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Johnson's Russia List


March 11, 1999    
This Date's Issues: 3084 3085  

Johnson's Russia List
11 March 1999

[Note from David Johnson:
1. AP: Official: Alcoholism Threatens Russia's Existence.
2. Itar-Tass: Chernomyrdin Says "Time Is Against Ua" at Talks with IMF.
3. Newsweek: The End of the U.S.S.R. [remarks of Gorbachev].
4. UPI: Gore to raise antisemitism with Primakov.
5. Mark Ames: Re: Peach/FIMACO/3083.
6. David M Rowell: Teaching/training Russian students.
7. Philippe D. Radley: Re: 3082-Hellman/Morality.
8. Newsday: Michael Slackman, Russia's Inner Struggle. Federal government 
losing its authority over regions.

9. Moscow Times: Andrei Piontkovsky, SEASON OF DISCONTENT: Personal Thrill 
At Oligarch's Comeuppance.

10. Christian Science Monitor: Fred Weir, Is Moscow graft-busting for real?
A big anticorruption drive is read as just the sound of a Kremlin power

11. Itar-Tass: Berezovskiy Addresses US Audience on Russian Election.] 


Official: Alcoholism Threatens Russia's Existence
March 10, 1999

MOSCOW (AP) -- Alcoholism among Russian teen-agers is on the rise, and
drinking problems continue to afflict millions of Russians, a top health
official said Wednesday. 

Some 2.5 million people, or nearly 2 percent of Russia's population of 146.3
million, are officially registered alcoholics, but the actual number is
probably much higher, Deputy Health Minister Gennady Onishchenko told a news

"This is a frightening figure," he said, according to the Interfax news

Especially alarming is a growing number of alcoholics among teen-agers, he
said. There were 17.4 alcoholics per 100,000 teen-agers five years ago,
compared to 20.8 per 100,000 last year. In 1999, the figure may rise to 24.4
per 100,000, Onishchenko said. 

Per capita alcohol consumption in Russia was about 3.6 gallons last year --
about the same as in France, the world leader. But where the French tend to
drink moderate amounts of wine daily with food, Russians are more prone to
periodic vodka binges that can involve potentially lethal amounts of alcohol. 

Official figures also apparently don't include bootleg vodka that often causes
fatal poisonings. 

Experts have said that alcoholism, along with smoking, poor diet and a decline
in the birth rate, has contributed to a drop in Russia's population by roughly
2 million people, or 1.3 percent, over the last seven years. 


Chernomyrdin Says "Time Is Against Ua" at Talks with IMF.

WASHINGTON, March 10 (Itar-Tass) - "Time is against us" at the talks with the
International Monetary Fund, Russian ex-prime minister Viktor Chernomyrdin
said after his meeting with IMF managing director Michel Camdessus on

"The more we delay these talks and postpone the signing of the agreement, the
more we will lose," Chernomyrdin told Itar- Tass. 

The meeting between Chernomyrdin and Camdessus lasted about two hours, much
more than was planned. Chernomyrdin said it was a "good" meeting which allowed
"us to discuss and consider in substance" the issues which concern both Russia
and the IMF. 

"I think that there is a complete understanding of what is happening and I
think there is an understanding of what should be done," he said. 

The IMF is sending a new mission to Russia. Its work is Moscow was also
discussed at the meeting. 

Chernomyrdin noted that the decision to send the mission had been made by the
IMF head after his telephone conversation with Russian Prime Minister Yevgeny

The mission will "once again check our positions and find points of contact,"
Chernomyrdin said. 

He believes that this issue can be solved "without any detriment to Russia." 

The length of the mission's work in Moscow "is not the main issue," he noted,
adding that IMF experts will work in the Russian capital as long as it will be
necessary. At any rate, "the IMF and Mr. Camdessus are set to do business." 

Asked whether he will feel hurt if the talks in Moscow end successfully
without his participation, Chernomyrdin said that "I have not set myself such
a task" and have not received corresponding powers. 

"I am not participating in the signing. This is not my function or my mission.
It will all be signed by the government. It is not the question of who feels
hurt and who doesn't. Business and the result should be most important to all
of us, Russians," he said. 


International Edition
March 15, 1999
The End of the U.S.S.R. [remarks of Gorbachev]

MOSCOW, 1991: Vacationing on the Black Sea, Mikhail Gorbachev was nearly
overthrown by communist hard-liners. The Soviet president regained the
Kremlin, but the U.S.S.R. broke up within months. 

I think I shouldn't have gone on vacation. But I thought we had an
agreement that we'd signed, we had an anti-crisis program. I thought that,
in this situation, only an adventurer could decide to take such steps. But
they were adventurers. We should have been more vigorous in reforming the
Communist Party. 

I made a choice in favor of freedom and democracy, which was bound to
lead to the abolition of the monopoly [on power] held by the party, to
political pluralism. It was bound to lead to political reforms [and]
reforms of property. But this is a very complicated process, especially
here. And what is happening now is bad. 

I would say [the cold war actually ended] in '89, maybe even before
'89the movement started already then. The atmosphere became different,
international relations were no longer ideological ... 

