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Johnson's Russia List


Febuary 25, 1999    
This Date's Issues: 3069    


Johnson's Russia List
25 February 1999

[Note from David Johnson:
1. Moscow Times: U.S. Official: Funds Didn't Go on Arms.
2. AP: Russia Hopeful of More Govt Revenue.
3. Reuters: Russian army leaner but not meaner - committee boss.
4. Reuters: Russia Communist says Albright shames women.
5. Jacob Kipp: Request for assistance.
6. Jerry F. Hough: Re 3068-Matt Bivens and Jonas Bernstein.
7. Itar-Tass: Russia Minister Accuses "Sunday Times" of Distorting Facts.
8. Greg Grunner: Pilot seeks info. about flight crew positions.
9. The Russia Journal editorial: Boris Yeltsin’s Ninth Life.
10. Reuters: CIA warns of Y2K problems in Russia, China.
11. AP: Russian Anti-Semitism Said Rising.
12. Moscow Times: Natalya Shulyakovskaya, Web Site Serves Up Political 

13. AFP: Russian politics riddled with crime, analysts say.
14. Washington Post: David Hoffman, Russian Rocket Called Invincible
Designer Says It Can Penetrate Any 'Potential ABM System.'

15. Excerpts from statement of SECRETARY OF STATE MADELEINE K. 
ALBRIGHT before Senate Foreign Relations Committee, February 24, 1999.

16. Christian Science Monitor: Yuri Luzhkov, A Russian leader on 
porridge, czars, and real estate.]


Moscow Times
February 25, 1999 
U.S. Official: Funds Didn't Go on Arms 

A U.S. Energy Department official rejected congressional claims that U.S.
aid money has helped finance development of new Russian weapons, saying
Wednesday that it has supported scientists working on safe maintenance of
Russia's nuclear arsenal. 

A congressional General Accounting Office study, released Monday, said that
some of the U.S. money intended to help fund civilian work for unemployed
scientists in the former Soviet Union has gone to scientists currently
working on Russian weapons programs. 

But Rose Gottemoeller, head of the Energy Department's Office of
Nonproliferation and National Security, argued that the congressional study
had failed to distinguish between the development of new weapons - which
she said got no U.S. funding - and work on ensuring safe storage of
Russia's existing arsenal. 

"And we support this because we want to make sure that Russian nuclear
weapons remain safe and secure," she said at a news conference in Moscow. 

Gottemoeller stressed repeatedly that her agency carefully screens Russian
scientists for eligibility for U.S. funding, and promised to toughen the
regulations further, in line with GAO recommendations. 

Most of the U.S. money has been spent on purely civilian projects, like
creating infrastructure and computer-programming companies in former
nuclear weapons centers, she said


Russia Hopeful of More Govt Revenue
February 24, 1999

MOSCOW (AP) -- Russia believes it can slightly exceed its revenue forecasts
in 1999 despite skepticism by the International Monetary Fund, a top
official said Wednesday. 

Economics Minister Andrei Shapovalyants said the government may take in an
additional $400 million this year, on top of the budget's planned revenues
of $21 billion. 

The budget, signed into law by President Boris Yeltsin this week, calls for
spending of just $25 billion -- less than the U.S. government spends in an
average week. 

The government has been struggling to pay its bills for years, and
conditions deteriorated even further after a financial crisis hit in August. 

Shapovalyants, who spoke during a Cabinet session, said half the additional
revenues could be used to boost spending while the other half would help
pay off the government's debts, Russian news agencies reported. 

Russia has $17.5 billion in foreign debts that fall due this year, but says
it can pay only about half of that. The government hopes to reschedule the
rest, though no deals have yet been worked out with foreign creditors. 

The report didn't say how the government hoped to raise the additional

First Deputy Prime Minister Yuri Maslyukov said Shapovalyants' forecast was
too low and he argued that revenues may be significantly higher than

He also said Russian industrial output would increase by 1 percent to 1.5
percent this year, and by 4 percent to 6 percent annually in following
years, the Interfax news agency reported. 

Maslyukov welcomed a report from the State Statistics Committee that
February inflation would be from 3.5 percent to 3.8 percent -- down from
8.5 percent in January and 11.6 percent in December. 

The government hopes its austere budget will keep inflation under control
and help persuade the IMF and other foreign lenders to resume assistance
that was halted after the economic crisis hit in August. 

Maslyukov said the IMF would undoubtedly give Russia new loans, Interfax
reported, though he declined to specify a possible amount or date of payment. 

Maslyukov also said Russia's economy would be hurt by this week's agreement
requiring Moscow to slash its steel shipments to the United States in
response to dumping complaints. 

``This is very unpleasant for us,'' Maslyukov was quoted as saying by the
ITAR-Tass news agency. ``Steel exports had kept Russia's steel output at a
normal level.'' 

Russian trade officials, facing the prospect of punitive tariffs on steel
exports to the United States, agreed Monday in Washington to cut steel
shipments by 70 percent in return for continued access to the U.S. market. 


