June 18, 1998   
This Date's Issues: 2227  2228

Johnson's Russia List
#2228
18 June 1998
davidjohnson@erols.com

"America's Impact on Russia" television program:
The Center for Defense Information produces a weekly television series,
"America's Defense Monitor," carried on public television and cable stations.
I have produced an episode on "America's Impact on Russia." It will be shown
in Washington DC on Sunday, June 21 on WHUT (Channel 32) at 12:30 pm.
In New York city it can be seen on WNET (Channel 13) on Saturday June 27 at
7:00 am and on WNYE (Channel 25) on Wednesday, June 24 at 7:30 pm.
VHS tapes of the half-hour show are available for $25.
Appearing in "America's Impact on Russia":
Vasily Aksyonov, novelist
Alexei Arbatov, Duma member
Susan Eisenhower, Center for Political and Strategic Studies
Ulysse Gosset, French television
Irina Hakamada, Duma member
Eliza Klose, ISAR
William Maynes, Eurasia Foundation
Peter Reddaway, George Washington University
Blair Ruble, Kennan Institute
Stephen Sestanovich, US State Department
Anne Williamson, journalist

[Note from David Johnson:
1. AP: Russia Calls for $10-15B in Aid.
2. Interfax: Yeltsin: Operation With Chubais Is Temporary.
3. Nezavisimaya Gazeta: Natalia Konstantinova, WHY YELTSIN IS CALLING 
CHUBAIS BACK INTO BIG POLITICS.
4. Segodnya: Oleg Odnokolenko, DIE-HARD RUSSIAN STATE DUMA OPPOSES 
START-II TREATY. US Conservatives Should Also Be Blamed.
5. U.S. Efforts To Keep Russian Nuclear Materials Secure To Be Discussed At 
RFE/RL Briefing in Washington.
6. The eXile: Abram Kalashnikov, Press Review.
7. Jeffrey Barrie: Response to Marshall Porner on Industrial Policy /
Russian 
Aviation Industry.
8. Moscow Times: Dmitry Zaks, NEWS ANALYSIS:Kiriyenko Lobbies, Referees 
Oligarchs.
9. Moscow Times: Pavel Felgenhauer, DEFENSE DOSSIER: West's Language 
of Force.
10. Reuters: Small firms survive Russia crisis intact.
11. VOA: Rick Nunez, Russian Mafia in Latin America.
12. Interfax: PM Sees Need To Set Up Presidential Supervising Council.
13. AP: Russians Offer To Embalm Castro.
14. Matt Taibbi: Re Segodnya on "Chubais for President." ]

*****

#1
Russia Calls for $10-15B in Aid
June 18, 1998

MOSCOW (AP) -- Anatoly Chubais, the Kremlin's newly appointed liaison to
international lending institutions, called today for $10 billion to $15
billion in financial aid to stabilize Russia's markets. 
The Interfax news agency quoted Chubais as saying that Russia would not
accept loans ``at any price,'' and said that the Cabinet was discussing the
conditions under which the country could get financial help. 
The government previously had said it would try to cope with the
financial crisis on its own, without an added infusion of foreign aid. But
officials confirmed Wednesday that Russia would seek a bailout from the
International Monetary Fund. 
Chubais, Russia's highest-profile free market reformer who previously
has served as deputy prime minister, was called back to President Boris
Yeltsin's inner circle to negotiate with the IMF and other international
financial institutions. 
Chubais didn't spell out where the assistance should come from. He said,
however, he would soon be discussing Russia's financial difficulties with
the IMF's First Deputy Managing Director, Stanley Fischer. 

``The situation in Russia right now is not a simple one,'' Chubais told
Interfax. 
The communist opposition today angrily denounced Chubais' return to
government a day earlier. 
``This is our great Russian beggar,'' said the leader of the
parliament's hard-line Agrarian faction, Nikolai Kharitonov. 
Another well-known communist, Viktor Ilyukhin, accused Yeltsin of
consigning ``our descendants to a debtors' prison.'' 
Yeltsin, who has already fired and rehired Chubais twice, tried to parry
criticism, saying Chubais' job was temporary. But he said the Duma's
reaction was irrelevant. 
``For us, more important are the state, the current situation at the
world's financial markets, the value of today's ruble,'' Yeltsin was quoted
as saying by the Interfax news agency. 
Yeltsin also hinted at new appointments to the Cabinet, saying ``the
appearance of new figures is possible,'' the ITAR-Tass news agency reported. 
The government also was working on its strategy to lower its debt costs.
The Finance Ministry said today the government has selected J.P. Morgan and
Deutsche Bank as joint bookrunners for a long-dated, dollar-dominated
Eurobond, but has declined to comment further on the bond issue. 
Such a long-term bond would reduce the amount of money the government
pays on short-term debt-servicing. 

