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Johnson's Russia List


June 26, 1999    
This Date's Issues: 3362 Ľ  Ľ

Johnson's Russia List
26 June 1999

[Note from David Johnson:
1. Reuters: US sees erosion in Russia crop outlook.
2. Elizabeth Pond: on democratic transformation.
3. Jonathan Weiler: Russian budgetary data from about 1991-1998.
4. AFP: Poet ends marathon ode-to-Pushkin.
5. Moscow Times: General Shows Gift For Poetry. (General Ivashov)
6. Radiostantsiya Ekho Moskvy: Stepashin Hints At Possible Resignation.
7. Sovetskaya Rossiya Hits Yeltsin's 'Honest Elections' 
8. Moscow Times: Matt Bivens, Union Plans Hint Yeltsin Won't Go.
9. Christian Science Monitor: Judith Matloff, Like a candidate? Buy his 
aftershave. Some Russian politicians are putting their faces on goods from 
CDs to clothes for political and financial gain.

10. St. Petersburg Times: Fyodor Gavrilov, Still Waiting For the Prophet 
150 Years Later.

11. Moskovskiy Komsomolets: Leonid Krutakov, Return of the Prodigal

Berezovskiy Attempts To Regain Lost Ground in 'Family'
12. Peter Rodman: Reality Check: Success Has Its Costs.
13. Komsomolskaya Pravda: Abramovich's Early Years Recounted.
14. Moscow Times: Igor Semenenko, Chubais Strengthens Grip on UES.
15. AP: Russia To Hear Religion Appeal.
16. Rossiyskaya Gazeta: Clinton 'Has Set World Against Him'] 


INTERVIEW-US sees erosion in Russia crop outlook
By Barbara Hagenbaugh

WASHINGTON, June 25 (Reuters) - As the harvest gets under way in Russia, it
is clear the country's grain output will be smaller than originally hoped,
a top U.S. Agriculture Department official said on Friday.

``We do see some erosion in the crop prospects,'' USDA General Sales
Manager Chris Goldthwait told Reuters after speaking to the Bankers'
Association for Foreign Trade. ``We don't yet know how serious that (the
problem) is.''

That assessment follows statements coming out of Russia this week. SovEcon
Ltd., an independent research group, reduced its forecast of grain output
for this year by five million metric tons to 60 million tons. One official
at the State Duma was quoted as saying the harvest could be as low as 50
million to 55 million metric tons.

Goldthwait said that officials in Moscow have not contacted the USDA about
any additional food aid since Gennady Kulik, Russia's former deputy prime
minister for agriculture, indicated in a March meeting with U.S.
Agriculture Secretary Dan Glickman that Russia might need a second food

Russia has been short on food, due to a last year's disastrous harvest of
just 47.8 million metric tons and the August 1998 devaluation of the
Russian currency, which made imports more expensive.

Last year's poor harvest forced Russia to ask the West for about $1.5
billion of food aid, including four million metric tons of grain.

If a request for more food aid were to come, it probably would not be
received until the harvest in Russia is further along, the USDA's
Goldthwait said.

However, officials in Russia told Reuters on Friday that the country sees
requesting more food aid as an ``extreme measure'' that it will try to avoid.

USDA officials are satisfied with the progress of the current U.S. food aid
package for Russia that was negotiated late last year, Goldthwait said.
Glickman and others have repeatedly said the USDA would not consider more
aid until they are satisfied that the food provided by the nearly $1
billion U.S. package is getting into the right hands.

``Things seem to be going well,'' Goldthwait said. ``We are more
comfortable than perhaps we thought we might be.''

Goldthwait will be leaving the USDA in July. He is awaiting U.S. Senate
confirmation of his appointment to the ambassadorship to Chad. His
successor, Richard Fritz, has been working with Goldthwait for about a
month to learn the ropes.

As part of his training, Fritz is leaving Friday night for a trip to Moscow
to meet with officials there. Goldthwait called the visit a
``familiarization trip.''

Fritz came to the USDA from the Oregon Wheat Commission and formerly served
on the House Agriculture Committee staff.

``I am very confident that I am leaving the job in very good hands,''
Goldthwait told the bankers' group.


From: (Elizabeth Pond)
Date: Sat, 26 Jun 1999 
Subject: on democratic transformation

Dear David,
As a start to answering your key question, there are several useful 
examples: Germany after World War II, Spain after Franco, and Poland in the 
1990s. All are different, of course, but one interesting aspect of Spain is 
the role of the German political foundations, especially the Friedrich Ebert 
Foundation associated with the Social Democratic Party. In a period when 
Kissinger was ready to give up on Spain the EU, and especially the Germans, 
and especially the Ebert Foundation, did not, and they were right. (The 
Christian Democratic counterpart, the Konrad Adenauer Foundation, has been 
playing a similar, totally unpublicized role in the Balkans, in, for example, 
helping bring about the reconciliation between Bulgaria and Macedonia that 
led to their agreements of last February after eighty years of cold war.)
Regards, Beth


Date: Sat, 26 Jun 1999 09:23:05 -0400 (EDT)
Sender: Jonathan Weiler <>
Subject: Russian budgetary data from about 1991-1998

HI David
I am trying to get Russian budgetary data from about 1991-1998, for
overall spending, military spending, spending on social programs and
prison spending, and data on estimated costs of the war in Chechnya. Do
you, by chance, know where I could access those figures? Or,
alternatively, could you post this request to the list. Thank you.
Jonathan Weiler


Poet ends marathon ode-to-Pushkin

MOSCOW, June 26 (AFP) - A Pushkin-mad poet ended his bid to enter the
Russian record books Saturday, completing 200 poems on the nation's
favourite bard after a three-week seclusion in the far-east port of
Vladivostok, television reported.

