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Johnson's Russia List


April 23, 1999    
This Date's Issues: 32533254   

wJohnson's Russia List
23 April 1999

[Note from David Johnson:
1. Bloomberg: Stable Russian Economy Is Vital to US Security, Rubin Says.
2. Vlad Ivanenko: Re: 3251-8/New Russian Deal.
3. Business Week: Margaret Coker, Is Russia Y2K Ready? Don't Bet on it.
4. AFP: Camdessus Says Not Under NATO Pressure In Aid Talks With Russia.
5. Moscow Times: Jonas Bernstein, PARTY LINES: Warring Sides Face Off Over 
Skuratov's List.

6. AFP: Media writes off Yeltsin after crushing parliament defeat.

9. Argumenty i Fakty: Oligarchs After the Crisis.
10. RFE/RL: Robert Lyle, Russia: Officials In Washington For IMF And World 
Bank Meetings.

11. Robert McIntyre: Lisovsky, Berezovsky and Luzhkov.
12. Kennan Institute Washington, DC internship.
13. Mark Ames: Re: Eric Kraus: Droit de Response/3252.
14. Moskovskiy Komsomolets: Yuliya Kalinina, Will the Retired President 
Run Out of Steam?

15. Jake Rudnitsky: The Russian Political Crises of 1993 According to the 
New York Times. (DJ: I want to thank Jake for reminding me of this important
subject. Long-time readers of JRL may remember my earlier interest in the
1993 events and my conviction that Yeltsin's assault on the Parliament, with
backing from the United States, is the central political event of the post-
Soviet era. Dimitri Simes in a talk at Johns Hopkins yesterday also mentioned
this theme. Jake in this shortened version of a longer paper highlights a
prominent example of the failure of the American press to accurately report
the complex struggles of Russians to cope with the crises they have been
with long before August 1998. In view of the fact that David Hoffman, Moscow
correspondent of the Washington Post, was given an award by Johns Hopkins
yesterday I would note that his paper provided the same kind of misleading,
one-sided coverage of the 1993 events as the New York Times.)]


Stable Russian Economy Is Vital to US Security, Rubin Says

New York, April 22 (Bloomberg)
The U.S. must do everything it can to help Russia stabilize its 
economy to prevent its becoming a national security risk, U.S. Treasury 
Secretary Robert Rubin said. 

Citing ``enormous national security issues,'' Rubin told a gathering 
sponsored by the New Yorker magazine that helping Russia get back on track is 
``really very difficult, but we cannot afford not to do it.'' It's ``an up 
and down process.'' 

The U.S. must also work to promote reform in China and integrate it into the 
global economy, the Treasury secretary said. China's membership in the World 
Trade Organization could be a step forward, and it's ``totally doable,'' with 
only ``five to six market access issues that are unresolved but that can be 
resolved with people working together,'' he said. 

``China can be the world's largest economy, but whether it will be a market 
economy is another question,'' Rubin said. 

Russia and China aren't the only economies in need of work. The global 
economy ``is not on a firm footing,'' Rubin said, pointing to a report by the 
International Monetary Fund earlier this week that forecast continued 
recession in Japan, slower growth in Europe, and recession in Latin America. 


Date: Thu, 22 Apr 1999 
From: Vlad Ivanenko <>
Subject: Re: 3251-8/New Russian Deal

Thanks to Robert Devane for a translation of Maslyukov's program (JRL

The description of the situation and objectives in the article is honest
and benevolent. Especially, I am intrigued by the statement that the
government considers a partial transfer of the social spheres onto
commercial basis. Social consumption is the only serious vestige of a
socially oriented economy and, if the government does not regard anymore
that its provision is a sacred responsibility of the state, the return to
socialism is not on short-term agenda.

However, the methods, by which Yuri Maslyukov plans to achieve stated
goals, may not work unless the government complements them with what is
probably not spoken out in the article. Utilization of idle capacities
(BTW, stated 30 percent appears to be underestimated) cannot be increased
without a simultaneous reduction in import. The latter could be done
through either an increase in tariffs or control of currency exchange.
Reestablishment of confidence in banks looks suspiciously close to
re-nationalization of (or, at least, heavy state intervention in) banking
industry. Stimulation of the export of the processing industry with state
guarantees smacks of state subsidization.

The article provides a hint, describing three stages of development, on
what the intended state policy will be. It is an expansion of money supply
(to substitute barter deals, to eliminate wage arrears, and to expand
social safety payments) and currency control ("to prevent abrupt jumps in
the exchange rate"). State subsidies to the processing industry are
planned through regulation of prices for natural monopolies. Since the
last two stages go beyond his expected spell in office, they look like
topics open to discussion.

Maslyukov seems to be a capable bureaucrat who learns by doing what market
economy is about. He is inclined towards direct (versus indirect) state
intervention, which makes it personally difficult for him to deal with
international lending organizations.