********

#2
Yeltsin: Operation With Chubais Is Temporary 

MOSCOW, June 18 (Interfax) - President *Boris Yeltsin* told the press
before meeting CIS Executive Secretary Boris Berezovsky Thursday that he
has to deal now "with the very difficult question of crisis on financial
markets in addition to all federal and other matters." 
"This is a global crisis which has hit the whole world, it is not local,
if it even embraces such countries as Japan. This fact is very indicative,"
Yeltsin said. 
He admitted that Russia needs "of course, certain support and
investments." 
"I talked to leaders of several countries: Clinton, Kohl, Chirac, Prodi,
Blair. I have not talked to (Japanese Prime Minister Ryutaro) Hashimoto yet
because he is in a difficult position," he said. 
"We will rely primarily on our own efforts, the work of the government,
the Security Council and legislative bodies, of course. One should also
count on presidential bodies and my work in this respect. But the
government has the main job," Yeltsin said. 
"Now this operation with (Anatoly) Chubais has been launched. It is
temporary. Journalists should not be drawing any unnatural conclusions from
it. This is temporary. Later he will be working on his job," he said. 
On Wednesday Chubais, head of the state electricity monopoly, Unified
Energy Systems, was appointed the presidential envoy for contacts with
international financial institutions with the rank of deputy prime minister. 

*******

#3
From RIA Novosti
Nezavisimaya Gazeta
June 18, 1998
WHY YELTSIN IS CALLING CHUBAIS BACK INTO BIG POLITICS
By Natalia KONSTANTINOVA

If Anatoly Chubais is back it means that somebody needs
it. At second thought, this does not seem to be needed by
anyone - nether the new Prime Minister, Sergey Kiriyenko, who

roughly, cold-bloodedly and immediately distanced himself from
the very name "Chubais" despite the fact that only recently he
was formally subordinated to him, nor the new Cabinet of
Ministers nor the now experienced First Vice-Premier Boris
Nemtsov who always feels the political situation no worse than
the President. On top of everything else Chubais is certainly
not wanted in any official government position by the Russian
financial tycoons many of whom, despite all their public
dislike for Chubais, to this day envy his ability to keep
afloat under any circumstances and not to go down the stream.
People who are well-disposed to Chubais (to put it mildly)
think approximately as follows. Chubais (he personally never
doubted this after any of his high-profile resignations) may be
necessary only for one person - Boris Yeltsin. What is the
nature of this truly magic connection between this almost
always ex-official and the incumbent president? Why does
Chubais to this day remain in fact the only member of Yeltsin's
inner circle whom the President has never scolded, using any of
his traditional fatherly but often tackless expressions which
he has done more than once with regard to other top Kremlin
figures? Why has Yeltsin (and this could have been done only by
him personally) "allowed" Chubais to head one of the largest
companies - RAO Unified Energy Systems of Russia, or UES, at
the moment when the scandal concerning the financial
unscrupulousness of Chubais and his comrades flared up in one
version or another? And finally, why did Chubais after his
resignation said in private conversations with his confidants
in his usual peremptory tone and categorical, confident and
even self-confident manner that he knew then better than ever
before what President Yeltsin wanted from him, what he himself
wanted and even that for him RAO UES was a model of Russia as a
whole with all the ensuing consequences?
Chubais's fans answer these questions as follows. The
first thing which Yeltsin realises despite his authoritarian
attitude and traditional view of the country's politics and
economics, despite his intuitive cautiousness with regard to
everything which concerns real money and the real levers of
their distribution and his rather relative competence in global
management and marketing at the government level is that
Chubais is just an educated and efficient man. This is very
valuable and can be regarded as a real phenomenon under the
specific Russian conditions of a catastrophic personnel
fluidity.
It is not excluded that Yeltsin has also been told that
Chubais is one of a few Russian politicians who begins each of
his new tenures not by picking his own staff and acquiring
furniture but by providing his office with newest technical
equipment, uses his own PC and, thanks to his connections with
the computer world elite keeps so much economic information of
most diverse character in his Notebook computer that the
President himself would be astonished to find out "how much
Chubais knows" if it all were made public.
Chubais's second specific feature, which has been of great
importance for his comeback into big time politics and which,

as some experts from the camp of radical-liberals believe,
Yeltsin also likes, is that he practically has no friends (that
is, no channel of information leakage), he is conservative in
his likes and habits, can put together a team and, lastly, does
not claim the role of a public politician and is not a public
politician despite his vast fame - and this is an unconditional
plus-factor for Yeltsin.
Chubais does not tolerate any control over his actions.
However, he aptly adjusts to the style of his boss, the
President, staying perfectly free and being rather tough
towards his own inferiors. Third: Chubais does not like visits
to public baths, sports and noisy parties, which keeps his
private life practically closed to others. This, too, adds up
sooner to his pluses than his minuses.
For Chubais any new (or well-forgotten old) job will not
be something out of the ordinary, all the more so as all the
plans of actions have long since been scrupulously scheduled
till the year 2000 not without the President's knowledge at
that.