Russian army leaner but not meaner - committee boss
By Peter Henderson

MOSCOW, Feb 24 (Reuters) - Russia's fighting forces may be leaner but
they're certainly not meaner, the Defence Committee chief said on Wednesday. 

``Despite a cut in the size of the armed forces, we have not achieved an
improvement in quality, unfortunately,'' Roman Popkovich, chairman of the
Defence Committee in the State Duma lower house of parliament, told a news

Russia cut its armed forces by 400,000 troops to 1.2 million last year and
has kept its budget steady at just under three percent of gross domestic

Popkovich said Russia needed a credible nuclear deterrent at the levels
envisioned by an unratified arms reduction treaty with the United States.
Conventional forces should be made more mobile and given up-to-date
weapons, he said. 

Russia's biggest threat was not to the West but in potential regional
conflicts in the southeast and southwest. Without modernisation, Russian
soldiers could face better armed opponents -- with weapons bought from
Russia, he said. 

``It is possible there would be a local conflict in which we met our own
arms, not having them ourselves,'' he said. 

Russia faces hard choices on both nuclear and conventional forces as its
financial resources are greatly overstretched. 

Russia's 1999 defence budget is about one-fifth of federal spending but
still slight at 110 billion roubles ($4.8 billion) -- or a bit more than
the cost of two U.S. stealth bombers. 

Popkovich and his parliamentary faction, the centrist Our Home is Russia,
say the country can make ends meet by deploying new nuclear missiles and
signing the START-2 nuclear reduction treaty. 

Popkovich said his committee had approved a draft bill which would set
guidelines for budgets of nuclear forces through 2010 and in line with
START-2, which the Duma has not ratified but could review by late spring. 

The treaty is viewed with distrust by legislators concerned by NATO
expansion plans and U.S. proposals to renegotiate a 1972 anti-ballistic
missile (ABM) treaty. 

Vladimir Ryzhkov, head of Our Home is Russia, told the daily army newspaper
Krasnaya Zvezda that his faction supported START-2 because it would assure
Russian parity to reduced U.S. forces. 

``Not ratifying START-2 we would push certain U.S. political circles to
leave the ABM treaty,'' he said. 

The United States wants to revise the treaty to build a Star Wars-style
anti-missile defence against small scale attacks from rogue states, which
Russia says threatens the bilateral balance. 

Popkovich also called for better monitoring of Russian forces. 

``We need to know the exact state of our armed forces so we do not suddenly
find them totally unready for fighting, as in Chechnya,'' he said. 

Russian forces suffered a defeat at the hands of Chechen separatists in the
southern region in the 1994-96 conflict. 


Russia Communist says Albright shames women

MOSCOW, Feb 24 (Reuters) - The head of Russia's Communist Party said on
Wednesday U.S. Secretary of State Madeleine Albright had brought shame to
all womankind through what he called her unnatural warmongering. 

``I am alarmed by this madame, whom I call Madame War,'' Gennady Zyuganov
told reporters in response to a question about peace talks on the Yugoslav
province of Kosovo. 

``She is a woman, after all. Rattling rockets and bombs -- it is simply
against nature,'' said Zyuganov, who controls the largest bloc of seats in
Russia's parliament. 

``I want to say through you (the media) to all the womens' organisations of
the planet and especially of Europe... She is bringing shame on the entire
female sex and the female tribe,'' he said. 


Date: Wed, 24 Feb 1999
Subject: Request for assistance 

I am trying to find reviews and commentary on the Boris Berezovsky[producer]
and Aleksandr Nevzorov [director] ORT film, Chistilishche [purgatory] which
came out last March and was supported by Ministry of Internal Affairs. The
film deals with the first day of the Battle of Grozny in January 1995. I am
interested in both artistic reviews and political commentary.


Date: Wed, 24 Feb 1999
From: "Jerry F. Hough" <>
Subject: Re: 3068-Matt Bivens and Jonas Bernstein, The Russia You Never 

I think that Matt Bivens does not understand the loans-for-shares 
deal. The real crime of Chubais and especially Nemtsov at this time was 
their swindling of America. They were claiming that there were 
oligarchs controlling banks, etc., so that they could sell GKOs and 
stocks to Westerners. The banks were no more private than the companies 
whose "shares" they were acquiring. As I understand, they sold their 
shares to Westerners within a few months of receiving them and then 
often paid the money to the government as "late taxes." The purpose, as I 
understand it, was to wash the shares so that when the pyramid collapsed, the 
Westerners would have legal recourse only to "private banks", not to the 
government or the original companies. Of course, various people were 
also getting commissions and underwriting fees.
I know for sure about some shares being sold to the West, but I 
would be grateful if someone would document the whole thing. The 
amazing thing is that even people like Tom Friedman, who understand how 
dangerous the situation in Russia is, still want the "reformers" back 
instead of pushing to expropriate any resources that people like Chubais 
and Nemtsov have abroad. Nothing is going to change for the better 
until Americans--and that includes the critics--have a better 
understanding of the con game.


