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Johnson's Russia List


January 16, 1999    
This Date's Issues: 3019    

Johnson's Russia List
16 January 1999

[Note from David Johnson:
1. AP: Laura Myers, Experts Say U.S. Needs 'Bad Guy.'
2. AP: Mitchell Landsberg, Many Russians Still Want To Leave.
3. Frank Durgin: request for information.
4. Boston Globe: Lynnley Browning, Russians assail IMF, urged 
lending be resumed. (Harvard conference).

5. Moscow Times: Matt Bivens, U.S. Tells Russia to Cut Budget Deficit.
6. Philadelphia Inquirer: Trudy Rubin, How one man is trying to stave 
off another Russian nuclear disaster. (Nikitin).

7. RFE/RL: Julie Moffett, U.S. Firm Selected To Fix Russia's Year 
2000 Bug.

8. Itar-Tass: Dirty Election Technologies DON'T Have Prospects Official.
9. Moscow Times editorial: New Laws Won't Deter Oligarchy.
10. AFP: Luzhkov renews swipe at "inactive" Yeltsin.
11. This is London: James Hansam, Rich Russians for whom the bill tolls.
FEARS are growing among new rich Russians that the West could raid their
secret bank accounts in Britain and other foreign bolt holes.

12. Jim Vail: Re: George Will/The Primacy of Culture?/3015.]


Experts Say U.S. Needs 'Bad Guy'
January 16, 1999

WASHINGTON (AP) -- The United States needs Iraq's Saddam Hussein -- or a ``bad
guy'' nemesis like him -- to rally support for U.S. foreign policy and defense
spending, world affairs experts say.
Think of the recent past. The U.S. enemies list has included Manuel Noriega
and Ayatollah Ruhollah Khomeini. Today, in addition to Saddam, there are
Moammar Gadhafi, Slobodan Milosevic and Fidel Castro, although the aging Cuban
leader has lost a good deal of his evil persona of late.
Iraqi President Saddam emerged as a top U.S. threat when he invaded
Kuwait in
August 1990. The move angered his Persian Gulf neighbors and more importantly
endangered the smooth functioning of the world's oil supplies. The strike
prompted President Bush to compare Saddam to Hitler and organize an
international force to expel Saddam's forces from the neighboring emirate.
When President Clinton ordered airstrikes against Iraqi targets over four
in December, he, like Bush, had overwhelming public support.
Robert Gates, former CIA director and deputy national security adviser
the Gulf War, said Americans have been ``conditioned'' to see Saddam as a
``The heart of it, I think, is against America's favorite bad guy,'' Gates
said, speaking of the Dec. 16-19 U.S.-British assault on Saddam's forces.
A tangible enemy helps unite the nation and justify a massive military --
million strong and costing about $280 billion a year -- equipped and trained
to fight two regional wars at once if necessary, analysts say. The end of the
Cold War officially put Moscow in the U.S. friend column, shifting the focus
to new foes.
``When the Soviet Union was the `Evil Empire,' other leaders around the
could have attracted our attention but mostly didn't because we were so
focused on the Soviet threat,'' said Robert Ebel, a national security expert
at the Center for Strategic and International Studies.
``Now these other people have popped up in their place -- the rogue of the
week -- whomever we are confronting now,'' he added.
The administration targeted Iraq last month after Saddam refused to
with U.N. weapons inspectors, required as part of the Gulf War cease-fire to
ensure he didn't rebuild his chemical and biological weapons to threaten his
neighbors again.
Since late December, Iraq has challenged U.S. and British aircraft enforcing
flight-interdiction rules over northern and southern swaths of Iraq. Iraqi
pilots are flying into the off-limits airspace as Iraqi air defense sites
launch missiles at the enforcers. No Western planes have been hit.
Retired Army Col. Harry Summers said the United States has a long history of
demonizing enemies, sometimes an entire population like the Japanese during
World War II, but more often individual leaders.
``It helps explain things to the American people,'' Summers said. ``It
makes it easier to fight a war if you demonize people so that you're not
killing human beings, you're killing the devil.''
In the case of Iraq, the Clinton administration is focusing its ire on
partly because U.S. officials believe the Iraqi president's policies are
harming his own poverty-stricken people, said Ebel of the Center for Strategic
and International Studies.
``It's very easy for us to personalize the matter in Iraq. We have nothing
against the people, just Saddam Hussein,'' Ebel said.
It's a similar situation in Cuba, where Castro has ruled with a communist
hand for four decades.
Clinton eased a U.S. embargo against Cuba this month to allow Americans to
send more money to needy Cubans while increasing people-to-people exchanges
between the countries, direct mail service and the sale of food and
agricultural goods to nongovernment entities.
``The steps are designed to help the Cuban people without strengthening the
Cuban government,'' Clinton said in a statement.
Most foreign policy analysts say the U.S. administration should have
eased or
lifted the embargo against Cuba long ago but is reluctant to do so because
Castro has been demonized by every president since John Kennedy and because of
strong opposition by Cuban exiles in this country.
``I think this is really a bankrupt policy in Cuba and has been for
said Robert Beisner, professor emeritus at American University, who is writing
a book about U.S. foreign policy. ``Demonizing Fidel for so many years makes
it harder to reverse course now.''