Vlad Svechnikov holed up in a city hotel with pen and paper for 20 nights
as he sought to enshrine in verse his admiration for the lyric master, 200
years after the birth of the dramatist, poet and romantic icon.

The commercial NTV television station reported that besides a daily visit
by the chambermaid to bring him food and change the bed linen, Svechnikov's
only contact with the outside world was by telephone.

The local poet admitted to feeling lonely at times during his self-imposed
literary purdah, the fruits of which will now be studied by a commission
that will decide whether Svechnikov's efforts merit a place in the record

"As a poet and a writer, you will always be my sun," began one of the poems
read out by Svechnikov on NTV. "Believe me until my last day, I will be
your eternal admirer."

In a nearby room, another Pushkin fan, water-pumping station worker
Konstantin Kereyev, took several weeks holiday to pen ditties to the father
of modern Russian literature which had a more down-to-earth flavour.

One poem entitled an "Interview with Pushkin" contained the lines:
"Pushkin, Pushkin, great genius. Your marvellous works draw us in like
raspberry jam attracts flies."

Russia indulged in a orgy of "Pushkmania" this month to celebrate the
poet's birth in Moscow in 1799.

The author of powerful dramas and lyric verse, which many Russians can
recite from memory, died in a tragic duel defending the honour of his wife,
a renowned society belle.

Although Pushkin fired first in his duel with the French dandy d'Anthes,
his bullet ricocheted off a button on his rival's trousers. Pushkin
received a serious stomach wound in the encounter and died in agony several
days later. 


Moscow Times
June 26, 1999 
General Shows Gift For Poetry 

One of the most vocal critics of NATO's campaign in the Balkans--Colonel
General Leonid Ivashov, head of the international relations department of
the Defense Ministry-- was inducted into a nationalist literary group
Friday in recognition of his poetry. 

Ivashov was inducted into the Union of Writers of Russia, a radical
patriotic organization that has in the past awarded literary prizes to
Communist Party chief Gennady Zyuganov and to Radovan Karadzic, the Bosnian
Serb leader and indicted war criminal. 

At a very private ceremony at the Center of Slavic Culture and Scripture,
Ivashov seemed thrilled with the recognition of his verse. 

"I'm even more nervous now than when I was talking to our ill-disposed
counterparts [during negotiations over Kosovo]," he said. 

Ivashov's muse is often overtly political. He has dedicated a volume of
poetry to the events of October 1993, when the Kremlin clashed with the
parliament and shelled it into submission. He also writes military songs,
which are popular in the Russian Army. At his induction ceremony, Ivashov
was praised by his fellow writers and guests for standing up for Russian
interests in the Balkans. 

It was not all politics, however, as Ivashov also read a few poems about
romance that he dedicated to his wife. 


Stepashin Hints At Possible Resignation 

Radiostantsiya Ekho Moskvy
24 June 1999
[translation for personal use only]

Russian Prime Minister Sergey Stepashin met Moscow 
State University graduates today. He called on the graduating students 
not to leave Russia and to come to the polls in December and next summer. 
The 21st century is your century, let us move forward into it together, 
Stepashin said. He noted that they would be leaving to go on to other 

Many people viewed one thing he said as an allusion to his possible 
imminent resignation. I quote: I may perhaps soon be coming back to 
teaching. Commenting on what he said to reporters, he later said that 
this was nothing dreadful, because nothing under the sun is for ever. 


Sovetskaya Rossiya Hits Yeltsin's 'Honest Elections' 

Sovetskaya Rossiya
24 June 1999
[translation for personal use only]
Article by Sovetskaya Rossiya Chief Editor V. Chikin and Zavtra Chief 
Editor A. Prokhanov under the rubric "From the Patriotic News Bureau": 
"Code Name 'Honest Elections'" 

The "honest elections" of which Yeltsin speaks are 
a code name for an operation aimed at destroying the anti-Yeltsin protest 
front, keeping the patriotic majority out of the State Duma, bringing 
Yeltsinists and Liberal Democrats into the corps of deputies, and 
creating lawmaking chaos, whereby parliamentary forms of opposition 
struggle would be ruled out. 

To achieve the aforesaid ends, the executive is using a huge arsenal of 
means, including bribing opposition leaders, splitting patriotic 
movements, creating spurious ephemeral movements, discrediting brilliant 
names that are well known in the patriotic camp, and much besides, over 
which the "sages" in the [Presidential] Staff, the "publicans" among the 
oligarchs, and the "knights of cloak and dagger" in the system of the 
special services are racking their brains. 

The undistinguished Flora commercial bank, whose financial well-being is 
linked to Siberia's economy, enjoys the Staff's special attention. Only 
recently Mr. Andreyev, Flora's deputy leader, was working as deputy chief 
of the Russian Federation Presidential Staff's Territorial 
Administration, a department that is capable of controlling the regions 
and, thus, the governors and, thus, the ballot boxes. This is the 
department that is credited with manipulating the consciousness of a 
number of patriotic governors who have noticeably changed their views on 
patriotism and the opposition in recent years. 

