May 19, 1998  
This Date's Issues: 2184 •• 

Johnson's Russia List
#2184
19 May 1998
davidjohnson@erols.com

[Note from David Johnson:
1. Washington Post: Michael McFaul, Russia: The Sky Has Not Fallen.
2. Interfax: Prices Collapsed On Russian Stock Market Monday.
3. AP: Disgruntled Russian Workers Strike.
4. Nezavisimaya Gazeta: ON THE THRESHOLD OF REVOLUTION? 
The blockage of railroads by miners may paralyse the country.
5. Dennis Orphal: Status of Vladimir Fortov.
6. Christian Science Monitor: Judith Matloff, IN THE KNOW ON MOSCOW
US Web-Surfer Keeps Tabs on the Kremlin. (DJ: About JRL).
7. Executive and Legislative Newsletter: RUSSIANS POLLED ABOUT NEW 
GOVERNMENT.
8. Financial Times (UK): Chrystia Freeland, RUSSIA: Political reformer
'witch-hunt' 
victim. (Alfred Kokh).
9. Moscow Times editorial: Lebed Now Man to Beat In 2000 Vote.
10. The Times (UK) editorial: TO SIBERIA AND BACK. Lebed's new strategy to
win the Kremlin.
11. RFE/RL NEWSLINE: LEBED SETS AGENDA AS KRASNOYARSK 
GOVERNOR, KREMLIN OFFICIALS SAY THEY WILL COOPERATE WITH LEBED,
and YELTSIN TO PUSH PARLIAMENTARY LEADERS ON START-2. 
12. RFE/RL: Floriana Fossato and Anna Kachkaeva, Russia: Media Empires 
Continue To Change Shape And Influence Politics.]

********

#1
Washington Post
May 19, 1998
[for personal use only]
Russia: The Sky Has Not Fallen
By Michael McFaul
The writer is a professor of political science at Stanford University and a
senior associate at the Carnegie Endowment for International Peace. 

Every day, democracies all over the world change governments in
accordance with some predetermined constitutional process. Yet, when
Russian politicians decide to change their government, the event is framed
as a "constitutional crisis," a "period of instability" or evidence that
Russian president Boris Yeltsin has gone mad.
During the past month, when Russian politicians were consumed with
selecting a new prime minister, analysts both in Russia and the West made
dire predictions about the impending chaos that would follow Yeltsin's
decision to dismiss his prime minister. Yet, as with so many other alleged
crises of the past few years in Russia, the sky did not fall. On the
contrary, Russian politicians followed well-defined constitutional rules
for selecting and approving the new premier.
So why did so many predict (if not even hope) that a constitutional
crisis in Russia was bound to unfold? In comparative perspective, why are
we so quick to label events in Russia in negative terms, events which in
other countries would be described as politics as usual? And given Russia's
short experience with democracy, why do we implicitly compare Russian
democracy to our own contemporary system, and not Chinese "democracy,"
Uzbek "democracy" or the early years of American democracy?
Several factors account for Russian democracy's image problem in the
West. First, it is is new and indeed imperfect. As the recent government
change demonstrated, Russia's constitution gives too much power to the
president. In addition, Russian political parties are marginal political
actors, civil society is weak, the rule of law is still a work in progress,
and the press is becoming less independent as large corporations take
control of most media outlets.
Yet despite these warts, it is striking what Russia's new democracy has
accomplished in the past three years. In December 1995, Russian citizens
voted in parliamentary elections. In two rounds of voting in June and July
1996, voters then elected a president. Despite calls for delay and
postponement, these two elections were held on time, under law, and were
considered relatively free and fair.

Moreover, large majorities participated in both elections -- 65 percent
in 1995 and 70 percent in 1996. After the presidential election, which
Yeltsin won handily, the Communist-dominated parliament approved the
president's candidate for prime minister -- Viktor Chernomyrdin -- by an
overwhelming majority. In April of this year, the Duma and the president
succeeded again in adhering to the constitution when they approved Sergei
Kiriyenko for prime minister.
In comparison with Western democracies, these may be meager
accomplishments. But when compared with the first two years of Russian
independence, the Soviet era, or the czarist period, these milestones are
impressive.
A second factor that contributes to pessimism about Russian democracy is
the Russian economy. Analyses of political and economic reform are often
conflated. Commentators accurately report on the dismal record of economic
growth and the subsequent human suffering that has accompanied Russia's
painful and slow economic reform, but then misleadingly suggest that this
poor economic performance will precipitate a meltdown of the political system.
A third reason for Russian democracy's poor image is that commentary
coming out of Russia is dominated by the Russian intelligentsia. In all
revolutions, the intelligentsia always has inflated expectations of the new
revolutionary state. In Russia, the intelligentsia's disappointment is
amplified by Russian culture -- a culture known for its gloom and doom,
whether talking about the "fate of Russia" or the weather.
Fourth, many within the American scholarly and policy community on
Russia also have a historical predisposition toward accentuating the
negative in post-Communist Russia. For those drawn earlier to the field
because of a fear of communism and Soviet imperialism, the Russian bear
still remains a threat. For those attracted to the field because of a
romantic affinity with socialism, Yeltsin and his reforms have destroyed
all that was good about the Soviet system.
The contrast between the Russian set and the community of Chinese
scholars and policymakers is revealing. For many within the Chinese
scholarly community, Chinese leaders can do no wrong. Whereas a change in
government in Russia is portrayed as a crisis or a sign of autocracy by
Russia analysts, the sustained absence of real progress toward genuine
democratic reforms in China is depicted by many Chinese scholars as a
necessary evil of China's development model. Many Russia scholars think
Russia will fail; most China scholars think China will succeed.
Finally, Russia has no domestic constituency in American politics. While
African Americans, Poles, Jews or Balts can muster effective lobbying
campaigns to further domestically the interests of countries dear to them,
Russia has no ethnic lobby to trumpet its cause. Most Russians living in
the United States actually hate Russia. Likewise in the business community:
Many large American corporations have mobilized to check criticism of human
rights violations in countries such as China, Saudi Arabia or Nigeria, but
U.S. investments in Russia are still minuscule, and comparable lobby for
that country does not exist yet.
The prevailing negative image of Russian democracy has real policy
consequences. Because so many do not believe that Russian democracy can
succeed, U.S. commitments to helping Russian democracy make it are few,
while investments in hedges against democratic failure in Russia, such as
NATO expansion, are high. In believing that Russian democracy is bound to
fail, those who form Russia's image within the United States might help it
to fail.