Vlad Ivanenko, Dept. of Economics,
University of Western Ontario


Business Week
May 3, 1999
[for personal use only]
Is Russia Y2K Ready? Don't Bet on it
Moscow is short on plans--and money--to battle the bug
By Margaret Coker in Moscow 

The Russian Defense Ministry will be ready. So will the Atomic Energy 
Ministry, the gas and electricity monopolies, and the oil industry. To hear 
Russia tell it, there will be no problems when the clock strikes midnight on 
Jan. 1, 2000. But from the Central Intelligence Agency to European utilities, 
there's concern that Russia is in denial.
Analysts fear nuclear power-plant shutdowns and other millennium 
near-disasters. Gartner Group Inc., a Stamford (Conn.) technology consultant, 
predicts that 80% of Russia's transport systems could face delays. Natural 
gas supplies to Europe could run short. A committeecreated by Prime Minister 
Yevgeny Primakov says that what Y2K problems remain will cost $3 billion. But 
even if Russia miraculously finds the money, it's too late to fix everything.
Multinationals are scrambling. Some are buying diesel generators; others 
are stockpiling inventory. Such efforts are unlikely to avert an earnings 
hit. Mitchell Krasny, CFO of SUN Brewing Ltd., an Indian company with 14% of 
Russia's beer market, says Y2K will be as bad as August's ruble devaluation.
Tensions between Russia and NATO over Yugoslavia could jeopardize a joint 
early-warning program in the U.S. and Russian defense systems. Pentagon 
managers are meeting with Russian officials to explain how the U.S. has made 
its systems Y2K compliant. ``But in the current climate, even this may not 
last,'' says a U.S. official. Y2K is one more crisis Russia is ill equipped 
to handle.


Camdessus Says Not Under NATO Pressure In Aid Talks With Russia 

WASHINGTON, Apr. 22, 1999 -- (Agence France Presse) IMF managing director 
Michel Camdessus said Wednesday he was not under political pressure from NATO 
countries in efforts to negotiate a financial program with Russia. 

"I don't feel any kind of political pressure," Camdessus told a news 

He said that perhaps after 20 years of such negotiations he had become 
impervious to pressure, but in any case "pressures don't determine at all our 
course of action in Russia." 

Russia has differed sharply with NATO over its air strikes on Yugoslavia in 
the past four weeks, and announced on Wednesday that it would not attend 
NATO's 50th birthday celebrations this weekend in Washington. 

Camdessus said Russia is "at this very moment perhaps the most difficult 
problem we must tackle" and that the Russian authorities had initially 
reacted to last August's crisis by taking action "that seemed to be in the 
wrong direction." 

But the IMF is actively negotiating a 1999 budget with the Russian 
authorities and both IMF and World Bank officials have reported "progress" 
towards agreement on necessary structural changes and "there is still the 
possibility for them to agree with us soon," Camdessus said. 

"The next few days will possibly bring us good news and if they do not, be 
sure that we will continue to work with them" to try to reach agreement. 


Moscow Times
April 23, 1999 
PARTY LINES: Warring Sides Face Off Over Skuratov's List 
By Jonas Bernstein 

The Federation Council's unexpected vote to reject Yury Skuratov's 
resignation for a second time is the best circumstantial evidence yet that 
the suspended prosecutor general possesses some very damning information 
concerning the Kremlin's inner circle. 

Prior to Wednesday's vote, much of Russia's political elite seemed to believe 
it was a foregone conclusion that the upper chamber of parliament would back 
President Boris Yeltsin in the Skuratov matter. Many observers even suggested 
that Skuratov's hints that he had a list of top Russian officials with Swiss 
bank accounts was no more than a bluff. 

If Skuratov had just been shooting blanks, however, the Federation Council's 
members would hardly have been willing to spit so openly in President Boris 
Yeltsin's face, as one newspaper inelegantly but accurately described their 
vote in support of Skuratov. The regional chiefs that make up the council 
are, like most Russian politicians, pragmatists with no time for quixotic 
causes. And the fact that Yeltsin's promises of increased autonomy failed to 
sway them suggests they put more stock in Skuratov's dirt. 

The fact that Skuratov has not revealed his hand by no means proves he's 
holding only deuces. The kompromat concerning money in Switzerland is, like 
any weapon of mass destruction, useful only as long as it's not detonated. 

What is more, a recent account by Obshchaya Gazeta's Yelena Dikun suggests 
the Kremlin takes Skuratov's list quite seriously. She reports that when 
Skuratov sent Yeltsin his second letter of resignation in February, he 
attached "a list of prominent people and their Swiss bank accounts." Dikun, 
citing unnamed informed sources, writes that Yeltsin "asked Skuratov not to 
touch a number of people particularly close to him, but promised full 
cooperation in the investigation into the other figures." 

Following Skuratov's April 1 television interview (which led to his 
suspension), in which he confirmed he had sent Yeltsin a memo on Swiss bank 
accounts, Kremlin officials "rushed around madly" for several days trying to 
find it, even combing through trash cans, Dikun reports. "The circle of 
people worried that their names might be on the list was quite large," she 
writes. The list, she says, probably remains stashed in a "special file" in 
Yeltsin's office. Skuratov, meanwhile, "naturally made back-up copies, which 
he hid in safe places." 

While historical analogies can be dangerous, the atmosphere surrounding the 
Skuratov affair, coupled with the Duma's impeachment threat, increasingly 
resembles the walkup to 1993's "October events." Then, too, the Kremlin and 
its foes pursued each other with corruption charges. In that battle, the 
suitcases of kompromat were never actually opened. Instead, both sides 
eventually reached for more blunt weapons. 

Saddest of all, perhaps, is the fact that even if Skuratov's list came to 
light, it would matter little - at least to the West. The New York Times' 
Thomas L. Friedman recently described Boris Yeltsin as an "enormous asset" 
for the United States for not causing NATO problems in the Yugoslav war. 
Friedman reached this conclusion, undoubtedly shared by most Western 
governments, even though half his column was devoted to how Yeltsin has - 
behold the euphemism - "mismanaged economic reform." (Not a word, of course, 
about Chechnya.) 