It has been learned from sources close to the Presidential Staff that 
this department is conducting a special operation to split the People's 
Patriotic Union by promoting the creation of a new electoral bloc, whose 
philosophy is "the philosophy of common sense" and whose method of 
campaigning is to have G.A. Zyuganov, leader of the People's Patriotic 
Union of Russia, criticized by his recent supporters. They want to 
"infuse" into this bloc other components of the People's Patriotic Union 
of Russia -- both those that rely on "spiritual values" and those that 
are close to the "soil," to the "ground." 

The trend in the People's Patriotic Union of Russia which defends the 
trampled Army enjoys the special attention of the staff's analysts. 
"Financial intervention" will be directed there, with subsequent 
discrediting of the leader. 

The tribute under which "the family" has laid Russia through 
nonbudgetary funds and various "donations" will replenish the 
undistinguished commercial banks, and these will finance the "honest 
elections" major subversive operation and feed the renegades' sick 
ambition, the "flora" and "fauna" of a split.


Moscow Times
June 26, 1999 
NEWS ANALYSIS: Union Plans Hint Yeltsin Won't Go 
By Matt Bivens
Staff Writer 

President Boris Yeltsin cannot run for re-election next year, but in
preparation for 2000 his Kremlin is already cracking down on the media,
trying to weaken a presidential contender in Mayor Yury Luzhkov and
flirting with the idea of keeping Yeltsin in power as head of an entirely
new country. 

This week saw both state-owned national television stations f RTR and ORT
f institute what looks like politically motivated censorship. 

At RTR, a weekly program famous for its political expos╬s, "Sovershenno
Sekretno," was pulled from the air. Complaining that "we cannot air an
uncontrollable program," RTR chairman Mikhail Shvydkoi f the same man who
approved the airing of a video showing then-Prosecutor General Yury
Skuratov cavorting naked with prostitutes f said RTR "was not an
appropriate venue for politicians to pour dirt on each other." 

ORT general director Igor Shabdurasulov, meanwhile, frankly stated that
ORT would let its own political bias dictate news coverage. 

Speaking at a conference on the Russian press, Shabdurasulov predicted
elections in 1999 and 2000 would see some of the worst media-manipulation
yet in post-Soviet Russia. He also said ORT executives "will determine for
ourselves which political parties and movements correspond to our political
understanding," and then steer coverage accordingly. 

"A cleansing of the media is under way on the eve of the election
campaign," said Artyom Borovik, president of the Sovershenno Sekretno

The Agency for Political News f an on-line Russian Internet information
service ( f reported this week that Borovik's show had been
pulled because it was preparing reports favorable to Luzhkov and his
political vehicle Otechestvo, or Fatherland. APN's explanation would not
only fit with the Kremlin's media crackdown, but also with its open
hostility toward Luzhkov. 

Borovik is enough of a Luzhkov supporter that he was a winner in a
reshuffle of the mayor's pet television station, TV Center, announced
Friday: Borovik got a seat on the TV Center board of directors, now headed
by Deputy Mayor Sergei Yastrzhembsky. 

Last weekend Luzhkov's helicopter was denied airspace for a planned tour
of Moscow region farms, and Luzhkov had to spend five hours touring the
region in a jeep instead. That same weekend, the newspaper Moskovsky
Komsomolets reported that ORT had refused the crooner Iosif Kobzon
permission to sing a well-known old tune called "Arise, Fatherland!" on
television f on grounds that it amounted to a free plug for Luzhkov's party. 

Russian media are also filled with speculation that the Kremlin is
preparing to launch its own new political movement, Rossiya, with Prime
Minister Sergei Stepashin as its head. Rossiya will reportedly be aimed at
beating out both Fatherland and the Communist Party. 

On Monday, an infuriated mayor still smarting from his jeep ride lashed
out against what he called the Kremlin's "anti-Luzhkov campaign." 

"This is a very dangerous precedent in our society which shows that
tension is rising," Luzhkov said. 

Then there is Belarus. 

Stepashin and Belarus President Alexander Lukashenko held a telephone
conversation Thursday to discuss proposed Russian-Belarussian unification,
and Stepashin's No. 2 in the Cabinet will visit Lukashenko in Minsk this
weekend to continue those discussions. 

Itar-Tass reported that Stepashin and Lukashenko discussed the integration
of Russia and Belarus, and also, to use the Tass formulation, "a widening
of trade and economic cooperation [and] the further deepening of political
interaction between the two countries."Nikolai Aksyonenko, Stepashin's
first deputy prime minister, will meet Lukashenko and the members of his
government Saturday and Sunday. He will also tour industrial enterprises
described by Itar-Tass as "particularly closely tied to the Russian

The reunification of Russia and Belarus enjoys broad popularity in both
countries, and Minsk and Moscow have made it a priority f at least on the
level of rhetoric and ceremony. 

But reunification is also seen by some as a way for President Boris
Yeltsin to remain in the Kremlin after his term ends: A new country
consisting of a Russia-Belarus union would need a new constitution and a
new president f and there is nothing yet that says the new president would
have to be elected. 

Politicians from Yabloko's Grigory Yavlinsky to the LDPR's Vladimir
Zhirinovsky are among those who have warned that Russia-Belarus union may
be a Trojan Horse to carry Yeltsin back into the Kremlin. 