*******

#4
RIA Novosti
Segodnya
June 18, 1998
DIE-HARD RUSSIAN STATE DUMA OPPOSES START-II TREATY
US Conservatives Should Also Be Blamed
By Oleg ODNOKOLENKO

The Military Academy of the Russian Armed Forces' General
Staff hosted a seminar dealing with the ratification of the
START-II treaty. Despite the fact that both Russian Defense
Minister Marshal Igor Sergeyev and the nation's Foreign
Minister Yevgeni Primakov failed to attend the initial part of
discussion for "diplomatic reasons", the majority of deputies
of the Russian Parliament at long last agreed that the main
20-th century nuclear accord must be ratified as soon as
possible.
Nevertheless, die-hard State Duma conservatives and
representatives of the Russian military-industrial complex (who
admit no other subsistence means than the unlimited defense
orders) remained adamant. Russian "patriots" were overjoyed to
hear a report by a general designer of the Topol (Poplar)
ICBM-s to the effect that there are technical possibilities to
produce 50 such ICBM-s per year (at a time when the money will
suffice to turn out just two such ICBM systems per year).
However, the "patriots" immediately suggested tightening our
belts still further and converting all conceivable enterprises
to military production.
At these words a Cold-War breeze swept through the hall.
Unfortunately, most advocates of a furious and merciless
struggle against US imperialism don't seem to understand the
causes of our utter defeat during the Cold War's previous
round. Such causes are rather trite -- Russia used to invest
much more money (than could be allowed by the
economic-expediency factor) into the arms race. As of today,
Russia has a much more limited potentialities than the USSR
did.
In a bid to open the eyes of the most stubborn persons,
the Russian General Staff was forced to lay its secret "cards"
on the table and to tell everyone that Russia can't maintain
old-time nuclear-confrontation levels. Moreover, Russia can't
afford to maintain even START-II ceilings; nor does it have the
required potential for doing this. However, such ceilings are

seen as something inexpedient because the use of even 500
nuclear warheads is fraught with unpredictable consequences for
the attacking side and its adversary, which boasts a
second-strike capability. Incidentally, all other countries
will also feel the crunch.
Our own nuclear pride seems to be something inappropriate
during the current economic and political situation just
because Russia's strategic nuclear-warhead "cluster" will die a
natural technical death during the 2000-2010 period (regardless
of the START-II ratification context). US strategic nuclear
forces are 10 years younger. Besides, America, which boasts an
entirely different economic situation, will have no trouble
maintaining 8,000 nuclear warheads. Nevertheless, the Russian
State Duma, which is seriously worried about NATO's eastward
expansion, doesn't want to discard its nuclear principles (no
matter what).
At the same time, a real threat emanates from an entirely
different direction (rather than that being discussed by
members of the Russian Parliament). The latest Indian and
Pakistani nuclear escapades serve as rather alarming harbingers
of a possible nuclear chaos. It's an open secret that Israel
already boasts its own "unofficial" nuclear weapons. Nobody
knows what Iran and Iraq may be hiding. Besides, North Korea
can continue to develop an A-bomb of its own. And this nuclear
weapon is much more dangerous. The point is that the "old-time"
nuclear powers have had to learn in the course of tragic
experience (that was amassed as a result of various disasters),
before developing specific "failsafe" weapons systems, which
can't be launched accidentally. Besides, they had advanced
defense industries. Meanwhile all those countries striving to
join the nuclear club from the back-yard have nothing except
ambitions and imported (or stolen) technologies. Consequently,
one can't say for sure that their nuclear devices will fly
along preset trajectories (instead of hitting the territory of
a state, which has nothing to do with a hypothetical squabble.
And this would entail a rather predictable response...
Incidentally, the Russian Supreme Soviet's concerned
committees had warned the US Senate about the danger of that
uncontrollable spread of nuclear weapons back in 1993. However,
US Senators had assured their Russian colleagues at that time
that they will resolve the non-proliferation issue all on their
own. That statement is now seen as rather imprudent. The
current situation dictates urgent measures on the part of all
nuclear powers and other leading countries of the world. All we
have to do is persuade France, Great Britain and China, which
don't want to hear anything until Russia and the United States
have reduced their nuclear arsenals down to 500 warheads
(France, Great Britain and China wield 500 nuclear warheads
each -- Ed.) to take part in negotiations. And it's well-nigh
impossible to work out the appropriate common nuclear-security
guarantees without their consent.
In other words, the future direction of world history now
depends on the reasonable attitude of our MPs. Either we enter
the icy waters of the Cold War and tense nuclear confrontation

once again, or we manage to form a situation of reliable
nuclear stability. At any rate we have no alternative but to
ratify the START-II treaty because this is seen as a vitally
important argument by America's conservatives, who also think
that the United States would lose its super-power status (after
scrapping all those arsenals, which contain a lot of nuclear
junk).

*******

#5
From: maryalice.hayward@hq.doe.gov
Date: Wed, 17 Jun 1998 
Subject: FW: ALERT: Russian Nuclear Materials Security

Press Alert
FOR IMMEDIATE RELEASE
CONTACT: Martins Zvaners (2024576948)
Cynthia May (2024576949)

U.S. Efforts To Keep Russian Nuclear Materials Secure To Be Discussed At 
RFE/RL Briefing

What: Two officials from the U.S. Department of Energy's Russia/NIS 
Nuclear

Materials Security Task Force discuss U.S. Government efforts to prevent 
theft or diversion of plutonium or highly enriched uranium located in the 
Baltic States and the former Soviet Union.