*******

#2
Prices Collapsed On Russian Stock Market Monday 

MOSCOW, May 19 (Interfax-FIA) - Prices collapsed on the Russian market of
corporate securities on May 18. 
The fall was the biggest in the first half of the trading session.
Following a "lull," it continued. Although the rate of price fall gradually
slowed down, RTS trading was suspended from 5:00 p.m. until 5:20 p.m.,
because its index had fallen below the threshold level established by the
Federal Securities Commission. 
Among the main causes of the crisis on the Russian stock market on
Monday was a fall in prices on state bonds during secondary trading, where
the average yield exceeded 47% by closing time. Many of the nonresidents
negatively assess the current state of the Russian financial system. The
market is still being influenced by the law on the management of the shares
of the United Energy Systems of Russia which seriously limits the rights of
foreign shareholders, who are already under the pressure of financial
instability in Southeast Asia. 
Trading was rather active on Monday and the volume of deals exceeded
$86.3 million. 
The Interfax Composite Index on Monday went down 80.63 points to 546.98
points in ruble terms. In dollar terms it fell 60.18 points to 407.46. The
Interfax Composite Index is now at the level registered at the beginning of
February 1997. 

******

#3
Disgruntled Russian Workers Strike 
May 19, 1998

MOSCOW (AP) -- Thousands of coal miners, scientists and other workers
blocked major railroads and highways throughout Russia today, demanding
that the government pay back wages and meet other obligations. 
Striking miners in the central Siberian town of Anzhero-Sudzhensk
blockaded the Trans-Siberian railroad for a fifth day today, forcing trains
to take an alternate route hundreds of miles longer. 
Miners from neighboring regions said they would seal off the alternate
route starting Wednesday -- effectively cutting train travel between Moscow
and Russia's vast eastern regions. 
In Russia's Far East, 200 scientists blocked a highway to protest low
wages and sharp cutbacks in funding for the sciences. 
The demonstrators from the Russian Academy of Sciences -- which includes
fields ranging from nuclear physics to child development -- halted traffic
for two hours on the highway in Vladivostok. They said salaries for some
scientists were as low as $50 a month, Russian news agencies reported. 
In the nearby Khabarovsk region, a teachers' union said its members have
not been paid since February, and have only received monthly salaries three
times in the past eight months, the ITAR-Tass news agency said. 
In the southern region of Rostov, over 2,000 coal miners blocked the
North Caucasian railway for the second day today to demand back wages and
job protections for workers who could be laid off if unprofitable mines are
closed. 
Prime Minister Sergei Kiriyenko has promised miners that the government
would raise funds to pay back wages, but the miners have grown wary of such
promises, which have not been met in the past. 
President Boris Yeltsin promised last year to solve the chronic problem
of overdue wages. However, millions of workers are still receiving salaries
months late. 

Deputy Premier Boris Nemtsov met today with officials from major coal
basins and said the total debt to miners amounted to at least $1.4 billion. 
He added that miners' problems had been exacerbated by bad management. 

