September 4, 1999   
This Date's Issues: 3481 • 3482 • 

Johnson's Russia List
#3482
4 September 1999
davidjohnson@erols.com

[Note from David Johnson:
1. AP: Greg Myre, Bribery Allegations Encircle Yeltsin.
2. The Guardian (UK): Julian Borger, CIA suspects Russians stole food aid 
funds.
3. New York Times: Markus Wolf, From Spy to Statesman. (Re Putin).
4. Itar-Tass: Electoral Commission Registers Fatherland-All Russia.
5. Russia Election Watch (Harvard): Igor Bunin and Boris Makarenko, 
THE COMMUNIST-REFORMIST STAND-OFF WILL SOON END NOW WE KNOW THE PLAYERS. WHAT NEXT?
6. Moscow Times: Valeria Korchagina, Yeltsin No Longer Hometown Hero.
7. St. Petersburg Times: Fyodor Gavrilov, Kremlin Strikes Back in St. 
Petersburg.
8. Moskovsky Komsomolets: AN ALLIANCE OF TWO COWBOYS. (Berezovsky and
Lebed).
9. NTV: Likely Impact of Y2K Bug.
10. Washington Times: Jasmin Fischer, Ukrainian poll stirs U.S. policy 
worries.
11. Rome's La Repubblica: Interview with Kremlin treasurer Pavel Borodin.] 

******

#1
Bribery Allegations Encircle Yeltsin
4 September 1999
By GREG MYRE

MOSCOW (AP) - Boris Yeltsin is under investigation in an alleged Kremlin 
bribery scandal, and the president's silence has hampered efforts to clear up 
controversies swirling around him, Russia's suspended chief prosecutor said.

Yeltsin has not yet spoken publicly about any of the corruption allegations 
made against him, his family or his inner circle. While the Kremlin has 
issued statements on the president's behalf denying wrongdoing, Yeltsin's 
reluctance to deal with the expanding scandals is undermining a presidency 
that has already been badly weakened.

Yuri Skuratov, the suspended prosecutor general, told The Associated Press 
that Yeltsin and his two daughters figure in an inquiry about possible bribes 
paid by the Swiss company Mabetex, which renovated the Kremlin.

Skuratov was suspended by Yeltsin in March and is under investigation himself 
for allegedly accepting the use of prostitutes in return for diverting 
criminal investigations. He technically remains Russia's top prosecutor since 
parliament has refused to accept his dismissal.

Skuratov has previously been reluctant to talk about the Kremlin 
investigation. But he said he had received documents from Swiss prosecutors 
alleging that the president and his family received kickbacks from Mabetex.

``These materials aren't new to me,'' Skuratov said in an interview Friday at 
his country home outside Moscow.

In a related development, Swiss prosecutors on Friday ordered Swiss banks to 
provide information on more than 20 Russians who may have had Swiss bank 
accounts. The Swiss authorities also have frozen 59 bank accounts in the past 
two months.

Those cited by Swiss authorities include Pavel Borodin, the Kremlin manager, 
who handled the contracts with Mabetex.

A report published last week by the Italian newspaper Corriere della Serra 
claimed that Mabetex deposited more than $1 million in a Swiss bank account 
controlled by Borodin. The report said Borodin allegedly made the money 
available to Yeltsin and his daughters, Tatyana Dyachenko and Yelena Okulova, 
through credit cards.

``We must carry out an investigation and find out what kind of credit cards 
they were, whether the president knew what kind of money there was, whether 
Tatyana Borisovna (Dyachenko) knew what money she was spending to make 
purchases and who was paying for them,'' Skuratov said.

The Kremlin has denied that the president and his family ever had foreign 
bank accounts.

``No one in the president's family ever asked me for help,'' Borodin said in 
an interview today with the Echo of Moscow radio station. ``Some politicians 
need this (scandal). They are fighting against the president.''

Skuratov refused to comment on specifics to the AP, but called on Yeltsin to 
cooperate with the investigation and set the record straight.

``I can't understand the president burying his head in the sand,'' he said. 
``Attempts to hush things up, to prevent the investigation from getting to 
the end will only fuel all kinds of allegations, gossip and inventions.''

Mabetex chief executive Behgjet Pacolli has denied paying any bribes and said 
Friday he was ``the victim of political machinations'' aimed at toppling 
Yeltsin's government.

The case is just one of several current scandals in Russia, a country where 
corruption in politics and business has become endemic.

In another high-profile case, U.S. authorities are trying to determine 
whether Russian organized crime groups funneled up to $10 billion illegally 
through accounts in the Bank of New York.

Yeltsin discussed the matter Friday with the head of the Federal Security 
Service, Nikolai Patrushev, but the president did not make any public 
statements.

Meanwhile, Skuratov's probe of possible Kremlin misdeeds began in early 1998, 
when Swiss Federal Prosecutor Carla del Ponte informed him that she had 
evidence of high-level corruption in Russia.

Soon after, Skuratov received documents on Mabetex. Checking Russian files, 
prosecutors discovered that Pacolli was once detained by police on charges of 
smuggling hundreds of thousands of dollars in cash into Russia. He was 
quickly released on orders from the Kremlin, Skuratov said. He did not say 
just when the incident happened.

In February, Skuratov was forced to resign as prosecutor general under what 
he called Kremlin pressure. He withdrew his resignation when the upper house 
of Parliament refused to confirm his removal.

