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Johnson's Russia List


July 20, 1999    
This Date's Issues: 3399    

Johnson's Russia List
20 July 1999

[Note from David Johnson:
REMINDER: JRL will be produced intermittently over the coming
1. Interfax: Russians Think Yeltsin Reluctant To Give up Power.
3. Reuters: Russia Still Suspicious of West, Wants Better Ties.
4. Itar-Tass: Gore-Stepashin Meeting to Continue US Summit.
5. Yale Richmond: Travails of Tourism in Russia.
6. Interfax: Primakov Not To Align With Communists, Yeltsin Aides.
7. Interfax: Official on Talbott Remarks on NATO Expansion.
8. Rossiya: Aleksandr Peresvet, The Electorate's Votes Will Flow by 
the 'Pipe'. (Yeltsin Team Controls Electoral Cash Flows)

9. Moscow Times EDITORIAL: Media War Just Moguls At It Again.
10. NTV: Pundits Comment on Political Developments.
11. NTV: Luzhkov Comments on Inquiry Into Spouse.
12. Moskovskiy Komsomolets: Aleksandr Khinshteyn, Berezovskiy -- 
Big Predator? (Berezovskiy May Face New Charges)] 


Russians Think Yeltsin Reluctant To Give up Power 

MOSCOW. July 18 (Interfax) -- Many Russian 
citizens think that President Boris Yeltsin who holds political power in 
all its entirety, will not surrender it voluntarily under any 
circumstances, including presidential elections. This conclusion was made 
by the Vox Populi public opinion center on the basis of a poll held in 11 
cities, excluding Moscow, on order from the weekly Interfax VREMYA. The 
poll revealed that Yeltsin's possible refusal to give up power is 
supported and opposed by about the same percentage of respondents. 
Support for such a possibility was the strongest in Bashkortostan and the 
weakest in Yekaterinburg where Yeltsin lived and worked previously. The 
percentage of "pros" ad "cons" in the answers to the question: "Does 
Russia need Western loans, or can it do without them?" was about the 
same. For details see the weekly Interfax VREMYA of July 15. 



MOSCOW, July 19 (Itar-Tass) - Russia may receive about 3.8 billion U.S. 
dollars in loans from international lending institutions by the end of 
the year if "the mapped-out measures are implemented," Russia's chief 
negotiator with international financial organisations Mikhail Zadornov 
Zadornov told a briefing on Monday that the World Bank board of 
directors will meet on Friday, July 23, to discuss the provision of the 
social and coal loans to Russia. 
The IMF board of directors will meet on July 27 to consider extending 
the next tranche of its credit to Moscow. 
The World Bank is expected to discuss the provision of the third 
adjustment loan either on July 29 or August 3, Zadornov said. 
The Paris Club is scheduled to meet on July 28 to discuss Soviet debt 
payments in 1998-2000, he noted, adding that the London Club is 
expected to meet on August 1. 
"We will ask for a deferment of the payment of the foreign debt which 
stands at 16 billion U.S. dollars," Zadornov said. 
He also said that "we will stop using the currency reserves of the 
Central Bank in the last few days of August for making foreign debt 
Russia is due to pay about 3.8 billion U.S. dollars top foreign 
creditors by the end of 1999, which is about as much as Russia has 
borrowed this year from international financial organisations, 
including the IMF, the World Bank and Japan's Ex- Im Bank. 
In the first seven months of this year, Russia has paid seven billion 
U.S. dollars to foreign creditors without borrowing. It has also paid 
1.5 billion U.S. dollars to internal creditors. 
Zadornov said the internal debt is shrinking and the "foreign debt is 
not growing and will not grow and it may even shrink. However, this 
will depend on the talks with members of the Paris and London clubs." 
He noted that "we borrow less from the IMF than we should pay it: 
Russia should pay the IMF 4.2 billion U.S. dollars but we borrow only 
about two billion U.S. dollars from it." 


Russia Still Suspicious of West, Wants Better Ties

MOSCOW, July 19 (Reuters) - Russia should work to overcome the anti-Western 
public sentiment that burst out after NATO began bombing Yugoslavia, Foreign 
Minister Igor Ivanov said in an interview to be published on Tuesday. 

But in the interview, with the popular tabloid Komsomolskaya Pravda, he made 
clear his country is still angry at NATO and suspicious of the motives behind 
the bombings. 

In a sign nerves are still raw in Moscow more than a month after the air 
campaign's end, Ivanov said NATO had created a false image of humanitarian 
crisis in Kosovo as a ploy to subvert the United Nations and extend its 
military reach. 

"I travelled to Balkans often," Ivanov said, referring to the period before 
NATO began air strikes against Yugoslavia. 

"There was no massive ethnic cleansing, although of course there were 
incidents. But through the media there was created a particular image of 
Milosevic and Yugoslavia, in order to back decisions that had been taken over 
the previous months. 

"First, to use force without a resolution of the U.N. Security Council, and 
second, to use force outside of the alliance's sphere of responsibility." 

But despite his continuing strong criticism of NATO, Ivanov said he would 
work to repair ties. 

"These events have damaged our relations. An example: the rise of an 
anti-American mood in Russia, especially among the youth. That is not the 
path we would like to follow further. 

"Therefore the task now -- not only at the level of the president and 
government but also of public opinion, is to try to overcome this negative. 
How can this be done? By solving real problems." 