Everybody [in the United States], even my friend George Bush, thinks
that it was a happy moment that fell from the sky when the Soviet Union
broke up. OK, it happened. But now Russia wants to be free, democratic,
market-oriented, open to other nations. That is what the world needs. The
people who live here can endure the kind of things the Americans would not
be able to endure. They will endure it, and they will eventually rise. So I
would like to take this opportunity to appeal to all the Americans and ask
them to understand Russia. It's not a poor country, but it is in this cycle
now, and it needs help to overcome it. I think if we could move from
[superficial] talk"my friend Boris, my friend Bill Clinton"to the [United
States'] making real steps in support of Russia, as a partner, it would
help tremendously. How many billions are needed for Russia? Trillions are
needed. Russia is a huge and rich country, and now half-a-trillion dollars
has been taken out of it. 

[With the right reforms in 1991,] the union could have been preserved.
And it would have been better for Russia, for other nations, for Europe and
the world. But, as they say, history doesn't know the subjunctive mood.


Gore to raise antisemitism with Primakov 

WASHINGTON, March 10 (UPI) Vice President Al Gore will express concerns
over antisemitism in Russia when he meets later this month in Washington
with Prime Minister Yevgeny Primakov, U.S. officials say. 

A spokesman for the vice president, Tom Rosshirt, said today that Gore has
been a consistent defender of Jewish rights overseas and plans to raise the
disturbing trend toward official antisemitism in Russia when he meets
Primakov during the last week of March. 

"Antisemitism has been an issue of deep concern to the vice president his
whole life," Rosshirt told United Press International. "He will raise it
when Primakov comes into town later this month." 

Gore's pledge comes two days after a confidential correspondence arrived
from Capitol Hill calling on him tell Primakov the Clinton administration
will reduce assistance unless action is taken to rein in "fascist
extremism" from the likes of Alexander Barkashov of the Russia National
Unity Party, Communist leader Gennady Zyuganov and Krasnodar Governor
Nikolai Kondratenko. 

The letter to Gore, a copy of which was provided to UPI, came from the
chairman and ranking minority member of the Senate Foreign Relations
subcommittee on European Affairs. 

"We hope that during your meetings you will find the time to let the prime
minister know in simple terms that United States support for democratic
institutions in Russia also includes also includes unwavering opposition to
antisemitism at any level, in any form," Sens. Gordon Smith of Oregon and
Joseph Biden of Delaware. "Over the years it has not been unusual for the
United States to act on this subject, linking American foreign policy with
what should now be regarded as a cornerstone of human rights policies in

In a separate letter, Biden and Smith asked Capitol Hill colleagues to
request that Gore raise the issue with Primakov. They wrote their fellow
lawmakers that the most effective way to "combat this new wave of
hate-filled rhetoric" is to "make it an issue" during Primakov's visit. 

But there have been more than rhetorical attacks on Jews in Russia. Most
recently, vandals broke into a synagogue in Novosibirsk on March 7 then
sprayed painted Nazi swastikas on the walls and destroyed the Torah. 

State Department spokesman James Rubin condemned the incident and called on
Russian authorities to bring the perpetrators to justice. 

"Antisemitism, racism and extremism have no place in any civilized society
and must be strongly combated," Rubin said today in a written statement.
"This issue remains a key element of our dialogue with the Russian


Date: Wed, 10 Mar 1999 
From: "Mark Ames" <> 
Subject: Re: Peach/FIMACO/3083

Dear David,
I rushed out a reply in the eXile to Gary Peach's truly shocking diatribe
against Russia, and I hope you'll publish it on your list. The trend among
journos towards increasingly hysterical Russophobia is incredible, and
gathering steam. You see it in the glut of Russians-as-anti-Semites
articles, or the see-the-idiots articles, or the schadenfreude at how much
worse things are going here than, say, in quaint little city-states like
Estonia, where "true" reforms were implemented. I know where this is
leading too: to the next phase of the cover-up, in which the neo-liberal
tools will start arguing that Chubais & Co. were never given a fair chance
to reform Russia, and look how much worse things are without them. I know
that the language in my piece is strong, but I'm merely attacking a
healthy, dollar-earning Westerner, while Peach, with a clear conscience,
condemned an entire nation to a century of misery.
Sincerely Yours,
Mark Ames
the eXile

Peaches 'N Hate
By Mark Ames

It was one thing when self-proclaimed Russophile Jean MacKenzie confessed
late last year that to her Russia was a "dark, savage country." 

Case closed on The Moscow Times' tolerate/hate relationship with Russia,
right? Wrong. Out of nowhere, their leading business writer, who answers to
the impossible-to-believe handle "Gary Peach", lashed out this past Tuesday
with an "analysis" that can only be described as bordering on a hate crime.
Entitled "FIMACO Shows All Hope Is Lost for Future of Russia", Peach's most
recent installment of the weekly column known as "The Analyst," which is
normally harmless monetarist propaganda vaguely connected to the realities
of Yeltsin's Russia, suddenly went loony tunes. 

"I can no longer restrain myself," the nerve-wracked tool wrote, after a
lengthy and totally unnecessary aside on why he denounces the pronoun "I":
"No 'I' this or 'I that' should be forced upon readers' better judgement.
But due to the appalling 'offshore' events recently revealed, my emotions
have gotten the better of me."