What, indeed, is a few Swiss bank accounts between friends? 


Media writes off Yeltsin after crushing parliament defeat

MOSCOW, April 22 (AFP) - Moscow newspapers splashed political obituaries of 
President Boris Yeltsin across their front pages Thursday, a day after 
parliament ignored Kremlin orders to fire Russia's chief prosecutor in a 
crushing defeat for the head of state.

"Russia has been left without a Kremlin," opined the Izvestia in a banner 

"Political decisions are no longer being made behind the Kremlin's walls," 
Izvestia said. "Russia is turning into a parliamentary republic."

Russia Federation Council, the upper chamber, on Wednesday ignored Yeltsin's 
appeals to approve his dismissal of controversial prosecutor general Yury 

This refusal to bow to the Kremlin will came even after Yeltsin offered 
governors in the chamber more independence from Moscow and possible financial 
assistance for special projects.

Skuratov has turned into a political pawn in the Kremlin's heated battle with 
the nationalist and Communist opposition.

He has been probing top government officials and businessmen for graft, while 
Yeltsin has accused Skuratov of taking bribes in the form of sessions with 
prostitutes and suspended him from his post.

But parliament's second consecutive decision in favor of Skuratov on 
Wednesday was interpreted by the media as a clear signal that power had 
shifted in favor of Kremlin opponents.

Lawmakers "spat in the president's face," said the usually-restrained 
Kommersant business daily.

"Yeltsin is presented with a choice -- he can either wipe his face and join 
the ranks of Kremlin pensioners, or he can launch a counterattack."

Kommersant further quoted one Kremlin insider as saying: "We will always 
remember today's date. It marks the start of a new era."

Nezavisimaya Gazeta observed that the Communists will now use Skuratov's 
graft probes as a rallying cry ahead of December's parliamentary elections.

"The Communists could not have received a better present at the start of the 
election race," the paper said.

And the Sevodnya daily decided that Prime Minister Yevgeny Primakov's 
unsuccessful bid to influence the chamber in the Kremlin's favor minutes 
ahead of the vote meant he was likely soon to lose his government post.

"The prime minister's chances for retirement increased," the liberal paper 

The Federation Council leader Yegor Stroyev, who has long shown himself loyal 
to the president, attempted to restore some calm amid the brewing political 
chaos by telling the session Thursday: "We need to find a political 

But the Kremlin reacted quickly to its defeat. On Thursday morning it 
announced the dismissal of deputy administration head Ruslan Orekhov, a 
presidential aide who apparently refused to obey Yeltsin's orders to speak to 
lawmakers before the Skuratov vote. 



WASHINGTON, April 22 (Itar-Tass) -- Gavriil Popov, the leader of the 
Russian movement for democratic reforms, and predecessor of Moscow 
Mayor Yuri Luzhkov, on Thursday said here that to settle the crisis in 
Yugoslavia peacekeeping forces of NATO nonmember states should be 
brought onto its territory with the consent of Belgrade. 

"In the present situation, there can be no doing without attraction of 
external forces, but they should not be NATO forces," Popov said. He 
further reasoned that it was theoretically possible to form a 
contingent of peacekeeping troops of six NATO nonmember states. Half of 
those countries should belong to the Islam world. According to Popov, 
the right to choose the countries belonged to Yugoslavia and NATO. "In 
that case Yugoslavia will meet NATO halfway on the issue of bringing 
foreign troops onto its territory, and NATO's concession will be that 
peacekeeping troops will be not of the alliance," the Russian 
politician emphasized. 

Popov said that the US administration was wrong in believing that if 
Russia was carrying out reforms and aspiring to democracy it would seek 
rapprochement with the USA. "Russia aspires to democracy and economic 
reforms, but it is disappointed over the US policy /for the bomb 
strikes against Yugoslavia/, and therefore would rely upon its own 
potential," Popov emphasized. He further called the assumptions about 
Russia being ready to yield to the US pressure for loans groundless. 



MOSCOW, April 22 (Itar-Tass) - Opinion pollsters said 32.9 percent of 
Russians believe that the Bolshevik leader Vladimir Lenin brought more 
good than harm to the country, versus 28.7 percent who think otherwise. 

The poll conducted by the Mneniye public opinion study center, involved 
1,020 respondents and was timed with Lenin's 129th birth date, the 
center's press service reported on Thursday. 

Fifty percent of those polled backed the proposal to bury Lenin in 
St.Petersburg, 36 percent said his body should remain in his Moscow 
mausoleum while 14 percent were undecided. 

As many as 40 percent approved the abolition of the ceremony of the 
change of guard at Lenin Mausoleum in 1993, against 42 percent who said 
the decision was wrong. Eighteen percent were uncertain. 

When asked if they preferred to call Russia's second largest city 
Leningrad or St.Petersburg in case of a referendum, 54 percent of the 
respondents said they would vote for St.Petersburg and 28 percent -- 
for Leningrad. 


