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Johnson's Russia List


September 8, 1999   
This Date's Issues: 3487 3488   

Johnson's Russia List
8 September 1999

[Note from David Johnson:
1. Christian Science Monitor: Fred Weir, New tremors in Dagestan show 
Russia's fault lines.

2. Journal of Commerce: John Helmer, CLEANUP CREW FOR THE KREMLIN.
4. AFP: 57 Percent Of Russians Believe December Polls Will Be Rigged.
5. Moscow Times: Brian Whitmore, Latest Polls Showing Communists Ahead.
6. Boston Globe: Lester Thurow, A declawed bear. After communism, Russia 
has gone from menace to mess.

7. New York Daily News: Lars-Erik Nelson, Let's Face It: We Helped The 
Russians Loot Russia.

8. Moscow Times: Chubais Denies Skuratov Allegations.
9. Turin'a La Stampa: Livshits: IMF Too Indulgent Toward Russia.
10. NTV: Interview with former Prime Minister Primakov.


Christian Science Monitor
8 September 1999
New tremors in Dagestan show Russia's fault lines
Islamic rebels launch a second raid Sept. 4, fueling fears Moscow may want a 
state of emergency. 
By Fred Weir, Special to The Christian Science Monitor

War is sweeping into Russia's troubled southern province of Dagestan once 
again, threatening to draw in neighboring Chechnya and making a mockery of 
Moscow's claims of victory over insurgents. The turmoil raises fears that the 
Kremlin may declare a state of emergency, endangering Russia's fragile 
political stability. 

The thousands of Islamic fighters who invaded Dagestan from Chechnya over the 
weekend of Sept. 4-5 appear deeply entrenched in at least one district of the 
tiny Caspian Sea republic. Hours before the incursion began, a car bomb 
demolished a building housing Russian military families in central Dagestan, 
killing 64 people. 

In Moscow, President Boris Yeltsin summoned his Security Council into urgent 
session Sept. 7 and said the military was partly to blame for Russia's second 
battlefield humiliation in less than a month. "How is it that in Dagestan we 
have lost an entire district? This can only be explained by the carelessness 
of the military," the ITAR-Tass new agency quoted Yeltsin as saying. 

Though details remain sketchy, military officials in Moscow say 1,500 federal 
troops, plus local police and armed volunteers, are preparing an assault on 
villages held by the insurgents. 

"Instability is spreading in the mountain regions of Dagestan, and the 
character of the fighting could change from guerrilla raids to full-scale 
war," says Alexander Iskandaryan, deputy director of the independent Center 
for Caucasian Studies here. The rebels are demanding the departure of Russian 
troops and the creation of an Islamic superstate in the north Caucasus. 

The latest events look like a rerun of last month's rebel raid, led by 
Chechen warlord Shamil Basayev and Khattab, a Jordanian-born follower of the 
strict Wahhabi sect of Islam. Wahhabi adherents also control parts of central 
Dagestan. After two weeks of fighting, Russian forces retook four villages 
the guerrillas had seized and declared victory. But critics insisted the 
rebels simply slipped away. 

"The Russian military blundered badly in August, and they seem to be 
repeating all the same mistakes today," says Vladimir Pribuilovsky, director 
of Panorama, a private Moscow think tank. "We know that Shamil Basayev and 
his men drove away ... while Russian forces kept bombarding empty villages 
into rubble for days. Can it be our military is that stupid?" 

Mr. Pribuilovsky says the scope of military incompetence raises the question 
of whether some Russian political forces are deliberately fueling instability 
in the Caucasus. "You have to wonder if this is being stage-managed to create 
a situation where a state of emergency could be declared and the Kremlin 
could put off elections." Anti-Kremlin candidates seem to have an early lead 
in the Dec. 19 parliamentary elections. Some members of Mr. Yeltsin's inner 
circle, under investigation for corruption, are reported to be nervous at the 
prospect of his leaving office in June. 