Who: Kenneth Sheely, Deputy Director
Russia/NIS Nuclear Materials Security Task Force 
U.S. Department of Energy

Michael Haase, Program Manager
Russian Civil and Regulatory Program
Russia/NIS Nuclear Materials Security Task Force 
U.S. Department of Energy

When: Tuesday, June 23
8:30AM10:00AM

Where: Fourth Floor Conference Room
Radio Free Europe/Radio Liberty
1201 Connecticut Avenue NW
Washington, DC

RSVP REQUESTED
by phone to Cynthia May at (202) 4576949,
by fax at (202) 4576992 or by email to mayc@rferl.org

*******

#6
From: "matt taibbi" <exile.taibbi@matrix.ru>
Subject: press review
Date: Thu, 18 Jun 1998 12:35:25 +0400

Make Me Pukh
Press Review
By Abram Kalashnikov
The eXile

Barometer (n): An ingenious device for telling us what kind of weather
we're having.
* Ambrose Bierce, the Devil's Dictionary

No, you weren't hallucinating last week. In the middle of the biggest
socioeconomic crisis to befall Russia since 1991, reporters from several
major news services, as well as the Moscow Times, published lengthy
features on-you guessed it-pukh. 

Far eclipsing even the Mir Space Station, pukh-the annoying white shit that
falls from trees one week a year here, making journalists sneeze-- has long
been recognized by foreign editors in Europe and America as the Ultimate
Article Subject for Russia-based reporters. Editors love pukh because it
boasts all the qualities that make a truly saleable Russia news article. 
For one thing, in the endless parade of "Those Russians have a different
word for everything!" foreign-color stories which allow reporters to avoid
complex or unwelcome news (like the financial crisis), pukh reigns supreme
as the dumbest, least informative, most defiantly irritating news option
out there. Pukh is more irrelevant than falling icicles, more distracting
than Mir, and every bit as cliche as the birch branches Russians beat
themselves with in the banya to "improve the flow of blood." It's literally
the ultimate puff piece-an easy score for a hack looking to get out of work

early.
Pukh stories also give reporters a chance to castigate Russians for their
stupidity (the excess pukh in Moscow is a result of a Stalin-era urban
planning mistake, in which too many female poplars were planted) and to
gloat over American dominance of Russia (the offending species of poplar
comes from America). 
The mileage newspaper editors get out of the pukh story is an amazing
testament to the grotesque laziness of their reporters. Instead of leaving
their offices and going out in search of facts and revealing material,
reporters will take pukh, an insanely dull story topic that literally drops
in their laps, and embellish it with 800-1000 words of 8th-rate
pseudo-lyrical wordsmithing. Here, for instance, is a passage from a recent
story by the AP's Maura Reynolds:

"Although it looks and acts a lot like it, it's not snow. It's `pukh.' And
it marks the arrival of summer in the Russian capital as surely as its
colder cousin marks the winter."

Wow...that's deep. Folks, this is journalism on the level of local TV live
sports standups. As in: "Well, Chet, some fans here at the Delta Center
feel the Bulls are going to win tonight's game. Others, however, feel they
are going to lose." 

(In fairness, Bronwyn McClaren of the Moscow Times out-banaled Reynolds in
her pukh piece, the Times's third in a week, with the line, "It seems that
for every pukh detractor, there is a pukh supporter.")

Reynolds didn't do much with her subject, but she at least left some clues
as to where she got her story idea:

"It floats into eyes, noses, and morning cups of coffee..."

Whose cup was that, Maura? The rest of her piece was pretty much standard
pukh literature: quotes from complaining pedestrians, the "weren't the
Stalin-era-communists-stupid" historical background, the assertion that
pukh this year is worse than ever (if you look back, you can find this
element somewhere just about every year), and the tried-and-true
straight-news journalism tool, the "One thing's for sure: Life goes on"
conclusion:

"In the end, many Muscovites agree with her. In fact, most seem to take
much the same attitude toward their summer snow as they do toward their
winter snow: Resignation.
"`It's part of nature,' says 45-year-old Natalia Dvoyeva. `We just have to
put up with it.'"

Well...that's great. If you're wondering what you're supposed to do with
that information, you're not alone. It almost makes you glad that some
writers, like the Knight-Ridder service's Inga Saffron, took the time out
to be overtly offensive in addition to inane:

"MOSCOW _ Mention these things to a disaster-weary Russian and you're
likely to get no more than a shrug: Chernobyl, nuclear subs rusting in
Baltic Sea fishing grounds, fountains of dioxin- laced soot spewing forth
on Russian towns, drinking water that makes Geiger counters ring like lost
alarm clocks.
"Of all the environmental catastrophes the communists foisted upon this
suffering land, the one that really gets Russians going is `pukh,' the
cottony spores of the female black poplar tree."

Okay, so from this we're supposed to infer that Russians are more upset
about pukh than they are about Chernobyl and irradiated drinking water.

That is, the ones that survived, right? Actually, this passage is almost
correct, except Saffron has her subject wrong. Substitute "Western
journalists living in Moscow" for "Russians" in that last sentence, and
you've got a solid piece of reporting there.
Saffron goes on to prove that even a story about pukh can be a fitting
vehicle for heavyhanded hack propaganda and stereotyping:

``I hate it. ... You can try to mop it up with a wet cloth, but afterward
it just flies around again,'' complained an exasperated Olga Andreyeva, 48,
a building caretaker who makes extra money cleaning the apartments of
Moscow's new middle class. 

