ruins, its
worshippers gone. The cupolas and parts of the walls are still piles of bricks
and shards of concrete. The main entrance remains precariously propped up by a
giant brace. 
A sign pleads for donations to rebuild the complex but an idle construction
crane abandoned nearby testifies to the fact that the country of nearly four
million is all but broke. 
``I was mailing a letter in the central post office when the first wave
hit. I
watched a three-storey building fall on top of a school across the street,''
said resident Jakob Harutsunyan, whose wife and son died in the quake. 
On a square next to the church, victims of the disaster still huddle in
``boxes'' as they are called -- temporary homes made of rusting sheet metal
and plastic. 
``We thought it would be for just a year or so. Now 10 years have passed,''
said 45-year-old Kayla, a plump woman in hair curlers and a red housecoat
living in one of the tiny cubicles. ``The government doesn't even promise us
anything anymore, and we don't ask.'' 
Kayla, a teacher, makes about $10 a month. Telling strangers their
future by
reading coffee grounds helps make ends meet. Officials say a third of the
city's 200,000 people have left, looking for employment in Russia or
``We have only been able to restore about 30 percent of the housing,'' said
Gyumri Deputy Mayor Sugias Avetisyan. ``At this rate it will take 20 more
years to rebuild everything.'' 


Latest nationwide opinion polls give Demirchyan a big lead, roughly 50
percent, over Kocharyan, on 35. 

A charismatic public speaker with slicked-back hair, Demirchyan spent
the last
10 years running one of Armenia's largest industrial plants. 
He is benefiting from the nostalgia of some voters who say they lived
under his rule and see him as a competent manager. 
Demirchyan, 65, gives only a vague idea of his plans for the country. He
abandoned his communist past but signals he favours a more gradual approach to
radical market reforms. 
``Since the earthquake no one has lifted a finger for this city,'' said
32-year-old unemployed engineer David Movsisyan. ``Things were good under
Demirchyan. He has experience. If anyone can make life just a little better,
he can.'' 
Diplomats in the capital Yerevan say Demirchyan, once a close confidant of
Azeri President Haydar Aliyev, would probably be more apt to compromise with
the Azeris over Karabakh. 

Kocharyan took over as interim leader last month after helping force former
president Levon Ter-Petrosyan to resign. 
Ter-Petrosyan advocated concessions to the Azeris to end the decade-old
conflict, saying a deal was needed to rescue Armenia from economic ruin.
Kocharyan saw them as treachery. 
Karabakh broke from Azeri rule in the 1980's after its mostly-Armenian
population demanded to be put under Armenian control. Kocharyan, 43, hails
from Nagorno-Karabakh, served as its leader and is considered a rogue citizen
by the Azeris. 
A hard-liner on the issue, he rejects a plan by the Organisation for
and Cooperation in Europe (OSCE) calling for Karabakh to get de facto
sovereignty within Azeri borders. 
His own plan involves upping defence spending to deter new fighting. 
``The more and better funded the military is, the less likely the enemy
be to wage war on us,'' he said recently. 
His backers, and some Western diplomats, applaud his attack on corruption
during his year as prime minister and support of economic reforms. 
``He is young, energetic and smart,'' said a woman after voting for
in the first round. ``Demirchyan represents the past, and it is impossible to
bring the past back.'' 


Armenia was already in trouble over fraud-tainted elections in 1995 and
Ter-Petrosyan's use of tanks and troops to quell protests after the 1996 vote
were another blow. 
In the March 16 first round, OSCE monitors reported voter intimidation,
media bias for Kocharyan, ballot box stuffing, and soldiers being ordered to
vote for Kocharyan, among other infractions. 
They say Armenia risks losing vital humanitarian aid and international
isolation if it does not prove a commitment to democracy. 
``Armenia has a noose around its neck. Now we will see if the trap door
opens,'' said one Western diplomat last week. 
The OSCE demands that Kocharyan ensure a fair vote as he has pledged to,
observers have seen little action so far. 
``They have arrested only three people in connection with the first-round
abuses,'' said one international observer who did not want to be named. ``The
government does not appear to be serious about doing anything about them.'' 