State television later released a tape that showed a man resembling Skuratov 
having sex with two women identified as prostitutes. Yeltsin suspended him 
pending an investigation into allegations that criminal suspects provided 
Skuratov with prostitutes in exchange for his dropping investigations against 
them.

Skuratov has not denied that he was the man in the tape but called it a 
provocation by his foes.

The probe against Skuratov appears to have fizzled, but he remains suspended 
and the Mabetex probe is being carried out by other prosecutors.

********

#2
The Guardian (UK)
4 September 1999
[translation for personal use only]
CIA suspects Russians stole food aid funds 
Julian Borger in Washington

Millions of dollars from the sale of United States emergency food aid to 
Russia have gone missing and are thought to have been embezzled by corrupt 
officials and criminal gangs, American intelligence sources said yesterday. 

US aid in the form of grain was meant to be sold by Moscow, which was 
supposed to plough the proceeds into social schemes such as the state pension 
fund, or into repaying the country's debts. 

The reports of missing aid come a fortnight after allegations that Russian 
crime syndicates channelled up to $10bn ($6.2bn) through the Bank of New 
York, and possibly much more through an array of other western banks. There 
is growing speculation that some of the laundered funds were pilfered from 
International Monetary Fund loans and other forms of western assistance. 

US intelligence officials blame Vice-President Al Gore for turning a blind 
eye to rampant corruption in the Kremlin - including Central Intelligence 
Agency doubts about a former prime minister, Victor Chernomyrdin. 

Specifically, Mr Gore is being criticised for pushing through a $1.1bn 
(£687m) package of food aid to win farmbelt support for his bid for the White 
House in 2000, even though the aid arrived too late to help ordinary Russians 
get through the winter and now appears largely to have vanished into the 
black hole of Russian organised crime. 

A US intelligence source said yesterday that revenues from the sale of 
donated grain had disappeared. "Under the commodity credit programme, the 
Russians sell the grain on the market and then put the money into a special 
account. Our [US agriculture department] people can't even find that account. 
They don't know where the money is," said the source, who has close links 
with the CIA. 

He said intelligence officials believed much of the missing revenue had "gone 
offshore", deposited in foreign bank accounts. 

A spokeswoman at the agriculture department (the USDA) did not respond to 
inquiries about the missing food aid yesterday. However, a department audit 
of grain deliveries this year, made available to the Guardian, reflects clear 
suspcision over possible diversion of grain and of sale proceeds. 

The audit was carried out by five US officials who acknowledged that they 
relied on their Russian counterparts to set their fact-finding itinerary in 
Russia. They noted that "the itinerary did not give us an opportunity to 
review or track the processing of funds from the final recipients to the 
Russian government pension fund [where the revenues were supposed to have 
been deposited]." 

The report also remarks that Russian ports "are believed to be heavily 
infiltrated by the organised crime syndicates", and passes on a report from 
US diplomats that "ships carrying grain cargo had been observed leaving a 
Black Sea port early this year". 

It is not clear whether this cargo was the US food being re-exported, but the 
USDA report points out that even if it was not, the export of grain at the 
same time as the US was donating similar foodstuffs would be a breach of the 
food aid agreement. The USDA's audit called for further monitoring of the 
ports "because these shipments could result in adverse press". 

It said that the US should enlist help from the Russian interior ministry to 
keep an eye on what was being done with American aid. 

The US intelligence source who spoke to the Guardian was withering in his 
assessment of USDA monitoring of the grain deliveries. 

"It's a political decision not to monitor it," he said. "They go around with 
a Russian national who makes all their appointments. They go to the port. 
They watch the grain unloaded, and they sign off on the documents. It's just 
a joke." 

Todd Nelson, a specialist on Russian organised crime at the Washington-based 
Centre for Strategic and International Studies, said: "The people [Russian 
officials] put in charge of the entire aid project are less than upstanding". 

******

#3
New York Times
September 4, 1999
[for personal use only]
>From Spy to Statesman
By MARKUS WOLF
Markus Wolf, the author of "Man Without a Face," was the head of East 
Germany's foreign intelligence office from 1952 to 1986. 

BERLIN -- Can a former spy make a good prime minister? As the longtime head 
of East Germany's foreign intelligence service, my answer is yes. In any 
case, all of us should hope I'm right, since Vladimir Putin, Russia's latest 
Prime Minister, is, like the two who immediately preceded him, a former 
intelligence operative. 

The common view of spies is that they're shadowy operators, dwellers on the 
dark side. Like Hollywood's version of international espionage -- Western 
spies good, Eastern spies evil -- such characterizations are grossly 
oversimplified. After all, every state that employs a military service also 
has an intelligence operation. 

In the West, men like George Bush and Yitzhak Shamir of Israel have served as 
respectable leaders after having led their countries' spy agencies. So it's 
not surprising that former Eastern spies are accepted in the role of prime 
minister or even president. 

I don't know Mr. Putin personally (he is a generation younger than I am), but 
I knew one of his predecessors, Yuri W. Andropov, a highly cultivated man of 
open political views and great esprit. Still, perhaps Mr. Andropov, who 
headed the K.G.B. before briefly leading the Soviet Union back in the early 
1980's, isn't the most appropriate model from which to judge the worthiness 
of the new Prime Minister. Yevgeny M. Primakov, another former head of 
intelligence, probably offers a better comparison. Note that despite the 
brevity of his term as Prime Minister, from 1998 to 1999, Mr. Primakov earned 
the esteem of politicians both in Russia and abroad. 