This week Interfax weighed in on that debate with an article quoting two
prominent politics watchers from Moscow research centers f Vyacheslav
Nikonov of the Fond Politika, and Sergei Markov of the Institute for
Political Studies. Both analysts were quoted as saying by Interfax that
they expected the Kremlin would use Russia-Belarus unification to scuttle
the 2000 presidential elections, and perhaps also the December
parliamentary elections. 

Nikonov said he favored unification with Belarus in general, but warned
that "it will be dangerous if they try in Russia to play the Slobodan
Milosevic variant." When Milosevic's term as president of the dominant
Yugoslav republic of Serbia ended a few years ago, Milosevic became
president of Yugoslavia. 

Markov was quoted by Interfax as saying, "The Milosevic variant is a very
attractive model for the Russian president, since it possesses that
extremely vague legal gray area that Boris Yeltsin is so fond of." 

Markov added that the 2000 Russian presidential elections might not even
have to be canceled. As long as the Kremlin can engineer the victory of a
loyal patsy as Russian president f someone who would sit quietly as power
was transferred from the institutions of the Russian state to the
Russian-Belarussian state f the vote could go forward. 


Christian Science Monitor
JUNE 25, 1999 
Like a candidate? Buy his aftershave
Some Russian politicians are putting their faces on goods from CDs to
clothes for political and financial gain.
Judith Matloff 
Staff writer of The Christian Science Monitor

When Russians next go to the polls, they will vote for candies,
beverages, and cologne. Or rather, for the candidates that appear on
labels wrapping these goods.

Packaging candidates is the name of the game for the parliamentary
race due in December and the presidential vote six months later.
Looking to the West for inspiration, political parties have decided that
consumerism is the way to go.

Gone is the Soviet era when marketing was frowned upon and
connections were key. Today's politicians are giving their names and
faces to products to gain votes. Marketing personalities for political
and financial profit spans the political left, right, and center. The tools
of the new battleground are chocolates, toffees, clothing, and music.

Campaigning across the planet's biggest country territory-by-territory
is formidable for even the best-funded candidates. So selling a
product with the picture of a politico provides advertising without
going through the trouble of putting up posters or shaking hands.

"It's a clever way to campaign in this country," says Yelena
Bashkirova, Director of the Public Opinion and Market Research
Institute in Moscow, which does surveys of trends. "Russians are
oriented toward personalities. They tend to vote for a man, not his
political program. So such branding helps sell a product while also
promoting the politician."

Officially, campaigning is not allowed to begin before September. But
by selling candidate-brand products, parties can get a head start on
the opposition.

Anticapitalist principles

Only Communist die-hards are bucking the trend. Putting up statues of
Lenin in a public square is one thing, they say. Placing the hammer and
sickle on a lemonade bottle is another.

"We have never used such a practice," huffs Viktor Peshkov, head of
the Communist Party's electoral campaign. "Every politician must be
sure not to cross the border between improper and proper. What's
next?" He should address that question to Vladimir Bryntsalov,
trailblazer of the branding trend. The legislator with the Our Home is
Russia party set the tone when he introduced his own vodka label four
years ago.

The idea caught the eye of Vladimir Zhirinovsky, maverick leader of
the ultranationalist Liberal Democratic Party of Russia (a group that is
neither liberal nor democratic).

Known for his outrageous antics, Mr. Zhirinovsky quickly launched a
vodka label bearing his picture. Then he introduced his own food
shops and a line of toffees, honey cakes, and beer.

"It's one of the most effective methods of advertising," Zhirinovsky
told the Monitor. "A poster can be destroyed. But who can prevent
someone wearing a T-shirt or putting our food and drink on his table?"

Parliament's greatest hits

For his latest venture, the irrepressible Zhirinovsky released an album
of songs, "Nastoyacshiyi Polkovnik," or "The Real Colonel"
(Zhirinovsky achieved that rank in the Army). He adorns the cover
dressed in uniform, with warplanes streaming overhead.

Zhirinovsky's next effort will be a chain of clothing stores named after
the T-34 tank. The garb will have a military flavor.

Joining the brandmakers is film director Nikita Mikalkov, who
launched an aftershave this year. Mr. Mikalkov has been circumspect
about his intentions, but is widely believed to harbor presidential

Moscow's popular mayor, Yuri Luzhkov, has also thrown his hat, or
rather scent, into the ring.

For the past two years, men have been splashing themselves with a
cologne called Mer (mayor). Although he has not officially declared
himself a candidate for president either, Mr. Luzhkov is widely known
to want the job and is seen as a top contender.

Novaya Zarya perfume company director Antonina Vitkovskaya says
an improved version is due to hit the boutiques soon. "The new Mer
will be a little bit different, but also be dynamic and unforgettable, like
the man. Fashion changes, our lives change, Moscow changes. And
Yuri Luzhkov himself also changes. So we thought we should reflect
this change."

It remains to be seen, however, whether Luzhkov will still smell as
good to voters in the months to come.


St. Petersburg Times
June 25, 1999 
Still Waiting For the Prophet 150 Years Later 
By Fyodor Gavrilov

IN the mid-19th century the poet Nikolai Nekrasov wrote a poem that became
a permanent fixture in textbooks: "Who Lives Well in Russia?" Nekrasov's
answer to his own question was negative, of course - 150 years ago, all
parts of Russian society had it bad. 

Back then, the monarchy was unable to quell a military uprising in the
capital and within a few days it crumbled, mostly because it didn't have
the support of society. Russians felt they deserved better and were willing
to experiment. 