*******

#4
>From RIA Novosti
ON THE THRESHOLD OF REVOLUTION? 
Nezavisimaya Gazeta,
May 19, 1998
The blockage of railroads by miners may paralyse the country
By Alexander ZHELENIN

Despite the fact that during the Saturday government
session devoted to the problems of mining regions chairman of
the Russian government Sergei Kiriyenko and Vice-Premier Boris
Nemtsov promised to miners' representatives to send to the
miners' regions in a matter of emergency 385 million roubles as
repayment of budget debts and 47 million roubles for the summer
vacation of children, the crisis in these regions continues to
grow like a snowball. Moreover, to all appearances, it is
developing spontaneously. 
In any case, it seems that the report on NTV television to
the effect that Rostov miners blocked the railroad took the
local heads of the regional miners' trade union by surprise:
they could not confirm nor refute this information when asked
by a correspondent of Nezavisimaya Gazeta. 
Nevertheless, this fact means that the miners' actions of
civil disobedience continue to expand. Now the miners from
Anzhero-Sudzhensk, who have been blockading for already four
days the Trans-Siberian railway mainline, and the miners of
Inta who have for already a week allowed only passenger trains
to pass through the Vorkuta-Moscow railway line linking the
region with the centre, have been joined by the miners of the
Russian Donbass coal area who have blocked the most intensive
railway line of Russia - the North Caucasian railroad.
Moreover, in Kuzbass the action was supported by virtually the
entire region, including teachers, doctors and representatives
of other sectors of the national economy. The same takes place
in the north - in the Pechora basin. Incidentally, people there
prepare in an organised manner for the march to Moscow, for
which purpose they began to raise money for the dispatch of
1,000 people to the capital. 
It is already evident that despite the fact that the
government has given up a harsh tone of speaking with the
miners and is looking convulsively for money to repay at least
part of the debts (it is expected that a special excise duty on
vodka will be introduced for this purpose), the situation began
to get increasingly out of control. The dismissal of the
President becomes the main demand of the striking miners
blockading the railroads. The second demand is the resolution
of the sector's global problems to provide for its viability,
i.e. the future of miners. The payment of wages is only the
third demand. 
Consequently, now we face a situation when the refusal of
authorities to resolve the economic problems generated by them
brings political issues to the foreground. The workers of many
trades - from miners to teachers - without any special
influence on them, come to the conclusion, relying on their own
experience only, that the main culprit of their misfortunes is

the President and advance as their main and principal slogan
the resignation of Boris Yeltsin who personifies in their eyes
the current economic system and the political system which
fastens it together. Whether the authorities will be able this
time to avoid the scenario which is being implemented in
Indonesia or whether the miners' strikes signify a threshold of
a new Russian revolution will be seen clearly already in the
near future. 

******

#5
Date: Mon, 18 May 1998 
From: Dennis Orphal<DORPHAL@aol.com>
Subject: Status of Vladimir Fortov

Can anyone help me determine whether Vladimir Fortov was reappointed Dep. PM
for Science and Technology in new cabinet?

*******

#6
Christian Science Monitor
May 19, 1998
IN THE KNOW ON MOSCOW
US Web-Surfer Keeps Tabs on the Kremlin
By Judith Matloff 
Staff writer of The Christian Science Monitor

MOSCOW 
The cold war is over. Western spies are not as busy as they used to be
here. But Kremlin-watching is as alive as ever - thanks to a freer flow of
information since the Soviet Union crumbled seven years ago, and thanks to
the Internet and David Johnson.
Many a scholar says a secret prayer for this obscure Russophile, who has
exploited the global information revolution to keep Moscow on the map. From
a desk in Washington, he pursues with almost-missionary zeal compiling the
most authoritative Internet collection of data about the former Soviet Union.
This one-man information machine spends more than half of his waking
hours putting together essays, opinions, and articles, and inviting debate
on his very own Internet mailing list.
Since its launch two years ago, Johnson's Russia List has acquired a
loyal readership of 2,200 academics, journalists, diplomats, and government
officials, who say it is indispensible reading. "Johnson's List is a
Kremlinologist's dream. I only wish he'd been around in the old days," says
Alan Philps, the Daily Telegraph's veteran Moscow bureau chief.
From his watchtower as an analyst at the liberal Center for Defense
Information in Washington, Mr. Johnson energetically puts out two
dispatches a day, seven days a week. They include everything from
translations of Russian articles to personal opinions about current trends.
The work is an unpaid labor of love. "It was a mission early on. Now it's a
habit," he says matter-of-factly, interviewed recently during his first
visit to Moscow since 1985.
The Petersham, Mass., native began learning Russian when he was 15 and
went on to get degrees in Russian studies at Brandeis and Harvard
Universities. He then moved to Washington, where he has been primarily
focusing on Soviet and now Russian affairs.
The idea for the current e-mail service - known simply as "JRL" to
insiders - occurred to Johnson during Russia's 1996 presidential campaign.
He was put off by what he felt was biased coverage by major US newspapers
and concluded there was a need for a broader spectrum of news about Russia.
So he started surfing the Web, picking out items that caught his eye.
Johnson particularly likes to select material from British and
non-mainstream American newspapers. His list snowballed by word of mouth
into a regular service that Russia experts await eagerly.
What makes Johnson's list stand out from other such services is not just
the range of information, but also the personal touch: Johnson himself
enters each new item or subscriber. He sees his role as not just a provider
of information but a stoker of discussions about "this mysterious subject,
which still fascinates people."