On the whole, the spies I have known have been extremely well read, highly 
intelligent, politically informed people. They have often been blessed with 
remarkable leadership and managerial skills. Being the leader of an efficient 
intelligence operation has made them particularly well versed in the 
political, military and economic potential of foreign governments. And they 
have been intimately familiar with the tactics of deception -- a skill that 
can have great advantages for political maneuvering. 

Because of President Boris Yeltsin's poor health, he must delegate many 
duties to his ministers and other Government officials. His tendency to find 
scapegoats when plans go awry has meant that his prime ministers' terms have 
grown shorter and shorter. 

Now, when the Kremlin seems less inclined to take on Russia's most pressing 
problems and criminal activity spreads like mildew across the land, the 
current Prime Minister will need to use compromise as his foremost political 
tool. To succeed, he'll have to be as skillful in the open melee of Russian 
politics as in the shadowy world of espionage.

******

#4
Electoral Commission Registers Fatherland-All Russia.

MOSCOW, September 4 (Itar-Tass) - A powerful Fatherland-All Russia election 
alliance forged by Moscow Mayor Yuri Luzhkov, ex- premier Yevgeny Primakov 
and some regional governors, was on Saturday registered by the Central 
Election Commission amid concerns that the decision may be contested. 

The possibility stems from the fact that Fatherland was registered on 
December 19, 1998. Under the law, parties and movements seeking to 
participate in the Duma elections must register no later than one year before 
the voting day, which will be December 19. 

Discussions were heated at a Central Election Commission (CEC) meeting on 
Saturday over which day makes it possible for the association to participate 
in the Duma elections - December 18 or 19. 

According to CEC secretary Olga Zastrozhnaya, the last day of the 
registration under the law must be December 18, 1998. However, the Justice 
Ministry, which is entrusted with drawing up the list of the movements 
seeking to participate in the polls, has included Fatherland in that list. 

According to Zastrozhnaya, "Fatherland is an acknowledged, even if not quite 
legal, child." 

The session approved in a majority of votes (ten votes for with three 
abstentions) the registration of the alliance. However, CEC chairman 
Alexander Vishnyakov said he did not rule out that the decision could be 
contested in court. 

The head of the Fatherland's election staff, Georgy Boos, said the alliance 
is ready to present the list of its candidates early next week, more likely 
on Tuesday, so that it could be registered on Friday. 

He said, however, that even if someone contests the registration, the bloc 
will retain the name Fatherland-All Russia. 

*******

#5
From: emily_goodhue@harvard.edu
Date: Fri, 3 Sep 1999 
Subject: SDI's Election Watch bulletin

From
Russia Election Watch
#2, September 1999
Strengthening Democratic Institutions Project 
John F. Kennedy School of Government
Harvard University


THE COMMUNIST-REFORMIST STAND-OFF WILL SOON END 
NOW WE KNOW THE PLAYERS. WHAT NEXT?
Igor Bunin, Director, Center for Political Technologies, Moscow
Boris Makarenko, Deputy Director, Center for Political Technologies, Moscow

As of end of August, the circle of main participants in the parliamentary
elections has been determined. The exact configuration of the
right-centrist parties has not been fixed and it is still not completely
clear into how many columns the Communist opposition will split, but the
favorites and the outsiders are already very clear. 

In this article we will try to look not at tomorrow, but at the day after
tomorrow, when the campaign comes to an end and the winners begin to divide
up the Duma seats. In this way we will try to find the answer to the
question: In what ways will the new Duma differ from the current one? 

The four electoral blocs which have a solid chance of overtaking the 5%
barrier will have the right to slice up the parliamentary pie:

The Fatherland-All Russia Bloc, with ex-Prime Minister Primakov at the
head, has accumulated colossal electoral resources: the two most popular
non-communist politicians, ten of the most influential governors, solid
ties with the regional elite and financial circles. 

We should add that this is the first instance of a voluntary ("horizontal")
union of influential circles of the federal and regional elite not
sanctioned by the Kremlin. 

The Communist Party - under pressure from the "Party Old Guard" - rejected
the idea of dividing the united electoral machine into a few divisions and
for the most part has succeeded in preserving the unity of the leftist camp
(albeit having lost a few key peripheral figures). 

For the KPRF, the important difference from previous campaigns is the
existence of a competitor which is capable not only of competing with them
"as equals" but also, under certain conditions, of surpassing the
Communists in the number of votes they receive. Just the same, the
Communist Party will most likely receive its 20%. 

Grigory Yavlinsky's Yabloko has received an unexpected electoral resource –
the former Prime Minister Stepashin, who left the government with an
unblemished reputation and relatively high popularity in public opinion.
Out of the clear stagnation of the "right" Yavlinsky and Stepashin have
received the opportunity to gain the general sympathies of their electorate.

The Third Duma won't be "Red" or even dark pink, but also won't feature
much power for the Yeltsin loyalists. 

Vladimir Zhirinovsky's Liberal-Democratic Party has no serious competition
for the protest-nationalist electorate. Even if at the last moment the
chauvinist wing of the Communists enters the elections with a separate list
with Viktor Ilyukhin at the head, Zhirinovsky is almost guaranteed 5% of
the votes. 

Two more blocs, Viktor Chernomyrdin's "Our Home is Russia" and Sergei
Kirienko's Union of Right-Wing Forces, have collected an impressive number
of politicians who, in recent years, have occupied the highest governmental
posts but who enjoy only minimal electoral support. Only a miracle could
bring one of these parties into the Duma. 