In the 1970s, though, my classmates and I sang a song with the refrain "How
good it is to live in the land of the Soviets!" Our pubescent voices rang
out clearly, but even then many of us knew that life in our country wasn't
all that great. We said of any defective, badly manufactured item, "It's

Mikhail Gorbachev's perestroika and Boris Yeltsin's reforms were the result
of a consumer uprising. The ordinary Soviet citizen gave little thought to
human rights or the social contract. We were unhappy because we lacked
quality goods: American jeans, Japanese stereos, German cars, Coca-Cola.
The communist regime stood in the way of our acquiring these fetishes. So
we overthrew it, and with little effort. Almost no one was sorry to see
Gorbie go. 

The shops were flooded with goods three months after Gaidar instituted his
economic reforms in 1992. Quality of life now depended only on how much
money you had. But a new danger lay in wait for us: the miracle didn't
happen, and reforms bogged down. 

Dependent on disposable cash for its lifeblood, commerce developed rapidly.
Fortunes were made and squandered in a matter of months. At the same time,
the unreformed and unprivatized sector of the economy - education, health
care, science, social security - withered. Every autumn the newspapers
predicted that the coming winter would be unusually severe, and since the
cities had no money to buy coal, we would freeze in our apartments. And we
would most likely starve: Grain stockpiles were low. 

Now it's the summer of 1999 and we're still alive. Unfortunately, my father
suffered a heart attack this spring. He's been recuperating in a pleasant
sanatorium on the coast. His treatment is free, but this has nothing to do
with connections or job-related perks. He shares a room with a
rank-and-file engineer, and a retired steelworker is their next-door

As I traveled out to visit my dad this past weekend I saw thousands of
beautiful Fords and VWs parked along the shoreline, their happy owners
basking on the sand. The highway is lined with huge mansions built by a
generation who grew up in cramped communal flats. Life in the city is no
worse. Everywhere you'll find cafes packed with customers. In the
audio-video stores there's a steady demand for home entertainment systems
priced at $1,500 and upwards. 

Russians work hard, sin hard, and hardly pay their taxes - but they do
live. But once again they're miserable. With the mass media stoking their
dissatisfaction, they're reminded that they deserve better. Where is the
prophet who will convince my compatriots that it won't get any better than
this, and at the same time give them something to hope for? 

Fyodor Gavrilov is the editor of Kariera-Kapital. 


Berezovskiy Trying To Regain 'Lost Ground' 

Moskovskiy Komsomolets
24 June 1999
[translation for personal use only]
Article by Leonid Krutakov: "Return of the Prodigal Oligarch. 
Berezovskiy Attempts To Regain Lost Ground in 'Family'" 

Berezovskiy has begun to raise his profile 
everywhere. At one moment at a press conference he speaks of the 
desirability of dissolving the State Duma and boasts of his relations 
with Yumashev and Dyachenko. At the next, having sidled and elbowed his 
way into the first World Russian Press Congress, he modestly blurts out 
that Russia's present leadership "is incapable of formulating either 
domestic or foreign goals." 

It is somehow hard to understand what Boris Abramovich [Berezovskiy] is 
saying: At one moment he dislikes the legislative branch, at the next the 
executive. But you can understand Berezovskiy: Most probably he does not 
like his current place within the regime. 

The recent government crisis severely undercut Boris Abramovich's 
position. Though the arrest sanctioned by the General Prosecutor's Office 
failed to take place, it struck a substantial blow to BAB's 
[Berezovskiy's] reputation. 

Today Berezovskiy never tires of repeating that the criminal case against 
him has been closed because the charge has absolutely no prospect of 
success. In fact Boris Abramovich is forced to constantly visit 
investigator Volkov in order to resolve his travel problems. On the last 
occasion he was forced to request Volkov's "permission" to replace his 
passport for foreign travel. So the criminal case concerning illegal 
enterprise by the former CIS executive secretary is taking its course, 
and it appears that no one intends to let Berezovskiy off the hook. 

Without himself suspecting it, Skuratov performed an invaluable service for 
the "family," which had long found the excessive tutelage of the most 
uncontrolled oligarch burdensome. The situation changed fundamentally 
after the criminal proceedings were instituted. Whereas before 
Berezovskiy had literally dictated his demands to Tatyana Dyachenko, 
sometimes stooping to open blackmail, today he is the role of a 
supplicant constantly mindful of the possibility that the investigation 
into the Aeroflot case could be stepped up at any moment. 

The composition of the present government is evidence of the decline in 
BAB's popularity with the "family." The main financial and industrial 
heights in the cabinet are occupied by Roman Abramovich's people, and the 
rest have been picked up by Chubays' people. Today Berezovskiy more or 
less has control of the MVD [Ministry of Internal Affairs] alone, and 
even Rushaylo's eye is constantly roving. At any rate, the minister of 
internal affairs has no intention of clinging on to a drowning oligarch. 
Another reason for the weakening of Berezovskiy is the strong allergy to BAB 
felt by a prominent "family" member who has been gaining strength lately 
-- Anatoliy Chubays. Chubays' return to behind-the-scenes politics was 
accompanied by only one condition set by him: Berezovskiy must be removed 
from active influence on the decisionmaking process. The attempt to 
surrender BAB in exchange for loyalty on the part of Skuratov was the 
consequence of all these factors. 