Most people here snapped quite a long time ago. Like when it turned out
that Yeltsin didn't give a flying fuck about his people, democracy, or
human rights; or when reforms wound up impoverishing the entire nation; or
when the war in Chechnya led to over 80,000 deaths; or when Yeltsin bombed
the White House; or when he created an oligarchy with the aid of his top
young reformers; and so on, and so on. Not Peach. What made him snap were
recent revelations that the Central Bank funneled reserves out to a secret
offshore company, and that profits from the management of this money
probably wound up in the pockets of Central Bank officials.

"... Nothing good will come out of this country in the next 30 to 40
years," the analyst wrote. "If the entire system is so [...] hopelessly
corrupt [...], then let Russia wallow in its own misery for another
century. The country deserves no better."

Folks, this isn't just outrage; it's bleeding-raw malice towards an entire
nation! The strangest part is that Peach is willing to condemn an entire
nation to suffer misery for 100 years because a small clique that
ruthlessly rules over them is corrupt. It would be like analyzing a
massive, abuse-laden orphanage, whose overseers have been accused of rape,
theft and snuff-film trafficking, and concluding, "If the orphanage is so
hopelessly debauched, then let the children wallow in their own misery for
the remainder of their youth. The orphanage deserves no better."

So now the question becomes, why all the ill-will? 

A simple scan through the trail of analytical evidence left behind by the
Times' very own Nostradamus reveals that "The Analyst" would better be
titled "The Dumbshit". Because no one, save interim-editor Geoff Winestock,
has been more consistently, 180-degrees-edly wrong about Russia's economy
and politics than resident analyst Gary Peach.

Just as early as last December, Peach, in his end-of-the-year assessment,
poo-poo'd doom-and-gloomers and optimistically declared: "There were plenty
of positive events over the past 365 days, which can hardly be said of
years gone by." In his opinion, "By far the worst thing to come out of 1998
was a trend: An ugly, unpunished, largely unrestrained rise in racism."
Uh, yeah. Okay, so he was a little off. There was this financial meltdown
and all, but... aw heck, forget it. You can never go wrong condemning

Completely missing the point and falling for the Nazi bogeyman hardly
explains Peach's Russophobia. Welp, maybe this spring-time column does:
"One can immediately see that Russia is in no way threatened by an
[Asian-style financial meltdown]... Some observers may place Russia on the
same level with Asia based on superficial accusations of corruption and
cronyism. This is largely unjustified. [...]Russia's cronyism -- selling
the nation's largest enterprises to an inside group of bankers -- can be
defended from a philosophical standpoint (Machiavelli, Hobbes), because it
helped ensure the re-election of a pro-reform candidate in 1996." [THE
ANALYST: Bad Managers Caused Asian Crisis, April 28, 1998.]

Or this: "No matter what mistakes it has made, since taking control in
October 1994, the Dubinin-led [Central] bank has been a fortress of
farsightedness in a country that lives week-to-week." [THE ANALYST: An
Unglamorous Crisis: The Central Bank at Risk, April 14, 1998.] 

Want more peachy-keen analysis? "The worst phase of Russia's financial
crisis is in the past. [...] Overall, many observers may be surprised to
see a stronger-than-expected Russian economy emerge this year." [THE
ANALYST: Rating Downgrade a Case of Too Much, Too Late, March 17, 1998.]
You can't stop this man! Only a few weeks before the spectacular crash of
Russia's stock market, as terrifying, black-as-death storm clouds were
gathering on the horizon, Peach cheerily declared, "Generally, one can be
sure that the bull run of Russia's stock market is not over." [Oil, Power,
Connections Spell 4th-Quarter Growth, September 30, 1997.]

The list goes on and on: groveling blowjobs on the young reformers (he
calls Chubais and Nemtsov "the dynamic duo of market reforms"), a
disgusting apologia for Alfred Kokh after he was sacked for taking a bribe
from Uneximbank (Peach describes the universally-criticized Norilsk sale to
Unexim as "a delectable treat for the government" and Kokh's sacking as
"unjustified"), and he consistently reads both economic and political
events with dusted pot leaves instead of tea leaves. In other words, he
stands out as the single biggest moron in local print. And not even a nice
moron, as is evidenced by his tough-guy "philosophical" defense of the
creation of an oligarchy by citing Machiavelli and Hobbes. It would be
interesting to see how Hobbesian Peach would be if a Berezovsky controlled
and raped his country instead of Russia.

Peach's beef with Russia is not corruption, FIMACO, or economics. Peach's
problem, like Jean MacKenzie's, like so many other Westerners', is that
Russia didn't turn out the way they wanted it to. They wanted Russia to
become something familiar, and when it didn't, they blamed Russia for
making them look bad. They rammed a totally alien, poisonous remedy of
pseudo-Thatcherism down Russia's throat, and when the patient began to
break out in boils and vomit blood, they screeched, "It's the goddamn
patient's fault! She deserves to die!" and ran fleeing from the hospital.

Instead of doing the honorable thing by publishing a mea culpa for badly
screwing up the whole Yeltsin-era story, Peach did what most Westerners
have done here, issuing a they-a culpa, and damn them to hell.