Date: Wed, 25 Mar 
From: (Peter Mahoney)
Subject: eXile

Please allow me to contribute some belated comments to the eXile
I, too, have been experiencing computer problems of late, and as a List 2
addict, it has taken me some time to wade through my crammed mailbox.
The chosen style of the eXile is hipper-than-thou and in-your-face. Their
stated goal is to be as offensive as possible to as many people as possible,
particularly women. I think we may safely say they have been wildly
successful on this score. It is a style that either you like or you don't.
Personally, I find the eXile entertaining, primarily because I think both
Ames and Taibbi are excellent writers, although I would agree that their
attempts at humor are often sophomoric (may I say downright freshmanesque?).
The fact that I am a former
eirdo-radical refugee from the sixties and seventies may also have something
to do with my enjoyment factor.
Before Taibbi joined Ames at the eXile last year, the purpose of the rag
(and its predecessor publication, whose name now escapes me) was clear: it
was exclusively (eXclusively?) a hip club listing - the best in Moscow -
with Ames' column a decidedly secondary diversion. Despie Ames'
predeliction to regale us with tales of his over-the-edge sexual and social
life, he is also capable of some of the finest insight into Russian life
that I have read. I particularly remember his piece called "The Good
Genocide", which appeared on JRL in the early days, which I thought was
brilliant, and which none of the ivory-towered stuffed-shirt experts
responded to, despite DJ's pointed invitation to do so.
When Taibbi came on board, the eXile quickly developed a split personality,
something which they, themselves, admitted. On the one hand, they tried to
maintain their "We're not serious" posture, at the same time, they most
definitely wanted to be taken seriously, as their continued participation in
JRL attests. Taibbi began his quixotic jousting at Russian establishment
windmills, and his pseudononimous swipes at the hackiness of Western
journalism emanating from Moscow. Mark Ames - perhaps feeling it his duty
to uphold the other side of the eXile personality - has recently degenerated
into the self-absorbed excesses which have been duly documented on JRL.
At first, I found all this refreshing. After all, life in Russia these
is a fornicating LSD-trip (have I assuaged the sensibilities of all those
JRLers who cringe at the word fuck?), and Mark Ames is the only one I've
read who recognizes that and writes about this place as such. I found
Taibbi's targets and the arrows he aimed at them to be right-on. The eXile
has even stimulated the white-bread Moscow Times to spice up their club
listings, and initiate their own - albeit timid - press review.
Unfortunately, for me, this feeling of refreshment has worn off, and I'll
tell you why. It has nothing to do with posture, or split personalities,
or offensiveness. It has to do with professionalism. That doesn't mean

that the eXile has to change its style. Far from it. I am reminded of the
Russian television show "Kukli". This show is biting, irreverent, satiric,
and funny. It is also deadly serious. Everything the eXile wants to be
(although I'm sure Ames and Taibbi would howl at the comparison). The
difference is professionalism.
What Ames and Taibbi don't seem to realize, in my opinion, is that the very
style they've chosen requires a greater discipline, a greater
professionalism, to make it work than that required by mainstream hacks
pumping out formulaic journalism on a daily basis. Excess doesn't
substitute for excellence. Ames' recent stuff bothers me not because it is
offensive or excessive, but because he has shown he is capable of
excellence, and he doesn't have the discipline to hold himself to that
standard. Reading Taibbi's articles is like almost having an orgasm: that
was stimulating, but is that all there is? His articles, for the most part,
are rehashes of readily available information (at least to info-addicts like
me), larded over with a healthy dose of sarcastic opinion. Even when he
gets ahold of some newsworthy piece of information, like the Boris Jordan
connection to the first book advance scandal, he doesn't run with it, he
walks, or perhaps I should say stumbles. He makes a!
phonecall or two to give the appearance of investigative reporting, then
falls back on unsubstantiated accusations and fancy wordsmithing to carry
his stories. It is passionate, oddly-principled, but ultimately lazy
journalism, something which, if practiced by others, would be excoriated in
Taibbi's press review. Unfortunately, Taibbi doesn't seem to hold himself
to the standards he holds others to.
What Ames and Taibbi need is a good editor, one who could focus Ames on the
thing he does best - writing brash, irreverent, insightful commentaries on
this other-world called Russia we currently inhabit - one who could push
Taibbi to make that extra phone-call, dig out those additional facts that
could turn his half-assed, shoot-from-the-hip articles into first-rate
investigative reporting. Don't change the style; just do it better with
discipline and professionalism.
Of course, given our boys' dedication to "intellectual freedom", aka
spoiled-brat egotism, such a development is not likely to be forthcoming.
So we are left with shrugging our shoulders at their excesses, sighing at
their failures, and being entertained by their occasional flights of fancy.
What we can't do, unfortunately, is take them seriously.