Some subscriber eyebrows have been raised over Johnson's legally
questionable practice of reprinting articles without permission. But except
for a complaint from the American Spectator, most writers appear
indifferent to or grateful for the unsolicited exposure. Harsher criticism
focuses on the sheer volume of information, prompting calls for less overload.
"Johnson's list provides a very high level of discussion. It's
interactive. Only Johnson's list makes it possible to ask opinions of top
experts in the field and get answers back," says Nikolai Petrov, an analyst
at the Carnegie Center in Moscow. "But there's so much coming in, it's
almost impossible to read all the articles at once."
For a man who has dedicated his life to publishing others' views on
Russia, the bespectacled Johnson is reticent about volunteering his own
opinions. He prefers instead to canvas the thoughts of JRL contributors.
And for one so clearly committed to Russia, Johnson was surprisingly eager
to maintain his American roots during his two-week sojourn. Every morning
he ate at the Starlite Diner - Moscow's quintessentially American restaurant.
"Fried eggs, toast, and orange juice," he says. "A real American
breakfast. Great."
• Send e-mail to David Johnson at DavidJohnson@erols.com

*********

#7
>From RIA Novosti
Executive and Legislative Newsletter, No. 19
May 1998
RUSSIANS POLLED ABOUT NEW GOVERNMENT

On April 30-May 7 the All-Russian Centre of Public Opinion
Studies held a representative poll of 1,600 Russians. The
answers are given in percentage to the number of those polled. 

"Journalists and political scientists still make
conjectures about why the President dismissed the Chernomyrdin
Government. Which of the following opinions, do you believe,
explain best of all why the President acted in this way? 

Due to the Government's failure to 
resolve the problem of delay in the 
payment of wages 26
He was dissatisfied with the growth of 
Chernomyrdin's political influence 17
To accelerate reform, change its course 9
So that the Government's activity does not 
depend on financial and industrial groups 7
To bar himself from the criticism for the 
situation in the country 7
He begins preparation for the elections 6
He wanted to seize the political initiative
from the opposition, frustrate the 
"spring offensive of working people" and 
avoid no-confidence vote 3
He wanted to place the Government under 
his control 3
He acted under the influence of Berezovsky 
and his entourage 2
There was no special reason; he acted on his 
whim 2
He promised to do this earlier 1
Other reasons 1
Hesitant 16


"The State Duma endorsed Sergei 
Kiriyenko for the post of the Prime Minister of Russia.
Does this mean that the Government crisis is over and the
Kiriyenko Government will start working in earnest in the
coming two or three weeks?" 
The Government crisis is over, the Government 
begins to work in earnest 14
Conflicts and scandals around the new Government
will for long time impede its work 66
Hesitant 20

"Do you believe that the new Government of Russia led by
Kiriyenko will work better than the Chernomyrdin Cabinet?"

It will work better than before 19
It will work like the previous Government 47
It will work worse than before 15
Hesitant 19

"Do you believe that the current authorities will be able
soon to change the situation in the country for the better?" 

Definitely, yes 2
Most likely, yes 11
May be yes, may be no 25
Most likely, no 36
Definitely, no 20
Hesitant 6

*********

#8
Financial Times (UK)
19 May 1998
[for personal use only]
RUSSIA: Political reformer 'witch-hunt' victim
By Chrystia Freeland in Moscow

Alfred Kokh, a former deputy prime minister who has been caught up in
one of Russia's highest-level corruption cases since the collapse of
communism, says he is the target of a politically motivated witch-hunt.
"This is no less dangerous than the events of the Brezhnev era," Mr Kokh
said in a telephone interview from New York. "It is a nightmare."
Mr Kokh, whom Moscow prosecutors charged this month with embezzling
state property, said communist-dominated law-enforcement agencies were
using their power to mount a covert attack against Russia's reformers.
"The procuracy is taking over the functions of government. They are
entering the political process," he said.
"The procuracy and its cadres have not changed since the communist era.
The prosecutors simply hate us. They are communists."
Moscow prosecutors allege that Mr Kokh fraudulently distributed 21
apartments to government officials, including himself. The charges carry a
maximum penalty of 10 years' prison.
Mr Kokh, the former head of the state privatisation agency, acknowledged
that government money had been used to buy 21 Moscow apartments for himself
and fellow civil servants.
However, he asserted that the deal had been authorised by Anatoly
Chubais, then a senior government official, and Victor Chernomyrdin, then
the prime minister.
Mr Kokh said the apartments, including his own three-bedroom apartment
in the heart of Moscow, were a legitimate remuneration for reformers who
worked hard on low government salaries.
He believed that, if he returned to Russia, he would risk being
arrested. Nonetheless, he said that this week he planned to come back to
Moscow to launch a controversial book.

Last year Mr Kokh was paid $100,000 for the book, which is a history of
Russia's privatisation drive. The Swiss company which purchased the book
rights had connections with Oneximbank, a powerful Russian financial group
which rivals alleged Mr Kokh had favoured during the privatisation process.
Mr Kokh said that at the time he sold the book rights, he was unaware of
the links between the Swiss trading company and Oneximbank. However, he
insisted that, even had he know of a connection, there would have been no
impropriety.
"Let us say, for the sake of argument, that Oneximbank itself paid me
the honorarium directly, although that was not the case," he said.
"Even if it were so, what would be the problem? . .. I think a bribe is
if you do something for me and I pay you money for it. That is a bribe. But
those people who supposedly paid me a bribe are making a profit [on my
book]. How can it be a bribe if it makes them a profit? It should be a loss."