Even here, buried under all this pukh, we're getting force-fed that garbage
about the mythical middle-class? Amazing. Imagine a Russian version of the
same passage:

"Sometimes pigeon shit lands on my forehead, and when I try to brush it
off, it just smears," said Ricardo Lopez, a taxi driver who makes extra
money chauffeuring the wealthier members of New York's acquisitive yuppie
class.
It's ridiculous, isn't it? Of course, even Saffron didn't go as far as the
Moscow Times's Jean MacKenzie, who last week lapped the pukh field with her
boldly hyperbolic puff piece, "A Riddle Wrapped in Pukh". That piece began:

"Better minds than mine have struggled with the question of what makes
Russia the way it is. Just what combination of historical, geographical,
meteorological and anthropological conditions formed the popular id?"

The answer to that question, incredibly, is:

"But since it's June, it's hot, and I'm going on vacation soon, I'll take a
shortcut. The answer, in a word, is pukh."

MacKenzie goes on to maneuver pukh into the role of proving that Russia is
a "nation of extremes", where it is too hot when it's hot, and too cold
when it's cold...rhetorically, this moves the narrative on to a MacKenzie
friend, who then says that Russians should "cherish the golden mean -- but
instead we put it in jail or drive it into exile."

Pukh, responsible for the purges. Woodward and Bernstein couldn't have
solved it better. Of course, they didn't have so much free time...

********

#7
From: "Jeffrey Barrie" <jbarrie@bigfoot.com> 
Subject: Response to Marshall Porner on Industrial Policy / Russian
Aviation Industry 
Date: Thu, 18 Jun 1998 16:44:06 +0400 

Jeffrey Barrie is a senior consultant to the Price Waterhouse Aviation
Group in Moscow and has been working closely with the Russian aviation
industry for ten years.
Marshall Porner's posting on the need for effective industrial policy to
redevelop the Russian Aircraft Industry was a logical argument but ignored
some illogical problems.
While partnerships such as United Technology (Pratt & Whitney) and
Ilyushin for the IL96-M/T and Rolls Royce and Tupolev for the TU-204 are
offering Russian aircraft to the domestic market as an alternative to
Boeing and Airbus equipment, the fact is that domestic airlines are not
really interested (although they are forced to pay lip service to the idea
for political purposes).
Western engines and avionics are the most visible deficiencies of these
Soviet-era designed aircraft, but there are tens of thousands of other
aircraft components that are supplied by the single source system created
by the Soviet centrally planned economy, and nearly every supplier is
bankrupt. It simply makes more commercial sense for domestic airlines to
lease Western aircraft with their built in parts and service support and
low gate delay statistics, than to risk dependence on the old system.
The illogicality is the old system's refusal to change itself into
something more workable. The contract tender process by which Western
aircraft manufacturers secure multiple sources of supply for necessary
aircraft components is hardly used in Russia, where there is so far no
system for supplemental type certificates (STC's) that allow third party
manufacturers to sell after market parts for certified aircraft without the
approval of the aircraft manufacturer.

For example, modern Western aircraft use solid state proximity sensors
to determine whether doors are properly shut, landing gear is properly
stowed and control surfaces properly set. Russian aircraft continue to use
far less reliable mechanical switches for these purposes. The carried
over Soviet system makes modernization extremely difficult.
The supreme illogicality is the continued supremacy of the aircraft
design bureau (Ilyushin, Tupolev, Yakovlev, etc) over the aircraft
manufacturers (Voronezh, Samara, Ulyanovsk, etc). One of the most striking
deficiencies of this situation on the partnerships mentioned above has been
the inability on Ilyushin's part to provide an acceptable interior for the
IL-96M (passenger version).
No amount of industrial policy will be effective until these
illogicalities are dealt with.

*******

#8
For more articles from The Moscow Times, check out their website at


www.moscowtimes.ru

Moscow Times
June 18, 1998 
NEWS ANALYSIS:Kiriyenko Lobbies, Referees Oligarchs 
By Dmitry Zaks
Staff Writer

Prime Minister Sergei Kiriyenko's decision to meet the tycoons known as 
"the oligarchy" to agree on a strategy to meet the Russian market crisis 
looks like an attempt to avert a repeat of the bitter bankers war of 
last summer. 
With Kiriyenko planning to announce a tough austerity program next 
Tuesday, he summoned the financial tycoons to Volynskoye, a resort west 
of Moscow, to make sure that they would not use their media and money to 
oppose his plans. 
The financiers, on the other hand, seem to have been motivated by a 
desire to make sure the pain from any austerity package is shared 
equally among them. 
The "bankers war" last year was triggered by allegations that the 
government was favoring one faction of financiers. Oil and media magnate 
Boris Berezovsky led a sleaze campaign to discredit the government after 
he lost a privatization auction for the state telecoms company to rival 
Vladimir Potanin's Uneximbank. 
Berezovsky said Wednesday that the Volynskoye meeting was indeed a sign 
of a truce between the government and the oligarchy, calling it "an 
evident sign of consolidation of reformist forces in Russia for 
overcoming the crises in which we have all found ourselves," Interfax 
reported. 
But he also hinted that the financiers were capable of threatening the 
government if it crossed them. "The government has no other real base of 
support," he said. 
The only short-term decision at the confab was to ask Anatoly Chubais, 
head of Unified Energy Systems, the national power monopoly, to act as 
President Boris Yeltsin's personal messenger to the international 
financial institutions. 
This looks like a concession on the part of Berezovsky, who has been a 
bitter Chubais enemy for the past year and played a major role in 
driving him from his post as first deputy prime minister. 
"Whatever some of these oligarchs personally think of Chubais, they had 
to admit that Westerners still think of him as the guarantor of reform," 
said Sergei Kolmakov, deputy director of the Fond Politika research 
group. 