Peter P. Mahoney


RFE/RL NEWSLINE Vol 2, No. 59 Part I, 26 March 1998

DEALS... "Novye izvestiya" on 25 March charged that before Kirienko
joined the government last year, he used shady financial deals to withhold
profits accrued by his oil business from both creditors and the Pension
Fund. As a former Komsomol activist and protege of then Nizhnii
Novgorod Governor Boris Nemtsov, Kirienko became head of the Norsi-oil
company and the local bank Garantiya. The newspaper charged that Norsi-
oil managed to avoid paying the oil processing plant Norsi's debts while

"real money" from the plant's transactions flowed into Norsi-oil's bank
accounts. It also reported that Kirienko devised a scheme whereby revenues
from the oil business were deposited into the Garantiya bank, which
performed lucrative transactions with the funds and at the same time issued
promissory notes (rather than cash payments) to cover Norsi and Norsi-oil's
contributions to the Pension Fund. Boris Berezovskii is reportedly one of
the financial backers of "Novye izvestiya." LB

March, "Novye izvestiya" reminded readers of allegations it had made last
November against Viktor Ott, whom Kirienko recently appointed acting
fuel and energy minister. The newspaper added that Ott, who at the time of
the allegations had been Kirienko's deputy at the ministry, had never
responded. "Novye izvestiya" had charged that as a first vice president of
the state-owned oil company Rosneft, Ott acquired two Moscow apartments
and one cottage. All were constructed using Rosneft funds and were
ostensibly for company use. Once construction had been completed,
Rosneft managers, including Ott, purchased them for "laughable prices," the
newspaper alleged. "Novye izvestiya" concluded that a "happy future"
awaits Russia if all Kirienko's appointments have "talents" similar to Ott's.

BY BANKS. First Deputy Prime Minister Boris Nemtsov predicted in an
interview with the "Wall Street Journal" on 25 March that the new
government will not be influenced by leading bankers who supported
Yeltsin's re-election campaign in 1996. Nemtsov said the dismissal of
Chernomyrdin and Anatolii Chubais as prime minister and first deputy
prime minister, respectively, will leave the "oligarchs" unable to put
pressure on the government. Asked to comment on Nemtsov's remarks,
Chernomyrdin said Nemtsov often "speaks first and thinks later," Interfax
reported. The former premier added that "I think [Nemtsov] will come to his
senses somewhat and say something absolutely different." Nemtsov told
Interfax on 26 March that he gave the interview in English and that the
newspaper misinterpreted his remarks about Chernomyrdin. LB


Tycoon Berezovsky Endorses Kiriyenko 
25 March 1998

MOSCOW -- Boris Berezovsky, a business tycoon who wields strong political
influence, endorsed Russia's new acting prime minister in comments
published on Wednesday. 
Berezovsky told Interfax news agency that Sergei Kiriyenko was a
realistic candidate to take over permanently and to win approval from
parliament, following President Boris Yeltsin's shock decision to sack his
government on Monday. 
The powerful magnate told the Financial Times in a separate interview
that 35-year-old Kiriyenko, who replaced the long-serving Victor
Chernomyrdin, was "indubitably better than what we had up until today." 
"Is he ready to become the prime minister? I think not. Can he become
the prime minister? I think so," he added. 
Some Russian commentators believe Berezovsky played a behind-the-scenes
role in the downfall of Chernomyrdin's government. 
Returning to Russia after medical treatment in Switzerland, he gave a
lengthy television interview on Sunday in which he spoke of a need for "new
faces in the government." 