Bargaining between the "family" and the general prosecutor took place ahead
Skuratov's first abortive resignation. Yuriy Ilich [Skuratov] was told: 
Do whatever you like, but hands off Tanya [Dyachenko] and Rom 
[Abramovich]. As a result during the search at the Sibneft company the 
investigators did not even go to the sixth floor, which is where Roman 
Abramovich's office is. The only thing that saved Berezovskiy from being 
finally surrendered was the fact that Skuratov unexpectedly stumbled 
across the Swiss construction firm Mabetex, thereby hooking the "family 
treasurer" -- Viktor Stolpovskikh, in other words, Tatyana Dyachenko 

One thing is clear: Berezovskiy has lost his former power today. After 
the appointment of Aksenenko as first vice premier and Kalyuzhnyy as 
minister of fuel and energy, Roman Abramovich no longer has any need of 
BAB as a lobbyist for his commercial initiatives and aspirations. After 
the "publicity" of the Aeroflot criminal case and Abramovich's direct 
contact with Dyachenko, the "family" ceased to need BAB's services as a 

But in other respects our authorities remain the same. The Duma still 
accepts only one argument -- "greenbacks." And the government and the 
Presidential Staff are preoccupied with amassing as many as possible of 
these "arguments" in future disputes with deputies. And neither the White 
House nor the Kremlin is forgetting its own pocket. It remains a mystery 
what Berezovskiy dislikes about this situation. Maybe the fact that most 
of the "arguments" are today bypassing his pocket? 

In his speech at the Russian Press Congress Boris Abramovich declared 
that he will support no one in the next presidential elections. BAB has a 
simply pathological tendency to lie in public. All Berezovskiy's recent 
actions show that he has no intention of surrendering. 

BAB has developed frenzied activity in the mass media market. Ignoring 
obstacles, he is rushing to create the most powerful media empire in 
Russia. Ahead of the Duma and presidential elections media "magnates" 
will again be held in particular esteem. And with television in his 
pocket Boris Abramovich will not be left without "arguments." It will be 
possible to regain his lost ground with the "family" and promote his own 
candidate for president. Lebed has spent too long as a governor.... 


From: Greg May <>
Date: Fri, 25 Jun 1999 17:45:26 -0400

Reality Check: Success Has Its Costs
by Peter W. Rodman (Nixon Center)

The Clinton Administration's plans for Kosovo seem on track. The UN 
Security Council has not (as many had feared) impeded NATO's taking control 
of the province; the refugees are flooding back, confident of NATO's 
protection. This is a reasonable definition of success, at least for the 
short term.

The contretemps over the Russian troop contingent was a sideshow: Instead 
of sabotaging NATO's peacekeeping force by diluting the Security Council 
resolutions in New York, which it could have done, Moscow seemed more 
interested in being allowed a place to march in NATO's victory parade. 
That's harmless. Along with China (which abstained in New York), Russia 
is reluctant to seriously obstruct a NATO that looks like a winner.

The price that NATO and the U.S. pay, however, is in other coin. First, 
the KLA problem: While NATO establishes its military protectorate, and the 
KLA helpfully agrees to a general "demilitarization," the KLA can count on 
being the dominant political force on the ground. The KLA's reputation for 
being crypto-Communist drug-running terrorist thugs is amply deserved. 
Working with them to win the war was one thing. But if NATO has in mind a 
political future for Kosovo that is better than that, it urgently requires 
a political strategy to build up democratic leaders and groups and free 
media in Kosovo to block the KLA's monopoly. Whether we'll be any good at 
that is not clear. But nature abhors a vacuum, and the KLA are now filling 

Internationally, there are more profound consequences. Where the 
Administration sees vindication for the Atlantic Alliance, for U.S. 
leadership, and for universal values, the rest of the world now sees 
American dominance as one of the world's biggest problems. This is made 
worse by our seeming victory in Kosovo. The Europeans are only 
accelerating the construction of their autonomous institutions in foreign 
and security policy, vowing never again to be so tied to the Americans. 
China - which is particularly alarmed by what it denounces as American 
"bullying" - is taking steps to patch up its quarrel with India, reinforce 
its alliance with Russia, and woo Japan. Coalition-building is for China a 
way to avoid isolation and fend off American pressures. Russia is obliging 
by agreeing for the first time to sell China Su-30's, its most advanced 

Building counterweights to American dominance is the name of the game now, 
around the world. Where the Clinton Administration basks in the glow of 
Wilsonian humanitarianism, the rest of the world thinks geopolitically. 
The new Great Game of international politics is only beginning.


Abramovich's Early Years Recounted 

Komsomolskaya Pravda
19 June 1999
[translation for personal use only]
Report by Aleksandr Yevtushenko on comments by Vyacheslav Shulgin: 
"Roman Abramovich: Has Life Been Good to Him?" 

The editorial offices received a telephone call 
from Syktyvkar a few days ago. The caller was Vyacheslav Shulgin. "I 
started reading Komsomolskaya Pravda and could not believe my eyes: Could 
Romka Abramovich be the Kremlin's 'eminence grise'?" 

Shulgin was the senior Abramovich's best friend for many years and knew the 
future "eminence" when he was still in diapers. Here is his account of 
those days. 

Fate and circumstances played the primary role, and probably the 
principal one, in making Roman what he is today. The main circumstances, 
it seems to me, was the tragic death of his father. After all, if that 
had not happened, today Roman might be just as famous, but he would be a 
citizen of the State of Israel. 