"They agreed to put aside some of their differences at a time of trouble 
and agreed on Chubais," Kolmakov said. 
Yury Korgunyuk of the INDEM research center said, "[The oligarchs] are 
all trying to make sure that no one gets off lightly. The situation must 
be pretty bad if they have managed to put aside their difference to do 
this." 
Tuesday's was Kiriyenko's second meeting with the financiers in two 
weeks. It follows a high-profile affair attended by Kiriyenko and 
Yeltsin in the Kremlin on June 2. 
Reports later filtered out that a few of these bankers had another 
gathering two days later at the estate of Gazprom chief Rem Vyakhirev. 
Kommersant Daily reported the financiers were so wary of each other on 
the lawn of Vyakhirev's dacha that the moment any two strolled away from 
the group "and their conversation would last longer than a minute, they 
were instantly joined by a third." 
Tuesday's meeting was attended by Vyakhirev, Chubais, Mikhail 
Khodorkovsky of Menatep-Rosprom, Mikhail Fridman of Alfa Group, Vladimir 
Gusinsky of Most Group and Alexander Smolensky of SBS-Agro. Izvestia 
reported that Berezovsky, who was absent from previous meetings, also 
took part and actually initiated the meeting. The tycoon has previously 
claimed he is not taking any active role in business because of his 
official job as secretary of the Commonwealth of Independent States. 

********

#9
Moscow Times
June 18, 1998 
DEFENSE DOSSIER: West's Language of Force 
By Pavel Felgenhauer
Special to The Moscow Times

This week, President Boris Yeltsin tried hard to stop a new war in the 
Balkans. After talks with Yeltsin in the Kremlin, Yugoslav President 
Slobodan Milosevic agreed to resume negotiations with Kosovo Albanians, 
to carry out no more "repressive actions against civilians" and so on. 
Yeltsin declared the summit a success, the situation to be defused and a 
war averted. But this was all in vain. After joint military exercises by 
NATO jets near Kosovo this week, the armed Albanian rebels obviously see 
no need to negotiate the terms of "autonomy." If fighting continues, 
they believe, NATO forces will invade and all will be over -- the Serbs 
defeated and full independence at hand. 
Yeltsin is under severe pressure to support an attack by the North 
Atlantic Treaty Organization against the Serbs. Russia is desperately 
seeking a standby loan from the International Monetary Fund to avert a 
collapse of its financial system. But U.S. Defense Secretary William 
Cohen has already warned Russia that "it risked isolation" if it blocked 
international efforts against the Serbs. "Isolation" apparently means no 
financial support. 
Some U.S.-instigated "isolation" of Russia could mean a speedy end for 
Yeltsin. If Russian markets fully collapse, so will his regime. Still, 
the Kremlin cannot openly support the West in the Balkans and disregard 
Russian public opinion. All important political factions in Russia 
protest that NATO actions near Kosovo are unjust and illegal. 
The wars that ravaged the former Yugoslavia since 1991 have left 
thousands of innocent victims, but not a single innocent warring party. 

But the West has picked out the Serbs as the only villains. The Serbian 
population of Kraina was cleansed by the Croats, but the West did 
nothing to stop or reverse this. Tens of thousands of Serbs were evicted 
from Sarajevo, while NATO forces stood by. There were no sanctions, and 
military aid from the West continued. 
U.S. Secretary of State Madeleine Albright says Milosevic "had failed to 
meet most of the U.S. demands" and that all Serb forces should pull back 
from Kosovo "in any event." The inevitable result of such a forced 
pullback will of course be a total eviction of all Serbs from a province 
that the Serbs believe to be the spiritual heartland of their state. 
The long-term legal ramifications of current Western policies in the 
former Yugoslavia, however, are perhaps more important than moral 
injustices. U.S. President Bill Clinton's administration takes the 
position that a new UN Security Council resolution, which Russia could 
block with its veto, is not required to take military action against the 
Serbs, while Britain, a close U.S. ally in the Balkans, is pushing for 
such a resolution.An attack against Yugoslavia without any Security 
Council resolution to back up the action legally smacks of blatant 
aggression. But the real problem is even more fundamental: Does the 
Security Council actually have the legal authority to order an invasion? 
A Security Council resolution cannot change the UN Charter, which the 
United States along with other nations signed and ratified. 
The UN Charter was introduced in the '40s to forever end all wars. It is 
very explicit. Armed force can only be legally used in self-defense. 
There is no way to justify an invasion of a sovereign nation. The 
unequivocal nonaggression pledge is the foundation of the United 
Nations. No "just causes" to invade can be accepted. Every war since the 
beginning of mankind was claimed to be for a just cause. The Nazi 
invasion of Czechoslovakia 60 years ago was also claimed to be in 
defense of an ethnic minority. 
Nowadays, the United States is constantly challenging the fundamentals 
of international law and happily getting away with it. In the Balkans, 
the road to aggression seems to be open. Militarily, the Serbs are no 
match for NATO. All that Russia can do is withdraw its NATO-attached 
troops from Bosnia. 
But future rulers of Russia and other major powers in the East will know 
for sure that the West understands only the language of force and 
deterrence, that NATO actually is an aggressive military alliance and 
that "peacekeeping" exercises are only a prelude to invasion. Even 
Denmark and Norway are ready to send jets to attack a militarily week 
nation. In the world the West is building after the end of the Cold War, 
weapons of mass destruction -- not ratified international treaties -- 
are the cornerstone of territorial integrity and national survival. 
Pavel Felgenhauer is defense and national security affairs editor of 
Segodnya. 