Russian Paper Views Status of Oligarchs 

Argumenty i Fakty, No. 965
April 1999
(signed to press 20 April)
[translation for personal use only]
Report from the "Details" column by Tatyana Korostikova, Gennadiy 
Chernikov, and Diana Chernikova: "Oligarchs After the Crisis" -- passages 
within slantlines published in boldface


Last summer, even before the crisis, the president [Boris Yeltsin] 
summoned those who had traditionally been regarded as the pillars of 
Russian business, in other words, the oligarchs, to go and see him: /Rem 
Vyakhirev/ (Russian joint-stock company Gazprom), /Vladimir Potanin/ 
(ONEKSIMbank), /Aleksandr Smolenskiy/ (SBS-Agro bank), /Vagit Alekperov/ 
(LUKoil), /Mikhail Fridman/ (Alfa-group), /Vladimir Gusinskiy/ 
(Most-bank) and /Mikhail Khodorkovskiy/ ("Menatep" bank). In his 
conversation with them, the president acknowledged the great impact they 
had had on the country's finances and economy. The crisis had tested the 
soundness of everyone, including that of the oligarchs' empire. 

Where are they now? 

Vyakhirev, Khodorkovskiy and Alekperov are in Moscow. True, the latter is 
planning to go to Astrakhan soon to launch a floating oil platform. 
Fridman and Potanin are on business trips abroad. 

Gusinskiy is also abroad, but he spends most of his time there. He has homes 
in London and Spain. The most difficult to trace was Vinogradov 
(Inkombank). Nobody knows where he is. How much money do they have? [subhead] 
Just as before it is /Vyakhirev and Potanin/ who are the leaders. 

According to the estimates of foreign journalists, their personal wealth 
amounts to /3 billionn dollars each/. 

/Khodorkovskiy/ has every reason to give himself up to his favourite hobby, 
the collecting of purses, even those with money in them. According to 
"Forbes" magazine, his personal wealth is /1.3bn dollars/. 

/Alekperov/ is slightly behind him with /1.2bn dollars/. 

All the oligarchs' banks suffered during the crisis. 

But this does not mean that the oligarchs left the banking business. 
They transferred their best assets to newly created banks. For instance, 
in transferring part of his money to Rosbank, Khodorkovskiy moved his 
banking business to the northern capital, to Menatep - St Petersburg and 
to the Principal Investment Bank of which he was head. 

The crisis was even to the advantage of some people. /Gazprom 
drastically fortified its positions in the banking sphere./ Its assets 
almost doubled. /The group of Gazprombanks is now only second to the 
Savings bank./ Alfa-bank rose from 20th to 6th place. 

But Alekperov's "Imperial" and Vinogradov's Inkombank were very unlucky. 
They lost their licences. 

The oil and gas business 

Some of the shares of the Russian joint-stock company /Gazprom/ were sold 
to the German Ruhrgas. Now the share of foreign capital in Gazprom is 14 
per cent. As a result, its /shares rose in price by 65 per cent./ The 
company Mezhregiongaz [Interregional Gas] was set up, which was headed by 
Vyakhirev's son. 

In an attempt to overcome the difficulties, Khodorkovskiy's YUKOS was 
forced to use 95 per cent of its shares as collateral security. But the 
beginning of 1999 was said to have been lucky for him. The foreign 
investors were soon permitted to develop the Priobskoye oil deposit which 
belongs to YUKOS. YUKOS has every chance of turning from a bride without 
a dowry into a rich bride. 

It looks as if better times lie ahead for /Alekperov/ as well. On 19th 
April, he signed an agreement with the Savings Bank of Russia /on a loan 
of 150m dollars to develop the oil business./ In December 1998, LUKoil 
bought the controlling package of shares in the Murmansk Sea Shipping 
Line and is laying claims to the exclusive right to transport fuel along 
the Northern Sea Route. 

LUKoil is a member of three consortiums to develop Azerbaijan's and 
Kazakhstan's oil and is taking part in the development of oil deposits in 
Iraq and Egypt. 

After the crisis, Potanin is doing everything he can to save his main 
property, the joint-stock company /Norilsk Nickel/ (the company produces 
90 per cent of Russia's nickel, 50 per cent of its copper, 85 per cent of 
its cobalt, and 95 per cent of the metals of the platinum group) and /the 
oil company Sidanko/, a world-wide corporation. A controversy is brewing 
round it. /Sidanko is being accused of false bankruptcy./ Bankruptcy is 
the cheapest way for it to get its tax payments deferred. 

Information empires 

Each oligarch has "his own" mass media. Gazprom helps the newspaper 
"Trud", it also has a share in Russian Public Television. Alekperov owns 
shares in TV-6 and 40 per cent of the shares in the newspaper 
'Izvestiya'. Potanin has shares in Izvestiya', 'Komsomolskaya Pravda' and 
more than 50 publications all in all. In February 1999, /Fridman/ 
acquired the blocking /package of shares in the company Network of 
Television Stations (STS). Today this company is already broadcasting to 
220 towns in Russian and, according to some estimates, controls 7 per 
cent of the country's television viewers. 

But, naturally, the /real media magnate is Mr Gusinskiy./ This is the 
publishing concern Media-most [Media-bridge], NTV, a share in Russian 
Public Television, the newspaper 'Segodnya', the magazines 'Itogi' 
['Results'] and 'Sem Dney' ['Seven Days'] and the radio station Ekho 
Moskvy. This entire concern was not affected much by the August crisis. 
It even launched its own television satellite costing 150m dollars. 

Gusinskiy borrowed money from Americans with the Russian government 
acting as a backer. Information has emerged about a project called 
"Kino-most" ["Cinema-bridge"]. The structure will make films itself and 
hire them out. They are even planning to get experts from America to help 
them in doing this. And cinemas are being built in Moscow. At the present 
time, "Kino-most" is repairing the Oktyabr cinema, turning it into a 
multiplex. Its own restaurant "At the Goose's" is to be opened on the 
ground floor. 