The next morning, Yeltsin sacked the whole Cabinet and asked Kiriyenko
to form a more dynamic team to advance reforms. 
In another interview published on Wednesday, Berezovsky told the
newspaper Komsomolskaya Pravda he would concentrate from now on politics,
not business, and was considering leading a party to run in next year's
parliamentary election. 
A presidential election is due in 2000, when Yeltsin's term expires. 
Speaking to the paper last Saturday, Berezovsky said there was no danger
of Russia returning to communism, but he was worried by the threat from the
extreme right. 
Berezovsky, a billionaire with extensive oil and media interests, is one
of a group of tycoons with close links to the Kremlin. He formerly served
on Yeltsin's Security Council. 
Opponents say such magnates wield unhealthy influence in what they
describe as a system of "crony capitalism." 
A rise in organized crime, including contract killings, has been blamed
on murky business dealings and the settling of scores between rival factions. 


Los Angeles Times
25 March 1998
[for personal use only]
Yeltsin Firings Shaping Up as a Boost to Reform 
By CAROL J. WILLIAMS, Times Staff Writer

MOSCOW--Russian President Boris N. Yeltsin hinted Tuesday that he will
reappoint key ministers despite an across-the-board sacking of his Cabinet
a day earlier, suggesting that the startling move was really a parting shot
by the Kremlin's chief economic strategist to eliminate the last obstacles
to reform. 
Like a suicide bomber, departing First Deputy Prime Minister Anatoly B.
Chubais left Yeltsin's team in a blast that both relieved him of the poorly
paid obligation of government service and took out the surviving stalwarts
of Communist cronyism along with him. 
The strategy behind Monday's firing of Prime Minister Viktor S.
Chernomyrdin and the rest of the Cabinet became clearer with the first
subtle indications by Yeltsin that key officials, such as Foreign Minister
Yevgeny M. Primakov and Defense Minister Igor D. Sergeyev, will be returned
to their jobs. 
Those two powerful ministers and "the lion's share of the rest" are
likely to be reappointed, presidential spokesman Sergei V. Yastrzhembsky
told journalists after Yeltsin praised the work of Russia's Foreign and
Defense ministries. 
That observation made clear that the real target of Yeltsin's sweep was
Chernomyrdin, a dour Soviet-era bureaucrat who had become increasingly
beholden to the powerful new industrialists running Russia's raw market
Russia's Constitution dictates that all Cabinet members must resign with
the prime minister to give the new head of government a clean slate to
build his own team. But, in reality, the president makes all important
personnel decisions and has tended to use the prime minister's post as a
figurehead position. 
Chernomyrdin, who will turn 60 next month and like Yeltsin has recently
undergone heart surgery, was allowed to remain prime minister for more than
five years because he was viewed by the president, until recently, as a
harmless, loyal ally, acceptable to the Communist-dominated opposition and
the bankers and businesspeople whom he helped make rich during the
conversion of state assets to private property. 
Chubais, 42, and fellow former First Deputy Prime Minister Boris Y.
Nemtsov, 38, have been considerably more influential and supportive of
reforms than Chernomyrdin in the year since Yeltsin appointed them to
reinvigorate the leadership. 