*********

#10
INTERVIEW-Small firms survive Russia crisis intact
By Timothy Heritage 

MOSCOW, June 17 (Reuters) - Russia's financial crisis has had little direct
effect on small firms but life remains tough and they should get a reward soon
from a "revolutionary" tax change, the state official overseeing small
business said on Wednesday 
Irina Khakamada, head of the State Committee for the Support and Development
of Small Business, said help could be on the way in the form of planned
changes in tax rules. 

Taxes that can currently suck away anything up to 80 percent of a small firm's
income should be replaced by one basic tax setting a level of about 25
percent, she said in an interview. 

The proposals are expected to be signed by the government in the next few
days, Khakamada said, and if approved by parliament could be in force by the
start of next year. 

"In principle this tax will be a stimulus and very simple," she said. "It is
in fact a revolution. To a great extent it is a victory for me." 

Russia's 850,000 small companies have shown their resilience and independence
during the nation's recent financial turmoil that prompted a rise in interest
rates. 

Khakamada, a former pro-reform member of parliament who was appointed at the
end of last year, said small firms had ironically benefited from a traditional
problem of getting access to credits by learning how to live by their own
means. 

"Small businesses have felt no direct impact from the financial crisis because
nearly 80 percent of these enterprises do not use loans or state resources,"
Khakamada said. 

"They went through bad times and learned to live independently. So when things
become really bad, they survived," she said. 

Even so, Khakamada described the situation as "very hard" for small businesses
-- firms which employ up to 100 people. 

She listed the main obstacles as high taxes, a lack of financial resources,
the arbitrariness of bureaucrats and crime, including protection rackets and
widespread bribe-taking. 

Many small businessmen regard taxes as crippling and simply do not pay up,
depriving state coffers of much-needed cash and contributing to long delays in
state sector workers being paid. 

Khakamada, who was involved in the computer business before making her name as
an independent politician, said she hoped small and medium businesses would
account for 50 percent of gross domestic product within five years and employ
more than 50 percent of the working population. 

Currently only about 13 million people out of a population of 150 million are
employed in small and medium-sized firms and they account for only 12 percent
of gross domestic product. 

Such changes would be possible only with the coordinated efforts of all of
Russia's political elite and by ensuring Russia's economy becomes less
dependent on a few big banks and financial and industrial groups, she said. 

"The policy of stimulating small and medium-sized enterprises and the
formation of comfortable economic, political and legislative measures around
this sector is now the only saviour for Russia." 

President Boris Yeltsin underlined the need to develop small firms and create
a middle class in a recent radio address, but he made clear the state could

not offer major funds to help out. 

********

#11
Voice of America
DATE=6/17/98
TITLE=RUSSIAN MAFIA / LATAM (L-O)
BYLINE=RICK NUNEZ
DATELINE=WASHINGTON

INTRO: A FORMER U-S LAW ENFORCEMENT OFFICIAL IS WARNING THAT 
RUSSIA'S POWERFUL ORGANIZED CRIME NETWORKS HAVE BEGUN PENETRATING
COUNTRIES IN LATIN AMERICA. AS WE HEAR FROM V-O-A'S RICK NUNEZ, 
THE RETIRED FEDERAL AGENT SAYS THE RUSSIAN MAFIA POSES A SERIOUS 
THREAT TO THE REGION.

TEXT: ROBERT LEVINSON CONSIDERS THE RUSSIAN MOB A DANGEROUS 
CRIME SYNDICATE THAT OPERATES WITHOUT REGARD TO NATIONAL BORDERS.
HE SPOKE WEDNESDAY AT A WASHINGTON LUNCHEON SPONSORED BY THE 
"INTERNATIONAL ANTI-CORRUPTION FORUM."

MR. LEVINSON SAYS THE GANGSTERS VIEW LATIN AMERICA AS FERTILE 
GROUND FOR TWO CRIMINAL OPERATIONS:
// LEVINSON ACT //
ONE IS TO LAUNDER THE PROCEEDS OF ILLEGAL ACTIVITIES 
SUCH AS DRUG TRAFFICKING, EXTORTION AND ARMS 
TRAFFICKING. THE SECOND IS TO SET UP SOURCES OF SUPPLY 
FOR COCAINE. 
// END ACT //
MR. LEVINSON SAYS THE REGION ALSO APPEALS TO THE RUSSIAN MAFIA 
BECAUSE FALSE PASSPORTS, VISAS AND OTHER DOCUMENTS ARE EASY TO 
OBTAIN.