What is their life like? 

Not bad at all. Fridman has a flat 450 sq m in area in Moscow. 
Gazprom has its own block of flats in Moscow, opposite its main office. /The 
flats which are as much as 500 sq m in size with eight rooms in each/ are 
equipped with all modern conveniences: electronic devices, bathroom 
fittings and sound proofing. 

The house in Moscow where Potanin lives is one of the first experimental 
blocks of executive flats in the capital. In 1994, the cost of one square 
metre here was as much as 7,000 dollars, and the flats cover an area of 
350-700 sq m. The block has its own restaurant, sauna, gym, a billiard 
room with a cafeteria, a swimming pool, a solarium, room service, a 
children's play room, a hairdressers, an independent telephone exchange, 
satellite television and a winter garden. There is a lit and guarded ski 
run next to the house. The monthly rent ranges from 300 to 800 dollars 
per flat. Potanin also has an out-of-town residence by Istrinskiy 
reservoir, next to the country cottage of Anatoliy Chubays [head of 
Unified Energy Systems of Russia]. When the friends go out "to sea" in 
their yachts or go jet-skiing, the lake fills with body guard launches. 


Russia: Officials In Washington For IMF And World Bank Meetings
By Robert Lyle

Washington, 22 April 1999 (RFE/RL) -- Russia may be boycotting this
weekend's NATO summit in Washington, but senior officials from Moscow will
still be in the American capital. They'll be just down the street at the
regular spring meetings of the International Monetary Fund (IMF) and the
World Bank.

The big NATO summit forced the two global financial institutions to shift
parts of their meetings to avoid conflicts, but the IMF and World Bank have
agendas of their own and Russia, according to IMF Managing Director Michel
Camdessus, is at the top.

"Russia is at this very moment probably the most difficult problem we must
tackle. And indeed, here we are in a domain where there are no such things
as evidences. Nothing is evident there. Everything is difficult," he said.

At a press conference Wednesday, Camdessus was answering questions about
the fund's continued efforts to work out a way to resume lending to Russia.
After all, went the questions, the fund itself has acknowledged that Moscow
lost its last IMF loan because it failed to meet its promises on
implementing reforms.

Camdessus responded that indeed Russian officials had done some
"back-peddling" in the process of economic reforms. But he said, Moscow has
been trying to do a lot by itself to avoid major negative developments:

Camdessus said: "What we have seen, and of course we have been in a
permanent dialogue with them throughout this period, is that they have
tried to maintain the dialogue with their creditors and in particular for
the debt of Russia, they have made every effort to try to stay current
while they were applying for rescheduling of the former Soviet Union debt."

The IMF head said there has been progress in negotiations with Moscow. He
said the Russians have agreed to amend the current budget to limit the
effective deficit and even to create a surplus of two percent this year not
counting debt repayments.

But he said the fund and the bank have both been working with Russian
officials to adopt some major changes in the structures of major parts of
the Russian economy.

Camdessus said: "We want in particular to see more rapid progress in
banking restructuring, we want to have full clarification of the suspicions
that have been raised about the use of our resources, the propriety of the
behavior of the central bank, we are looking forward to the results of the
audit in this domain. But in view of what they have been doing, in view of
what they tell of us of their intentions -- and you know I have personally
spent many, many hours discussing that with Mr. Primakov -- we believe that
there is still the possibility to agree with them soon."

Camdessus said it's possible there might even be good news in the next few
days, but he was quick to keep that in perspective, saying that major
issues remain to be resolved. He added that if there is no "good news" this
week, the IMF will continue to work with Russia to get it through this
difficult period.

Exactly how a new loan for Russia would be structured is not clear, but
Camdessus says Moscow understands that the IMF will have to be tough in
lending any more money:

He said: "They (Russian officials) themselves recognize that we will have
demonstrate extra care in this operation and to maintain a strong
surveillance, and be minding for the implementation of their commitments. "

The IMF Managing Director, used to being questioned about whether the U.S.
and other member governments were pressuring the fund to lend more money to
Russia, was challenged from a different perspective this time. He was asked
if the U.S. and its NATO allies were pressuring the fund not to lend to
Moscow because of Russia's opposition to the air strikes on Serbia.

"No Sir," was Camdessus's quick response. Like fish in the deep seas who
don't feel the water pressure and humans who don't feel atmospheric
pressure, the IMF doesn't even perceive such pressures. 

Camdessus said he couldn't say if there were people around who wanted to
pressure the IMF one way or the other on Russia, but he said, political
pressures don't determine in any way the fund's course of action in Russia.

An IMF team is currently in Moscow working on the framework agreement
Camdessus himself negotiated a few weeks ago with Prime Minister Yevgeny
Primakov. But senior Russian officials attending the bank and fund meetings
through next Wednesday will also be negotiating with top IMF officials in


Date: Thu, 22 Apr 1999 
From: "Robert McIntyre" <> 
Subject: Lisovsky, Berezovsky and Luzhkov

Lisovsky, Berezovsky and Luzhkov

In JRL 3231, 8 April 1999, item 13 repeats the Moskovsky 
Komsomolets story of 27 March which states that large amounts 
of incriminating intelligence material was seized from the homes 
and offices of Sergei Lisovsky by the General Proscutors Office. 
The tapes and documents are reported to deal with "virtually the 
entire Presidential Staff", as well as Chubais, Nemstov, Luzhkov, 
Dyachenko and others. 
The article ended by asserting that Lisovsky would return to Moscow 
from Cyprus on 29 March. 
In JRL 3044 of 5 February 1999, item 6, a post script notes Sergei 
Lisovsky has joined the staff of Yuri Luzhkov. 
What has happened to this two stories? If both are true, they are 
interesting if not surprising. 