*******

#9
For more articles from The Moscow Times, check out their website at


www.moscowtimes.ru
Moscow Times
May 19, 1998 
EDITORIAL: Lebed Now Man to Beat In 2000 Vote 
Alexander Lebed certainly has something going for him. The square-jawed
war hero won the gubernatorial elections for the huge Siberian region of
Krasnoyarsk with the charisma and elan that have become his stock-in-trade. 
Lebed ran a brilliant campaign based on his action-movie image, his
straight-talking soldier's manner and his reputation as a stranger to
Kremlin political intrigue, tough on corruption and in tune with the common
people in the regions. 
True, Lebed's victory was helped by a general backlash against
incumbents in several regional elections and by financial support from
Moscow tycoon Boris Berezovsky. 
But Lebed is looking like the man to beat in the next presidential
elections. 
The atmosphere among some sections of Moscow's political elite is one of
mild panic. The barbarian is not exactly at the gates but he has taken one
of the outposts of empire. 
Communist leader Gennady Zyuganov compared Lebed to the young President
Boris Yeltsin 10 years who used his position as an outsider to undermine
the authority of Soviet leader Mikhail Gorbachev. 
The result Sunday is also a blow to Moscow mayor Yury Luzhkov who, aware
that he would be competing for many of the same voters as Lebed in a
presidential race, campaigned against him in Krasnoyarsk. 
But now that he is governor of a region with three million people and a
huge natural resource-based economy, Lebed faces one of his toughest tests.
Lebed is a brilliant soldier, a peacemaker and a talented campaigner, but
can he actually govern? 
He has almost no practical experience of running anything more
politically complicated than a paratroop division. His three-month stint in
the Kremlin was marked by a brilliant achievement ending the war in
Chechnya but also by administrative sloppiness and constant bickering with
fellow ministers. 
Lebed now has the chance in Krasnoyarsk to show that he has the makings
of a real leader who can be trusted with high office. He can either dispel
or confirm the perception that he is a loose cannon, a reactionary
nationalist and an economic troglodyte. 
For all Lebed's charisma and wit, it has been hard to identify what he
stands for. He has no team behind him. He has formed alliances and broken
them, for no obvious reason. He has lurched from free market rhetoric to
neocommunist conservatism. He has attacked corruption but has tacitly made
alliances with some of Russia's most controversial businessmen. 

Lebed will be under the microscope as governor and he must prove that
he is more than just a B-movie adventure hero. 

********

#10
The Times (UK)
19 May 1998
[for personal use only]
Leading Article [Editorial]
TO SIBERIA AND BACK 
Lebed's new strategy to win the Kremlin 

General Aleksandr Lebed, the gravel-voiced former paratrooper, made a
successful drop far behind enemy lines at the weekend, capturing the vast
Siberian territory of Krasnoyarsk from the Kremlin-backed governor and
establishing a bridgehead for his assault on the Russian presidency in
2000. The extraordinary comeback for the charismatic general, sacked 18
months ago from his post as National Security Adviser, re-establishes him
as a serious contender in the race to succeed President Yeltsin. 
His election gives him an area four times the size of France, renewed
media attention and the backing of millions of Russians who see him as the
only outsider who can now take on the Moscow establishment. But will his
exile to a remote, mineral-rich area known only for its strategic air
defence radar give him the necessary political experience from which to
launch a national campaign? Or will it grind down a man who now joins other
Kremlin dissidents such as former Vice-President Rutskoi and Vasily
Starodubtsev, a leader of the coup against Mikhail Gorbachev, in ruling one
of Russia's 89 largely autonomous regions? 
Mr Lebed made no secret of his presidential ambitions during the
campaign. But on election he insisted that he would devote himself to the
problems of his new constituency. They are formidable. Krasnoyarsk is poor,
distant and neglected. Its military importance has diminished, and the
concentration of troops means that the problems of the army - the abysmal
conditions of service, payment arrears and low morale - have a significant
local influence. The area is rich in minerals but, like most of Siberia,
this promise of future wealth is doomed to remain unfulfilled as long as
the overwhelming bulk of foreign investment goes to Moscow and the
populated west of Russia. 
Mr Lebed's enemies are hoping that he will fall on his face in
Krasnoyarsk. They will now be ruthless in their attempts to isolate and
undermine him. This might, however, be their undoing. The more Mr Lebed is
able to portray himself as the champion of the downtrodden provinces, the
man willing to take on the entrenched interests of the Kremlin and its rich
business friends, the more popular backing he will receive. Russia has had
too few democratic elections to show whether running against Moscow is as
popular as running against Washington has proved to be in America. But
every poll shows the dislike of the pampered capital, the anger at the
Government's torpor, the hatred of corruption and resentment over the
inequalities that have accompanied market reforms. 