Still, Russians blame outside forces for the turmoil, especially Chechens 
seeking to break out of their isolation. Russian officials claim Islamic 
mercenaries from as far afield as Pakistan, Afghanistan, and Saudi Arabia are 
involved in Dagestan. Analysts say external forces are definitely involved, 
but the causes of the conflict are mostly indigenous. Dagestan, a tiny 
republic with 32 ethnic groups, is one of Russia's poorest regions. 
Unemployment hovers near 80 percent, and the average monthly income is just 

"Dagestan need not be lost to Russia, but we must develop a strategy that 
provides economic and social development," Pribuilovsky says. "If Moscow 
offers nothing but air raids and bombardments as the solution to their 
problems, the war will surely spread." 


Date: Tues, 7 Sep 1999
From: (John Helmer)

By John Helmer
Journal of Commerce Special

MOSCOW. Russian politicians, Kremlin staff, and western diplomats
believe that President Boris Yeltsin is already unhappy with his one-month
old prime minister Vladimir Putin, and is thinking of dismissing
him in another dramatic move.
There is also growing speculation in Moscow that the Clinton 
Administration is advising Yeltsin to resign this month, call an
early presidential election, and replace Putin as his candidate
with another figure, untainted by the corruption and money-laundering
investigations now under way.
Kremlin staff claim to know that Putin is fighting to hold his
job, and and may be ousted on September 13. The prime minister has 
reportedly decided not to travel to an Asian-Pacific heads of state meeting, 
where he is to meet President Clinton, scheduled for the weekend before.
Western sources claim Yeltsin will make a "significant announcement"
by September 19. That is just three months before the scheduled parliamentary
elections, due on December 19. If Yeltsn resigns early, Russia's constitution
requires a new presidential poll within three months.
The reasoning behind the hints, rumors, and predictions is that Yeltsin
himself, his family, and advisors now realize that Putin, the man Yeltsin
designated to succeed him on August 9, cannot stop the rot. By that they
mean the international media campaign to expose corruption, money-
laundering, and wrongdoing that grows more embarrassing every day. 
The Yeltsin circle is also fearful that the election juggernaut of
former Prime Minister Yevgeny Primakov and Moscow Mayor Yury Luzhkov is
on track to capture a large number of parliamentary seats in December, 
and unstoppable in the race to win the presidential election scheduled for
next July.
There are many plots afoot around the Yeltsin family to find a replacement
for Putin. Yeltsin financier Boris Berezovsky has made no secret of his 
opposition to Putin; he continues to promote Alexander Lebed, the former 
general and now governor of Krasnoyarsk region.
Anatoly Chubais, once Washington's favorite and the organizer of Yeltsin's
1996 re-election campaign, favoured former prime minister Sergei Stepashin. 
But he was unable to save him from being removed last month. Chubais's 
plan to assemble a coalition of right-wing politicians failed this month,
after Stepashin opted to join the centrist opposition movement of Grigory 
Yavlinsky, and ex-prime minister Victor Chernomyrdin decided to campaign 
alone. Chubais is now fielding an unelectable team led by ex-ministers
Boris Nemtsov and Sergei Kirienko.
Chubais has denied rumors he is to be reappointed Yeltsin's chief of
staff. He and the Yeltsin family may entertain the illusion that he could
be returned as prime minister, and produce calm in London and Washington.
However, Chubais is one of the most hated men in Russia. At this point, a 
Kremlin post for him would intensify the enquiries into his own involvement
in Russia's state-led corruption. 
Chernomyrdin would love to return to power, but he is much too visibly
implicated in corrupt dealings by the U.S. media campaign.
Stepashin's alliance with Yavlinsky is a broad hint that 
Yavlinsky is angling once more for Yeltsin's favor to become prime minister. 
The young economist, who once had Washington's support to reform the
last Soviet government, headed by Mikhail Gorbachev, is deeply distrusted
in Moscow. Accused by his colleagues of being too close to the
U.S. oil companies in Russia, Yavlinsky is nonetheless regarded by
most Rusisan voters as cleaner than most of his competitors. However,
he failed in 1996 to make a significant showing in the presidential race.
And current polls show he is trailing the field still.
Yavlinsky's banker and political ally, Mikhail Yuriev, a deputy speaker
of the Duma, said a year ago he expected Yeltsin to pick Yavlinsky as his
successor. Four prime ministers later, Yavlinsky is still in the running,
and Yeltsin has few alternatives left. 
Yavlinsky also realizes that if he is not appointed prime minister in the 
runup to the presidential elections, he has no chance of beating the 
Primakov-Luzhkov alliance. That, Yavlinsky reasons, would leave him almost 
no hope for the presidency again.
Yeltsin has rebuffed Yavlinsky's overtures many times before. But Yavlinsky
is now telling the Kremlin -- and also the White House -- that his cleanup 
crew is the only one they can turn to now, to save themselves in Russia.