Russia froze relations with NATO when the air campaign began in March. On 
Tuesday a joint NATO-Russia consultative body was to hold its first meeting 
since the bombings began. 

Ambassadors from the Permanent Joint Council -- which comprises the 19 NATO 
member nations and Russia -- are to meet in Brussels to discuss cooperation 
on the ground in Kosovo, where Moscow has committed 3,600 troops to a 
NATO-led force. 

Ivanov said on Monday that the issue of formally renewing Russia's relations 
with the alliance could be discussed. 

"We do not rule out early contacts on a wider agenda to decide on which 
principles and conditions we will build relations between Russia and NATO," 
he told reporters on Monday. 


Gore-Stepashin Meeting to Continue US Summit
By Mikhail Petrov 

MOSCOW, July 19 (Itar-Tass) - A meeting between Russian Prime Minister Sergei 
Stepashin and U.S. Vice-President Al Gore will be a follow-up to the meeting 
between the presidents of the two countries in Cologne and there will be a 
lot of work to do, U.S. Ambassador in Moscow James Collins said on Monday. 

Speaking at a press conference devoted to the official commencement of the 
Open World programme, Collins said the Gore- Stepashin meeting agenda will 
include security issues, such as the reduction of strategic weapons, 
non-proliferation and a whole bunch of AMB issues. 

As for economic questions, Stepashin and Gore will discuss ways to improve 
relations between the two countries, the IMF and World Bank programme, and 
other issues from environmental protection to the development of trade and 

In addition, Stepashin will meet U.S. business people, the ambassador said. 

Asked about the future of Russian-U.S. relations, Collins noted the need to 
build relations on a strong and healthy basis in order to solve questions and 
settle conflicts in the decades to come. 

Under the Open World programme, Russian politicians and leaders will visit 
the U.S. between July 26 and September 30 to study the activities of its 
government structures and familiarise themselves with the life of the 
American people. 


Date: Mon, 19 Jul 1999
From: Yale Richmond <>
Subject: Travails of Tourism in Russia

Angela Charlton's report on the travails of tourism in Russia (JRL 3398)
shows how difficult it can be to bring change to Russia and realize its
vast potential. It also recalled my own unsuccessful effort a few years
ago to help develop Russia's tourist industry.

The year was 1992, and I was in Moscow on behalf of an American NGO that
was sending advisers to Russia to help in the transition to democracy
and a free market. My assignment was to find Russian organizations
willing to host such advisers. What easier place to start, I thought,
than the tourist industry, with its great potential for development, now
that Russia was open to the world and free of the restrictions of
ideology and central planning.

I requested an appointment at the Ministry of Physical Culture and
Tourism where I was politely received by a man with the rank of deputy
minister, probably one of the predecessors of the Sergei Shpilko who was
interviewed by Angela Charlton. He talked about the many problems of
tourism in Russia, and I spoke about the consultants we were prepared to
provide to help resolve those problems and to assist Russia in
realizing its vast potential in tourism. The minister heard me out and
understood what I was saying. In fact, he had just returned from a visit
to the United States, courtesy of an American corporation that was
trying to sell computers to the Soviet tourist industry, so he
understood what good and efficient tourism meant. We even scheduled a
second meeting to continue our discussion. Nothing, however, came of our
talks. The ministry apparently was not prepared to accept foreign
advisers or to think about reorganizing its tourism infrastructure.

This seems so typical of Russia today in so many areas--great potential,
but lots of problems and an inability, or perhaps even lack of desire,
to do much about them. It reminds me of an old Russian proverb: "The
Russian won't move until the red rooster pecks him in the rear." Or
another: "If men could foresee the future, they would still behave as
they do now."


Primakov Not To Align With Communists, Yeltsin Aides 

MOSCOW. July 16 (Interfax) -- It is unthinkable 
that former Prime Minister Yevgeny Primakov will enter either an election 
alliance with Communists or make a deal with the entourage of President 
Boris Yeltsin that is continuing its efforts to form a 
right-of-the-center coalition to outweigh Fatherland led by Moscow Mayor 
Yuri Luzhkov, a source close to Primakov told Interfax. "Primakov's 
statement made in May that he does not rule out anything should not be 
taken too literally," the source said. According to him, there are little 
chances of Primakov meeting with Yeltsin as was mentioned by Prime 
Minister Sergei Stepashin in a recent interview. "Even if such a meeting 
takes place, it will be a visit of courtesy," the source said. In the 
interview Stepashin said Yeltsin plans to meet Primakov after his 
vacation. "I recently talked to Boris Nikolayevich (Yeltsin). After his 
holiday, he wants to meet Yevgeny Maksimovich (Primakov) and talk with 
him to use his potential and experience," Stepashin said. He said that 
Primakov did not leave big time politics after his dismissal. "However, 
as I understood him, he does not intend to join the games against the 
president," Stepashin said after meeting Primakov. Commenting on this the 
source said Primakov as an experienced politician understands that "any 
games with the presidential entourage or aligning with Communists will 
spoil his reputation for the public." He agreed that in an interview with 
Komsomolskaya Pravda this week Primakov expressed his sympathies for 
constructive centrist forces - Fatherland and All Russia. However, the 
source said, one should not expect a concrete reply from Primakov in the 
near future for unofficial invitations to join the unions. According to 
the source, Primakov will not make any decision before autumn when the 
correlation of election coalitions will become fully clear. 