Many Russians Still Want To Leave
January 16, 1999

MOSCOW (AP) -- Ten years ago, Mark Levit had good reason to want to leave
As a Jew, he had seen a promising scientific career derailed by blatant
Semitism. As a believer in democracy, he had been ill-served by Soviet
communism. And as a talented mathematician and computer scientist, he surely
had the credentials to find good work in the West.
But Levit saw hope where others saw only a country in ruins. And so, when
and non-Jews began leaving Russia in the early 1990s as the Soviet Union
collapsed, he stayed, hoping to rebuild Russia.
Today, Levit has given up. Scary brushes with a new, grassroots
-- a back-alley beating, anonymous threats at work, swastikas drawn on his
door at home -- have convinced him he has no future here.
``I can't say that I am beaten or spat upon every day,'' he said. ``There
a lot of good people in Russia. But I can't feel secure here anymore. ... That
is why I want to emigrate.''
By applying for admission to the United States, Levit is typical in at least
one way. Today, as during the last days of the Soviet Union, most Russians who
seek a new life in the United States are Jews who apply under the relatively
liberal refugee provisions enacted during the Cold War.
The 1991 breakup of the Soviet Union, and the loosening of the bonds that
Soviet citizens from leaving their country, opened floodgates that poured a
steady stream of emigres into the West.
That stream has slowed considerably. Today, Russia receives far more
immigrants than it sends to other countries -- ethnic Russians coming from
other parts of the former Soviet Union. And among those who leave Russia, far
more go to neighboring ex-Soviet states than to the West.
Still, enough Russians seek a new life abroad that there is a weekly
-- Inostrannets (Foreigner) -- dedicated solely to those planning to emigrate
to the West. Every day, lines form at some Western embassies.
Germany has seen a huge influx of ethnic Germans whose families had lived in
Russia for two, three or more generations. Israeli society has been
transformed by Russian immigrants who were considered Jewish by the Soviet and
Russian governments, even though many had only a passing acquaintance with the
religion of their forebears.
Many emigres, too, have found their way to swelling Russian enclaves in New
York and other U.S. cities, as well as Canada.
So far, Russia's economic crisis, which began last year and turned
in August when the ruble was devalued, has not led to sharply increased demand
to leave the country.
``Intuitively, one would think there would be an increase,'' said David
Firestein, a spokesman for the U.S. Embassy. ``Instead, the demand for
immigrant visas and nonimmigrant visas has remained quite steady.''
That's partly because strict immigration rules in many countries make it
for more Russians to move.
``The interest is very high, but the possibility of these people to get an
American visa is very low,'' said Pavel Timoshen, a Moscow lawyer who
specializes in immigration law.
There could be other reasons as well.
Galina Vitkovskaya, a migration scholar at the Carnegie Endowment for
International Peace, said the economic crisis might actually keep people from
leaving by making it harder for them to afford it.
``The worsening of your social and material life can be an obstacle on
the way
to a new life,'' she said.
Vitkovskaya suggested that those leaving now are more likely motivated by
of social and political instability than by hope for better economic
That appears to be the case in Russia's Jewish community.
Ron Armon, press secretary for the Israeli Embassy, noted that Jewish
emigration to Israel from Russia had slowed substantially in recent years
after peaking at just under 25,000 in 1992.
Armon said it had appeared that most people who wanted to go to Israel had
already gone; the Jews remaining were mostly those who weren't motivated to
Then, he said, ``In the last two or three months, I would say, we've had a
small reversal of this process, and I would say we have doubled the number of
people who call or come to the embassy to consult about immigration.''
The number of Russians actually moving to Israel has increased by 10 percent
to 15 percent, apparently in reaction to growing anti-Semitic rhetoric in
Russia, he said.
Many Jews were especially shaken when a member of parliament, Albert
delivered a speech blaming Jews for the country's problems and seemed to
advocate violence against them. When liberal lawmakers tried to pass a
resolution condemning the remarks, it was soundly defeated by Communists and
nationalists who expressed support for Makashov.
It is this environment that people like Levit are trying to escape.
Russians emigrating to the United States fall into one of several
There are those with immediate family members in the United States, a
that includes Russians who marry Americans. Increasingly, there are Russian
babies adopted by Americans -- 4,676 in 1997.
There are a handful who win the U.S. ``diversity lottery,'' designed to
that immigrants to the United States represent diverse ethnic and national
Then there are those who are technically nonimmigrants, but who have a good
chance of being issued resident papers in the United States. These include
Russians who start businesses in the United States as well as the largest
emigrant category of all -- refugees.
More than 7,000 refugees from Russia were admitted to the United States in
1996, the last year for which figures are available. Many were admitted under
an amendment sponsored by Sen. Frank Lautenberg, D-N.J., that grants refugee
status to persecuted religious groups -- and especially Jews -- from the
former Soviet Union.
``You have to look at the U.S. admission policy toward Russia and the
rest of
the former Soviet Union as a legacy of the Cold War,'' said Arthur Helton,
director of migration programs for the Open Society, a nonprofit research
organization funded by financier George Soros.
Helton said he doesn't oppose the admission of Russian Jews to the United
States, but believes they haven't, in recent years, needed the protection that
refugee status normally implies.
That might be changing, he conceded. But in the meantime, he finds the
program ``a bit hypocritical.''
It may be getting tougher, though. Many Russian applicants are turned
away for
failing to prove they are persecuted. Daniel Retter, a New York lawyer who
handles many Russian refugee cases, said that he believes the interview
process in Moscow is getting much more adversarial and that applicants are
being rejected who appear to meet the criteria of the Lautenberg amendment.
A spokeswoman for the Immigration and Naturalization Service in Washington,
Barbara Francis, said the agency is seeing more fraud in refugee applications.
``However, we apply the same standards as always,'' she said.
Among Retter's current clients is Levit, whose application for refugee
was rejected despite seemingly compelling claims of anti-Semitic persecution.
Levit is frustrated, but determined to keep trying. He thought of moving to
Israel, but decided the United States would be a less alien culture. Besides,
he knows a bit of English, but no Hebrew.
As he looks at the situation in Russia, he sees only trouble on the horizon.
``I know the story of fascism in Germany,'' he said. ``I see the smoke of
Auschwitz here.''