Russia Minister Accuses "Sunday Times" of Distorting Facts.

WASHINGTON, February 25 (Itar-Tass) -- Russian Minister of Labour and
Social Development Sergei Kalashnikov, now here on a working visit, accused
the English "Sunday Times" of distorting facts about a near-Moscow boarding
school for backward children. In an interview he gave Tass and Russian
state-run ORT television on Wednesday, Kalashnikov said that all the
medical institutions in Russia, including such boarding schools for
retarded children, needed better financing. "Of course, it is absurd that
people have to go to hospital with their own linen and medicines, but even
under the difficult circumstances boarding schools have more opportunities
than regular medical institutions." 

The Minister refuted assumptions that situation with the boarding schools
in the outlying regions of Russia was yet worse than near Moscow. "There is
no difference between Moscow and province," he said. "There are standard
requirements for all the institutions of the kind," Kalashnikov emphasized. 

Kalashnikov came here to take part in a conference of the G-8 labour ministers


Date: Wed, 24 Feb 1999 
From: (Greg Grunner)
Subject: Pilot seeks info. about flight crew positions.

Experienced, FAR 121 U.S. regional Airline Pilot seeks information about
flight crew positions with any corporations, agencies, etc. that operate
aircraft to or within Russia or any of the former Soviet republics.
2700+ hours total time, 1300 multi-engine, 700 turbine, Russian language
proficiency, and previous work experience within Russia. All
suggestions, possible leads, and inquiries welcome and highly
Please respond to:
Greg Grunner E-mail:
tel.(USA): 847-368-1736 or 818-500-8819


News and Analysis Weekly 
Published every Monday from Moscow.

February 22, 1999
Boris Yeltsin’s Ninth Life

Each visit by President Boris Yeltsin to the Kremlin resembles a badly made
sequel to a movie thriller. Even though the president has looked active and
healthier in the past few days, having made some very public displays of
vigor, his irrelevance to the country cannot be easily ignored. Ever since
his re-election in 1996, the president has had to resort to bravado antics
to assert his authority. At times it seems as though he only makes ritual
staff changes and dismissals to remind himself of his own power. Yeltsin
has done little in the past few years for the health of a country that
spends millions on his. 

There is no doubt that in addition to all his illnesses, Yeltsin suffers
from an ailment common to other "immortal" leaders: hubris. He exudes
smugness and an air of self-gratification that is almost criminal. The fact
that he has comfortably isolated himself from the realities of ordinary
citizens’ lives is well established. It was his instinct for political
self-preservation that motivated his actions during his first term. A
strong dislike for communists and a flirtatious liking for the free market
made him support the experiments conducted on the Russian economy during
the past decade. But his conceit seems to have lately grown so much that he
has started making errors in his political judgement as well. A politician
who needs to face the questions of an electorate at the end of a term in
office would at least pretend to care about real issues. But this president
has no such worries. He believes his growls scare apathetic and inept
bureaucrats into action and his smiles lighten the lives of his subjects.
But there can be no rejoicing in his performance during the visit of German
Chancellor Gerhard Schroeder last week. 

Yeltsin, many have said, is now mostly concerned about his place in
history. He has long tried to shake off his image of a provincial
politician. But his summits "without ties," friendly gestures toward
foreign heads of state, and loud pronouncements of his ability to solve the
thorniest of issues with bear hugs are as much signs of his naivete as real
image building. There is no doubt that Yeltsin fancies himself a statesman.
Nothing, however, will earn him a better place in history than doing what
he does best: small-time politicking and making instinctive political

In the past few weeks, Yeltsin has looked increasingly like a person who
still might have some tricks up his sleeve. If he does not, his place in
the dustbin of history is guaranteed. He will not only be known as a man
who did not finish anything he started, but also as a leader who presided
over a new and disastrous period of stagnation. Unfortunately, only an
irrational man like Boris Yeltsin can make the necessary political
decisions that could help pull the country out of its mess. 

Indeed, there are signs that something might be cooking in Yeltsin’s
"kitchen cabinet." It is well known (and documented in his own biography)
that the president trusts few people, if anyone at all. His impulsiveness
and instincts have brought him where he is, and long-time Yeltsin watchers
say that he still seems to be holding on to to some of his old attributes.
If that is true, then some fireworks can be expected within the next few

The signs are there. The firing of four presidential advisors at the
beginning of the month did not have political significance. But since then,
the "resignation" of Prosecutor General Yuri Skuratov for "health reasons"
followed by the dismissal of the tax police chief were extremely
significant developments. For one, they point to the fact that the
Yeltsin’s "kitchen cabinet," with tycoon Boris Berezovskii as chef might
still remain intact and influential. Both dismissed crime fighters were
seen to have overstepped lines in getting too close to Yeltsin’s family.
And the president’s visit to Jordan and the EU and German summits in Moscow
showed Yeltsin’s willingness to sideline Prime Minister Evgenii Primakov or
at least keep the limelight on himself. 