I met Arkadiy Abramovich, the future father of Roman, in Syktyvkar in 
the early 1960s. We worked together in the sovnarkhoz [national economic 
council]. He was in the supply section and I was in the wood chemistry 
division. We were young and we loved life and women. There were actually 
three of us, and we were inseparable: Arkasha, Filchik, and I. Arkadiy 
was a handsome man, and he was the most boisterous and most sociable 
member of our team. He and Filchik always planned to move to Israel. 
"This is what we will do," he told me. "We will go there, get settled, 
and then get you over there too." Filchik did go, but Arkasha never got 
the chance. 

Arkadiy did not feel comfortable in an office. He was too active for that, 
and he was always drawn to the production line. They made him the head of 
the supply division of a large construction and installation 
administration. He was restless in one spot there too, and he kept moving 
around and getting involved in every aspect of the work. It is as if he 
knew he did not have that long to live. He kept trying to make everything 
run more efficiently. In general, he was full of ideas and they were good 
ideas. We spent every evening together--but only until we got married, of 

His wife was from Saratov. She could not understand why we were staying 
in the north and kept saying we should all move south. We always laughed 
about it later when we were alone: We were happy in Syktyvkar. There were 
so many pretty young women there. She went back to Saratov to give birth. 
When she returned, she brought Romka and some serious health problems 
back with her. Something had gone wrong during the birth and she died 
soon afterward. 

Her death was a terrible shock to Arkadiy. Later, when he came to, so to 
speak, we started spending all of our time together again. We saw Romka 
often. He was living with Arkadiy's mother, and all of us took care of 
him together. Arkasha loved Romka very much and he treated him as an 
equal, speaking to him as one adult to another. 

Sometime in the late 1960s, a free-labor Saturday was scheduled for 4 May at 
the construction and installation administration. Arkadiy, who had to get 
involved in everything, volunteered to supervise the work on that day, 
even though this was not the job of the supply manager. When they were 
moving the crane into position, the arm broke off and crushed Arkadiy's 
legs. My best friend died a few days later. The doctors told me that this 
was a highly unusual case: Particles of bone marrow had clogged his 
arteries. We buried Arkadiy next to his wife. 

For a long time no one told Romka that he was an orphan. He was told 
that his father had gone away on business. I visited Romka and his 
grandmother frequently. Later he was adopted by Arkadiy's brother, who 
was some kind of oil and gas supervisor from Ukhta. In general, I heard 
that his uncle gave him a good start in life. I also know that his 
uncle's wife was a republic beauty queen because Arkasha had bragged 
about that. 

Romka was already living in Ukhta when he started school. I never saw him 
again until I opened your newspaper, and there he was, our Romka. He 
looks exactly like Arkadiy, but with slightly higher cheek bones. 
So please do not write anything bad about him. Here is what I think: If 
Romka managed to become an "eminence grise" and to take charge of the 
Yeltsin family's money, this means he is intelligent and capable. If he 
says or does something wrong and everyone around him agrees, then they 
are the fools, and that is not Romka's fault. 

Soon after Abramovich's death, Vyacheslav Shulgin left the sovnarkhoz 
following a quarrel with his superiors. He became a photographer and took 
pictures for various publications. Now he is retired, but he still has a 
business--a small portrait studio. He is happy that his "godson" has had 
such a good life. 

But has it been that good? At the age of 26, after all, Roman Abramovich 
was already being charged with grand larceny. His name kept coming up in 
investigations of questionable incidents in the privatization era. The 
people closest to the Family "exchequer" today include not only Valentin 
Yumashev and Tatyana Dyachenko, but also the members of a highly 
influential Chechen clan, not to mention "crime bosses." Law enforcement 
agencies are still collecting evidence against the "eminence grise," just 
waiting for the command to "charge." 

How long can they wait? 


Moscow Times
June 26, 1999 
Chubais Strengthens Grip on UES 
By Igor Semenenko
Staff Writer 

UES chief Anatoly Chubais has successfully orchestrated a velvet
revolution at national electricity grid Unified Energy Systems,
strengthening his own position and getting a measure passed that will
prevent the Kremlin from reshuffling top management at its own whim. 

Shareholders at UES' annual meeting Friday amended the company charter to
include a clause that requires the approval of three-quarters of all
shareholders to nominate or dismiss the chief executive. 

The amendment was proposed by a group of shareholders led by a
representative of Deutsche Bank AG (London). 

Previously, the chief executive officer was appointed and dismissed by the
board, where the government always had a majority of seats. 

Chubais managed to push a decree through the presidential administration
Thursday that gave the state representative at UES the authority to approve
the amendment. The state controls 52.5 percent of the company's ordinary

The victory Friday was widely supported by foreign shareholders, which
with a consolidated 33.6 percent stake in UES will now be able to block any
government attempt to oust the CEO. Many Western shareholders consider
Chubais, a former finance minister, to be their fair-haired child at UES,
where in just over a year he has managed to bring drastic reforms to the
sprawling giant. 

Chubais also threw foreign investors a bone Friday, hinting that he could
pull the strings to torpedo a disdained law that caps foreign ownership in
UES at 25 percent. 

"I don't think this law will exist for much longer," Chubais said. 

Under Chubais' command, foreign shareholders could get more influence in
the company, analysts said. However, there is little doubt that Chubais is
going to have the upper hand in all major decisions and is going to
maneuver between the government and foreign investors. 