From: (Frank Durgin)
Date: Sat, 16 Jan 1999 
Subject: request for information

1) In JRL 3017, item 8 is an article titled "Zyuganov Sees 
Liberals' Comeback as Greatest Danger." The article stated that 
Zyuganov "quoted a public opinion poll conducted by U.S. analysts in 
Russia with the help of intelligence services as saying that about 
55% of voters currently support Communists and some 200 movements of 
the patrioticforces".
Could someone provide some information on that poll and where one 
can read the results?

2) We repeatedly read "Yeltsin ordered this or that...." Yeltsin 
said this or that ....." Yeltsin fired such and such.." "Yeltsin is 
in control of the nuclear suitcase..." etc.
My question is just who 
is really making those decisions and pronouncements.
I think we would all agree that it is not Yeltsin.

3) All Duma bills go through several readings. Could someone 
please explain what goes on at a first reading, a second reading etc.


Boston Globe
January 16, 1999
[for personal use only]
Russians assail IMF, urged lending be resumed 
By Lynnley Browning, Globe Staff

Prominent Russian figures lashed out at the International Monetary Fund
yesterday for prescribing what they called the wrong medicine for the
country's fiscal ills, but they forcefully urged the agency to resume lending
to Moscow. 
A senior IMF official brushed aside the attacks, making clear that Russia
either bow to the agency's demands for greater fiscal austerity or do without
a key loan package. 
Urging higher tax collection and a host of other difficult measures, IMF
deputy managing director Stanley Fischer said there was a straight and narrow
path for Moscow - and that it was paved with more revenue and less spending. 
''There isn't any other way of doing it, unfortunately,'' Fischer told a
Harvard University conference on foreign investment in Russia. ''Russia is
bound by those same simple rules of economics and arithmetic.''
The Washington-based IMF, in a humiliating retreat, suspended a $22.6
loan package to Moscow in August as the government devalued the ruble and
suspended billions of dollars in debt payments. The crisis, which plunged the
country into fresh economic and political turmoil, came just one month after
the IMF had granted Russia a $4.5 billion loan. 
Russian officials, and some Western economists and leaders, have argued the
IMF cripples the sick emerging markets it aids by demanding innappropriately
tight spending amid Depression-like conditions. In Russia's case, critics say,
the measures stifled recovery and growth and ignored systemic features, such
as a web of nonpayments among companies and the state. 
''It's completely obvious the IMF didn't take into account the
specificity of
Russia, our particularities and our psychology,'' said Andrei Kokoshin, vice
president of the Academy of Sciences and former head of the policy-making
Security Council. ''They used a formula. There is even greater reason today to
doubt the IMF's policies.'' 
Kokoshin, an influential player in Moscow, said the IMF should dispense the
next loan installment immediately and help Moscow win approval for a
rescheduling and perhaps write-off of around $100 billion in Soviet-era debts.
Boris Nemtsov, the reformist ex-prime minister who now heads a presidential
council on local government, urged the same. 
''I've always been very critical of the recipes of international financial
institutions, especially the IMF,'' said Nemtsov, who is more influential in
the West than in Russia. ''It would be a much wiser policy on the part of the
IMF to provide Russia with additional loans as soon as possible.''
Russia desperately needs money to help meet interest payments on government
debt due this year. But a collapse in commodity prices - Russia is a big oil
exporter - and an exodus of foreign investors have left Moscow with depleted
With that in mind, parliamentary deputies have outlined a 1999 federal
that counts on about $5.5 billion from foreign governments, the World Bank,
and the IMF, with $4.3 billion of the total coming from the latter. From that
budget, Russian deputy economics minister Vladimir Kossov said, there could be
no further cuts. 
The IMF argues that its one-size-fits-all economic formulas reflect
fundamental macroeconomic principles. Russia is a mess, it says, because it
has never been able to muster the political will to enact tough reforms,
including enterprise restructuring, bankruptcy measures, and tax crackdowns on
powerful firms. 
''We need and will stay engaged in Russia,'' said Fischer, who held talks
first deputy prime minister Yuri Maslyukov, head of econominc policy, in
Washington's main airport Thursday night as the two waited for an icestorm to
subside. ''There is no intention to withdraw from Russia.''