There might be more to come. It is almost inconceivable that Yeltsin, if he
retains good sense, will allow the country to enter parliamentary elections
later this year under a Communist-led coalition government. If the
president is to leave a legacy of reform, he will have to take power away
from the Communists at least three months before the elections. No matter
what the current government does, the country’s economic decline has begun
and making a scapegoat of the economic bosses of this Cabinet might even be
popular. If Yeltsin continues to enjoy good health, it might simply be a
matter of when rather than what. But two most important questions are: Does
Yeltsin have the political strength to wrestle power back from the current
group lead by Primakov, and if so, to whom would he entrust it? 

In his ninth life, Boris Yeltsin might yet spring another surprise. We
should keep our fingers crossed that Yelstin does not mess up a last
opportunity for what could be his last incarnation. 


CIA warns of Y2K problems in Russia, China

WASHINGTON, Feb 24 (Reuters) - The year 2000 computer bug problem could
cause havoc in some countries, ranging from defective nuclear reactors and
early warning systems in Russia to banking glitches in China, the CIA said
on Wednesday. 

Gen. John Gordon, deputy director of the Central Intelligence Agency, told
a Senate Armed Services Committee panel while the United States was
well-equipped to deal with year 2000 computer problems, many foreign
countries were not. 

``Foreign countries trail the United States in addressing Y2K problems by
at least several months and in many cases much longer,'' he said. 

The millennium problem arises because many older computers record dates
using only the last two digits of the year. If left uncorrected, such
systems could treat the year 2000 as the year 1900, generating errors or
system crashes next Jan. 1. 

Countries least prepared included Russia, China and many states in Eastern
Europe, the Middle East and Africa. Russia, Gordon said, had a talented
pool of programmers but lacked the time, organisation and funding to
address the issue. 

He predicted Russia could have some difficulty with the early warning
systems it uses to monitor foreign missile launches. A Defence Department
delegation visited Moscow last week to address this problem. 

Gordon said the CIA was very ``attentive'' to the possibility that foreign
strategic missile systems, particularly in Russia and China, could be hit
by year 2000 problems. 

For example, liquid-fuelled missiles stored in silos needed to be monitored
for fuel leaks and other defects. 

However, Gordon stressed the CIA did not foresee the automatic launch of
Chinese or Russian missiles, or nuclear weapons going off due to computer

``In fact we currently do not see a danger of unauthorised or inadvertent
launch of ballistic missiles from any country due to Y2K problems,'' he said. 

The CIA was also monitoring Soviet-designed nuclear plants in Central and
Eastern Europe, which could have some difficulty. 

Problems included a loss of off-site power because of glitches on the power
grid. In addition, computer-related problems could affect internal
components or sensors crucial to the operation of nuclear plants. 

``For example, a valve with a digital controller designed to automatically
adjust the flow of cooling water, could potentially malfunction because the
digital controller does not recognise the year 00,'' said the general. 

Russia's Gazprom Natural Gas pipeline was also susceptible to possible Y2K
outages and Russia's ability to transport and export natural gas could be
affected, he added. 

Gordon said European awareness of the Y2K problem was uneven and largely
focused on modifying computer systems for the European Monetary Union
conversion launched this year. 

``This was done, in many cases, by postponing coming to grips with Y2K
problems,'' he said. 

Asia's economic problems had hampered Y2K remediation efforts of most of
the Asia-Pacific countries and China's late start in dealing with the issue
could lead to failures in key sectors such as telecommunications, power and

He told the committee the CIA was aggressively attacking the Y2K issue,
stressing the United States had to be able to respond quickly to any
``unforeseen problem that will jump up and bite us on New Year's Day.'' 


Russian Anti-Semitism Said Rising
February 24, 1999

WASHINGTON (AP) -- Anti-Semitism is growing in Russia, kindled by economic
distress and fueled by political parties on both the right and left, Jewish
leaders told members of Congress. 

``Again, history has shown the enduring appeal of anti-Semitism as a
political weapon in this part of the world, especially during periods of
transition,'' David Harris, executive director of the American Jewish
Committee, said Wednesday at a hearing of the Senate Foreign Relations
European affairs subcommittee. 

Those who testified identified bombed synagogues, desecrated cemeteries,
Nazi-style demonstrations and, most ominously, blatantly anti-Jewish
rhetoric from some of Russia's top political leaders as symptoms of the

Mark B. Levin, executive director of the National Conference on Soviet
Jewry, said statements of hate and violence by the Russian Communist Party
have ``created a tense atmosphere and growing fear of anti-Semitism in an
already precarious environment.'' 

Rabbi Pinchas Goldschmidt, chief rabbi of Moscow, said Gennady Zuganov,
leader of the Communist Party, has blamed Russia's economic crisis on Jews
by noting that some ministers in the last government were of Jewish descent. 

On the right, the virulently anti-Semitic Russian National Unity party has
established chapters in more than a dozen cities across the country, Levin

He said while polls show that most Russians are not overtly anti-Semitic,
many are ambivalent in their attitudes toward Jews and thereby are open to
manipulation by politicians. Anti-Semitism has a long history in Russia;
tsarist governments sanctioned pogroms against Jewish populations. 