Thanks a fucking lot, Peach. Russia will fondly remember your small
contribution to the massive cover-up campaign that helped prolong its
destruction under the guise of "reform," and now, they'll remember your
condemnation of Russia to live out another century in misery. It's a good
thing you've given up all hope on Russia. A better thing would be if you'd
apply your hard-hitting judgement to your own record. 

The best punishment for Gary Peach would be that he wallow in his own
miserable little Moscow Times column for the rest of his life. And may
flesh-eating bacteria eat away his jaw and ears, but not kill him, making
him so physically repulsive that even his cat would flee from him. He
deserves no better.


Date: Tue, 09 Mar 1999 
From: David M Rowell <>
Subject: Teaching/training Russian students

Peter Ekman analyses cogently and clearly (JRL 3082) the various
western initiatives to train/teach Russians in Western business
practices, and I can't disagree with anything he says. I can however
offer some perspective on the concept of training interns in the US,
based on my/my company's experiences participating in such programs, and
provide some derivative analysis.

We have had two Russians spend respectively three and four weeks with a
travel company I own. The first woman, two years ago, was a travel
agency owner in St Petersburg in her early forties, the second woman a
month ago was an employee from Ekaterinburg, in her mid twenties. Both
were coordinated through the Center for Citizen Initiatives in San
Francisco, and in both cases, the intern stayed at home with my wife and
I and worked at our office during the day.

The first experience was generally unsatisfactory, the second experience
much more satisfactory. The first woman tended to be inflexible in her
thinking and was trying to discover some sort of "magic secret formula"
that she could miraculously apply to her business upon her return and
transform it into - well, into something that it wasn't and never would
be. This was nothing more than a slight variation on the "get rich
quick" mentality which afflicts so much of Russian business at present.
She left feeling frustrated and disappointed, suspecting that we had
chosen not to share the secret of sure-fire business success that she
remained certain exists.

The second experience was much more positive and productive. The intern
was open minded and intelligent, and receptive to new ideas while still
having enough practical experience to understand the imperfections of
both marketplaces and the imprecision with which anyone ever develops
and deploys a business plan. She left with some clearly identified
opportunities for implementation back at her company in Ekaterinburg,
and indeed an email from her yesterday indicates she is now following
through on developing these accordingly.

>From a cost effectiveness point of view, I'd rate such programs highly.
The total cost (apart from program administration) was merely an airline
ticket and a small amount of spending money. We (as host) covered all
the living costs while the intern was here. Of course, program results
are very variable, depending both on the selection of interns (I agree
with Mr Ekman's concern about the potential for improper selection, even
though both interns I met seemed to be sensible choices) and - of equal
or greater importance, the selection of suitable hosts for the interns
to be placed. However, in general, if one contrasts the illustrative
cost in Mr Ekman's article of $40,000 to graduate a student from a two
year MBA program (with such student then over-equipped with skills that
only rarely would translate directly to the Russian marketplace - I say
this as an MBA graduate myself) with the probable alternate under an
intern program of the same $40,000 funding between 25-40 people, all of
whom return to Russia with a profound re-orientation of many of their
values and "world-understanding"; I'd advocate an increase in such
intern programs as being the more valuable "across the board"

I think (if I may put words in Mr Ekman's mouth) one of the main lessons
from his article is that any training program has to be evaluated not
just in isolation but within the cultural milieu of Russia. As such, he
cogently points out that funding Russian in-country educational programs
have major challenges. A solution to this might be to fund the
establishment and operation of fully Western tertiary institutions in
setting up subsidiary branch Russian campuses?

The application of the real-world filter to the abstract theory also, to
my mind, argues against creating more western style MBAs and dumping
them back in Russia - just what the country doesn't need - a fresh bunch
of people all hoping to make their fortunes playing money markets and
other financial abstractions! (Okay - cheap shot, but most readers will
know what I mean!)

Surely the largest need is to shift the whole social framework from the
anarchistic "everyone for himself" situation at present to a more
merchant-driven, (dare I say) "Protestant work-ethic" type scenario. If
this is accepted as an appropriate objective, then short term
internships giving people a chance to experience for themselves the
values of honest business trading, of good customer service, of treating
staff well, etc etc - all the things that we take for granted in the
west but which are lacking in Russia - this helps to build up a
groundswell of support for such things in Russia.

We need to bring as many as possible "bright young things" - currently
junior managers with future potential - to the west and expose them to
the best and the worst of the west. Upon their return to Russia, we
need to create the opportunities for ongoing interaction between these
people - heck, allow them/encourage them to form a new political party
even (!) - so as to allow for the development and reinforcement of their
experiences on their return.

In closing, I strongly feel that the most pressing need in Russia is to
help them to re-invent their total social framework, and to encourage
and assist the population to re-discover the virtues of basic honesty
and morality to a practical level such is are found in most other
countries in the world. When this has been achieved, anything and
everything else becomes possible, but until this huge first step is
taken, nothing else is possible and everything is doomed to have the
life sucked out of it by the giant corruption engine that has so
effectively destroyed Russia better than the Soviet Communists, the
Germans or the French ever achieved in the past. Until honesty is an
accepted cornerstone of their society, trying to teach western business
practices is out of place and premature.