Official on Talbott Remarks on NATO Expansion 

MOSCOW. July 17 (Interfax) - Diplomatic sources in 
Moscow reconfirmed Russia's aversion to NATO'S plans of expanding 
eastwards, when asked by Interfax Saturday to comment on recent remarks, 
concerning NATO expansion, made by U.S. First Deputy Secretary of State 
Strobe Talbott. Reports from Washington quote Talbott as saying after 
last Friday's meeting with Estonian and Lithuanian foreign ministers and 
the Latvian Foreign Ministry's state secretary that the entry of these 
three baltic countries in the North Atlantic Alliance is "almost 
inevitable despite Russia's categorical objections". Talbott said that 
"no state is ineligible for entry into NATO just because of its 
geographic location." Moscow "has repeatedly voiced grave concern over 
the plans of Riga, Vilnius, and Tallinn to enter NATO." It "resolutely 
opposes such intentions" on the part of both the Baltic countries and 
NATO, the sources said. 


Yeltsin Team Controls Electoral Cash Flows 

9 July 1999
[translation for personal use only]
Article by Aleksandr Peresvet: "The Electorate's Votes Will Flow by 
the 'Pipe'" 

B.N. is now entitled to say that he will serenely 
yield his place to a "progressive" successor. Because the president knows 
that the results of the elections are a foregone conclusion. And this is 
because of a quiet individual with the smile of a lizard. 

A person who is not formally a part of the system of public 
administration but is merely the head of the president's personal 
chancellery. It was Aleksandr Voloshin who was the driving force behind 
the recent maneuvers, as a result of which practically all the principal 
Russian natural monopolies are now under the direct control of the 
president's "team". RAO YeES Rossii, the Gazprom public corporation, the 
Ministry of Railways, and Transneft are now in its hands. The situation 
involving the Central and Savings banks--they are both controlled by 
Gerashchenko, head of the Central Bank--is complex, and who controls 
Gerashchenko himself remains an open question. But the head of the 
Central Bank can, in any event, today be replaced by presidential edict 
alone. And Gerashchenko knows this, he has already been there. 

What is characteristic is that all seizures were accomplished not by the 
Family, Berezovskiy, Voloshin, or, in some way, by Chubays specifically. 
The truly increasingly close presidential inner circle united and 
consolidated for the success of this action. 

Voloshin-Chubays is the first connection. The two of them seized total
control over 
RAO YeES Rossii: Voloshin became in the company chairman of the board of 
directors, and Chubays, CEO. 

President and prime minister of the power monster. 

The authors of the new economic strategy were not in the least bit 
concerned by questions, in the old style of speaking, of ethics and law. 
YeES is a publicly-owned company, and a representative of the state, as 
the holder of the most substantial block of shares, should, of course, be 
the head of its shareholders. But here's the question: can any 
"representative" represent the state? Are shares of Chubays's company 
owned by the administration? Its chancellery? Or the Ministry of State 
Property, as the legitimate administrative body managing this same 
notorious property? Can the head of the chancellery in that case manage 
another's property? Or is the president's chancellery the state in our 

The questions might appear rhetorical, but many of the specialists whom 
we questioned made no secret of their negative attitude toward the 
maneuver staged with RAO YeES Rossii. Formally correct, perhaps, but 
essentially an outrage--thus, paraphrasing Lenin, may we interpret their 
responses. The president's personal chauffeur might just as well have 
been appointed to the company, as one of them colorfully put it. 

The questions are, truly, rhetorical, as a matter of fact. Aleksandr 
Voloshin's appointment as "commander" of the country's energy property 
has shown that not the interests of the state but the interests, 
logically, of the president will now be represented in a most important 
branch of the economy. Of, in fact, the Family, that is. 

An entirely similar picture has come about in Gazprom also. The 
chairman of the board of directors is now a person who is not in public 
service at all. Except, perhaps, in "sovereign," presidential service. We 
are talking about Viktor Chernomyrdin, who is merely the president's 
personal representative in the Balkans. In other words, here also the 
people have been shown the same thing: that which is of the state and of 
the "sovereign" is in our present-day Russia one and the same thing. And 
when did Boris Nikolayevich manage to adopt such an edict--on property of 
the state passing into his hands? Otherwise what is the point of putting 
a private individual in charge of the management of a publicly-owned 

Although.... Viktor Stepanovich is here more than a private individual. He
is the 
head of a political party. Albeit dwarf-like. But it is housed right 
there at the dollar-carrying pipe. 

According to our information, Gazprom chief Rem Vyakhirev resisted this 
scenario as best he could. He realized that they had come for his 
money--like a red food-requisition squad going into well-to-do rural 
areas. But he was able to retain for himself merely the position of chief 
manager of the company. And this was still a success for Vyakhirev 
because, in the opinion of informed analysts, he should not have kept his 
place in this office at all. 

We would note here that Voloshin put pressure on Vyakhirev in an 
alliance with Stepashin. This is our second connection. And there is a 
third also: the chairman of the board of directors of one further 
monopoly--Transneft--is Sergey Chizhov, an adviser to the prime minister. 

The circle closes: Stepashin and Chubays are sticking to each other. 