``All this pathetic scapegoating certainly casts a pall over our relations
with Russia,'' Sen. Joseph Biden, D-Del., said. 

The subcommittee chairman, Sen. Gordon Smith, R-Ore., said U.S. leaders
must make clear that mistreatment of Russia's estimated 600,000 Jews will
affect U.S.-Russian relations. ``We've got to make some tough calls,'' said
Smith, who in the past has tried to tie U.S. aid to religious freedom in


Moscow Times
February 25, 1999 
Web Site Serves Up Political Intrigue 
By Natalya Shulyakovskaya
Staff Writer

With elections approaching, Russia's political schemers are using the World
Wide Web to update the technique of kompromat, the venerable tactic of
dishing documentary dirt on business and political competitors. 

The latest popular site is Kogot-2, or Claw (, which
provides a treasure trove of purported secret files, police reports and
intelligence analyses on Krasnoyarsk governor and presidential hopeful
Alexander Lebed and his public enemy, aluminum magnate Anatoly Bykov. 

The site details what it says are links between Bykov, various criminal
groups and Moscow's powerful Mayor Yury Luzhkov, another presidential

Internet scandal-mongering is not new - U.S. web gossip Matt Drudge was the
first to report the Monica Lewinsky-Bill Clinton scandal - but the current
outburst is peculiarly Russian, with heavy use of electronic eavesdropping
and the intelligence services lurking in the background. 

It's fascinating stuff - and almost totally unsubstantiated. Theories
abound about who is behind Kogot and other such sites - could it be spies,
political imagemakers, jittery journalists? 

"I think by election time, there will be a madhouse of such rumors on the
web," said Alexander Plushchev, a host of a daily Internet review program
on radio Ekho Moskvy. His program, EkhoNet (, devoted the
entire week of programs to political provocations and scandals. 

Anton Nossik, webmaster for the Moscow News, said Moscow is awash in legal
and illegal surveillance by current, former and would-be intelligence agents. 

"There is a ton of such material gathered around Moscow," Nossik said.
"Private investigators are listening in, the secret services are listening
in, specialists paid for by the newspapers such as Moskovsky Komsomolets
are listening in. There are piles and piles of such tapes lying around many

"And because any governmental organization is basically a compilation of
poorly paid workers, all these things can be sold and bought." 

Unlike its predecessor, also called Kogot, the site is hosted safely
offshore, on a U.S. computer. The first Kogot disappeared within a few
hours of its debut Nov. 26 amid media outcry and an investigation by the
computer crime unit of the Interior Ministry. Notonly did the site
mysteriously disappear, but its Russian host computer was disconnected from
the Internet, the worldwide computer network. 

But before it disappeared, the first Kogot spread all kinds of kompromat
goodies: a long list of home addresses and phone numbers of the Russian
political and business elite; biographical files on politicians including
the interior minister and prosecutor general; and transcribed pager and
answering machine messages for several influential public figures. 

For additional spice, it offered what it said was a transcribed
conversation between the politically-connected billionaire Boris Berezovsky
and Tatyana Dyachenko, President Boris Yeltsin's daughter and image adviser. 

The information itself did not vanish. Internet lurkers saved bits, pieces
and entire files and put them up on other web sites. 

The web, with its low cost and potential for anonymity, was perhaps an
inevitable destination for kompromat. Though the immediate audience is
limited to Russia's estimated 1 million people with web access, newspapers
and radio magnified the effect by jumping on the Kogot story. 

Experts say there are numerous suspects: political spin doctors working out
new technologies for the upcoming elections for parliament in 1999 and for
the presidency in 2000; intelligence agencies seeking to influence public
opinion, or journalists who need to distance themselves from tidbits leaked
from sources sitting in Kremlin offices. 

Nossik said one clear beneficiary of the hysteria surrounding the Internet
rumor mill is the Federal Security Service, or FSB, successor to the KGB.
The uproar could help it lobby for eased restrictions on monitoring the
web. Currently, the FSB has to get a warrant to track electronic
communication by individuals, but it is pushing to gain automatic access to
all web communications - without warrants. 

The information on the first Kogot site looked genuine, said journalist
Alexander Minkin of Novaya Gazeta, one of Russia's best known investigative
reporters. About a year's worth of his private pager messages wound up on
the first Kogot. 

"It was obviously information that came from my own pager," he said. "I
could remember most of them. Some of them were work-related, some were
pages from family and friends. 

"No buts about it, these leaks will have the most grave consequences for
our society," said Minkin. "They demonstrate the weakness of our
government, the weakness of our law. 

"Just think about it: My personal messages get posted on the web, and it
goes unpunished and doesn't infuriate any one," he said. 

But while Minkin was outraged, many other journalists used the information
without a second thought. 

In mid-December, another site,, appeared. Although registered
in Russia, it was located on a computer in the United States where
companies providing computer space for web pages have more freedom and less
responsibility for the content of a site. In Russia, Internet providers
could be held responsible under Russia's more restrictive mass media laws. 