Moscow Times
January 16, 1999 
U.S. Tells Russia to Cut Budget Deficit 
By Matt Bivens
Staff Writer

Cambridge, Massachusetts -- Opening an annual conference on investment in
Russia, a top U.S. Treasury official said the United States would only back
more aid if Russia reached a deal with the International Monetary Fund on
cutting the budget deficit. 
Deputy U.S. Treasury Secretary Lawrence Summers said Thursday that Russia
would have to make "genuine and realistic cuts" in its budget deficit to
secure IMF aid. 
He warned that Russia's decision to reduce the VAT from 20 percent to 15
percent this year appeared to be "firmly headed in the wrong direction." 
The Russian government claims that, despite the cut in the value-added tax,
the 1999 draft budget now before the State Duma is a model of toughness and
the deficit is being cut. 
But Summers struck a cautious tone on the budget, admitting it was tough but
saying it was too optimistic in its projection for the ruble and inflation
The draft budget sets a ruble rate of 21.5 to the dollar for the year, even
though the actual rate is already lower. It also predicts inflation of only 30
percent while the State Statistics Committee said prices rose 3.2 percent just
in the first 11 days of this year. 
Despite Summers' comments, Prime Minister Yevgeny Primakov said Friday the
positions of Russia and the IMF on Russia's economic prospects were growing
closer, Russian news agencies reported. 
Speaking in the Siberian city of Kemerovo, Primakov said he had received
that talks in the United States between First Deputy Prime Minister Yury
Maslyukov and IMF Managing Director Michel Camdessus were going "not badly." 
He also said the ruble was undervalued because of "psychological factors." 
An IMF mission is due in town next week to consider further lending to
The IMF ceased lending to Russia after the Aug. 17 financial crisis but
Summers defended the fund's $22.6 billion bailout to Russia this summer. 
That bailout failed to ease pressure on the ruble, and just a month after
receiving it the Russian government defaulted on its treasury bills and let
the ruble devalue dramatically - decisions that together crippled the banking
system."It was a calculated risk. In my judgement it was a risk worth taking,"
Summers said. He added later, "talk of 'who lost Russia' misses the point.
Russia has never been and never will be ours to lose or win." 
Summers, a Harvard-trained economist who came to the Clinton
Treasury Department from the World Bank, has been a leading architect of U.S.
economic policy toward Russia. He and his boss, U.S. Treasury Secretary Robert
Rubin, have also coordinated a policy of using large IMF loans to patch up
weakening economies around the world. 
This week a bailout similar to Russia's - a $41.5 billion aid package to
Brazil to bolster its currency, the real - also ended in failure, with Brazil
devaluating the real by 8 percent Wednesday. 
Although a speaker introducing Summers noted that Summers must be busy
on what to do next about the real, Summers did not mention Brazil in his
speech or in a brief question-and-answer session afterward. 
As Harvard University's third annual U.S.-Russian investment symposium
Thursday, blizzard conditions dumped snow and freezing rain up and down the
Eastern Seaboard, paralyzing airlines. 
Summers - along with Maslyukov and Stanley Fischer, the first deputy
director of the IMF - found himself trapped by the snowfall at an airport in
Washington. His address to the opening dinner was therefore made via
videophone bridge. As financiers such as Boris Berezovsky and politicians such
as Deputy Moscow Mayor Vladimir Rezin dined on pasta, Summers' face looked
down on them from an enormous screen at the end of the hall. 
Organizers joked that it was an improvement over last year, when Summers,
Rubins and Fischer had to fly to Indonesia to broker an IMF bailout there. 
On Thursday, the weather and the real seemed to capture the mood of a
conference devoted to investing in a nation that Summers said still lacked
rule of law and had too little long-term investment and "far, far, far too
much" capital flight. 
Asked by one participant what his first steps would be to revive the economy
if he were in Primakov's chair, Summers said his No. 1 priority would be
judicial reform, because a strong legal and court system is crucial to
establishing rule of law and to guaranteeing that business contracts be
He added that there were IMF and World Bank projects already in the works to
encourage judicial reform. 
Another priority he said, would be to launch "a comprehensive
campaign ... making sure those in government and [who are] corrupt are brought
to justice." 
Summers praised Primakov's government for the passage of a law on
sharing agreements which will help investment in oil and gas. 
But he complained on several occasions of capital flight - of money intended
to help Russia being diverted instead " to beachfront properties, to Swiss
bank accounts." 
Afterward, one American businessman joked, "talking of capital flight and
corruption, I'll bet if a bomb went off in this room, that would solve a lot
of the problem." 
To a questioner who suggested the United States was not doing enough for
Russia, and then invoked the memory of the U.S. Marshall Plan, which spent
billions of U.S. dollars assisting Europe to rebuild itself after World War
II, Summers was sympathetic. 
"It is important that we do as much as we can. There are arguments that at
some points more could have been done, there are others who have argued that
at some points too much was done and the money ended up in Swiss bank
accounts. That will be for historians to sort out." 