In the competition for the spots in the second half of the Duma, elected
from single mandate districts, there are two favorites. "Fatherland" and
the Communists have the right to count on several tens of seats each.
Right-wing and Yabloko candidates will get something, but the majority of
the spots will be obtained by independent (and for the most part centrist)
deputies. 

To figure out how these percentages of the vote will translate into numbers
of seats is, at this point, impossible since we do not yet know what part
of the votes for the party lists will be given to small parties that don't
make it to the Parliament. We dare to propose that their representation in
the Duma will be much higher then in 1995 when these types of "lost" votes
were 49%. 

The above information provides enough evidence to conclude that:

* In the third Duma after the fall of the Communist regime, there will be
two powerful fractions which will be comparable in size – "Fatherland" and
the Communist Party – which will be in sharp competition for the division
of leadership posts in the Duma and for influence over the swing deputies;

* The other two lists that will pass into the Duma, "Yabloko" and the LDPR,
will form strong fractions which could protect the traditional influences
that their parties have had on decisions in parliament; 

* The formation of three groups of deputies (formed, in contrast to the
factions automatically created by the parties clearing the 5% barrier, on a
spontaneous basis) is extremely likely: the Agrarian group of "village"
deputies; the solely technical union of regional lobbyists, similar to the
old Duma's group called "Russian Regions;" and groups of liberal deputies
from single mandate districts. 

The Kremlin will no longer be able to play its traditional game,
Demon-stration of Strength, on the pretext of a war against the "bastion of
communism." 

The first two of these could appear if "Fatherland" tries to repeat the
experience of the Communists in the previous Duma – to delegate their own
deputies to this group in order to allow it to reach the sought-after
figure of 35 deputies [the minimum for forming an officially recognized
group in the Duma – HH]. 

This strategy would allow them to capture more of the leadership positions
in the committees and the Duma Council, and similarly effectively to
control the "daughter" groups – since recalling their own deputies would
automatically result in the deregistration of these groups. 

The Liberal group will appear in the case where Our Home is Russia and the
right-wingers together take over no less than 35 deputies of the single
mandate districts.

* Thus, in place of the unipolar Duma, in which the Communists have a
powerful fraction and a mechanism of reliable influence over two leftist
groups of deputies, there will be a bipolar model – with two powerful
players to the left and in the center and with an exposed right flank. The
rest of the fractions could join in different unions with one of the
favorites, but it is clear that "Fatherland" will enjoy far greater
opportunities to form broad Duma coalitions;

* The general config-uration of the third Duma, therefore, will be
significantly different from the first, where the main lines of
contradiction were "for or against the President" and from the second,
where the main intrigue in key questions was opposition to the Communist
majority. 

The Third Duma will not be "Red" (and not even "dark pink"), but at the
same time it will not feature significant power for the Yeltsin loyalists.
There will no longer be grounds nor the opportunity for the traditional
Kremlin game ("Demonstration of Strength") in front of the Duma on the
pretext of a war against the "bastion of communism." 

As a result, the balance of political power and authority of the branches
of power that has been typical for Russia during the past five years will
cease to exist. 

The prediction of "the end of the bipolarity" made by Stanford researcher
Michael McFaul will come true despite the delay. "Repair work" on the
political regime established by Yeltsin will begin a half year before the
expiration date of the regime's authority. 

*******

#6
Moscow Times
September 4, 1999 
Yeltsin No Longer Hometown Hero 
By Valeria Korchagina
Staff Writer

BUTKA, Ural Mountains -- The village of Butka, population 5,000, is no 
different from thousands of others across Russia - wage arrears, 
unemployment, sleepy streets with an occasional "cock-a-doodle-doo" heard 
here and there. 

Except for one thing - this is President Boris Yeltsin's hometown. 

Butka, according to sparse local records, was the place where Yeltsin was 
baptized and spent his early childhood in the 1930s. Yeltsin has not visited 
since he became president, but locals remember him. 

They remember his popular touch when he was Communist Party boss of the 
Sverdlovsk region from 1976 to 1985. They remember the roads and the hospital 
he had built in the village. Remember him, yes, but what do they think of him 
now? 

Don't ask, suggested his distant cousin, Klavdia Bersenyova. It seems 
Yeltsin's popularity, abysmally low nationwide, is a bit depressed in Butka, 
too. 

"I just don't want to talk about him. I can no longer praise him, but to only 
slam him would also be unfair," said Bersenyova, 65, answering the door. 

Thawing a bit from her initial response, Bersenyova said she worked with 
Yeltsin when he headed the Soviet-era construction enterprise in 
Yekaterinburg, then called Sverdlovsk, during the 1960s. 

"I was just a simple engineer then, and he was a big boss. Yeltsin was very 
much liked and respected by everyone for his dedication to work and dignity," 
Bersenyova said as she cooked for the men in the family. It was early 
afternoon, and the menfolk, lead by Bersenyova's husband, a retired miner, 
were drinking in honor of Miner's Day. 

When Yeltsin was regional party boss, roads were paved and a new hospital was 
built for 60 patients. It has the only maternity ward in the area and takes 
care of mothers-to-be not only from Butka and nearby villages, but even from 
the local municipal center, Talitsa. 

More help came in the 1990s, according to local administration, when Yeltsin 
ordered money allocated to repair the road from Talitsa to Butka. The road 
indeed is a good one. 

"When he was the head of the region, he would constantly travel around, 
sometimes in a helicopter. If something went wrong he was always there 
calling an emergency meeting with local officials, trying to get things back 
on track," Bersenyova said. 