Dr. Robert J. McIntyre
Project Director, Transition from Below
UNU/WIDER (World Institute for Development Economics Research) 
Katajanokanlaituri 6B
00160 Helsinki


Date: Thu, 22 Apr 1999 
Subject: Kennan Institute Washington, DC internship

Internship Positions * Washington, DC

The Kennan Institute for Advanced Russian Studies of the Woodrow Wilson
Center in Washington, DC, offers paid Research Assistantships throughout the
year for undergraduate, graduate students and prospective graduate students
who are either U.S. citizens or permanent residents. A number of positions
are available for Fall, 1999. Each research assistant works with a Fellow
or Research Scholar in residence at the Institute over a period of three to
nine months. Applicants must have a good command of the Russian language,
good organizational skills, and be able to conduct independent research.

A Research Assistantship at the Kennan Institute complements any student's
academic interest in Russian or Soviet Studies. Research Assistants have
the opportunity to:

· Work closely with a prominent scholar in the field.
· Attend discussions and seminars sponsored by the Institute.
· Build on research skills you've acquired in college.
· Gain the privilege to use the Kennan Institute Library, which houses
approximately 7,500 volumes and more than fifty Russian journals and
· Have the opportunity to use your Russian language skills.
· Have a flexible schedule of 15 hours per week.

If you are interested in continuing in Russian Studies, a research
assistantship at the Kennan Institute will provide practical experience in
the field while helping you establish contacts with academics and policy
makers that may prove useful for achieving future career objectives.

To apply, send a resume and cover letter describing your research interests
and available dates to work in Washington, DC to:

Research Assistantships
Kennan Institute for Advanced Russian Studies
Woodrow Wilson International Center for Scholars
One Woodrow Wilson Plaza
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Date: Thu, 22 Apr 1999 
From: "Mark Ames" <> 
Subject: Re: Eric Kraus: Droit de Response/3252

At first, I literally laughed out loud when I saw that Eric Kraus's
droit-wing response relied on adopting the Moral Majority high ground by
calling us "semi-pornographic" and accusing us of "offering Russian women
for sale to foreigners" because we publish advertisements by prostitutes in
our classifieds section. If Kraus is really outraged by the morality of
prostitution (which we are not), then he must be fuming mad at himself for
having published an article, "Slaying Russia's Hydra?", in the February 12
issue of the Moscow Times, the same issue which, in the inside back-page
classifieds section, lists, under "Massages," the telephone numbers of some
40 prostitutes and prostitution agencies geared towards foreigners. Also in
that issue, in the Moscow Times's MT Out section (a bland rip-off of the
eXile's popular nightlife guide), the club guide lists, among other things,
a description of the club Dolls: "teenage girls who thrust their pelvis at
you for $100 [...] a VIP room in the back where the girls get a little
naughtier, and nicer." All three English-language newspapers regularly run
classifieds advertisements for prostitutes; prostitution is not something
hysterically frowned upon in Russian culture and using this as a counter-
"ad hominum" attack on the eXile's is strange and again suggests something
about Kraus, not us. Not only strange, but utterly hypocritical. Kraus has
published other articles for the Moscow Times, and regularly offers himself
up to them as a quote-a-matic. The implicit comparison of our profiting
from prostitute ads to the reformers' giving away Russia's top assets to
thieves is not even worth replying to and once again only reflects on how
seriously Kraus takes the destruction caused by the reformers he so
relentlessly supports.

Let me state boldly that I am not only in favor of prostitution, but I am,
if money permits, a proud and satisfied customer as well. I have even dated
and lived with prostitutes, and find them to be... well, sorta like other
people, only free of the moral hypocrisy that I find so nauseating, and
definite titanium-tipped-condoms-alert material. The point of linking
Eric's argument about Kosovo to his stand on the young reformers was to
show that he has a record of supporting whatever the Western powers
support, in spite of the devastating results. His arguments stink of the
Western powers' moral hypocrisy, of good intentions that mask horrible
consequences. His attack on the eXile's liberal attitude towards
prostitution is just another small example.

In May of last year, I spoke at length with Eric when I wrote my piece on
why Russia's economy was heading for an inevitable implosion. While I
couldn't use any of his quotes--he spent almost the entire interview
pushing an IMF stabilization plan of $10 billion and restructuing of GKOs
as the solution to the growing crisis, while insisting that the situation
was far from unsalvageable, something that seemed looney to me--I did find
him to be witty and charming and likeable. Which is to say, I really don't
mean any of this as an ad hominum, but as an attack on the hypocrisy that
underpins such reasoning, a hypocrisy endemic to so many foreigners here.

Mark Ames
the eXile


Paper Sees Yeltsin's Retirement as 'Hard To Imagine' 

Moskovskiy Komsomolets
20 April 1999
[translation for personal use only]
Article by Yuliya Kalinina under the general heading "Not Even Flower 
Beds Will Save Him": "Will the Retired President Run Out of Steam?" 

Yeltsin and pensions fit together very badly. They 
don't go together at all, they are incompatible. Why? 