The Philadelphia Inquirer
January 15, 1999
[for personal use only]
How one man is trying to stave off another Russian nuclear disaster 
By Trudy Rubin (

Sometimes a lone individual can illuminate a problem with which the
world hasn't yet come to grips. Such is the case of retired Russian Navy
Capt. Alexander Nikitin, who will come before Russia's Supreme Court on
Feb. 4 for a decision on whether he should be tried for espionage.
Nikitin's crime? He revealed how Russian submarine bases on the Kola
Peninsula near Norway have become dangerous dumping grounds for nuclear
waste. The Bellona Foundation, a Norwegian environmental group that
published Nikitin's findings, says that 90 reactors' worth of radioactive
fuel from decommissioned subs is sitting in cracking tanks, open containers
or rusting hulks. Foreign experts aren't allowed near them.
"The ships' condition is so bad that they could just sink," Nikitin told
me in an interview in St. Petersburg in December. Bellona (
calls the situation "a Chernobyl in slow motion."
Nikitin's case highlights how the Cold War's end and Russia's economic
collapse have foisted a new kind of nuclear threat on the world. Russia is
disarming its nukes but can't afford to store the radioactive matter
safely. Russian officials (from embarrassment or ingrained secrecy) want to
keep the extent of the mess hushed up.
The Russians can't agree on where to build new storage facilities or how
to pay. Meanwhile, a bankrupt Moscow isn't paying maintenance or staff
salaries for naval repair yards servicing the Northern Fleet. Food is
short; crews are desperate: In September, a 19-year-old sailor shot eight
comrades and threatened to blow up his nuclear attack sub before committing
suicide in the torpedo compartment.
But in the new Russia, a lone crusader like Nikitin at least has a
chance to get his message out. "I am the first Russian who was accused of
espionage who was released before a final court decision," he says. A
Russian court threw out the charges last October -- but gave the FSB (the
KGB's successor) a second chance to present stronger evidence. Now the
Supreme Court must decide whether to dismiss the case or let the FSB try
Nikitin again.
If he is exonerated, more Russians may join in exposing their country's
new nuclear dangers. This, in turn, could galvanize Western governments to
provide more financial aid to help Russia store its nuclear waste safely.
"When [ the FSB ] started this investigation," says Nikitin, "they
thought no one would know." But the security services didn't realize that
they were living in a different Russia, more connected with the outside world.
Nikitin, 45, who had devoted his 23-year navy career to working on
issues of nuclear waste security, had linked up to that larger world. After
his retirement in 1992, he was desperate to publicize the deteriorating
nuclear waste situation but couldn't find work with a Russian organization.
Most Russians were too busy figuring out how to survive in their new
situation to worry about radiation dangers. Friends and former military
colleagues grasped the problem, he said, but dared to talk about it only
"in their kitchens."
Then Nikitin met Bellona staffers and agreed to help them with
nonclassified information. "When I started to write my report, my goal was
to tell the world that there was a very serious problem which Russia
couldn't solve on its own," says Nikitin, an intense, handsome
scholarly-looking man with a dark bushy mustache and aviator glasses.
In 1996, the FSB arrested him for spying. In a throwback to the Soviet
era, he was imprisoned for 10 months and denied medicine for his ulcers,
and his lawyer was beaten up by mysterious thugs. After a wave of
international protest, from Amnesty International to Vice President Gore,
he was let out of jail pending resolution of his case.
Nikitin believes the outcome will determine whether Russians will
finally confront their nuclear dilemma. "During Soviet times, there were
special symbols which it was impossible to discuss, like the nuclear
industry, the Ministry of Defense, the KGB. No one could say anything
critical of their activities. And they don't like it that someone now
begins to tell the truth."
But even if that truth comes out, it won't produce the funds to secure
Russia's nuclear waste. At present, the United States spends around $400
million a year on a program to dismantle weapons of mass destruction in
Russia, including help in cutting up submarines that once carried ballistic
missiles. But this doesn't address the lack of storage for spent fuel from
the submarines and other radioactive waste.
Nikitin would like to see the Europeans and America spend much more to
remove waste from submarines and build special storage facilities. He knows
the obstacles are enormous. Russia's military is wary and humiliated; its
atomic energy officials have big mistakes to hide. And Westerners are
unwilling to bear the costs.
But consider the alternatives. Nikitin knows of two cases in which
thieves stole fissile material from northern naval bases. One group was
caught; one threw it away. (See the Inquirer series this week on the
dangers of nuclear theft.) How much is it worth to prevent a terrorist bomb
or another Chernobyl?