"Some time in 1968 he was moved up to party work and stopped saying hello to 
me if we occasionally met in the corridor," she said. "I'm often tempted to 
think, especially lately, that maybe he always aimed at getting really high 
up in the power structures, and all his dedication was simply the means to 
push his career." 

But she hasn't lost all faith in him: "And e ven now, I'm sure that sometimes 
he simply is not aware of the problems. If only he knew, he would surely do 
something. And also maybe his weak health gets in the way," Bersenyova said, 
demonstrating the ancient Russian belief in the good tsar surrounded by 
vicious subordinates. 

After retirement 10 years ago, Bersenyova, was forced to move back to her 
family home in Butka. "Gradually it became obvious that we would not be able 
to survive in Yekaterinburg," she said. 

Just like everyone in Butka, Bersenyova's family survives mostly on what they 
grow on their small plot of land as well as by keeping pigs and chickens. 
They even bake bread themselves because it is cheaper than buying it in a 
shop. 

The location of the original Yeltsin house is disputed, but everyone points 
at the part of the village on one side of the Belkovka River, which runs 
through the settlement. The two halves are connected by a concrete bridge - 
also built when Yeltsin headed Sverdlovsk region. 

Yeltsin's father, Nikolai, moved the family elsewhere in the 1930s, only to 
return to the village in the 1950s, Bersenyova said. Nikolai Yeltsin built a 
house where he and his wife, Klavdia, lived until 1973. The house on Korotky 
Pereulok was purchased by the family of Faina Botanina, now 59, for 4,000 
rubles - a hefty sum at the time. The sturdy cabin has two bedrooms, a 
kitchen and a living room. 

Korotky Pereulok seems to be the only side street in Butka which is paved. 
"Some 20 or 25 years ago, Yeltsin came to have a look at the house, so the 
street was quickly paved," Botanina said. 

"Many people used to come here to have look at the house, especially during 
the elections. Then journalists and visitors would come every day," Botanina 
laughed. 

Klavdia Zhukova, director and only worker at the local museum at the town 
school, said the village was founded in 1676 in the time of Tsar Alexei 
Mikhailovich, father of Peter the Great. The name Butka translates from the 
local Turkic dialect as "mess" or "lake mud," which probably comes from the 
nearby Butka River, which Zhukova said must have been muddy. 

Between old peasants' furniture and a mammoth tusk there is also a small 
Yeltsin exhibit. One of the most cherished exhibits is a signed copy of 
Yeltsin's memoirs "Against the Grain." 

"To my native school, in native Butka, on native land," Yeltsin's inscription 
reads. Zhukova said, "I just don't understand why did he call our school 
native, since he never studied here." 

She, too, seemed to have mixed feelings toward Yeltsin. "Yes, he is a great 
man, but life here and everywhere is very difficult," Zhukova said. 

She has hardly been paid for almost a year. "To survive we keep a cow, other 
animals, grow vegetables. The bills are covered from the pensions of my 
parents, which luckily arrive regularly," she said. 

Other Yeltsin cousins are not so balanced in their assessment. "Yes, sadly I 
am Yeltsin's relative," confirmed Stanislav Glebov, 58. "I always saw the 
lust for power in him." 

Glebov dreams of being president himself. His political platform, however, 
seems vague. He wants to raise Russia's profile, but doesn't seem to be able 
to explain how, relying mostly on Biblical quotations, though he calls 
himself an atheist. 

"Yes, I do want to be the president. And I do like to talk and suggest ideas, 
but nobody wants to listen," he said. 

Glebov, who has a small frame contrary to his well-built cousin, said that he 
even tried to influence Yeltsin's policies. "I went to Moscow once, but was 
not allowed in to see him," he said. 

******

#7
St. Petersburg Times
September 3, 1999 
NOTES OF AN IDLER
Kremlin Strikes Back in St. Petersburg 
By Fyodor Gavrilov

TWO political scandals grabbed the limelight this week: the question of
"Russian" money laundered in American banks and the temporary disruption in
the broadcasts of our very own TV channel, Petersburg. 

Although New York and Petersburg are separated both "literally and
figuratively" by the expanse of the Atlantic Ocean, I would go so far as to
say that both of these events are part of one and the same process - the
new war of information. 

Many people in Russia are surprised by the audacity of statements made by
USA Today and can only wonder to themselves who exactly benefits from their
publication. 

One thing is certain - in the pre-election climate in Russia, the
discrediting of Yeltsin and his comrades-in-arms is highly profitable for
those political movements whose main campaign argument is that the existing
rulers are unfit to govern Russia. 

Many observers agree that the anti-Yeltsin mass media campaign to be found
in the West at present is the unified effort of the so-called Russian
"centrists" - Primakov, Luzhkov and Yakovlev. 

In my opinion, Gov. Vladimir Yakovlev is a crucial figure in forecasting
the political climate that will certainly result if the "governors' party"
succeeds in taking a dominant power position in Russia. 

Election time again, and the mass-media machine of the town administration,
which was seemingly dismantled after the infamous local elections, is up
and running. It's a rickety old machine, but not without a few efficient
components, and journalist Alexander Nevzorov is certainly one of them. 

At the beginning of the perestroika era, Nevzorov hosted an interesting
news program called "600 seconds." However, like many democrats of the
first wave, Nevzorov quickly evolved into an apologist for post-Soviet
imperialism. 

His reputation on television was soon spoiled by this new style, but he was
determined not to abandon it. After all, it didn't stand iin the way of his
successful bid to become a deputy in the State Duma. 