But Chernomyrdin had lately emerged as the industrialists' preferred
candidate to succeed Yeltsin in the next presidential election, in 2000, or
in the event the sickly current head of state fails to serve out his term. 
With almost zero public support, Chernomyrdin's chances of winning a
fair election were dim, and both Yeltsin and Chubais probably calculated
that removing him now would give them time to groom a more democratic
acceptable successor. 
Nemtsov remains more popular than any other viable candidate for the
presidency. But Yeltsin is probably reluctant to elevate him to prime
minister and heir apparent because, with more than two years remaining
until the election, that would make him a target for the opposition. 
Analysts speculate that Yeltsin will appoint a capable regional governor
with no national profile to replace Chernomyrdin or that Sergei V.
Kiriyenko, the little-known acting prime minister, will be nominated and
given a trial run as head of government. 
Kiriyenko is a close Nemtsov ally and like-thinker but is less likely to
incite a Communist revolt against his leadership than if Yeltsin was to
appoint Nemtsov to head the Cabinet. 
Both Nemtsov and Kiriyenko carry the Chubais reform mantle and could be
expected to continue pressing for a bigger role for the private business
sector and for a much-needed cleanup of the corrupt federal government. 
Chubais had said for months that he longed for the chance to be a
private player in the new market economy he was instrumental in crafting
for Russia. But he hesitated to leave the Kremlin while reforms were still
fragile and while Russian markets are being buffeted by the economic
turmoil sweeping Asia. 
Because Chubais was the lightning rod for popular frustration with the
slow pace of measurable improvement in Russian life, his "ouster" has been
welcomed by Communists and other Yeltsin opponents in the Duma, the lower
house of parliament. 
The Duma will now be under pressure to approve the president's choice
for a replacement for Chernomyrdin, probably a figure closer to Chubais'
uncompromising views of how the new market economy should function. 
With the departure of Chernomyrdin and hawkish Interior Minister Anatoly
S. Kulikov, the reformers, most of whom are expected to return to the
Kremlin, will now have a freer hand in managing the transition's endgame. 
The respected daily Sevodnya ranked 30 Cabinet members by likelihood of
reappointment, listing all but four as having even or better chances. The
evening newspaper Izvestia also predicted that all but Chernomyrdin,
Kulikov and a handful of no-names will return to the new leadership. 
"We can pronounce the once all-powerful prime minister politically
dead," the business daily Kommersant declared Tuesday, reinforcing the
impression left with most analysts that Yeltsin's axing of Chernomyrdin was
final and probably part of a political survival strategy bequeathed by the
departing Chubais. 


New York Times
26 March 1998
[for personal use only]
You're All Fired!

WASHINGTON -- Bored? Depressed? Stumbling and coughing a lot? Fearful your
public is tiring of you, but unwilling to gamble on vigorous reforms? Take
the Yeltsin Cure: grab world headlines by firing your whole Cabinet, and
then hire most of them back. 
A week before Russia's President flexed his shake-up muscles, Gen.
Alexandr Lebed was here campaigning for governor of a region in Siberia by
speaking in the U.S. 
That may sound odd, but it's the new Russian politics: "See this
cameraman?" he said to me after telling Congress that NATO expansion is no
big threat. "His film goes on television back home. I'm being pragmatic." 
He's gambling his national future on a regional race. If Lebed loses in
Krasnoyarsk, he's finished; if he wins, he'll be a prospect for president
in 2000. 
Last time out, Yeltsin pumped money into Lebed's campaign to split the
large anti-Yeltsin vote, then paid him off with a short-lived appointment
before dumping him. 
The formerly arrogant general must be happy about Yeltsin's latest
reshuffle. Lebed's archenemy in the military, Interior Minister Anatoly
Kulikov -- whose botched war in Chechnya Lebed ended -- is out on his ear.
And Prime Minister Viktor Chernomyrdin, Gore's Gazprom gasbag, has also
been cut adrift. 
"Chernomyrdin's like a sunflower," Lebed opined through an interpreter
before the P.M. got the sickle, meaning his power was purely derivative.
"When Yuri Luzhkov is no longer Mayor of Moscow, he's still Luzhkov; but
take Prime Minister from Chernomyrdin, and he's nothing." 
He sees Luzhkov as "a serious candidate, with money, organization." What
about the Communist leader, Gennadi Zyuganov? "A scarecrow -- his ceiling
is 29 percent." And Boris Nemtsov, the handsome young democrat said to be
Yeltsin's favorite, soon to be reappointed? "He gets the unpopular
assignments, along with taking care of the bones of the last czar. Finished." 
I presumed that Yeltsin won't seek a loophole in the Russian
Constitution that would enable him to run again. Lebed disagreed: "Yeltsin
will run again. He's running already." 
Gee -- that's what Grigory Yavlinsky, the only reformer building a
national political party, has been saying all along. "There's a Russian
saying, 'fools agree,' " smiled Alexandr Ivanovich. (The more pompous
American expression is "great minds think alike.") What about Yavlinsky? 
"Intelligent man, attracts smart people around him. Controls 8 percent
of the Duma. I don't know what's the matter with Yavlinsky -- he doesn't
engage but doesn't resist. Still, there's an affinity between us. Everybody
says he could be kingmaker, not king." 
Yesterday I reached Yavlinsky on his cell phone in Moscow (Kremlinology
is easier now). The putative kingmaker gives Lebed a good chance of making
a comeback in Siberia. He, too, is relieved at the fall of General Kulikov,
and will not miss Chernomyrdin; he's glad his reformist ally Nemtsov
remains in place. 
"Firing the Government is positive," says the leader of the Yabloko
party. "Yeltsin did it himself, with no advice." Wasn't Boris Berezovsky,
the billionaire capitalist at odds with Chernomyrdin over a gas deal,
behind the shake-up, as he has hinted? "No," says Yavlinsky flatly. "This
was Yeltsin being Yeltsin, wanting a tabula rasa. He showed the seven
bankers their power was not absolute. Now we'll see if he follows through." 
Yavlinsky, unlike most of the bears dancing to Yeltsin's game of musical
chairs, has a clear direction in mind: "Gaining people's confidence with a
fair and simple tax system; ending nontaxpaying monopolies like Gazprom;
breaking the criminal oligarchy, and privatizing property, including land." 