Just as Mr Yeltsin drew popularity from Mr Gorbachev's attempts to
sideline him, so Mr Lebed may be strengthened by an anti-Lebed campaign. He
has matured notably in the time since his dismissal. He retains a
reputation as a man of action, who prevented civil war in Moldova and
brokered the popular but difficult Russian disengagement in Chechnya. At 48
he is young enough to be identified with the post-Communist revolution and
has already incurred the suspicion of the old hardline Communists. He must
now use his national visibility, political contacts and media skills to
attract money, foreign investment and talent to Siberia. With solid local
backing, he could come back from the cold in two years' time to lay
successful siege to the Kremlin. 

********

#11
RFE/RL NEWSLINE Vol. 2, No. 94 Part I, 19 May 1998

LEBED SETS AGENDA AS KRASNOYARSK GOVERNOR. Aleksandr Lebed
outlined several priority tasks he will address after he is
inaugurated as governor of Krasnoyarsk Krai during a lengthy
interview with NTV on 18 May. Lebed said he is preparing a
package of more than two dozen agreements to supplement a
power-sharing treaty that President Boris Yeltsin and then
Krasnoyarsk Governor Valerii Zubov signed last November on
behalf of the federal and krai authorities. He also said he
plans to work within the Federation Council to change
policies on taxation and transportation fees, which, he
said, are hurting industry in Krasnoyarsk. (All regional
leaders automatically become deputies in the upper house of
the Russian parliament.) Lebed repeated that he will try to
prevent "fires" in the North Caucasus region from being

"rekindled," adding that "I have authority and influence
there. People there respect me." LB

KREMLIN OFFICIALS SAY THEY WILL COOPERATE WITH LEBED.
Presidential spokesman Sergei Yastrzhembskii told Ekho
Moskvy on 18 May that the presidential administration will
cooperate with all three winners of the 17 May regional
elections, including Lebed. Aleksandr Livshits, the deputy
head of the presidential administration, told journalists in
Moscow that "we are ready to work with any governor,"
Interfax reported. He added that "political and ideological
qualities vanish" after someone is elected governor and
needs to tackle the region's economic relations with the
federal authorities. Meanwhile, Communist Party leader
Gennadii Zyuganov on 18 May described Lebed's victory as a
"misfortune" for Russia. But Lebed, who is likely to face
Zyuganov in a future presidential campaign, told Interfax
that the Krasnoyarsk election shows the Communist leader is
"out of the game." Zyuganov has described Lebed as "a young
Yeltsin, but three times worse," RFE/RL's Moscow bureau
reported on 13 May. LB

YELTSIN TO PUSH PARLIAMENTARY LEADERS ON START-2. President
Yeltsin is to make the case for ratifying the START-2 arms
control treaty during a meeting of the "big four" (Yeltsin,
Prime Minister Sergei Kirienko, Federation Council Speaker
Yegor Stroev, and State Duma Speaker Gennadii Seleznev)
within the next few days, presidential spokesman
Yastrzhembskii announced during an 18 May appearance on Ekho
Moskvy. Both Russian and U.S. officials have said the next
summit meeting between Yeltsin and U.S. President Bill
Clinton will not take place until Russia has ratified the
treaty. The Duma was scheduled to hold closed hearings on
the treaty next month (see "RFE/RL Newsline," 15 May 1998),
but Duma Geopolitics Committee Chairman Aleksei Mitrofanov
of the Liberal Democratic Party of Russia told Russian news
agencies on 19 May that the hearings have been postponed
until September. LB

********

#12
Russia: Media Empires Continue To Change Shape And Influence Politics
By Floriana Fossato and Anna Kachkaeva

Moscow, 19 May 1998 (RFE/RL) -- The picture of the "Russian Media Empires"
RFE/RL outlined first in September, 1997, and updated in March, 1998, is
rapidly evolving. Some of the business interests controlling media assets
are transforming simple ownership of outlets into organized holding
structures.
These structures aim to exert influence, in order to facilitate
short-term and long-term financial gain. Their establishment also
underlines political goals, as Russia approaches parliamentary elections
(December 1999), and a presidential election (June 2000).

This article identifies some of the main business and political actors
who are shaping current developments, on the basis of the print and
electronic media they control, or, over which they have significant influence.
Yeltsin's Spring Government Re-Shuffle Could Influence Media 
Russian President Boris Yeltsin's March 23 decision to sack the
government led by Viktor Chernomyrdin came as a shock to almost everyone,
including the former prime minister and the business magnates who, since
the beginning of the year, had given the impression of rallying around a
Chernomyrdin candidacy for the 2000 presidential election.
Yeltsin's decision, which he said was motivated by the need to inject
fresh approaches and ideas to revive reform and improve Russia's fragile
economic performance, was undoubtedly also designed to diminish
Chernomyrdin. According to most analysts, Chernomyrdin, who, during his
five-year tenure in office, had been content to remain in Yeltsin's shadow,
had recently displayed growing independence, and had started building a
bolder public image - clearly with an eye toward the year 2000.
A re-distribution of powers at the beginning of the year had also
stripped the so-called "young reformers" in the cabinet of key
responsibilities, transferring them to Chernomyrdin. 