Prior to the 1996 presidential elections, Nevzorov appeared on screen once
more, this time as a spokesman for the ideas of - who would have guessed
it? - Boris Berezovsky. 

Nevzorov's unbelievably crude and insulting reports (they always are, this
is the essential component of his style) on the pre-election campaign of
the "Right Wing Coalition" were shown on ORT, a channel which is controlled
by Berezovsky, and repeated on "Petersburg," which is controlled by
Yakovlev. After the report was shown on ORT there was a swift and definite
reaction from the Press Ministry, which labelled the report as illegal. 

But the first warning didn't stop Nevzorov from showing the offending
report once again on the "Petersburg" channel, this time in a longer
version. This resulted in an unexpectedly severe reaction from Moscow - the
channel's license was temporarily removed. Yeltsin replied to the
provocation from New York by reacting in St. Petersburg. 

And here, as always in Russia, the paradoxes begin. 

We all know that Berezovsky represents the interests of Yeltsin's "clan," a
clan opposed to the patriotic division of Luzhkov, Primakov and Yakovlev.
Berezovsky's main weapon is the TV channel ORT, which shows programs
featuring Nevzorov. 

My question is: Who does Nevzorov represent? His pro-Yeltsin patron
Berezovsky or Yeltsin's political antagonist Yakovlev? Who is fighting in
this virtual war and where is the battlefield? 

Considering the fact that this war is getting so much publicity, it's
surprising how little we really know about it. 

Fyodor Gavrilov is the editor of Kariera-Kapital. 

******

#8
Russia Today press summaries
Moskovsky Komsomolets
September 3, 1999, 
AN ALLIANCE OF TWO COWBOYS 

It is not a secret that Boris Berezovsky and Governor of Krasnoyarsk
Alexander Lebed cherish kind feelings for each other. 

But currently not only mutual sympathy unites the two oligarchs - economic
and political ones do as well. They cannot survive without each other. If
Luzhkov, Primakov, Stepashin, or Putin become the next president
Berezovsky's sweet life in Russia will end. He will not only lose his power
but he will possibly become a telling example how the new power fights
corruption. 

Alexander Lebed will have to accept the last and internecine battle, too.
The last because he will never have real chances for presidency - there are
too many new politicians with far nobler manners and in addition his image
as the field general is becoming boring. 

As for Boris Berezovsky, he seems to have big troubles: according to the
media, prosecutors of various countries casting off all restraint began
seizing his accounts. The oligarch even had to borrow money from Lev Cherny
who, by the way, owns the Krasnoyarsk Aluminum Plant, to purchase TV-6 and
Kommersant Publishing House. 

Last week Boris Berezovsky visited Krasnoyarsk where he held top-secret
negotiations with the governor. Sources from the administration of the
governor assert that they discussed the upcoming elections, both
parliamentary and presidential. The oligarch is interested in some Siberian
region where with minimal expenditure and large degree of probability it is
possible to become deputy of the Duma - in other words to gain the status
which guarantees immunity from any encroachment on the part of the law
enforcement agencies. The same sources assert that Boris Berezovsky gave a
few pieces of advice to the governor how to involve the most prospective
regional organizations and enterprises in the electoral projects of the
general. 

Not long before Berezovsky's visit to the meeting of the Siberian Consent
Association Lebed tried to get the approval of Prime Minister Vladimir
Putin for the privatization of the Krasnoyarsk Coal Company by the
administration of the region. The governor intended to give the control
over the money flows of coal miners to the structures formed by the
administration of Krasnoyarsk or those friendly to it. Putin objected to
this idea, and rather strictly: Lebed's plan is favorable to him in his
presidential race but it would deprive Russia of the Western credits
necessary for restructuring the entire coal industry. Lebed failed with
privatization of Krasugol, but he may succeed in buying the KrAZ Car
factory. The next day after Berezovsky's departure from Krasnoyarsk the
regional Prosecutor's Office gave warrants for arresting Board Director of
this aluminum giant Anatoly Bykov. By a strange coincidence, a large group
of influential leaders of the regional business raised interest of the
Krasnoyarsk Prosecutor's Office. 

******

#9
Russian TV on Likely Impact of Y2K Bug 

NTV
2 September 1999
[translation for personal use only]