And the ordinary individual might well ask here: so what? Some have been 
replaced by others--what's this got to do with us? 

The fact that, without going deeply into the politics of it, all the 
money flows of these natural monopolies will now be controlled from the 
Kremlin. And this means that the result of the future elections is 
already three-fourths predetermined. 

The mechanism is simple. It is not even necessary here, as the press is 
shouting, to rake up money for oneself and for one's candidates. It was a 
question during the latest reshuffles rather of NOT GIVING money! Not 
giving it to the disagreeable and the disobedient. 

After all, everyone has plenty of objective difficulties. Everyone has 
unpaid taxes. And Ivan Ivanovich's request for a netting arrangement 
could be respected somehow. But permitting Ivan Petrovich such a 
violation of state tax discipline is absolutely out of the question. 
Actual payments in real money will have to be demanded of him for gas and 
light. Or that gas and light will have to be squeezed somewhat. Not 
heavily, not to the point where it causes a rebellion. But to the extent 
to which Vladivostok, say, was tormented until Cherepkov was cleared out. 

And why may one be excused, and another, not? Because--whispering in 
your ear--Petrovich's people are not voting right, and Ivanych is working 
with his people. 

It is clear who here can now "work" with people. The governors. They 
now have immeasurable power over the election commissions, the local 
prosecuting attorneys, and the local security services. 

So the appointments of Voloshin and Chernomyrdin are a loud signal to 
the actual politicians and practical experts: power does exist. It is the 
oligarch over all oligarchs. And it is more advantageous to all of you to 
assist it at the elections. 

And it is by no means a question here of an endeavor to crush everyone 
and secure one's own reelection. Or the election of a safe successor. It 
is simply that either Yeltsin with his feral instinct or someone in his 
administration--the man with the lizard's smile--have sensed that the 
administrative and economic elite that has taken shape in the reform 
years is on the verge of a nervous breakdown. Good or bad, it has 
achieved some things in this time and is not about to give them up. 
Consequently, its, the elite's, proteges have to remain in power after 
the elections also. With a new president, with a president in general, 
even with a little hare at the head of the state, real power and property 
have to remain in the former hands. 

Only to whom to entrust them? Whom to make the protege? The communists 
are passing away, Yabloko is unduly ambitious and intractable, 
Zhirinovskiy, on the contrary, is unduly accessible. The 
Kiriyenko's-Nemtsov's-Gaydar's are too weak and they turn the people's 
stomach. So the elite is confused. Either to force its way into 
Fatherland or to try to get along with Primakov. 

Why worry about the electorate? Look at us--we may appear weak and 
ailing. But when we have to, we, like the Anglo-Saxons, go and take. So 
all is in order. The nucleus of the elite has already consolidated. There 
is the guarantor president. His interests coincide with ours--he also 
cannot permit a return to the past. Here are your "oligarchs," who also 
have no wish to lose anything. Here are your birds of a feather managing 
the natural monopolies, who also are seeking their place in the future. 
Look at Viktor Stepanych. How about him as a guarantor of future 
well-being? Stately, reputable, and conscientious here to the point 
of.... Well, selflessness, let's say. 

So quit casting about: here's your money, here's your party, here's 
your leader. Here's your future. 

And whoever does not understand, we'll disconnect the gas.... 


Moscow Times
July 20, 1999 
EDITORIAL: Media War Just Moguls At It Again 

To hear NTV anchor Yevgeny Kiselyov talk on Sunday's "Itogi" program, it's 
time to start building barricades in the street, la August 1991. An assault 
on the press and free speech from the Kremlin, in the persons of Kremlin 
Chief of Staff Alexander Voloshin and Boris Berezovsky, whose ORT television 
station tore into NTV over the weekend, is imminent. The Kremlin is on the 
march, it seems, against an independent voice, and threatening to turn Russia 
into a "banana republic." An information war is under way in earnest. 

Others are sounding the alarm, too. Moscow Mayor Yury Luzhkov is shocked - 
shocked - to find out that the intelligence services are sometimes used for 
political purposes. Turns out that Russia's leadership, i.e. President Boris 
Yeltsin, has failed to build a law-governed society, Luzhkov said in a 
heartfelt interview with Kiselyov, the mayor not mentioning that he supported 
the very same Yeltsin enthusiastically in 1996. It had something to do, we 
recall, with being allowed to divvy up state property in Moscow as he 

These alarms recall the old saying from the Pogo comic strip: "We have met 
the enemy, and he is us." Russia's oligarchs - NTV's owner Vladimir Gusinsky, 
Berezovsky and their political counterparts like Luzhkov and Voloshin - are 
at war, not against tyranny but rather for the chance to preside over the 
system of crony capitalism and insider privatizations that they themselves 
created on the ruins of the Soviet state. 

In 1996, these people managed to convince much of public opinion in Russia 
and abroad that the great struggle was between free markets and a communist 
return to power. They argued that rapid privatization and a little 
anti-communist media bias were necessary sacrifices. Now again there's a 
trumpet call saying Armageddon is around the corner. Looking at what they did 
with their power after 1996, this time the clarion call rings a bit hollow. 