True to its name, the site was a warehouse of rumors about the political
elite, ranging from alleged links to criminal groups to sexual orientation. 

The agency that claimed to have created the site, Slukhovoye Okno or the
Listening Window, advertised it on the popular search engine and
soon claimed high popularity. 

In two e-mail interviews with Russian media, the creators of
claimed to be four former analysts from the presidential administration.
The anonymous authors said they simply wanted to give the Russian public "a
quality information product." 

But on Feb. 18, the site vanished. In a note, the creators said they would
be back in 3 or 4 days, but for now were yielding to "unprecedented
pressure from some of the subjects of the rumors." 


Russian politics riddled with crime, analysts say

SAINT PETERSBURG, Feb 25 (AFP) - The indictment of Yury Shutov, a local
deputy charged with ordering the murder of seven businessmen, shows the
degree to which criminal groups have infested Russian politics, analysts
here said.

Shutov, a 53-year-old deputy in the local assembly, was indicted on Monday
after prosecutors charged him with running a 12-man gang suspected of
killing the businessmen, four of whom were well-known in Russia's
second-largest city.

The gang was also preparing to "liquidate" Vyacheslav Shevchenko, a deputy
in the Russian Duma, or lower house of parliament, for ultra-nationalist
leader Vladimir Zhirinovsky's Liberal Democrat party, press reports said.

Shutov began his political career under the Soviet regime, and during the
late 1980s period of perestroika he was close to Saint Petersburg's liberal
ex-mayor Anatoly Sobchak.

He has since distanced himself from Sobchak, who is now in France and being
investigated by Russia's prosecutor general for alleged corruption and
abuse of power in office.

"Shutov's arrest is only the tip of the iceberg," said Anton Ostapov from
the Saint Petersburg Institute of Sociology.

He said that since the end of the Soviet Union, a new breed of politician
has emerged to look after the interests of "New Russians," a class of
wealthy entrepreneurs who quickly took advantage of communism's fall.

Many of the newly rich are reported to have ties with Russian mafias.

"Saint Petersburg political life is built on relations with the world of
finance and business," Ostapov said.

Running for public office "is not political, its objective is economic,"
said Yury Sokhnov, another of the sociological institute's experts.

This was confirmed in fall 1998 local elections, which were marked by the
unresolved assassination of liberal deputy Galina Starovoytova on November 20.

Most of the seats were won by "independent" candidates, who in fact have
links with figures from the city's economic and financial communities.

"The extent of corruption in Saint Petersburg is enormous but in the end
not much more so than in other Russian cities," said a local deputy's aide,
who asked to remain anonymous.

According to Interpol, 8,000 to 10,000 criminal groups with a total of
50,000 to 100,000 members currently operate in Russia, and mafias are said
to control some 40,000 businesses and 550 banks.

"The police has failed in its fight against organised crime, which has
undermined Russia by infiltrating all levels of power," the interior
ministry recently admitted.

While not as serious as the crimes Shutov is accused of, several other
recent affairs reveal the extent of corruption within Russian society.

Viktor Volkov, a former deputy governor of the Tver region in central
Russia, was sentenced at the end of January to nine years in prison after
he took 250,000 dollars in exchange for public aid grants to several
regional firms.

In Moscow, highly-placed officials in charge of privatising state-owned
companies were arrested in early 1998, followed in June by Yury Yurkov,
head of the federal statistics board, along with some 20 assistants.

Vladimir Petrov, a former deputy finance minister, has also been arrested
for accepting a half million dollar "gift" from a Moscow bank


Washington Post
February 25, 1999
[for personal use only] 
Russian Rocket Called Invincible
Designer Says It Can Penetrate Any 'Potential ABM System'
By David Hoffman

MOSCOW, Feb. 24—The leading designer of Russia's new intercontinental
ballistic missile claimed in an interview published today that the Topol-M
rocket has the ability to "effectively penetrate" the antimissile systems
"of any state."

The comments by Yuri Solomonov, general constructor at the Moscow Institute
of Heat Technology, which built the new missile, made public what other
Russia experts have previously asserted privately: that the missile has a
secret design that permits it to elude the most modern missile defenses.

Solomonov was not specific about the missile's shield-smashing ability in
an interview with the newspaper Nezavisimaya Gazeta, and his claim could
not be verified. But his comments could add to the debate over the
feasibility of limited missile defense systems, such as one now being
developed by the United States.

His remarks also could be intended as a warning to the United States, which
has suggested modifying the 1972 Anti-Ballistic Missile Treaty to allow use
of a limited missile defense. Russia has steadfastly opposed changing the
treaty, although there have been some hints that it might be willing to
accept changes as part of a larger arms-control agreement.

The single-warhead, solid-fueled Topol-M is the centerpiece of Rus sia's
hopes for preserving its nuclear deterrent in the years ahead, at a time
when many of its aging missiles, submarines, aircraft and
command-and-control systems are scheduled to be retired because of
obsolescence and lack of money to build replacements. A first regiment of
10 new Topol-M missiles was placed on combat-duty status in December.