Date: Tue, 09 Mar 1999 
From: "Philippe D. Radley" <>
Subject: Re: 3082-Hellman/Morality

re Adrian Helleman on "the need for morality". Like many in the U.S.,
Helleman mixes up private and public. Religion-based morality is personal,
not public.Religion can guide us in our personal behavior, but to look to
it to regulate public behavior is to ask of it what it cannot do. I have no
doubt that there are moral people in Russia today, but their personal
morality cannot provide public standards, unless those standards are
codified into laws and regulations, that have both juridical and executive
strength. Russia will have a working economy, when it has a working legal
system, not before. What alarms me is that Helleman is pointing to a
blurring of boundaries of personal and private that very nearly led a to a
constitutional crisis here. Russia certainly is in no need of that.


March 7, 1999
[for personal use only]
Russia's Inner Struggle / Federal government losing its authority
over regions

Krasnodar, Russia - Winding their way through backroads, often
waiting until nightfall to make the journey, drivers with pockets
stuffed full of rubles pull their trucks into Nikolai Tetovskoy's
weathered and sagging warehouse. Inside, the deals are made quickly, the
vehicles are loaded, and the drivers slip back into the night, hoping
they are not stopped by the police.
The smugglers are not trading in drugs, or guns, but a contraband
that thrives in the thick, black earth of Tetovskoy's farm: It's wheat.
Plain, old wheat. Sometimes peas, sometimes corn and even barley. Often,
he clandestinely sells meat. Sides of beef, freshly slaughtered, from
the small herd of cows he raises.
Here in southern Russia, one of the nation's most productive
agricultural regions, Krasnodar governor Nikolai Kondratenko has
unilaterally prohibited exporting most food products. His order would be
tantamount to the governor of Florida declaring it illegal to ship
oranges to Louisiana. Or Gov. George Pataki prohibiting baymen from
shipping oysters to New Jersey.
Kondratenko can get away with his order because there is no one to
stop him. Russia is far from the monolithic state it once was under
communism, an image that remains burned into the consciousness of much
of the West by the Cold War. But when the Soviet Union spun out of
control, pulling itself apart, the centrifugal force undermined the
cohesion of Russia itself, down to the provincial, even municipal
There is chaos brewing, not the kind of anarchy that breeds rioting
in the streets. But a virtual free-for-all has broken out among regional
leaders, with each presiding over his jurisdiction as though it were an
independent nation. Regional leaders are signing trade deals with
foreign governments. They have refused to pay federal taxes. They are
requiring permits to live within the most desirable cities. Some are
trying to run a centrally controlled, communist-style economy. Others
are pushing the bounds of capitalism, selling land to individuals. Last
year alone, local officials adopted 1,500 laws that violate federal law.
At least eight regions have tried to restrict the sale of food outside
their borders.
"Nobody has levers of power, neither the president, the government,
the governors, the Duma nor the Federation Council. Nobody. Nobody is in
charge," said Michail Prusak, governor of the Novgorod region north of
Moscow. "That is the main trouble. Each of us shouts and screams, but we
cannot do anything. We are all separate."
The confusion that has replaced the Communist Party's once-iron
grip on national policy underscores the complicated reality that is
Russia today: For all intents and purposes, Russia as a unified
government operation does not exist. There are 89 so-called subjects of
federation, the equivalent of states, each with very different rights
and responsibilities. There is a central, federal government, but it is
so powerless that officials have been unable to force local officials
to nullify those laws that violate the federal constitution.
"We have no mechanism for enforcing the decisions of the
constitutional court," said Yury Skuratov, the prosecutor general who
recently resigned for health reasons.
Complicating the situation, Russia has no experience with federalism
or separation of powers. Under the czar, who was said to have been
chosen by God, virtually everything was controlled by the monarch. Then
during the seven decades that the communists ran the government,
everything was decided by the Party. That meant fishing boats plying the
waters of the Far East could not even empty their nets without approval
from Moscow. Often, the fish rotted in the sun.
After the collapse of the Soviet Union, Russia's government sought
to work out relations with the regions, particularly those with ethnic
strongholds. But the effort was undermined amid fears that Russia was on
the verge of dissolution. As separatist feelings spread, particularly in
those ethnic enclaves, President Boris Yeltsin began entering into
treaties with regional governments. These documents created a dizzying
and uneven patchwork.
In one case, for example, the treaty with Tartarstan freed the young
men from having to serve in the military outside the borders of the
region. Another treaty allowed the region of Bachkortostan to set up
its own banking system. Overall, 46 treaties were signed, producing in
their wake an abundance of hard feelings between regions but keeping
Russia together in name.
"There is much that is subjective in Russia," said Nikolai Khovansky,
head of the legal directorate of Federation Council, the upper house of
Parliament, and a specialist in relations among the regions. "The
outcome of the treaties often hinged on the relationship between the
governor and the government."
For a time, however, the system managed to hold. But much of that
early success hinged on the popularity and moral authority of Yeltsin
and the ability of the center to provide cash to the regions. As
Yeltsin's credibility vanished, and the federal bank accounts drained,
the center has grown weaker and weaker. In fact, there is a growing
concern that even the military owes its allegiance to regional, and not
national, leaders. It is the regions that have provided many military
units with food, clothing, blankets and shelter.
"It is possible to speak about a kind of disintegration, as well as