Yes, NTV and its news operation constitute a tremendously important 
institution - a nongovernmental, well-funded, if sometimes imperfect national 
news organization that does some fine journalism. We wouldn't miss our Itogi 
on Sunday, and yanking NTV's license, as other news media have speculated 
might happen, would be a disaster. But the NTV-ORT battle seems more a 
propaganda spat between oligarchs than a defense of independent television. 

Before rallying to the banners of democracy, free speech and law, let's 
remember who's sounding the war cry, and not overreact. The current media war 
is more evidence, if any were needed, that Russian politics has left the 
realm of ideology and has become a struggle for the financial spoils of 


Pundits Comment on Political Developments 

July 18, 1999
[translation for personal use only]

[Presenter Yevgeniy Kiselev] We shall discuss 
the situation arising now over the Fatherland movement and Moscow mayor 
[Yuriy Luzhkov] along with some other top political issues of the week 
with Russian leading political analysts. Our guests are the chairman of 
the presidium of the council for foreign and defence policy, Sergey 
Karaganov, the president of the Politika foundation, Vyachaslav Nikonov, 
and the Ekho Moskvy radio editor-in-chief, Aleksey Venediktov. My first 
question to everybody is about your assessment of what happened at the 
end of last week. I mean the actions taken by the law-enforcement 
agencies against Luzhkov's wife, Yelena Baturina. 
[Karaganov] It is hard to believe it was a chance event or a mistake. 
[Passage omitted: repetition] 
I think it is a deliberate campaign aimed at weakening the rivals and 
clearing up the political field in order to push forward their candidate. 
[Passage omitted: repetition] 
[Presenter] Do you have any idea of what this "their candidate" might be? 
[Karaganov] It should be either some weak person who is easy to
manipulate or 
somebody who has been compromised. 
[Passage omitted: repetition] 
[Nikonov] Undoubtedly, this is a part of a coordinated campaign staged by
[Passage omitted: repetition] 
The present Kremlin, or the family as people call them, originates from 
the 1996 presidential campaign which was founded on a monopolistic 
possession of almost all electoral resources. Naturally they would like 
to preserve their status after 2000. It is quite obvious for them that 
they will never enjoy the same unlimited access to state finances and the 
same unlimited control of the state media outlets if Luzhkov becomes 
president, because he has his own team and his own ideas of what is good 
for Russia. 
[Presenter] You mean that Luzhkov would get rid of many problems if he
to strike a deal with the so-called family? 
[Nikonov] Basically, in this case Luzhkov would have no problems at all. 
[Passage omitted: repetition] 
[Venediktov] It is almost impossible that Luzhkov has made peace with the
after what happened last week. An attack on his wife is an unacceptable 
move. It was the first case of this kind in modern Russian history. 
[Passage omitted: repetition] 
[Venediktov] By the way, the authorities have created a very dangerous
because the Kremlin people also have relatives. 
[Passage omitted: repetition] 
They should be afraid of being treated the same way. 
[Presenter] Now let us pass on to another issue. What do you think about
news of Fatherland offering [former Prime Minister] Yevgeniy Primakov a 
place at the top of its list of candidates, which became a sensation a 
week ago but was denied later? 
[Passage omitted: repetition] 
Sergey Aleksandrovich [Karaganov], it is not a secret that you know 
Primakov very well. Is he thinking about running for president in 2000? 
[Karaganov] I know him and I am sure that he cannot but be thinking about
[Passage omitted: repetition] 
[Nikonov] I think that the possibility of such an alliance [between Luzhkov 
and Primakov] is higher than 50 per cent. 
[Passage omitted: repetition] 
Primakov does not want to make his plans on membership of Fatherland or any 
other movement public. He understands that he would become a target for 
serious attacks by the Kremlin if he did so. 
[Presenter] So, you think that he will announce his plans concerning 
parliamentary elections at the very last moment? 
[Nikonov] Yes, I think it would be logical behaviour. 
[Passage omitted: repetition] 
[Presenter] And now I have a question to Aleksey Venediktov. Is it
possible that 
Luzhkov will make an alliance with Primakov and sacrifice his own 
presidential ambitions? 
[Venediktov] It would not be just an alliance between Luzhkov and Primakov. 
[Passage omitted: repetition] 
Primakov wants a three-way alliance between himself, Luzhkov and [the All 
Russia movement leader and Tatarstan President Mintimer] Shaymiyev. 
[Passage omitted: repetition] 
If such an alliance becomes a reality, they will decide on who runs for 
president and who becomes prime minister if this candidate should win. 
[Presenter] Do you have any information on the recent meeting between
and Stepashin? 
[Karaganov] I only know that they have good personal relations. At the
same time 
I do not think that Yevgeniy Maksimovich [Primakov] will cooperate with 
the power which sacked him. 
[Passage omitted: repetition] 
[Presenter] What is the sense of the statement by [oil-to-media tycoon]
Berezovskiy on his intention to run for a Duma seat? 
[Venediktov] My idea is that Boris Abramovich [Berezovskiy] is after Duma 
immunity, though he denies it. Experience shows that an independent 
deputy elected in a one-seat constituency can do absolutely nothing in 
the Duma. So he must have some other reasons for doing it. 
[Passage omitted: repetition] 
[Karaganov] Yes, it would be strange to assume anything else. 
[Passage omitted: repetition] 
[Nikonov] I absolutely agree. 
[Passage omitted: repetition; known facts] 