RFE/RL NEWSLINE Vol. 3, No. 174, Part I, 7 September 1999

with NTV's "Itogi" program, US Deputy Secretary of State
Strobe Talbott said Washington is opposed to any "quarantine"
against Russia, Interfax reported on 6 September. He said
that that word and "deterrence" are not used in any
reasonable discussion of Russian-U.S. relations. Instead,
Talbott suggested, one should talk about involvement,
cooperation, common interests, mutual respect, and an open
and honest exchange of views. The U.S. official added that
Washington has repeatedly raised with Russian officials the
question of corruption in Russia, and he noted that financial
misconduct by some Russians has become an obstacle to future
U.S. assistance. PG


57 Percent Of Russians Believe December Polls Will Be Rigged

MOSCOW, Sep 7, 1999 -- (Agence France Presse) Some 57 percent of Russians
believe forthcoming parliamentary elections will be rigged, an opinion poll
published in the Vremya daily showed Tuesday. 

Twenty-six percent of respondents in the Public Opinion Foundation poll
said the December 19 elections could be honest, while 17 percent were
without opinion. 

The poll questioned 1,500 people in 56 areas across Russia in late August. 


Moscow Times
September 8, 1999 
Latest Polls Showing Communists Ahead 
By Brian Whitmore
Staff Writer

The fabled Primakov bounce may turn out to be only a blip, according to a 
poll by a respected public-opinion research center. 

When former Prime Minister Yevgeny Primakov announced he was joining Moscow 
Mayor Yury Luzhkov's Fatherland-All Russia movement last month, analysts and 
pollsters predicted the party would leapfrog past the front-running 
Communists into first place in December's parliamentary elections. 

But a recent poll by the Russian Center for Public Opinion Research, or 

VTsIOM, shows that even with the popular Primakov on board, Fatherland-All 
Russia is still running a distant second to Gennady Zyuganov's Communists. 

The poll, conducted from Aug. 20 to 24 among 1,600 voting-age adults, shows 
that 54 percent of the eligible electorate plans to vote in the Dec. 19 State 
Duma elections. Among those likely voters, 31 percent plan to vote for the 
Communists, 16 percent for Fatherland-All Russia and 10 percent for Grigory 
Yavlinsky's Yabloko. 

The margin of error was plus or minus 3.8 percentage points. 

"It turns out that Fatherland-All Russia's support remains the same, even 
with Primakov," VTsIOM's director, Yury Levada, said Wednesday. "This was 
surprising. Primakov and Luzhkov have very different electorates, and it 
appears that part of Luzhkov's electorate is afraid of Primakov, and part of 
Primakov's electorate is afraid of Luzhkov." 

Levada said Luzhkov gets some of the reform-oriented electorate, while 
Primakov gets some communist votes. Some of Luzhkov's liberal supporters are 
scared off by Primakov, and some of Primakov's left-wing voters are turned 
off by Luzhkov. 

A VTsIOM poll taken in July, prior to Primakov's announcement, suggested that 
the popular former prime minister would boost Fatherland-All Russia's support 
from 16 percent to 28 percent. 

The most recent VTsIOM poll was taken prior to Yabloko's alliance with 
ex-Prime Minister Sergei Stepashin. Levada said, however, that more recent - 
and still unpublished - data show Yabloko picking up from 2 to 3 percentage 
points as a result of uniting with Stepashin. 

"With Stepashin, Yabloko now has the support of 12 to 13 percent of the 
electorate," said Levada. 

As far as the first round of next year's presidential elections go, the poll 
shows Zyuganov leading all candidates with 26 percent, followed by Primakov 
with 19 percent, Luzhkov and Yavlinsky with 9 percent each and Stepashin with 
7 percent. Prime Minister Vladimir Putin, President Boris Yeltsin's chosen 
successor, has the support of 2 percent of the electorate, the poll shows. 