ACCORDING TO THE ANALYST, TOP CRIME BOSSES FROM RUSSIA HAVE 
ALREADY SET UP SHOP IN ARGENTINA, COLOMBIA, COSTA RICA, PANAMA 
AND PERU.

THE MAFIA CONCEALS ITS ACTIVITIES BEHIND A NUMBER OF FRONT 
OPERATIONS, INCLUDING BANKS, HOTELS, CASINOS, AND INVESTMENT 
FIRMS. 

MR. LEVINSON SPENT 28 YEARS FIGHTING ORGANIZED CRIME AS AN AGENT 
WITH THE FEDERAL BUREAU OF INVESTIGATION AND THE (U-S) DRUG 
ENFORCEMENT ADMINISTRATION. HE NOW HEADS A CONSULTING FIRM BASED
IN MIAMI.

THE RETIRED LAWMAN SAYS THE RUSSIAN MOB WORKS ON AN ENTIRELY 
DIFFERENT LEVEL THAN THE ITALIAN MAFIA:
// LEVINSON ACT //
WHEN I WAS WORKING AGAINST THE ITALIANS, WE WOULD SEE 
EXTORTIONS OF UP TO 30-THOUSAND DOLLARS. WITH THE 
RUSSIANS, THE SCALE IS (MORE THAN) 10 TIMES THAT: 
BETWEEN 500-THOUSAND AND ONE-MILLION DOLLARS.
// END ACT //
ROBERT LEVINSON ADDS THAT SINCE RUSSIAN MOBSTERS HAVE ACCESS TO 
EXTREMELY LARGE SUMS OF MONEY, THEY AIM HIGH IN THEIR EFFORTS TO 
CORRUPT GOVERNMENT OFFICIALS. THE MAFIA, HE SAYS, HAS BEEN KNOWN
TO ENTER EVEN PRESIDENTIAL CIRCLES IN ITS DRIVE FOR INFLUENCE. HE
DECLINED TO ELABORATE. 

*******

#12
PM Sees Need To Set Up Presidential Supervising Council 

MOSCOW, June 18 (Interfax) - Prime Minister Sergei Kiriyenko says it is
necessary to set up a special control and supervising council under the
president. "It is necessary to set up such a council to improve the system
of government control in Russia," he told a Thursday Cabinet session. 
The Economics Ministry suggested setting up a special council primarily
to coordinate the operation of all federal executive bodies involved in
government control. 
Deputy Economics Minister Andrei Svinarenko who presented the concept of
improving government control said the absence of a clear mechanism of
cooperation between all government bodies is one of the main causes of the
absence of due executive discipline. 
He said the concept implies primarily the removal of parallel and
overlapping functions. He said the idea should be carried out in the
framework of the current reorganization of executive bodies. The
ineffectively used budget spending on government control could be cut as a
result. 

Svinarenko pointed to the need to develop regulations and legislation
to update the system with the law on the foundations of government control
forming the core. 
The Cabinet generally approved the concept of the Economics Ministry but
stressed the need to finalize it. At Kiriyenko's suggestion, the Justice
Ministry will join the effort alongside with the Economics Ministry. 

******

#13
Russians Offer To Embalm Castro
June 17, 1998

MOSCOW (AP) - The Soviet era was kind to Russia's embalmers, offering a
steady stream of communist dignitaries to preserve for posterity.
But now the experts from the Lenin Mausoleum laboratory are starved of cash
and clients. So a recent news report that Cuban officials were looking into
erecting a mausoleum to Fidel Castro has raised spirits at the lab, the
Interfax news agency said today.
``We are ready to meet a possible request by Cubans that Castro's body be
preserved if they contact us,'' Interfax quoted top embalmer Yuri Denisov-
Nikolsky as saying.
The Sunday Times of London reported last week that Cuban officials were
considering displaying Castro on Havana's Revolution Square after his death.
Interfax said the laboratory, which has preserved such communist
luminaries as
Josef Stalin and the leaders of Bulgaria, Mongolia and Czechoslovakia, is now
reduced to embalming newly wealthy Russians to stay solvent.

*********

#14
Date: Wed, 17 Jun 1998 
From: matt" <exile.taibbi@matrix.ru>
Subject: segodnya

David;

Spotted the "Chubais for President" piece by Segodnya on your list and was
immediately concerned that your readers might not know that Chubais's
approval ratings in Russia routinely score lower than Viktor Anpilov, and
only slightly higher than cancer and the Ebola virus. To further illustrate
what I'm talking about, I'm willing to make a wager: if Anatoly Chubais
runs for President in 2004, I myself will run for the same office entered
on the "Exterminate Russia" ticket and dressed in an SS uniform, and I
guarantee I will win more votes than the former Vice-Premier.

Sincerely,
Matt Taibbi
editor-in-chief
the eXile

*********