Full results of the shareholders' meeting had not been made public late
Friday night, but foreign shareholders had hoped to pass several other
amendments that would give them more rights and further limit the power of
the board of directors. 

But having won the government's support, Chubais looks poised to win no
matter how private shareholders voted. 

In the long term, UES is likely to remain heavily dependent on the
benevolent stance of foreign investors, analysts said. 

In the wake of last year's meltdown the company barely escaped default on
its debts to Credit Suisse First Boston, Sberbank and Inkombank. UES is
refinancing the loans and now hopes to restructure them, Chubais said. In
other remarks, Chubais said that UES equipment is obsolete and 62 percent
of it requires replacement. 

"Our estimates, which are similar to those made by World Bank experts,
show that UES will need about $60 billion of capital investments before the
year 2005," he said. 

That only leaves UES with the option of tapping international capital
markets, company officials said. 

However, it is by no means clear who would be willing to lend UES the
large amounts of cash needed for the upgrade. 

Last year UES had revenues of 218 billion rubles ($20 billion), but cash
revenues were only 21 percent of this amount. 

UES increased cash collection to 33 percent in May this year and hopes to
get 35 percent in cash over the whole year, the company said in a statement. 

Even power exports brought only $46.5 million in cash last year, a meager
15.4 percent of the total worth of exports. Ukraine managed to pay as
little as $1.1 million in cash, having imported energy worth $84.4 million. 

In such circumstances foreign partners remain UES' only hope. 

Realizing that, Chubais through his reforms has made UES a more
transparent and investor-friendly company. 

UES has recommended that its subsidiaries lift a 1 percent cap on the
purchase of shares by an individual shareholder, and it has made serious
efforts to consolidate grip over subsidiaries, putting its representatives
on the boards of regional power companies. 


Russia To Hear Religion Appeal
June 25, 1999

MOSCOW (AP) - A Moscow court will hear an appeal Monday by a branch of
Jehovah's Witnesses, who are seeking to overturn a lower court ruling in a
case aimed at banning the group, church officials said.

The Moscow city prosecutor's office is trying to outlaw the Moscow branch
of the U.S.-based church, using a provision in a religion law that gives
courts the right to ban religious groups found guilty of inciting hatred or
intolerant behavior.

This is the first time prosecutors have used the religion law to try to
disband a religious group.

The prosecutor's office charges that Jehovah's Witnesses are a cult that
destroys families, fosters hatred and threatens lives. But it hasn't
produced any specific evidence so far, defense attorneys say.

If outlawed, the Jehovah's Witnesses would no longer have the right to hold
public services, rent property or distribute literature in Moscow.

In March, the Moscow district court judge hearing the case to ban the group
ordered a panel of experts to study the group's literature.

Jehovah's Witnesses challenged that decision, and the appeal was scheduled
to be heard in the Moscow city court on Monday, Jehovah's Witnesses
spokesman Alexei Nazarychev said Thursday.

The group's literature was already studied by a federal panel of religious
studies experts when the Justice Ministry was considering whether to renew
the Jehovah's Witnesses registration as a religious organization.

The ministry's panel found nothing untoward in the group's literature and
operations, and the registration was renewed in May.

The registration of all religious groups in Russia had to be renewed after
the passage of the religion law in 1997.

The Moscow district judge refused to recognize the Justice Ministry's
findings and insisted on a review by a separate court panel. Jehovah's
Witnesses say that the court panel lacks qualifications to decide the matter.

Even though the Justice Ministry has granted the group federal
registration, individual cities may still use the religion law to outlaw
local branches of the group.

The law was adopted under strong pressure from the Russian Orthodox Church,
which is jealously guarding its position in Russia and is eager to see a
ban on Jehovah's Witnesses, accusing them of ``aggressive proselytism.'' 


Clinton 'Has Set World Against Him' 

Rossiyskaya Gazeta
25 June 1999
[translation for personal use only]
Article by Nikolay Paklin: "Even a Doctrine Can Get It Wrong" 

"In Skopje US President Clinton stated that NATO 
could repeat an operation similar to the Yugoslav one: 'If necessary we 
could do it anywhere else tomorrow: in Africa or Central Europe'" (Radio 
France International). 

Such a doctrine has never existed in the world before. What does it mean 
in practice? That henceforth the United States will assume the role of 
world gendarme who will use force when it wants without considering any 
United Nations Organizations or Security Councils or the norms of 
international law and the sovereignty of states. And there can be no 
question of the will of the peoples either. "If necessary" means 
according to Washington's wish. 

The world order, which has been keeping the world more or less 
successfully from a big war for over half a century, is being turned 
upside down. The right of force is being asserted in the world. Bill 
Clinton, who by the will of fate moved from deep in the American 
boondocks to Washington, believes that the United States is the world's 
strongest power. But even many Americans realize that is not the case. 
There are at least several other countries in the world which possess 
all-destroying nuclear weapons and the means for their delivery. 

Incidentally, the number of those countries is growing. It is not hard to 
suppose that any of these countries could deliver a rebuff to those who 
try to implement Clinton's doctrine of "permissiveness." 

The US President has set the world against him. The response to 
Washington will be the stepping up of the race in all types of arms, 
including weapons of mass destruction. If that is what Bill Clinton 
wants, that is what he will get. There remains one hope: With his 
departure from the White House this doctrine will sink into oblivion, as 
happened with Brezhnev's doctrine of "limited sovereignty." 


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