If no candidate gets more than 50 percent, a second round runoff will be held 
between the top two. In a second round, the polls showed Primakov beating 
Zyuganov 58 percent to 35 percent and Luzhkov beating Zyuganov 52 percent to 
41 percent. Primakov runs ahead of Luzhkov 57 percent to 30 percent, 
according to the polls, although the two have suggested only one of them 
would seek the presidency. 

The poll also showed that only 6 percent approve of the job Yeltsin is doing 
as president and that 60 percent of Russians do not think the government is 
able to solve the country's problems. 


Boston Globe
7 September 1999
[for personal use only]
A declawed bear 
After communism, Russia has gone from menace to mess
By Lester C. Thurow
Lester C. Thurow is professor of management and economics at the MIT Sloan 
School of Management.

During the Cold War, thousands of people were employed in the United States 
government, in our think tanks, and in American universities studying the 
intentions and capabilities of the old USSR. None of them predicted the 
demise of the Soviet Union in 1991.

After the breakup of the USSR, economic euphoria briefly reigned. Given what 
was believed to be a per capita GDP more than half that of the United States, 
a well-educated citizenry, demonstrated mastery of high technology (missiles, 
nuclear weapons, space stations), and abundant natural resources, Russia 
would quickly join the ranks of the developed world. By moving from military 
production to civilian production and eliminating the inefficiencies of 
communism, personal standards of living would rise even faster than per 
capita GDP. These widely made predictions were quickly proven to be equally 

Today few Americans are employed studying Russia. The economic euphoria is 
gone. If it were not for its thousands of nuclear weapons and the missiles to 
deliver them, Russia would be completely ignored.

Russia's per capita GDP is down sharply. Exactly how much depends upon the 
extent of the unmeasured barter economy. Military production fell sharply as 
predicted but civilian production fell almost as fast. At market prices for 
their output, much of Russia's production simply wasn't competitive. As 
military and civilian production fell, wages and incomes declined. The demand 
for goods and services went down. Production fell again and the vicious 
downward spiral swirled on.

Financial headlines tell us about Russian economic crises (in the summer of 
1998) or criminal economic activities on a scale that the world has never 
seen (in the summer of 1999). International Monetary Fund aid within a matter 
of days quickly ends up in private Swiss bank accounts. General headlines 
report on fighting in places such as Dagistan and Chechnya. A Russian army 
that was once feared around the world is now comical in its inefficiency. 
Human interest stories report on how street crime has changed what used to be 
some of the world's safest streets into streets seen to be totally unsafe or 
on how many Russians work but do not get paid (teachers, coal miners, 
soldiers) since the taxes necessary to pay their salaries cannot be collected.

Valuable natural resources such as oil or gas that can be sold for hard 
currencies get quickly transferred into private hands. The revenue from 
selling these natural resources ends up in offshore bank accounts. 
Privatizations that might help the average person (transferring the ownership 
of the assets of the collective farms into the hands of the peasants who work 
on those farms) happen, if at all, only very slowly.

In many Russian cities, one can visably see the decline in standards of 
living. Clothes are shabbier than they were under communism, buildings are 
less well maintained, and beggars (often with physical handicaps) abound. The 
exception is Moscow. Under communism, Leningrad and Moscow looked 
economically very similar. Today the contrasts are startling. St. Petersburg 
is much shabbier than it used to be and Moscow is much smarter than it used 
to be. How much of this is due to better local government in Moscow than in 
St. Petersburg and how much is due to the fact that national leaders live in 
Moscow is difficult for an outsider to say. It is not unusual in capitalistic 
countries for the nation's capital to look much more prosperous than the same 
country's provincial cities. Think of the difference between London and the 
cities in the north of England.

What has gone wrong in the last decade is easy to enumerate. Government 
essentially collapsed in Russia and the transition from communism to 
capitalism takes a strong government that can make the tough decisions 
necessary to restructure the economy. After 70 years of communism, the 
attitudes necessary to make capitalism work (initiative, willingness to take 
risks) had disappeared. Low-level corruption is a problem in all of the old 
communist countries, but high crimes on the Russian scale are unique to 

What is not so easy to see is a successful path forward. History is full of 
downward spirals (Rome, the Ottoman Turks) that were not reversed. Today's 
young Russians are not getting the quality education their parents got. 
Teachers get paid $40 per month when they get paid. Anyone with better 
economic opportunities leaves teaching and those who remain have little 
incentive to do a good job. 