No Clear Heir 

By the beginning of March, analysts had noted that the influential
financial and political clans dominating Russia's economic, political and
media scene were maneuvering to place their favored candidate in the
Kremlin, while Yeltsin seemed to adopt the manner of a monarch, convinced
that society would wait for him to name a successor. 
Yeltsin seems to have become aware of this sentiment, making clear that
he is also looking toward 2000. According to some observers, if his
faltering health holds up, Yeltsin will likely try to take advantage of a
loophole in the Russian Constitution and seek a third term. If this is not
the case, all observers agree that Yeltsin will certainly assert his right
to promote a successor of his liking - one who will continue his political
line, and, who will not diminish Yeltsin's image of retired elder statesman.
At the moment, Yeltsin's range of choice seems rather narrow.
It could include Chernomyrdin, or Moscow Mayor Yuri Luzhkov - but it
could also bypass both. The sudden and unceremonious way Yeltsin sacked
Chernomyrdin and the entire government, indicates Yeltsin has his eye on
younger politicians. As one Kremlin official tells RFE/RL, "Yeltsin decided
that he is a young reformer himself."
And recent moves indicate that Yeltsin is well aware that no possible
pro-reform candidate - himself, or, for example, Deputy Prime Minister
Boris Nemtsov, will have a serious chance of election, if Russia's economy
does not improve between now and June 2000, when the next presidential
election is scheduled.
In this respect, as in 1996, support from media assets, particularly
from nationwide television channels and regional electronic and print
media, is seen as essential for a successful campaign. But the situation
has changed significantly. Powerful business interests, which united to
support Yeltsin against his Communist opponent in 1996, have battled since
then over state assets, and are unlikely to unite again in support of one
candidate, who could not guarantee stable development for their business
interests.
Since the March reshuffle, Yeltsin has seemed to depart from his usual
pattern of "divide and rule." He has blunted opposition from parliament and
business tycoons, and has established a cabinet dominated by young
managers, led by the new Prime Minister, Sergei Kiriyenko.

Considering Yeltsin's previous habits, no analyst would risk saying how
long and deeply Yeltsin is likely to remain committed to Kiriyenko and the
current cabinet, comprised mainly of young regional leaders, with few ties
in the Russian capital, and no real power base, except Yeltsin's goodwill. 

The New Cabinet's Uphill Struggle 

Kiriyenko handled himself skillfully during his month-long confirmation
battle. He repeatedly and respectfully consulted with the parliamentary
opposition, appeared frequently on television programs anchored by some of
the most politically engaged Russian journalists, admitting that pressure
was put on him while forming the cabinet, but warned that the attempts
would not prove successful. In fact, most observers agree that, in the end,
Kirienko, did not give too much away, and consistently turned for advice to
those who are anathema to parliament and most business magnates: Nemtsov,
former first deputy prime minister Anatoly Chubais, as well as to an
architect of Russia's reform, former acting prime minister Yegor Gaidar.
Yeltsin, somewhat out of character, remained fully engaged in supporting
Kiriyenko, and seemed satisfied to act as the main arbiter of disputes, in
defense of the new, young government. 
Taking Yeltsin's mandate to heart, Kiriyenko and his government
immediately, after taking office, launched into their economic duties, and
announced a plan to avert financial crisis and promote growth. Kiriyenko
and the new cabinet seem to understand clearly that they face an uphill
battle, and that Russia is unlikely to break through into rapid economic
growth and prosperity soon, or, at least not before the year 2000.
Lacking a power base in parliament and virtually unknown to the majority
of the public, the new government seems to realize that it does not have
too much time before powerful political and financial forces will start
opposing it. 
Two of the main forces supporting Kiriyenko's difficult confirmation in
the State Duma - Chairman Gennady Seleznev and the Our Home is Russia
faction, have already said the new government's activity will need to be
checked by Autumn, implying that a lack of tangible economic improvement
will set the stage for a no-confidence vote.
Confronted with economic needs, but also with political ones, Yeltsin
and his government are turning their attention on the state media assets,
which will convey to the population, the image of the government's
performance. Particularly in the case of the first channel of Russia's
television, ORT, the risk exists that a channel owned by the state will
convey to citizens a message in contrast to the Kremlin's interests. 

Kremlin, Magnates Mobilize Media Assets 

ORT is the country's most popular television network, reaching about 99
percent of Russians. Despite being state owned, ORT is effectively
controlled by business magnate and new CIS (Commonwealth of Independent
States) Executive Secretary Boris Berezovsky. He owns only a small stake in
ORT, but maintains control over some top ORT managers, reports say, by
paying their salaries directly. And car dealership LogoVaz, controlled by
Berezovsky, is a member of a consortium that includes four banks that owns
38 percent of ORT.
Berezovsky, in January, scored an important victory over leading "young
reformers" Chubais and Nemtsov for the control of ORT, with confirmation of
a new eleven-member board of directors including state representatives. The
board is viewed as loyal to Berezovsky.