First, because in spirit and image Yeltsin is the worthy continuer of the 
series of traditional Soviet rulers who burned themselves out at work, 
not letting go the helm of power until the very last moment. His lyrical 
image makes it impossible to imagine Boris Nikolayevich without the black 
attache case. It is absurd. They are inseparable, like water and air. 

But according to the Constitution that possibility does exist. And if it 
should happen that the first president of Russia is replaced with the 
second through democratic elections, his well-earned rest will depend on 
who that second is. 

There is a very high probability that it will be a representative of the 
Communist opposition, and that is the second reason why Yeltsin and 
pensions do not go together. Even now Zyuganov is blurting out with such 
keen hatred: "They will answer for everything" -- that it becomes 
absolutely clear that the quiet life of a pensioner is not in store for 
Yeltsin. It is better not to say what could happen at worst, and at best 
he will simply leave very quickly for abroad. For medical treatment. 

First to somewhere like Switzerland or Germany, then somewhere else, then 
somewhere else again, and gradually the trail will be lost and in a 
couple of years journalists will seek him out in some quiet corner of the 
globe engaged in a perfectly proper occupation for a pensioner. What 
occupation? Unfortunately very little is known about Boris Nikolayevich's 
hobbies, inclinations, or pursuits that he is fond of. The broad public 
knows about only two amusements -- power and vodka. Apparently there used 
to be tennis too, but because of his age that is no longer relevant. 

Retired people usually do what they wanted to do all their lives but did not 
have time because of work. They go to their dacha and look after their 
flower beds, read, write their memoirs, raise their grandchildren, travel 
-- if they have the money, of course, but for Boris Nikolayevich that is 
presumably not a problem. The problem lies elsewhere. 

It is not known what congenial occupation, pleasing to himself, he has 
wanted to pursue all his life but has not had time because of work. 
The impression is that there is nothing he wanted to do. He had no 
passions that do not fit into the general scheme of work-related needs. 
...Yeltsin growing super-tomatoes. Reading "Chinese Philosophy." Sitting with 
a fishing rod. Painting in oils. Cutting out holes in nesting boxes. 

Looking round the Pharaohs' tombs... 

No, it doesn't look right. These are just special effects. Even if he 
feels very well, he still won't be able to occupy himself in such a way 
for more than five minutes. He will find it mindlessly boring. 

That is the third point. That is why it is just as difficult to imagine 
what the president will do with himself in retirement if the democrats 
remain in power as a result of the elections and he has no need to flee. 

But what can he do? No doubt he will live in some residence in the Moscow 
region and do the same as he does now: drink, get sick, get better, sink 
into childishness, and explode in sudden fits of destructive activity. 

For a president (and, in fact, for any other kind of leader) retirement 
is a transition to a fundamentally different state. 

He must switch from superman to normal person. 

Psychologically this is very difficult, but most people manage it somehow, 
overcome the barrier. Probably even Yeltsin could adapt to the new 
situation in time, return to the milieu of "normal people," but in his 
case it is not only up to him. An even bigger question is: Will that 
milieu take him back? 

He has reached a point where there is no place for him among "normal 
people" anymore. He can either be president or nobody. And that is 
doubtless the main reason why it is so hard to imagine Yeltsin on a pension. 


Date: Thu, 22 Apr 1999 
From: "Jake Rudnitsky" <> 
Subject: Paper on New York Times Coverage of 1993 events

George Washington vs. the Raving Nationalists, Neo-Bolsheviks, 
Fundamentalists, Paranoiacs, and Thugs:
The Russian Political Crises of 1993 According to the New York Times
[shorter version]
By Jake Rudnitsky
Russian studies student at Macalester college in St Paul, Minnesota