Solomonov said the missile had "from the very beginning design capabilities
enabling it to effectively penetrate a potential ABM system of any state."
He said the missile has different configurations, so that it can function
without special equipment against missile defenses or be outfitted to
penetrate a defensive shield.

"One must understand," he said, "that if you are going along the second
route, you must increase spending and also change the characteristics of
the missile -- make it heavier, more sophisticated in construction."

He said that even though the Topol-M has received high priority and
personal backing from Defense Minister Igor Sergeyev, funding for the
project last year was only half of what was budgeted because of Russia's
continuing economic problems. Solomonov said characteristics of the Topol-M
-- in addition to its ability to penetrate an anti-ballistic missile shield
-- include a high degree of accuracy, resistance to damage and the
"effectiveness" of the warhead itself. He suggested that the warhead has a
self-targeting mechanism that activates just as the warhead is approaching
its target.

The Topol-M is designed to replace aging "heavy" missiles with multiple
warheads, which were outlawed by the START II arms treaty. The treaty has
languished unratified in the lower house of the Russian parliament, and
some American analysts have suggested that Russia could be allowed to
modify the Topol-M into a multiple-warhead missile in exchange for changes
in the ABM treaty.

Solomonov said that if START II is discarded and if Russia can scrape up
enough money, the Topol-M could be converted to a multiple-warhead missile.
Other officials have said it could carry up to seven warheads, although
they would be relatively small. 


before Senate Foreign Relations Committee
on Fiscal Year 2000 Budget
February 24, 1999

Further to the east, towards the Caucasus and Central Asia, democratic
change remains very much a work in progress. In many countries,
respect for human rights and the rule of law is unsatisfactory and
economic reforms have been slowed by financial turmoil.

With the aid of our soon-to-be-created Bureau of East European and
Eurasian Affairs, we will vigorously pursue diplomatic and
programmatic efforts to help countries in the region find the right
road. We do this for reasons of principle, but also because this part
of the world is critical to our own long-term security and prosperity.

I want to express my appreciation for past congressional leadership,
through Nunn-Lugar and the Freedom Support Act, to safeguard the
handling of nuclear materials and lay the groundwork for economic and
political reforms in the New Independent States. We will need your
continued help this year in providing the resources and the
flexibility we need to advance our goals, for we have entered a
pivotal period.

Every country in the region will hold parliamentary or presidential
elections in 1999 or 2000. We hope to see progress on Nagorno-Karabakh
and on withdrawal of Russian troops from Moldova. We will also renew
our request this year for legislation to repeal Section 907 of the
Freedom Support Act. And we will press for completion of CFE
negotiations by the OSCE summit later this year.

We attach high importance to our strategic partnership with Ukraine,
knowing that an independent, democratic, prosperous and stable Ukraine
is a key to building a secure and undivided Europe. In 1999, we will
continue to support Ukraine's economic and political reforms, press
for a free and fair Presidential election, deepen our cooperation
under the NATO-Ukraine Charter and strengthen our joint
nonproliferation efforts. Last week, I was able to certify -- after
careful consideration -- that the requirements of U.S. law with
respect to Ukraine's business climate have been met -- albeit just

We are also striving to strengthen our partnership with Russia. During
my visit to Moscow last month, I found a Russia struggling to cope
with economic setbacks, high rates of crime, and political
uncertainty. I was heartened by my meeting with leaders of Russian
civil society, and urged them to persist in efforts to build democracy
and to resist the forces of extremism and intolerance -- including
anti-semitism -- that are threatening progress.

On the official level, we continue to work closely with Russia. Our
constant communication helps us to manage differences and make
progress on important issues such as the CFE negotiations and Kosovo.

A peaceful and democratic Russia that is tackling its economic
problems and playing a constructive international role can make an
enormous contribution to the 21st Century. It should not be surprising
that the Russian transition from Communism to a more open system is
proving difficult. Our own democracy took many decades to mature and
remains unfinished. We have an enormous stake in Russian success and
will continue to help as long Russia is committed to the path of

The economic crisis in Russia and elsewhere in the New Independent
States (NIS) adds urgency to the need for effective action. The
President is seeking $4.5 billion over the next five years for threat
reduction programs in this region to dismantle or store strategic
weapons safely, secure fissile material components, and engage
scientists to prevent the proliferation of WMD expertise. We are
determined that no nukes become "loose nukes."...

I have personally made clear to Russian leaders that deployment of a
limited NMD that required amendments to the ABM Treaty would not be
incompatible with the underlying purpose of that Treaty, which is to
maintain stability and enable further reductions in strategic nuclear
arms. The ABM Treaty has been amended before, and we see no reason why
we should not be able to modify it again to permit deployment of NMD
against rogue nation missile threats.