Luzhkov Comments on Inquiry Into Spouse 

July 18, 1999
[translation for personal use only]
>From the "Itogi" program 

[Presenter Yevgeniy Kiselev] Good evening, Yuriy 
Mikhaylovich. How would you comment on what happened? 
[Moscow Mayor Yuriy Luzhkov] You mean the situation related to my wife's 
[Presenter] Of course. 
[Luzhkov] I think that here we have an evident case of arbitrariness by the 
authorities and of the law-enforcement bodies being used for the purposes 
of political struggle. 
[Q] You have no doubts about that? 
[A] Absolutely none. Absolutely. 
[Q] Who is behind it? 
[A] I think the answer is absolutely clear. Yesterday an ORT programme 
showed Mr [oil-to-media tycoon Boris] Berezovskiy presenting his 
political platform. He cannot do anything with Fatherland, which is 
gaining more and more support among Russians. So now he kindly allows 
Fatherland to be present in the State Duma after the elections in 
But speaking about his attitude to the mayor, he and everybody whom he 
supports, or whom he serves, do not admit even the possibility of this 
personality's presence in future political structures. 
[Q] Aren't we demonizing Berezovskiy when we say that he stands behind 
it all? 
[A] I think that it is not just Berezovskiy, but also the presidential 
administration. This is a general system. It is a big structure that is 
united by common political goals of preserving power for as long as 
possible or to make the new state leadership that succeeds the current 
one inefficient. As far as demonization is concerned, how are we 
demonizing him if he is like this in reality. You can't make him look 
worse than he is. 
[Q] But Berezovskiy is not in charge of the Federal Security Service 
[A] The FSS? Yes, I agree with you. Unfortunately the FSS now works for 
the Kremlin and not for the country. And even in our - very symptomatic - 
case concerning my wife's company one could see all the artbitrariness 
that is reigning in our state. This arbitrariness could be seen in the 
actions of various bodies, the FSS in particular. One such symptom is the 
case of my wife's company. 
[Q] But the whole story is not about your wife. We all understand that. 
The story is about yourself. 
[A] Of course. She is in trouble because she is the wife of a mayor, 
around whom tensions are being aggravated. 
[Q] Not just a mayor but the leader of Fatherland and a person who quite 
possibly will participate in the future presidential election. 
[A] I have not announced that yet. 
[Q] Yes, we know your position. You don't exclude such a possibility. 
[A] I haven't announced anything but our dear comrades are afraid of the 
very possibility. 
[Q] By the way, in the Kremlin there is an opinion that when Luzhkov 
takes over the Kremlin he will deal with everybody there. We know your 
position. You said many times that you might participate in the 
presidential election if you see that there is no candidate whom you 
would support yourself and who would guarantee the continuation of 
democratic development. But let's imagine no such candidate has been 
found. Having won, would you really deal with the previous cabinet and 
previous president as they expect? 
[A] I can't speak about myself. I have not made any decisions or 
announcements regards that. So please don't speak as if I am ready to 
participate as a presidential candidate. 
[Q] I am not saying that but in theory it could happen. 
[A] No, not that. I am speaking about what I would like to see in the 
next president. 
[Q] What should be the attitude of the next president to his 
[A] I think that in any case we should transfer power in a civilized 
manner, so that the one who is leaving the post was not afraid to be 
arrested or publicly compromised. 
[Q] There is an idea to adopt a law on guarantees to a president after 
his resignation. Do you support that? 
[A] Of course I do. It should have been adopted a long ago. In our 
conditions it is simply compulsory. In our country we are forming, 
despite all the difficulties, a civilized mechanism of transferring 
power. Russia is used to the situation where the tsar always dies 
naturally, or in some cases gets killed. But there was no normal mode for 
the transfer of power. We have usually dethroned our tsars. 
[Q] We have gone a bit too far from our main subject. Going back to this 
story, when the authorities are using the law-enforcement structures to 
act not even against you, but your wife - a woman - what are you going to 
[A] First of all I would like to explain in few words why are we 
protesting against such actions by the authorities. A criminal case has 
been opened in Vladimir Region against a large group of companies that 
laundered money and then transferred it to Switzerland. An investigation 
into this case is going on. 
There was a document that orders, as part of this investigation, the 
confiscation of accounts [as said] of number of companies that had 
business contacts with this group. Soon after this another document 
appeared, which was very similar to the first one, but it also included 
two companies (?Vistroplast) and (?Inteko). The investigation is 
conducted by Vladimir Region FSS. 
[Q] So these are two companies linked to your wife. 
[A] Yes, two companies in which my wife works. When we are speaking 
about why Vladimir Region FSS included these two companies in the list of 
companies whose documents should be confiscated - it is here where the 
collision is emerging. Vladimir businessmen and nobody in Vladimir know 
anything about the (?Inteka) company. 
[Passage omitted: repetition] 
And suddenly the FSS directorate for Vladimir region felt an itching to 
confiscate documents from Inteka. I am listening to the explanations 
given by top Vladimir FSS officials, and they say: we are investigating 
about 300 companies, 200m US dollars have been [illegally] transferred 
abroad. I have quite a natural question: what does Inteka have to do with 
all this? Inteka has never had a single deal with companies involved in 