Washington Journal: U.S. Firm Selected To Fix Russia's Year 2000 Bug
By Julie Moffett

Washington, 15 January 1999 (RFE/RL) -- A U.S. firm has been selected to
provide technology for solving the Year 2000 computer problem in Russia.
The U.S. computer firm Relativity Technologies made the announcement in
Washington Thursday during a press conference. The corporate executive
officer of Relativity Technologies, Vivek Wadhwa, said his company and a
private Russian corporation called Lanit Holding have signed an agreement
which will permit Russia to use and develop special technology to provide
Year 2000 solutions to both government agencies and business enterprises in
The Year 2000 computer problem, better known as the "millennium bug,"
will cause many computers to malfunction or fail because their chips cannot
distinguish between centuries. The problem affects computers worldwide and
some observers say it could cause the world economy to grind to a halt.
Wadhwa said that while initially the Russian government was slow to
understand the global significance of the problem, now officials are
putting a top priority on the issue. He said the agreement proves it is not
to late to lessen the impact of the bug on Russia's economy.
Wadhwa explained: "There is good news and bad news in the Russian
situation. The good news is that because society is much less dependent
upon technology than in the West, the impact will be less severe.... (The
bad news) is that the Russian government and Russian industry are highly
Wadhwa said what concerns most experts at this point is that Russia
currently uses old and outdated technology, most of which is not supported
by the West. This makes it even more difficult to find enough knowledgeable
people and software to fix many of the bugs, he said. Relativity's
software, "RescueWare" is perfect for Russia, he says because the agreement
allows Lanit to adapt the technology to support the unique variety of
popular computer languages and platforms still in use within Russia.
Wadhwa said he could not definitively say how much the agreement is
currently worth because the company expects profit to come slowly over
time. But he said he estimates the agreement will eventually bring in
millions of dollars for his company.
Wadhwa said Lanit is expected to sign multiple agreements with other
agencies and companies as well as other countries in the region to help fix
the problem. Moreover, all enhancements and adaptations made by Russian
programmers to the technology, will be owned by Relativity, he added. 
Andrey Terekhov, a board member for Lanit and chairman of the software
engineering department at the University of St. Petersburg, said that Lanit
had been recently certified by the Russian Committee for Communications and
Information as Russia's first Year 2000 Readiness Center. 
The Readiness Centers are a part of a Russian government plan to solve
the Year 2000 program. These centers, manned by the most qualified and
experienced computer systems integrators in Russia, are responsible for
identifying highly adaptable and efficient technologies to repair the
computer bug throughout the nation. 
Terekhov said Lanit will use Relativity's software to focus on fixing
"mission critical systems" in Russia such as telecommunications and
transportation, with a special focus on the railway system. He added that
preliminary talks are also underway with the Russian Central Bank, GasProm
and Aeroflot. Terekhov said Lanit will likely not be dealing with Russia's
defense or nuclear systems, since he said he was assured by officials that
the most critical problems in this area have already been solved.
Lanit has already signed agreements with Uzbekistan and Kazakhstan to
help fix the computer glitch, and Terekhov said he expects other countries
of the former Soviet Union to quickly come aboard. 
Terekhov said Russian government officials have estimated that it will
take approximately 500 million dollars to solve the Year 2000 problem in
Russia. He said officials will probably give additional funds for the
repairs to "non-profit agencies" such as the Defense and Health Ministries,
while ordering the "more profitable" sectors such as the Transportation and
Energy Ministries to find the funds from what they already have in their
Terekhov acknowledged that Russia started the process "a little too
late." He said only last May was a government order finally signed ordering
the Ministry of Communication and Information to take responsibility for
the problem.
Kent Hughes, Associate Deputy Secretary of Commerce, told reporters that
the U.S. is trying hard to help the Russians fix the computer bug. He says
last year the U.S. government, in conjunction with the American Chamber of
Commerce in Moscow and the Russian government, sponsored a day-long seminar
in Moscow to raise awareness of the problem.
Hughes also said the U.S. is working with the IMF and other international
financial institutions to provide much-needed funds for the repairs. He
said approximately 12 million dollars has already been given to the
Russians or specifically set aside for this purpose and more might be
He said the U.S. was particularly concerned about the command and
control systems of Russian military equipment, and also nuclear and atomic
controls. He added that the U.S. is providing assistance on how to identify
what aspects of industry and government should be considered mission


Dirty Election Technologies DON'T Have Prospects Official.