Perhaps the title of this paper sounds more like a comic book 
rendition of American history than the New York Times’ description of 
Russia’s 1993 Constitutional crises. However, the epitaphs, 
referring to Boris Yeltsin and the Russian Parliament, respectively, 
were taken directly from the Op/Ed section of the Times. Like most 
mainstream American media outlets, the Times has a great deal of 
trouble providing decent coverage of political, social, and economic 
events in Eastern Europe and the Newly Independent States. They are 
mired in a two-dimensional perspective, stemming from the Cold War, in 
which all conflicts must be portrayed as a clear-cut struggle between 
good and evil. This paper will illustrate this bias by presenting a 
brief summary of events in the Spring and Fall of ‘93 and a selection 
of quotes from the Times editorial and Op/Ed pages during that time. 
Starting in ‘92, the Russian government was locked in a 
constitutional crisis. While virtually all politicians agreed that 
the heavily amended Brezhnev era Constitution needed to be replaced, 
Boris Yeltsin and the majority of parliamentarians, under the umbrella 
of the Civic Union, could not reach a compromise over the nature of a 
new constitution. Yeltsin supported a super-presidential draft and 
the Civic Union backed a draft that would reduce the role of the 
president to a figure head. The Times started covering the story 
when, in late March, Yeltsin declared a period of special presidential 
rule until a referendum, set on April 25, would determine who the 
Russian people backed. He was denied the special powers, but the 
referendum was held and came out conclusively in Yeltsin’s favor.
During this month, the Times published 5 editorials and 10 opinion 
pieces. Of these, only 3 of the opinion pieces saw anything but black 
and white. The editorials paint Yeltsin as the only true 
representative of the Russian people and dismiss the courts as 
irrelevant. "The chairman of the Constitutional Court, Valery Zorkin, 
has accused Yeltsin of undermining the rule of law. But Zorkin... 
invests Russia’s Constitution with a legitimacy it does not deserve." 
(Editor, Mar. 23) But the rule of law is essential to a functioning 
Most of the opinion pieces offer the same absurd critiques, only 
they use more colorful language. A. M. Rosenthal declares that the 
Parliamentarians are "the enemies of Russian democracy- the army hold 
over Communist bureaucrats, the managers of big government industries, 
the right wing brutalists who long to substitute a Russian fascism for 
a Russian Communism." (Mar. 23) The author forgets that Parliament 
was elected in free elections and that the Civic Union was actually 
quite moderate. Furthermore, were not Yeltsin and his advisors former 
Communists, too?
Only 3 articles suggested a more complex analysis. Of these, 2 
concluded that the US ought to back Yeltsin, anyway. Only one 
commentator was openly suspicious of Yeltsin’s agenda. Melor Sturua 
wrote, "Yeltsin’s forces falsely bill the vote as a showdown between 
democrats and Red-Browns.... A decisive victory for one side... could 
lead to the destruction of the principle of separation of powers." 
(April 24) Indeed, the later remark proved to be prophetic. 
The referendum was rejected by Parliament as a product of 
Yeltsin’s manipulation of the media, and the power struggle continued 
throughout the summer. It became an increasingly personal fight 
between Yeltsin on one side and Alexandr Rutskoi, the Vice-President, 
and Ruslan Khasbulatov, Chairman of the Parliament, on the other. The 
situation culminated when, on Sept. 21, Yeltsin moved to dissolve the 
parliament and replace it with a loyal Federation Council. Zorkin and 
the Constitutional Court objected to this action, and Yeltsin 
dissolved the Court as well. 
The Parliament responded by convening in the White House and 
setting up an independent government. Yeltsin cut the electricity to 
the White House, and the building was isolated by a ring of troops. 
Yeltsin dominated the media. This standoff continued for over a week, 
during which time extremists within the White House became 
increasingly influential because they could mobilize their well 
organized, militaristic constituency. Many of the Parliamentarians 
left as the tension escalated, but several liberals, including noted 
Soviet dissident Oleg Rumyantsev, remained to defend what they saw as 
a threat against democracy. 
On Oct. 3, Rutskoi sent out a force of armed irregulars to capture 
Ostankino TV Station, but they failed. The next day, Yeltsin secured 
use of the army, and shelled the White House until Khasbulatov and 
Rutskoi surrendered. 146 people died in the conflict. Russia’s 
capital hadn’t seen that much violence since the Revolution. 
Yeltsin quickly introduced a new constitutional draft, which gave 
the President more powers than his previous draft, and announced that 
Parliamentary elections and the referendum on the new Constitution 
would be held on Dec. 12.
During this time, the Times printed 4 editorials and 10 Op/Ed 
pieces. 4 Op/Ed pieces were offered a somewhat balanced assessment of 
the events. The editorials played down the violence and entirely 
blamed Parliament, going so far as to praise Yeltsin’s restraint. The 
number of dead contradicts this last point. Even the Times admits 
that "Yeltsin had no constitutional authority to suspend the powers of 
Russia’s Parliament yesterday and call early elections. But, his bold 
coup could help consolidate Russian Democracy." (Editor, Sept. 22) 
How does dissolving a democratically elected institution consolidate 
democracy? Judging from the current state of Russian democracy, it 
apparently is consolidated into the hands of Yeltsin alone. 
Most of the Op/Ed pieces are even more inaccurate. William Safire 
imagines that the Parliamentarians "are dying hard for the cause of a 
return to a command economy, centralization of power, gulags, 
oppression, militarism, imperialism, employer mandates, the whole 
discredited Soviet works." (Sept. 30) No doubt that is why Rumyantsev 
remained in the White House. Even Rutskoi and Khasbulatov, who wanted 
to slow the pace of reforms, were not Communists, and had only entered 
politics during perestroika. Other Op/Ed pieces offer an only 
slightly less outrageous assessment. 
The more evenhanded pieces still generally sided with Yeltsin, 
although they saw certain dangerous trends, especially in his control 
of the media during and after the crisis. 
Of the 29 pieces that addressed the situation in Russia during 
this time, only 7 provided a modicum of depth. 3 of these came out 
mildly against Yeltsin. Statistically, this means that only 24% of 
the pieces offered a relatively informed analysis, and only 10% of 
them didn’t back Yeltsin. This distorted presentation is a result of 
decades of misunderstandings of the USSR and the short term desire to 
open up Russia’s markets to Western goods and services. While Yeltsin 
was the West’s man in terms of market reform, the shortsightedness of 
this approach has, over the last several months, become evident with 
the collapse of Russia’s economy and Yeltsin’s health. 
The problems with this method of reporting are numerous. It 
provides an amazingly narrow view of the situation for an American 
audience and betrays a failure to comprehend the situation. When the 
media is uninformed, it cannot act as a watchdog. For example, Bill 
Clinton’s unquestioning support of Yeltsin during the Sept./Oct. 
crisis tacitly encouraged Yeltsin to avoid compromise. When two 
notable attempts at negotiations were made (by mediators Zorkin and 
Patriarch Alexei), Yeltsin felt no pressure from the West to heed 
them. This is precisely the type of information that independent 
media should report. But the Times, and other US media, was too 
preoccupied with towing the party line and backing Yeltsin at all 
costs. Ironically, the Times’ support of ‘democratic’ Yeltsin over 
the ‘Communist’ Parliament lead to Soviet style journalism, caulked 
full of misinformation and a political agenda. 



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