[Presenter Grigoriy Krichevskiy] There is a 
computer problem which worries special services, namely a possible 
computer failure at the beginning of the year 2000. Our correspondent 
Konstantin Mylnikov presents the details. 
[Begin recording] [Correspondent] Will Russia be able to avoid failure of 
computer networks on the night of 1st January 2000? How serious is this 
danger facing all developed countries? 
The millennium bug, as computer programmers now call it, was implanted 
in the early 1960s. The year in a number of programmes developed at that 
time was indicated by the two last digits only. Now that two zeros will 
replace two nines, nobody knows how these programmes will behave. 
Computers may understand it as the beginning of the year 0000. All the 
dates will be in a mess. This may happen with millions of programmes at 
once. However, it is not known what exactly will happen then. In the same 
manner, it is not known exactly in what old programmes the date was 
written with the help of two digits only. 
[Aleksey Salnikov, captioned as the director of Information Technologies' 
Centre at Moscow State University] In this country the majority of 
programmes, say those used by banks, was written in the 1990s. The people 
who developed them realized pretty well that the year 2000 would come 
soon and these programmes would survive until the year 2000. Those 
programmes were written with the year 2000 in mind. But we still have old 
programmes, most probably in power engineering. 
[Correspondent] The nuclear power station is a special risk facility. All 
security 
systems are duplicated. In case of failure of any system, the reserved 
one is activated automatically. Computers do not run the station, but the 
decisions and actions of people depend on their indications. 
[Correspondent, facing the camera] This is a modular control panel. Similar 
panels 
exist on all Russian nuclear power stations. All the data on module's 
work is received here. Engineers on duty keep an eye on the instruments' 
readings 24 hours a day. 
[Correspondent] Computers are wholly Soviet made. This is the so called
Uran 
complex, manufactured in the early 1980s. The machines are cumbersome and 
the data is being recorded onto magnetic tape. But they say here that 
these computers are quite reliable. 
[Vladimir Vysotskiy, captioned as leading instrument engineer of Kalinin 
Nuclear Power Station] We guarantee that the computer systems of the 
Kalinin nuclear power plant will operate normally on the first night of 
the year 2000. 
[Correspondent] After a thorough check-up of other nuclear power stations, 
Atomic 
Energy Ministry experts came to similar conclusions. 
[Valentin Ivanov, captioned as Russian atomic deputy energy minister] At
the 
Atomic Energy Ministry, at all nuclear and radiation risk production 
facilities, there is no problem with the date change [words indistinct]. 
[Correspondent] Energy production is just one of the areas, where the
failure 
of 
information systems may lead to catastrophic consequences. The US and 
Russian military are seriously worried that on the first night of the 
year 2000 computers of several strategic systems may fail at once. The 
possible consequences are so serious, that one cannot rely on equipment 
only, even on a reliable one. Some time ago Russia and the USA were 
carrying out negotiations on an exchange of military delegations on the 
New Year eve. They are supposed to celebrate the New Year at command 
posts. These negotiations were put on hold due to NATO's air strikes 
against Yugoslavia. However, they may resume now. 
[Aleksandr Volokitin, captioned as deputy chairman of the State Committee
on 
Telecommunications] Suppose we have a failure somewhere. We immediately 
tell this to this US headquarters officer: look, we have a failure here, 
and it may result in this and this. In order not to trigger off a world 
catastrophe, please send this information immediately. It may happen the 
other way round. 
[Correspondent] A failure may occur not only in the power engineering or 
defence 
systems. It may take place in transport, finance and economy. The West 
believes that Russia will not be able to solve this problem by the year 
2000. By certain estimates, more than two thirds of all computer 
programmes have to be checked. The old ones should be replaced. Russia 
does not have enough time or money for that. The situation is much more 
serious than many think. A failure in one faulty system may result in 
disturbances in the whole network, where other programmes are in good 
order. The economic damage may be much worse than that of any crisis. 
So what will happen in reality? The forecasts are contradictory, 
ranging from the most unpleasant ones to reserved optimistic. We shall 
find it out soon, in the first days of January 2000. 
[Video shows computers, city views, nuclear power station interiors and its 
computer centre, military hardware] [end recording]

******

#10
Washington Times
3 September 1999
[for personal use only]
Ukrainian poll stirs U.S. policy worries
By Jasmin Fischer
THE WASHINGTON TIMES

With presidential elections due next month, Ukrainians are dissatisfied with 
their living conditions, suspicious of government and have little grasp of 
how democracy and free-market systems work, a new survey has found.
There was widespread enthusiasm as recently as 1996 for rapid economic 
reform in the biggest ex-Soviet state after Russia, the pollsters said. But 
now 19 percent of Ukrainians say reforms should not be pursued at all.
"Thirty-nine percent of people asked were not able to say what a market 
economy means, and 25 percent don't know what it means to live in a 
democracy," said analyst Gary Ferguson, who compiled the data for the 
International Foundation for Election Systems (IFRS).
The results are a worry to American policy analysts, who see Ukraine as 
a pivotal country.
"Ukraine is located strategically central between Russia and Europe, and 
the U.S. has an interest in seeing Ukrainians live in democracy and freedom," 
said Elizabeth Gregory, spokeswoman of the International Republican Institute.
The IFRS survey, results of which were released in Washington last week, 
found that Ukrainian citizens blamed low living standards and high 
unemployment for their loss of faith in the country's democratic and economic 
development.
"When it comes to the desired types of economy, we see a dip in [support 
for a] market economy and [equal support for] a centrally planned economy and 
market economy," Mr. Ferguson said.
He said only 7 percent thought that economic conditions would be better 
next year, with many respondents admitting to using the black market to 
acquire goods and services.
Asked why economic reform has not been more successful, Ukrainians 
blamed corruption, the slow passage of necessary legislation and the failures 
of President Leonid Kuchma. Well over half the respondents said they had 
accepted corruption as "a fact of life."
Despite the high level of dissatisfaction, Mr. Ferguson said Ukrainians 
are beginning to realize that their ballot matters. "Thirty-five percent 
agree that voting is a chance," he said.
Michael Conway, senior program officer at IFRS, said the results are 
important because Ukraine, strategically located between Russia and new NATO 
members Poland and Hungary, can be seen as "a key to regional stability" in 
Eastern Europe.
The nation of 50 million people also inherited a large nuclear arsenal 
when the Soviet Union collapsed, but has since given those up under an 
agreement with the United States. It is now one of the largest beneficiaries 
of U.S. economic aid, having received $190 million last year.
"Ukraine, capable of sustaining a dynamic economy and a viable 
democratic political process, is likely to be a good neighbor. And a good 
neighbor addresses security issues as a mutual benefit," Mr. Conway said.
"With all the pluses available to Ukraine, like location, natural 
resources and educated work force, its success could easily drive success in 
neighboring countries with fewer endowments, and its failure could have just 
as serious an impact," he said.