the risk of further disintegration, both of which are connected with the
weakness of the center," said Nikolai Petrov, scholar-in-residence at
the Carnegie Center in Moscow. "There is a real danger now."
The situation has raised concerns that Russia's fragile federation
will fail to coalesce and may dissolve into an uncertain future.
"There is no immediate threat of dissolution, but it is a bomb
without a detonator, said Sergei Artobolevsky, a professor of geography
and adviser to the Ministry of Regional Policy. "If you don't pay
attention to this bomb, somebody will put the detonator in."
Aman Tuleyev, governor of the Kemerovo region in western Siberia,
was more alarmist about the situation: "It is the collapse of the
country. It is separatism."
All of this has finally caught the attention of the federal
government, which since the summer had been preoccupied with the
political crisis caused by Yeltsin's decision to twice dismiss the
government and by the nation's economic collapse. Slowly, Prime Minister
Yevgeny Primakov has begun to turn his focus to the regions, fearing
that if the center loses any more power it will be unable to enforce
laws, or even to hold the country together.
In a recent speech, Primakov said the chain of command between
Moscow and the regions should be "like a solid line, not a dotted
line," and added that he wants to restore "a rigid vertical system of
authority." He called for replacing the democratic process of electing
governors to instead have them chosen by local officials from candidates
selected by the president.
To begin to achieve his aim, Primakov organized a meeting last month
of all top federal and regional leaders, hoping to forge a strategy to
buttress the floundering federation. (All the meeting accomplished,
though, was to make clear the extent of the differences that exist. One
governor, Konstantin Titov of Samara, stood and said, "We are trying to
usurp federal power.") The prosecutor general is preparing a report
detailing the offenses of 10 regions. Primakov has increasingly turned
to the secret police, the one tool in the federal arsenal that is
guaranteed to get the attention of local leaders and encourage them, if
not force them, to bide by Moscow's will. Increasingly, local officials
are being charged with corruption for economic activities that violate
federal law.
The frustration and sense of urgency among federal officials is
"We must have a mechanism of intrusion to allow the center to force
the regions to obey the law," said Yegor Stroyev, chairman of the
Federation Council. "We need power, not for the sake of power, but for
the well-being of our people."
The regional authorities see it differently. Over and over, they
cite the maxim that the best government is the government closest to the
people, and they are pushing that agenda. Titov, of Samara, recently
announced a new political movement, aimed at uniting regional leaders
so they can put up their own candidates for federal office. But they
have decided not to wait to begin to flex their independence and pursue
their own policies.
In Saratov, for example, an agricultural and industrial center on
the Volga River about 400 miles south of Moscow, officials have flouted
federal positions. In perhaps the most dramatic example, the regional
government grew tired of waiting for federal lawmakers in the Duma to
pass a law allowing for the sale and private ownership of land, so they
passed their own law.
"Just imagine, before our law was passed, land was excluded from any
trade, or business deals," said Vladimir Prokopchuk, head of the Saratov
Land Committee. "Federal laws banned this because the Duma views this as
a political issue. They have slogans, `Land is our mother.' But they
don't think about life in the regions. Our law was a vital economic and
political necessity. If we face obstacles on the federal level, we will
protest. We will sue them."
So far, sales have been slow and cautious. Just over a month ago, an
ordinary citizen, an Afghanistan war veteran and pasta manufacturer
named Anatoly Suspitsin, purchased a swath of frozen land, sandwiched
between two massive concrete buildings, where he plans to build a coffee
shop. For 100,000 rubles, or about $5,000, he became one of the first
people in post-Soviet Russia to actually own land. Local officials view
people like Suspitsin as the only hope for the resurrection of the
regional economy; while federal officials see him as nothing less than a
threat to the integrity of the Russian federation.
"Everything is possible in our country," said Suspitsin, who said he
knows that if the federal government chooses to it can eventually
nullify his ownership of the land. "But I don't want to be like the
rest. Very few people want to achieve anything. People here in Russia
for 80 years, all they did was fulfill orders and now they cannot apply
their own initiative. They are awaiting new orders."
Three times so far, the prosecutor general has tried to overturn
Saratov's land law, and three times it has failed to force its will on
the region. Officials said they plan to go back into court and try
again. Yet, the defiance in Saratov runs deeper still. This past winter,
local officials grew concerned about the notion of "food security."
Officials said Muscovites would drive to their region, where food
was cheaper, load their trucks and take the food back to the city,
allegedly leaving local residents without enough to eat. Rather than
further aggravate federal officials with an outright - and illegal - ban
on such a practice, they imposed new regulations that effectively
achieved the same result. They required that producers receive 12
permits every time they want to transport food out of the region.
"We never undertook any illegal actions or approved of any
restriction," said Andrey Rossoshansky, minister of trade in Saratov,
adding this complaint: "They expected us to provide food in Moscow."
In Krasnador, the governor tries to regulate the price of goods sold
in his region. He regularly publishes price lists for food in the local
papers. The governor's staff declined to comment on any of his policies,
but an ally of Kondratenko defended his independent approach.
"Our interests contradict Moscow's interests," said Yuri Gavrilenko,
deputy ataman, or leader, with the Cossack movement based in Krasnodar.
"Ordinary people do not agree with Moscow."