the investigation. No mutual payments, no accounts, absolutely nothing. 
[Passage omitted: repetition] 
[Q] Does it do any business in Vladimir? 
[A] Absolutely none. 
[Passage omitted: repetition] 
I say: where did they learn in Vladimir that the Inteka company 
[Q] How do you think? 
[A] I can say definitely: from the central FSS [headquarters]. It is 
interesting for them to check the Inteka company looking for some 
[Passage omitted: repetition] 
They were given the task: to find something illegal in my wife's 
[Q] It would be funny, if it was not so sad. According to the law, now 
the FSS and other law-enforcement agencies are authorized to carry out 
investigative measures against your wife and her family members. They 
have the right to watch your movements or to listen in to your 
[A] It might be one of the aims of this action, but do not be naive, 
Yevgeniy: all this has been already done. We have no confidence in the 
current authorities. 
[Q] Do you really think they are following you or bugging your telephone 
[A] Definitely. My wife's telephone and my children's telephones as 
well. Certainly they are listening in. I am absolutely sure of this. 
[Q] And you say this calmly? 
[A] I am not calm about this. We were so enthusiastic in 1988, 1989 and 
1990, we began building a market economy, and a law-based and democratic 
state. We have failed on the economy. We have not built a market economy 
yet. I say yet because I am an optimist. But we should succeed in 
building a law-based and democratic state. One does not need money for 
this, just a conscience and high moral standards. But we have not built 
them as well. 
[Q] You made an unusually tough statement yesterday. You said that it is 
necessary to change the authorities. Maybe, you said it in the heat of 
the moment? 
[A] I have been saying this for a long time. The present authorities 
have become completely obsolete. Their actions turned out to be 
inefficient in the economic field. This country lives a horrible life in 
the economic aspect. Now the current authorities' actions are becoming 
dangerous from the point of view of protecting the right of an individual 
to a peaceful and secure life, if he is an honest person. 
[Q] What do you mean by changing the authorities? How should we change 
them? By force? 
[A] Under no circumstances we cannot accept any extremist action or 
revolution in Russia. Revolution is a terrible thing. 
[Passage omitted: repetition] 
[Q] So, you mean that the elections should take place in a 
constitutional way? 
[A] Yes, definitely. The elections must be held as planned, the Duma 
election in December [1999] and presidential election next summer. 
[Q] What is your opinion on whether the present authorities sitting in 
the Kremlin are ready to step down in 11 months? 
[A] I think that these authorities are in a rather complicated 
situation. On the one hand, there is a desire to be remembered in history 
as democratic authorities of this period. This desire demands everything 
be performed in a civilized and law-based manner. On the other hand, they 
want to engage themselves and to influence the situation in this country, 
which is developing unfavourably for these authorities. It is their own 
opinion. I mean a mighty increase in Fatherland's popularity. The 
authorities would like to persuade Fatherland's possible allies not to 
unite with Luzhkov. Luzhkov is being presented as a bloody monster. Just 
listen to what [media magnate Boris] Berezovskiy says! 
[Passage omitted: repetition] 
As if I have ever given him reasons for this! 
[Q] His logic is apparent: Luzhkov wants to reconsider the results of 
the privatization, to redistribute property, and redistribution of 
property always means bloodshed. 
[A] I stand for reconsidering the results of privatization deals 
conducted illegally. 
[Passage omitted: repetition] 
[Q] Yuriy Mikhaylovich, this is probably the last question, about 
something you yourself mentioned earlier: you say the authorities, the 
Kremlin, are trying to put pressure on your possible coalition partners, 
telling them not to join forces with Luzhkov under any circumstances. 
Could the fact that your alliance with [ex-Prime Minister Yevgeniy] 
Primakov did not happen be linked to this? Last week they were saying it 
was almost agreed, talks were under way, and it was even possible that 
Yevgeniy Maksimovich had been offered the top spot on Fatherland's 
election list. 
Then [Fatherland election staff chief] Georgiy Valentin Boos said the 
opposite last week. He said that nothing had really been going on. 
[A, laughs] You know, I can say that we all have a huge amount of 
respect for Yevgeniy Maksimovich Primakov. Most Russians think the 
authorities, and the president in particular, treated him - well, I would 
say unfairly, to put it mildly, unfairly. 
[Omitted: Luzhkov praises Primakov] 
[Q] Since he was sacked do you have any contact with him? 
[A] Of course I do, and they are very warm contacts. They are very human 
and personal contacts. We were worried about how his operation would go - 
a very complex operation - but thank God everything was fine. 
[Q] What about political contacts? 
[A] There are also political contacts, and we are counting on gaining 
serious support. 
[Q] You mean voters' support if Primakov is on your list? 
[A] Of course. 
[Q] So the ball is in his court? 
[A] The ball is definitely in his court, and we would very much like to 
see him in this powerful alliance. 
[Q] So is it really possible that you would give up first place on the 
list to him? 
[Omitted: Luzhkov says he does not love power except for achieving aims
help Moscow] 
[A] Very possible. 
[Q] Right, well then the last question, about the year 2000 presidential 
election. You have stated your position many times: if you see a person 
who suits you as Russian president, you would not run in the election. 
Does Primakov suit you? 
[A] He suits me. He suits me. 
[Omitted: Luzhkov praises Primakov again] 
[Q] Thank you again for your answers Yuriy Mikhaylovich. 