ORT has consistently given favorable coverage to retired General
Aleksandr Lebed, during the gubernatorial campaign in Krasnoyarsk. The
Kremlin is concerned by Lebed's popularity. Some analysts say that ORT's
previous, positive coverage of Lebed was a factor in Lebed's decision to
seek office. And, that it was one of the factors contributing to a recent
chill in relations between Yeltsin and Berezovsky, who boasts of
influential ties to Kremlin officials, including Yeltsin's daughter and
image adviser, Tatyana Dyachenko.
As Yeltsin announced that he and Kiriyenko had put the last touches on
the new cabinet May 8, the Kremlin also announced that, among other things,
the President had dismissed a number of officials and had signed a number
of decrees. The low-key announcement is very important for the future of
Russia's state-controlled media. 
Yeltsin dismissed the long-time head of the Federal Broadcasting
Commission, Valentin Lazutkin, a professional figure who had worked in the
field for decades. Lazutkin, considered to owe his successful career also
to his cautious approach, was, however, not known for being extremely close
to the positions of the "young reformers," who favor the de-monopolization
and privatization of state assets, including media assets. Rumors of
Lazutkin's possible dismissal had circulated widely before the new
government's confirmation. Mikhail Seslavinsky, Chairman of the Duma
Culture Committee and a member of the Our Home Is Russia faction, replaced
Lazutkin.
Seslavinsky, like Kiriyenko and Nemtsov and a number of new officials
appointed to the new cabinet, is from Nizhny Novgorod, but is not know in
professional Russian media circles. The Soviet habit of appointing
loyalists to key positions seems to persist in Kiriyenko's cabinet. Nikolai
Khvatkov, a former banker also from Nizhny Novgorod, was named to replace a
powerful official, Vladimir Babichev, as government chief of staff with the
rank of minister. Babichev was close to Chernomyrdin.
Also May 8, the Presidential press service made public the text of a
decree, by which Yeltsin instructed the new government to form, by the end
of 1998, a production/technical media holding company, including all
state-owned electronic media on the basis of VGTRK, the second nationwide
channel of Russian television, which also manages the channel "Kultura" and
Radio Russia. With this decision, the state-owned VGTRK - commonly known as
RTR - replaces ORT as the main channel of Russia's television. 
Yeltsin's decree was preceded by several announcements the government
plans to unite more than 100 state-owned firms, forming the infrastructure
of the radio and television industry, into a single holding company to be
privatized ultimately. 
State Communication Committee chairman Aleksandr Krupnov said at a
recent news conference that "for the first stage, it is expected that a
holding 100 percent owned by the government will be formed. That could be a
question of making it into a corporation, but that will be the next stage."
Nemtsov has repeatedly said state media organizations and the way they
are governed needs reform. He has said, "one should learn from private
businesses how to manage companies, so that their activities are supported
without increasing government expenditure." 


Choosing Between Two Evils 

Media analysts have said the reformers in government had been mulling
such a move for some time, particularly since the rift with powerful
business tycoons, such as Berezovsky and the head of the private Media Most
holding, Vladimir Gusinsky, intensified into a personal fight.
Yeltsin's decree is important, because the state is officially starting
a bid to re-assert control over its vast media resources. 
Nemtsov had said in 1997 that the government had vast media assets that
it did not know how to use effectively, thus giving powerful financial
groups a perfect opportunity to gain control over the Russian media. More
recently, Nemtsov said that one of the mistakes committed by the previous
government is that "it did not explain its moves to the population via the
media." And in a comment clearly aimed at Berezovsky, Nemtsov said that
"some electronic media organization are formally considered to be state
enterprises, but, in fact, belong to financial industrial groups that are
not interested in ensuring order in Russia's economy or in the government
reasserting its independence from financial-industrial groups." 
Considering the recent totalitarian past of the Soviet Union, with its
strict and pervasive control of the media that transformed information into
a pure propaganda machine, the decision of concentrating electronic media
infrastructure under government control is certainly likely to raise concern.
But, independent Russian media observers seem to dismiss this
apprehension. Andrei Richter, a professor of journalism at Moscow State
University and head of the Media Law and Policy Center, said in a recent
interview with the English-language daily "The Moscow Times" that an even
bigger concern could lie ahead, when the holding company is privatized and
made available to powerful media interests controlled by moguls such as
Berezovsky, Gusinsky, or the recently established "Gazprom media holding."
Richter tells RFE/RL that "the threat from the government to freedom of the
press is far less that what it used to be a few years ago." He says
privatization of state-owned media assets "is basically a choice between
two evils: the government and private media companies." 
Meanwhile, it is unlikely that media moguls will welcome Yeltsin's
decree. And, the government's rush to replace Lazutkin with a more loyal
figure, raised doubts about the new cabinet's understanding that, if
effective reform is to be carried out in the sensitive area of the media,
an official with skills as a manager and as a diplomat is needed. This
person's goals would include implementing ways to raise much-needed cash,
but also to conduct delicate negotiations with representatives of the
businesses currently influencing Russia's state-owned media. 
In an interview with RFE/RL's Moscow bureau May 8, NTV-holding
Director-General Igor Malashenko characterized new federal broadcast chief
Seslavinsky as a "professional" with a good reputation, despite a lack of
experience working in the media. Malashenko added that Seslavinsky's
appointment did not bear out the "worst fears" of journalists - namely,
that Lazutkin would be replaced by someone with "political commissar"
tendencies, who would blindly follow orders from above. 


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