Moscow Times
March 11, 1999 
SEASON OF DISCONTENT: Personal Thrill At Oligarch's Comeuppance 
By Andrei Piontkovsky 

The prime minister has won a total victory over his political adversary,"
cried the headlines of Friday's and Saturday's newspapers. I too was heartened
by the prime minister's "victory" over Boris Berezovsky, only it's a pity he
and other Russian politicians didn't fight that battle earlier. If they had,
maybe Russia would be a slightly different country today. 

I commenced my own personal war with Berezovsky about three years ago, when
this used-car-salesman-turned-billionaire first became noticeably active on
the political stage. It was he who initiated the written appeal of the 13
bankers to cancel the presidential elections and to strike a deal on the
division of power among the Yeltsin camarilla and the leadership of the
Russian Communist Party. 

The deal didn't come off for reasons beyond Berezovsky's control, and after
the elections he said: "We - seven people - hired Anatoly Chubais and invested
billions of dollars into Boris Yeltsin's election. We control 50 percent of
the Russian economy. We should occupy the key posts in the government and
benefit from the fruits of our victory." 

In another article entitled "Modern Day Rasputin" I was naive enough to
suppose that as soon as Yeltsin had recovered from his heart operation and
learned of this barefaced oligarchical manifesto he would immediately turf
Berezovsky and his accomplices out of their government posts. However, it
proved to be rather more difficult for the president to escape from the
suffocating embrace of his family's financial manager. 

Later, at a conference I participated in, a prominent Russian politician said
to me: "I liked your speech, but allow me to give you a piece of advice. Today
you mentioned the name of Boris Berezovsky several times, and I didn't mention
it once. Do you know why not? Because for a long time now I have known this
man all to well. Be careful." 

Everybody was indeed careful. Russia's "political elite" would mill round at
receptions thrown by Berezovsky's car dealership LogoVAZ to pay their respects
on the oligarch's birthday. Shedding tears of gratitude, the finest people in
the country - artists, musicians, actors - would annually accept "Triumph"
award envelopes from his hand, containing $10,000 fromthe dubious billions.
And nor do I remember a heavyweight political figure, a member of the Security
Council and foreign minister by the name of Yevgeny Primakov, ever publicly
speaking out against the financial schemer's huge and ignominious role in the
country's political life. 

To paraphrase U.S. President Franklin D. Roosevelt, everybody understood that
Boris Berezovsky was a son of a bitch, but they also knew he was the Yeltsin
family's son of a bitch. And only after the position of the president and his
kin became considerably weaker did everyone - including Primakov - suddenly
see the light about this man. 

But what about Deputy Prime Minister Gennady Kulik? His reputation is no less
odious. Is he untouchable for the simple reason that he in turn is in
Primakov's pocket? What about connections between City Hall and its pet
financial investment corporation AFK Sistema? Or is Vladimir Yevtushenkov, the
head of Sistema, also simply Moscow Mayor Yury Luzhkov's favorite sob? And how
about the FIMACO affair? 

It seems that inside our "political elite" everybody who is anybody turns out
to be someone's son of a bitch. 


Christian Science Monitor
March 11, 1999
[for personal use only]
Is Moscow graft-busting for real?
A big anticorruption drive is read as just the sound of a Kremlin power
By Fred Weir, Special to The Christian Science Monitor

Corruption charges so grave they would bring down any other government have
swept though Moscow in the last few weeks. 

It began last month when Prime Minister Yevgeny Primakov said he would release
tens of thousands of petty criminals in order to make room in the prisons for
legions of venal officials who, he said, are "plundering Russia and robbing

But then something peculiarly Russian happened: Few people took notice. 

Experts dismissed the charges as the usual background noises when a Kremlin
power struggle is afoot. 

"In the traditional language of Russian politics a corruption charge is not a
legal matter but a declaration of war against specific enemies," says Irina
Zvegelskaya, an analyst with the independent Center for Strategic Studies in

"Listen to the accusations," she says, "and sometimes you can tell who is
after what." 

Some analysts said the charges were only aimed at overcoming the doubts of
Western lenders, including the International Monetary Fund, who have warned
the country's hopes of economic revival are sinking into a morass of official

But the only actions taken so far by Mr. Primakov have been to remove a
selected few, most notably Boris Berezovsky, the powerful tycoon and executive
secretary of the Commonwealth of Independent States (CIS), a loose federation
of 12 former Soviet republics. 

Primakov accused Mr. Berezovsky of shady business dealings and spying on top

Analysts say Primakov's actual goal was to force Berezovsky out of his
controlling position in ORT, Russia's public television network. 

"Primakov wants to run ORT and Berezovsky is in his way," says Alexander
Konovalov, an analyst with the liberal Institute for Strategic Political
Assessments in Moscow. "That is not to say Berezovsky isn't covered with dirt,
it's just incidental." 