Berezovskiy May Face New Charges 

Moskovskiy Komsomolets
16 July 1999
[translation for personal use only]
Article by Aleksandr Khinshteyn: "Berezovskiy -- Big Predator?" 

The Prosecutor's Office has extended the 
investigation into the Aeroflot case. 

It should not be thought that Boris Berezovskiy's life is quiet and 
tranquil. At the beginning of July justice inflicted a few tiny but very 
painful blows on him. 

Last Wednesday [14 July] Acting General Prosecutor Chayka extended the 
investigation into the Aeroflot affair by another six months. The General 
Prosecutor's Office personnel have now been given every chance to pursue 
the criminal case to its completion. 

Berezovskiy's distress cannot be assuaged even by the Savelovskiy
Court ruling that Aeroflot's former commercial director Krasnenker should 
be reinstated to his post since his dismissal was unwarranted. (Which 
[Berezovskiy's] own ORT [Russian Public Television] hastened to report on 
a high note.) The court ruling notwithstanding, nobody has yet dropped 
the charges against Krasnenker. Nor are they going to. 

Contrary to the gloomy forecasts by pessimists, the criminal case continues 
to unfold. 

At the very beginning of July, at the request of Russia's General 
Prosecutor's Office, officials at the Swiss Federal Prosecutor's Office 
and Federal Police conducted searches and confiscated documents at the 
Lausanne offices of the Andava and Forus firms. It is common knowledge 
that Berezovskiy and his accomplices laundered the money stolen from 
Aeroflot precisely through these firms. 

Concurrently, the oligarch's accounts opened by the aforementioned
structures were 
frozen. Aeroflot's accounts were also arrested. 

What have the searches revealed? The Swiss side has been assuring its 
Russian counterparts that the catch is serious enough. Indisputable 
proofs of Berezovskiy's criminal dealings have fallen into the hands of 

These documents, however, are not yet available to the General 
Prosecutor's Office. Their arrival is expected any day now. And then.... 
"Then we will be able to bring new charges against the suspects," one of 
the high-ranking officials at the Prosecutor's Offices acknowledges. 
It appears that we may be talking about a case of particularly serious 

(Let me remind readers that Berezovskiy and Krasnenker are accused only 
of illegal business activity and money laundering). But this [charge of 
particularly serious embezzlement] is a entirely different kettle of 
fish. And accordingly, a different prison term. 

But do not think that Berezovskiy is sitting with his arms folded 
waiting for a Black Maria to call at his doorstep. The Kremlin staff and 
other power structures have lately stepped up their pressure on the 
Prosecutor's Office. Attention is particular centered on three criminal 
cases: Aeroflot, National Reserve Bank, and Mabetex. Precisely these 
three investigations have long been a major headache for the Kremlin. 

It is, apparently, no accident that, as soon as the Prosecutor's Office 
started acting, allegations against its leaders appeared in the press. 

For example, Literaturnaya Gazeta carried an item accusing Deputy General 
Prosecutor Mikhail Katyshev of machinations involving apartments. 

It is not for the first time that attempts have been made to play the 
"housing card" against prosecutors. Previously similar attacks were also 
launched against [General Prosecutor] Yuriy Skuratov. It is now the turn 
of Katyshev, the most vigorous fighter against corruption. (Incidentally, 
Katyshev never concealed the fact of getting a new apartment. He has 
nothing to fear: All the relevant documents are in order.) 

Katyshev has been accused of a host of sins. Of ties with Communists. Or of 
Stalin-Yezhov methods of work. The reasons are clear: The deputy general 
prosecutor is a very inconvenient figure for the Kremlin. He was the one 
in charge of the investigation of the highest-profile anti-corruption 
cases. It is not for no reason that, in May, he was transferred to a 
different job -- as far as possible from investigation. 

And yet, had I been in the Kremlin's shoes, I would not have raised the 
housing issue. Compared with other bigwigs' apartments, Katyshev's abode 
looks like a Neanderthal cave, something that journalists are, for some 
reason, unwilling to write about. 

I wonder why.... 

...Meantime the investigation into another story, which is very unpleasant
Berezovskiy, is also close to a logical completion. The Main Military 
Prosecutor's Office has submitted to court a case in which his friends, 
former intelligence officers Litvinenko and Gusak, are accused of abuse 
of office. (Let me remind readers that in spring of last year the 
aforementioned individuals accused the leadership of their directorate -- 
the Federal Security Service Directorate for Studying and Suppressing the 
Activities of Organized Crime Formations -- of having allegedly ordered 
them to kill Berezovskiy.) 

...The Litvinenko-Gusak case became the last case for General Bagrayev, 
chief of the Main Prosecutor's Office Oversight Department, who was 
dismissed from his post on Monday [12 July]. (Our newspaper has already 
written that Bagrayev was not forgiven for the ruling that instituting 
the case against Skuratov had been unlawful.) It is largely thanks to 
Bagrayev that the Prosecutor's Office managed to complete the 
investigation despite the political pressure. 

The authorities can "recruit" top-echelon leaders or groom puppet 
generals as much as they want. But as long as people such as Bagrayev, 
Katyshev, or Nikolay Volkov, a "heavyweight" in charge of the Aeroflot 
case, work in the law-enforcement organs, the life of Boris Abramovich 
Berezovskiy and the like will not be quiet or tranquil. 

That is why the ranks of such people are steadily dwindling.... 


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