That would take steady, purposeful leadership at the top, but I don't
see sustained vision in a fits-and-starts reformer like Boris Yeltsin. 
Yeltsin is splashing around a lot, but when it comes to building a free
economy he's treading water. His only policy consistency is wrongheaded,
coming from Foreign Minister Yevgeny Primakov, Saddam Hussein's loyal
K.G.B. friend, whose shortsighted nationalism discourages investment from
Yeltsin will serve until he drops because he needs to stay in office to
stay alive. But to struggle out of its swamp, Russia needs the daring
Yeltsin of a decade ago.

Moscow Mayor Submits Proposals to Acting PM 
25 March 1998

MOSCOW -- Moscow Mayor Yury Luzhkov submitted a set of fundamental
proposals on economic matters to acting Prime Minister Sergei Kiriyenko
during their Wednesday meeting. 
The problems "don't concern only the city but are important for the
whole country," Luzhkov said after the meeting. 
According to Luzhkov, the Russian government will have to make a number
of major decisions regarding privatization because "[Former Deputy Prime
Minister Anatoly] Chubais sold away property for almost nothing." 
He also said unlawfully privatized property should be returned to the
state. However, the owners who purchased property must be protected. 
"Law and justice should triumph," Luzhkov said. 
In his opinion, the new government must drop the policy of monetarism,
"which has fully outlived itself." Luzhkov also said it was necessary for
the government to support industrial facilities and solve the problems
plaguing the defense industry. 
He raised the question of developing the new tax code "on fundamentally
different principles." 
"The tax code should be worked out in the same way as the constitution
was -- a government commission must be formed for the purpose. Then the tax
code will be accepted more easily," Luzhkov said. 
The situation in customs should be radically changed, he said. "We have
a customs service, but have absolutely no customs policy, only fleecing,"
he said. 
In Luzhkov's opinion, unsubsidized provinces should enjoy certain
privileges to stimulate others to join their ranks. 
He also spoke of the need for the payment of debts for the fulfillment
of government contracts. 
Luzhkov stressed the need to revise energy tariffs. "There should be
strict government control over those prices," he said. 
"It was interesting and pleasant for me to see and hear that my
proposals coincided in principle with the stance of Sergei Kiriyenko,"
Luzhkov said, summing up the results of the meeting.


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