Last week a leading liberal lawmaker, Grigory Yavlinsky, and a newspaper owned
by Berezovsky fired back, charging that the government itself is rife with
corruption. Both suggested that Primakov's two left-wing deputy premiers, Yury
Maslyukov and Gennady Kulik, are compromised by corrupt dealings with private

"The law enforcement agencies know about corruption ... in the current
government. But they don't know what to do with this evidence," wrote the
newspaper, Nezavisimaya Gazeta. "Today in Russia there isn't a single
political force, not a single organ of power, that is free of bribe-takers,
thieves, and immoral dealers." 

By week's end President Boris Yeltsin, though hospitalized with recurring
health problems, moved to fire Berezovsky from his post as chief of the CIS.
Meanwhile, the Kremlin announced that it would launch an investigation into
the allegations against Primakov's Cabinet ministers. 

"You might think that a blow has been struck against corruption, that things
are being cleaned up. But you would be wrong," says Ms. Zvegelskaya. "This is
just the sound of a power struggle heating up." 

ANALYSTS say two key deductions can be made: First, Primakov is moving to
consolidate his power by removing opponents and replacing them with cronies.
Second, President Yeltsin, ailing but still jealously protective of his vast
constitutional prerogatives, is preparing to cut Primakov down to size. 

"The fundamental problem is that the Yeltsin era is drawing to an end, but we
have no stable and reliable method for transferring power," says Viktor
Kremeniuk, a political scientist with the Institute of Canada-USA Studies in

"[Yeltsin's] absences leave a critical power vacuum which others - just now
it's Primakov - try to fill. But the president is not so ill that he can't
come roaring back once in awhile to rearrange everything and reestablish his
authority," he says. 

In the political turmoil following last August's financial collapse, Yeltsin
was forced to abandon his own prime ministerial choice, Viktor Chernomyrdin,
and take on Primakov, a former Soviet spymaster who enjoys close links with
the Communist-led parliament. 

Though Primakov routinely protests that he has no presidential ambitions (the
next presidential vote is due in 2000), his efforts to stack the bureaucratic
deck will be recognized by Yeltsin - or any other Russian - as the classic
steps in building a personal power base. 

"Of course Primakov is interested in what happens after Yeltsin is gone. He is
preparing to take charge," says political analyst Mr. Konovalov. "Yeltsin is
not one to accept that. He is a master at shifting the power balance to suit

The impression that the president may soon move against Primakov was
strengthened when the Kremlin issued a weekend statement complaining that the
government thinks too highly of its own achievements. 

This game will be played out and Yeltsin will win - as long as he can muster a
burst of good health - says Mr. Kremeniuk, the political scientist. 

"It's really a great pity, because Russia desperately needs a genuine war
against corruption," he says. "That's what is being lost as the politicians
fight for control over the apparatus, accusing each other of all sorts of

"The crimes are real. This country is bankrupt and dying, and no one is even
trying to find a decent way out." 


Berezovskiy Addresses US Audience on Russian Election 

NEW YORK, March 9 (Itar-Tass) - Boris Berezovskiy, 
a Russian oil-to-media tycoon, was evasive in the election forecasts at a 
meeting organized by the Eurasia Group fund in New York on Monday [8 
March]. The fund invites Eurasian politicians to meet American interested 
groups. Over the past several months the invitation has been accepted by 
Boris Nemtsov and Grigoriy Yavlinskiy. 
"Among the aspirants currently on the surface I do not see a real candidate 
to the post of the Russian president," Berezovskiy said. He gave to 
understand he expected new candidates to appear on the Russian political 
scene later. 
"Nowadays we are in the same position to the elections of 2000 as there
those waiting for the elections of 1996 in 1995," Berezovskiy said. "At 
that time who could image the appearance of General Aleksandr Lebed and 
name him as a real aspirant for presidency? Who could forecast the 
victory of Boris Yeltsin, especially taking into account his then 
popularity rating of only 5 percent?" 
Asked whether that was a possible reason for Berezovskiy's backing of 
movie director Nikita Mikhalkov, the businessman said was an acquaintance 
of Mikhalkov and could assess his human qualities in comparison to those 
of other potential candidates. The question of "how high he assesses the 
chances of Yevgeniy Primakov in the presidential elections" was answered 
by Berezovskiy "no higher than Primakov himself does." No more comments 
on the issue were made by the politician. 
"Many accuse the oligarchs and the capital of Russian misfortunes. What 
comments as an oligarch can You make?" was another question. 
Berezovskiy suggested to specify the terms and stressed, in his opinion,
capital is an aggregate of the internal energy of the nation." He said he 
had always favored as a large number of the oligarchs as possible. "The 
capital played a rather positive role when it did not allow communist 
leader Gennadiy Zyuganov to take power in the presidential elections at a 
time when he could revert the situation after the communist victory in 
the parliament elections." 
In the words of Berezovskiy, the mistake of the capital is that its 
representatives failed to avoid differences after the defeat of the 
communists in the presidential elections. He thinks, however, that an 
increasing number of local businessmen "will assume responsibility for 
the future of the country" in the future elections. 



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