MOSCOW, January 15 (Itar-Tass) - The dirty pre-election technologies will have
no prospects in the federal parliament elections, Chairman of the Russian
Central Electoral Commission Alexander Ivanchenko said in a live program of
the Echo of Moscow radio station on Friday. 
As for compromising materials on candidates to the parliament, Ivanchenko
"we face a task of interacting with the law-enforcement bodies to obtain
official verified information about persons who have not served their
sentences and sources of revenues of these or those people. That will help to
close the loophole for the illegal immoral use of unverified information." 
"In any country a person seeking power shall get prepared to face illegal
methods of electioneering. However, he must get ready on a basis of the law
without lowering himself to a wholesale disparagement of the opponent,"
Ivanchenko said. 
He hopes "the results of the 1999 elections will help us to form a more
professional parliament that will be better structured on political
preferences." In the opinion of Ivanchenko, no less than 7-8 election blocs
will pass the 5 percent margin in the elections this time. "The election blocs
that manage to work exclusively professionally and correctly, respect their
voters both in Moscow and in districts and be interested in the needs and
wants of the voters will gain places in future Russian parliament," he said. 


Moscow Times
January 16, 1999 
EDITORIAL: New Laws Won't Deter Oligarchy 

Those wily oligarchs are up to their old tricks. On one front, they are
battling attempts by the government to increase taxation on their exporting
companies. On the other, they are battling attempts by the State Duma to make
it easier to bankrupt their banks. 
In both cases, the oligarchs deserve to lose - but the odds are not good
they will. 
The government started the first battle by showing unusual bravery in
a decree imposing a 5 percent tax on exports of crucial commodities,
especially natural gas, refined oil products and copper and nickel. 
This temporary measure will cost big Russian exporters like LUKoil, Gazprom
and Norilsk Nickel close to $1 billion. Only LUKoil has publicly expressed its
anger so far but an ugly brawl is going on within the corridors of power. 
The decree containing the exact terms of the export tax has yet to be
published and it seems likely the oligarchs are fighting to have it softened. 
If the export tax is introduced, it will mark a rare victory for Finance
Minister Mikhail Zadornov, who has argued quite rightly that oil, gas and
metals companies have received a huge boost to profitability as a result of
the devaluation of the ruble - but that tax collection has stagnated. 
The other nasty fight involves a long-delayed bill on the procedure for
bankrupting banks. The general bankruptcy law already in force calls for
specific legislation to cover credit institutions. The lack of it has
hamstrung regulators in their attempts to clean up the mess caused by Russia's
banking collapse. 
Parliament passed a bill in the fall that gave the Central Bank clear powers
to bankrupt banks and return money to depositors. But President Boris Yeltsin
vetoed and submitted a new law that gave these powers to a new ill-defined
agency, which will lack the Central Bank's independence and experience. It is
a recipe for a supine ineffective bureaucracy. 
This however would suit the oligarchs just fine. Immune from the threat of
bankruptcy, they have spent the past few months stripping all the useful
assets out of their collapsed banks rather than returning funds to depositors.
Yeltsin's vetoing of the bankruptcy law is yet another sign of the unhealthy
influence the oligarchs have on his inner circle. 
It seemed the oligarchs were down, but clearly they have plenty of fight
in them. So much so that no senior figure in the government or the
presidential administration has dared to comment openly on either of these two
crucial issues. 


Luzhkov renews swipe at "inactive" Yeltsin

MOSCOW, Jan 16 (AFP) - Moscow's powerful mayor and presidential hopeful Yury
Luzhkov on Saturday redoubled his criticism of President Boris Yeltsin,
calling on the Kremlin chief to consider early elections, Interfax reported.
Luzhkov, who founded his own Otechestvo (Fatherland) party late last year as a
vehicle for his Kremlin ambitions, urged the Russian leader to speak out on
the issue, the news agency said.
"There is a problem of early presidential elections," Luzhkov told
"We all know it exists. It would be hypocrisy to keep ignoring it or to spot
it and keep silent about it," he said.
"The president should weigh the situation thoroughly and inform the Russian
people of his decision," the ebullient mayor said.
The populist leader, who enjoys overwhelming support in the capital, on
complained Yeltsin "is not active enough," in what was seen as a direct attack
on the Russian leader who has been sidelined for weeks through illness.
Yeltsin was resting at his country dacha Saturday, television reports said,
after failing to make a scheduled appearance at the Kremlin on Friday for
meetings with Interior Minister Sergei Stepashin.
Luzhkov's renewed outburst comes less than a month after Yeltsin took a pot-
shot at the Moscow city chief, accusing him of launching the campaign for 2000
presidential elections too early.
"No one has yet declared the election campaign season open. But someone is
already campaigning in full swing, running ahead of the locomotive," Yeltsin
told media chiefs in the Kremlin.
"Personally, I think this is his mistake. But on the other hand, I think
it is
right that people should get to know him better and see through him all the
sooner," Yeltsin said.
Although Yeltsin never mentioned Luzhkov by name during his surprise attack,
there was little doubt Yeltsin was referring to Luzhkov, who has used his own
Moscow television station to carry his campaign deep into Russia's far-flung
Luzhkov, once close to the president, last year suggested Yeltsin might be
wise to step down before his term expires because the nation needed a more
vigorous leader at a time of economic despair.
Yeltsin's fitness to govern has been a constant cause for concern since he
suffered a series of heart attacks during his successful 1996 re-election
campaign. He underwent a quintuple heart bypass operation that November.
The president almost collapsed in public during a mid-October trip to
Asia, and was forced to take weeks off to recover from nervous exhaustion and
later pneumonia, although he his scheduled to visit France at the end of the