We could not and would not give Russia or any other nation a veto over
our NMD decisions. It is important to recognize that our sovereign
rights are fully protected by the supreme national interests clause
that is an integral part of this Treaty. But neither should we issue
ultimatums. We are prepared to negotiate any necessary amendments in
good faith.


Christian Science Monitor
FEBRUARY 24, 1999 
[for personal use only] 
A Russian leader on porridge, czars, and real estate

Moscow Mayor Yuri Luzhkov is considered a leading contender for the
presidency in Russia's scheduled 2000 election, though he has not yet
announced his candidacy. A Soviet apparatchik unbound, he has flamboyantly
and brutishly helped define Russia's new brand of democratic capitalism.
His style of machine politics and financial wheeling and dealing has
changed the face - and tenor - of Moscow with elaborate real estate
developments and an iron grip on who may or may not live or do business

Reelected to city hall in 1996 with nearly 90 percent of the vote, Mr.
Luzkhov's challenge in the presidential elections will be how to extend his
enormous local popularity beyond the glitter of the city limits to the
far-flung, impoverished regions of Russia. 

The Monitor's Moscow bureau chief, Judith Matloff, was granted a written
interview with Luzkhov. Excerpts of that interview follow. 

How did you get your reputation as a "man who gets things done"? 

Moscow is quite successful, compared with the other Russian regions and the
country as a whole. Why? There are many reasons. 

First, there is the philosophy of the Moscow city government: Government
should serve its citizens. Our main task is to create conditions so that
every capable citizen can work, own property, raise and educate his
children, and have proper leisure. The government must help those who can't
feed themselves because of poor health or old age. 

Second is our devotion to a market economy and free-market reform. We are
sure that tremendous creative potential is connected with the market
mechanism, but it has to be used skillfully. 

Our strength is that we managed to insist on our reforms, which differed
from those imposed on the country by such Russian monetarists as [former
Yeltsin ministers Yegor] Gaidar and [Anatoly] Chubais. 

The criteria for effective reform are economic growth and prosperity of the
people. That's why we decided not to enforce a process of privatization in
which Moscow property would be sold freely, regardless of the buyer. Our
privatization process was based on the principle that we sell property
according to its real market value, and the new owner be obliged to use it
effectively. As a result, Moscow earned more money from its privatizations
than the federal government did from the privatizations it conducted
throughout the whole country. 

Which historical figures are your role models? Are there contemporary
figures who share your views on Russia's transformation? 

I admire the genius of Peter the Great, the Russian czar at the beginning
of the 18th century. Because of his Titanic efforts, he managed to
transform Russia from an underdeveloped country into a powerful modern
European state. He conducted all his reforms by providing his subjects with
his personal example. He did all sorts of work, if it was necessary for his
country. He was a carpenter, constructing cities and ships with his own
hands. He was a blacksmith and melded big guns for his army. He commanded
his regiments in battle. 

I respect the American people and their history. I know how much effort and
energy went into making America become, over a short period, one of the
world's most developed and prosperous countries. Most of all, I admire
President [Franklin] Roosevelt, who had the courage to propose and
implement the New Deal during the worst economic crisis. This policy was
based on the interests of the state and nation and served America well. 

There are many talented and diligent people in modern Russia, including
politicians and scientists. I've already mentioned many times [democratic
reformer and presidential hopeful Grigory] Yavlinsky, whose ideas are the
closest to mine. 

Which parties could be potential political allies of your new party,
Fatherland, in the 2000 elections? 

We are open to all alliances, but not with just anyone and not without
certain principles. [Among] the main criteria for an alliance would be the
continuation of market reforms in the interests of the country and the
majority of its citizens. 

Generally, our wish is to create an organization which would unite only
people who have proved that they can do concrete work, to create new
material and spiritual values for the sake of the whole country. 

As far as the Communist Party ... we have many ideological differences. 

It seems to me that [Our Home is Russia, the democratic reform party of
former Prime Minister Viktor Chernomyrdin] ... should confess that it
embraced the wrong approach when it was in power. 

What are your main achievements and failings as Moscow mayor? 

Moscow has essentially changed for the better. Many things have been built
and are being constructed right now. Despite the decline of productivity
throughout the country, Moscow's production - including in industry -
managed to grow. Living standards of Muscovites are rising, and we have
practically no unemployment. 

What are our drawbacks? Well, you want all my secrets! 

We continue to worry about the housing problem. Although we have built a
lot of apartments, we are still unable to meet the demand for new, modern

The periodic financial and economic crises are our main obstacles. The
federal government is to blame for crises like the one in August 1998. But
I am still sure that we will fulfill our promises to Muscovites [to improve
their living conditions]. 

What are your hobbies, favorite foods, films, and books? How do you relax? 

I have practically no leisure time. In the past, I liked to do carpentry,
wood carving, and beekeeping. 

But currently I prefer to pay more attention to keeping myself in shape. I
regularly play soccer, tennis, and ride horses. 

My favorite writer is Dostoevsky, but I don't have enough time for reading. 

My favorite dish is pshennaya kasha (buckwheat porridge with milk and
sweetened pumpkin). 



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