******

#11
Kremlin Treasurer: Del Ponte Inquiry To Fail 

Rome's La Repubblica in Italian
2 September 1999
[translation for personal use only]
Interview with Kremlin treasurer Pavel Borodin by Moscow 
correspondent Alberto Stabile in Moscow; date not given: "The Kremlin 
Treasurer: 'Del Ponte Will Fail'" -- first paragraph is La Repubblica 
introduction 

Moscow -- The office where Pavel Borodin, the 
keeper of the Kremlin purse strings involved in the corruption 
investigation, works is the same one that Nikolay Kruchina, the grand 
steward of the CPSU [Communist Party of the Soviet Union], once occupied, 
and the window beside the desk, which looks out over the rooftops of old 
Moscow, is the same one from which Kruchina dropped in August 1991, the 
sole sign of dignity on the part of a routed system. However, Pavel 
Borodin, a 52-year-old, 6-foot giant of a man, has no intention of 
following his predecessor's example despite the scandal surrounding his 
person. 
[Stabile] Mr. Borodin, Mabetex, until eight years ago a small, obscure firm 
with its headquarters in Lugano, suddenly landed in Russia, at Yakutsk, 
of which you were mayor, and began winning gold-plated tenders. What 
other explanation can there be for this love at first sight between you 
and Mr. Pacolli but mutual interest? 
[Borodin] First of all, when I was mayor of Yakutsk, Mabetex had already
been 
operating in the Yakut Republic for three years, and I had only an 
indirect acquaintance with Mr. Pacolli. When I came to Moscow, in 1993, 
Pacolli won the tender to supply furniture to the White House. But I must 
make it clear at once that we, as Commissary, do not award contracts to 
foreign businesses. The contracts are awarded by the Foreign Trade Ministry. 
[Stabile] But how did Mabetex manage to win the Kremlin tender? 
[Borodin] Let me explain. Every year we launch 50 or 60 projects of various 
types entailing investments to the tune of $1.5 billion and involving 55 
or 56 foreign businesses. In six years, Mr. Pacolli has won only six 
tenders for a total of $300 million, 180 million of which were passed on 
to Russian subcontractors. Where are the billions of dollars that people 
are talking about? 
It is just delirium on some people's part. But I will say more: Mabetex 
has lost many high-prestige tenders, such as the restoration of the Grand 
Palace at the Kremlin and the Duma. Pacolli has by no means taken the 
lion's share. I have 60 Pacollis, and some of them bill $300 million a year. 
[Stabile] The Geneva judiciary froze 24 bank accounts in the names of
Russian 
citizens a few days ago. Is yours one of them? 
[Borodin] (Laughing -- La Repubblica editor's note) I have no foreign 
accounts. I have nothing to freeze. If someone has opened an account in 
my name, it is nothing to do with me. [Stabile] But are you aware of any? 
[Borodin] I do not know and I have no information. An account can be opened 
or 
a credit card applied for in another person's name without that person 
knowing about it. 
[Stabile] Of course, if a credit card in Boris Yeltsin's name emerges, as
one 
seems to have done, it is hard to believe it could have been obtained on 
false pretences. 
[Borodin] That is rubbish. Boris Nikolayevich does not even know what a 
credit 
card is. Anyway, the bank may just be out to gain a bit of publicity by 
claiming to have the credit card in the President of Russia's name. 
[Stabile] But in Yeltsin's daughter, Tatyana Djacenko's case, the card
seems 
to have been used. 
[Borodin] It is no point asking me about it. It may be that Ms. Djacenko
made 
some purchase or other, but I do not know. Her husband is a wealthy 
businessman and might have credit facilities, but she would never dare to 
use a credit card backed by funds obtained illegally. 
[Stabile] May I ask how much you earn? 
[Borodin] Mine is the third-largest state salary: $1,000 a month. 
[Stabile] And you get by on it? [Borodin] By Russian standards, I get by. 
[Stabile] It appears that Mabetex paid *1 million into the Dean account, of 
which you were the alleged beneficiary, in December 1995. 
[Borodin] Do you not think my signature should have appeared on the payment 
orders? You cannot transfer *1 million in someone's favor without anyone 
noticing. 
[Stabile] Over the last few days, you have repeatedly accused Swiss 
Prosecutor 
Carla Del Ponte of exploiting her investigations to pursue her own career 
interests, but all Ms. Del Ponte has done is to reply to the requests for 
foreign assistance filed by the Russian Prosecutor's Office. 
[Borodin] Ms. Del Ponte has tried to hit [former Italian Prime Minister, 
current opposition leader, and television magnate Silvio] Berlusconi, 
[French President Jacques] Chirac, and [former Pakistani Prime Minister] 
Benazir Bhutto too, but she has failed. She will fail this time as well. 
[Stabile] But prosecutor Chugasov has said that 90 percent of what has been 
reported in the press is true. 
[Borodin] In that case, I will tell you that Chugasov is 99 percent a fool, 
because that is the sort of statement the court can make, not an 
examining magistrate. After 11 months of investigations into Mabetex, I 
was questioned for 40 minutes, and no charges have been made against me. 
[Stabile] But your office and your daughter's apartment have been searched, 
and, it seems, evidence of use to the investigations was found. 
[Borodin] Not my office. As for my daughter's apartment, it has been 
searched, 
it is true. And what did they find? $100,000 hidden in a bottle of Asti 
Spumante. I ask you! 

*******