This is London
January 15, 1999
[for personal use only]
Rich Russians for whom the bill tolls
FEARS are growing among new rich Russians that the West could raid their
secret bank accounts in Britain and other foreign bolt holes, writes James

Thousands of the wealthiest ex-Communists have stashed money in the West,
often hiding it from the Russian taxman. But as the Kremlin fails to meet its
debt, nervousness is growing among Russia's elite that their hard-currency
nest-eggs may not be as safe as believed. 
While the West has so far resisted bankrupting Russia, the fear of this -
seques-tration of individual accounts and property assets - is being voiced
daily in Moscow. 
Russian intelligence analyst Alexander Zhilin said that Western financial
institutions accepted large sums without "asking where the money came from and
what it smelled of". But, he said, since 1995 major Western countries have
closely monitored the cash exodus from Russia. 
"All the money movements, including into offshore zones, are now
check-ed," he said, giving the West huge leverage with leading Russian
politicians whose secret accounts have been hidden overseas. 
"From the former Soviet Union, they managed to smuggle 236 billion. The
Russian share of that is 175 billion." The West is in a good position to know
where the money is hidden, he added. 
Komsomolets newspaper warned: "If the government announces bankruptcy, cred-
itors will have the right to grab not only State assets abroad, but also the
property and money of Russian citizens." The paper added: "With the
professionalism of Scotland Yard, the FBI, and the French security services,
they would be sure to discover 90% of this money." 
Professor Vladlen Sirotkin, an expert on Russian property overseas, claimed
the International Monetary Fund has already raised the issue of using
illegally exported cash to pay debts with Kremlin premier Yevgeny Primakov.


From: (Jim Vail)
Date: Sat, 16 Jan 1999
Subj: Re: George Will/The Primacy of Culture?/3015

I am greatly upset you would publish another rambling superficial conservative
piece, this time by George Will in Newsweek entitled 'The Primacy of Culture
Conservatives.' Once again we have yet another columnist write how America's
superiority to Russia stems from Russia being "remarkably resistant to
progress, material and moral." My first point of dispute is, America may be
flourishing, but who is really benefiting? True, America has a strong middle
class, a vibrant economy and certain fundamentals the world over envies.
However, when I sit down to watch the news or read the newspapers, I see
shivering African-American people on the south side of Chicago who have no
heat in their homes. I read essays by their children who fear they will not
live past their teenage years. I walk the west side of the city and see a
depressed area as if a war just wiped out anything of economic value. Many of
those inhabitants turn to drugs because they don't have the opportunities
people like me do, and many are automatically sent to prison while many of my
friends who made the same mistakes enjoy a new life after hiring a good lawyer
to keep them on the path to the good life Mr. Will writes about. Second, when
writing about culture, I believe one should define it properely, when has
culture been expressed through hard work to earn a good living? In fact, I
always thought it was really the expression of a society through art, music,
poetry, literarature, dance etc. which express the woes and beauty of an
imperfect and fallen world we live in. Now, can any of you who have visited
Russia, studied Russian or spoken with a few knowledgable people on the
subject, tell me that America embraces a superior culture to the Russians? I
guess green must be the primary color of Mr. Will's culture. Third, I'd like
to further expand on Mr. Will's interesting perception that Russia is
remarkably resistant to progress, material and moral. I actually thought this
was true myself when I first arrived to work in the country a few years ago. I
fully believed an essay written by a professor hired as a USAID contractor
that America has embraced ethical business values through its inheritance of
Christian-Judeo customs while the Russians have inherited an authoritarian
system which suppresses initiative and responsibility, thus morals and ethics,
particularly in the business world. Well, upon returning home, I found people
really are people, no matter where you live. Many Americans cheat, steal and
lie just like the Russians when pressed to make a buck. As one friend pointed
out, there they call it bribes, here we call it political contributions. Well,
my friend Mr. Will, as soon as people like you stop pontificating about the
superiority of western culture, and stick to the facts, you'll see that the
world should not be judged by American progress. In fact, the more you think
about it, what the communists tried to achieve in terms of an equal society
seems to me a far nobler cause than the American belief in individual rights
which allows the haves to have an increasingly greater piece of the economic
pie. It's a tragedy the Russian economic system collapsed, not a victory, as
more and more Americans are finding out to their horror. And please, keep
these enlightened Americans like Mr. Will as far away from the indiginous,
backward people who I'm sure most of you know would have been better off had
the pilgrims escaping religious persecution back home not set up their own
system to the detriment of the true natives of the United States of America.

Jim Vail
Center for Humanitarian Aid 


David Johnson
home phone: 301-588-3861
work phone: 202-332-0600 ext. 107
home address:
9039 Sligo Creek Parkway #1003
Silver Spring MD 20901

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