If temporary, better-paying jobs appear, teachers just don't appear in the 
classroom on the days when these better-paying jobs exist. Well-educated 
societies can become uneducated societies if the structure of social 
organization collapses.

Winston Churchill called Russia ''a mystery inside a riddle wrapped in an 
enigma.'' Given the recent history of bad predictions, he was certainly 
right. Today's pundits extrapolate current trends and predict economic 
disaster. One can only hope that these predictions will be equally wrong and 
Russia is about to rebou nd in an unforeseen and unexpected economic 


New York Daily News
5 September 1999
[for personal use only]
Let's Face It: We Helped The Russians Loot Russia
By Lars-Erik Nelson (

As he wound up a three-year tour in Moscow in late 1996, U.S. Ambassador
Thomas Pickering delivered a series of speeches that are astonishing in
their misjudgment. 

"Russians are going from the darkness of communism to the bright and sunny
uplands of market reform and democracy," he said. Yes, there was crime, but
it was only a natural part of reform and would fade away. 

Within three years i.e., about now Russia would be one of our largest
trading partners, as important as Europe and Japan, he predicted. Americans
would visit cities like Sochi and Samara as easily as they visit Chicago.
The Russian Far East would be as economically vibrant as Korea or
California's Silicon Valley. 

Pickering's fairy tale was Clinton administration policy. We wanted good
things to happen in Russia, so therefore they were happening. At the time,
Russia was being robbed blind by insiders who sold off public assets and
shipped billions of dollars to their own accounts overseas. 

Instead of free markets, we now see a kleptocracy run by ex-Communist
bureaucrats, including a new prime minister, Vladimir Putin, who, as a
supposedly non-Communist official of the new Russia, laid a ceremonial
wreath on the tomb of former KGB and Communist Party leader Yuri Andropov.

Throughout this rape of a people yearning to be free, Americans cheered. At
last, we were told and far worse, we preached to the Russians the free
market was at work, and there must be no restriction of currency flows.
Once Russia calms down, economists predicted, all that stolen money would
return as productive investment. 

Some critics are trying to blame President Clinton and especially Vice
President Gore for losing Russia. This is wrong on two counts. First,
Russia hasn't been lost; it has been stolen. 

Second, Clinton and Gore deserve much of the blame, but Republicans who try
to make partisan politics from this debacle will find that the loudest
cheerleaders for the looting of Russia come from within their own ranks,
from the free-market conservatives who oppose any kind of government
regulation and who saw in post-Communist Russia a perfect laboratory for
their theories. 

Former CIA analyst Fritz Ermarth tried to warn Bush administration
officials about the deepening criminalization of the Russian economy. But,
as he wrote in the spring issue of The National Interest, he encountered an
attitude that persisted into the Clinton years: "It doesn't matter who has
the money or how it was acquired, even if by theft; so long as it is
private, it will return to do good things if there is a market." 

"It is impossible to exaggerate," Ermarth continued, "how much this aim
rested on the dogma, embraced by both the (Russian)] reformers and their
Western supporters, that, as the state was removed from the economy, real
market capitalism would arise naturally and rapidly, even in the conditions
of Sovietized Russia." 

And now we find an uproar over the supposed laundering of runaway Russian
money through the Bank of New York. The real crime in this scandal is that
there is probably no crime at all and if there is a violation, it was done
with official American collusion. Asformer national-security adviser
Zbigniew Brzezinski pointed out in Friday's Wall Street Journal, "It is
unlikely that the cluster of official and unofficial Russians who a
mere five years ago were poor but are now billionaires could have
maneuvered with such skill in the Western financial markets without expert
Western advice." 

Is the looting of Russia a crime? In terms of morality and our national
security, yes. But is it against the law? Probably not. 


Moscow Times
September 8, 1999 
Chubais Denies Skuratov Allegations 

United Energy Systems chief executive Anatoly Chubais denied Tuesday that he 
used inside information to speculate on Russia's treasury bill market. 
Suspended Prosecutor General Yury Skuratov, in interviews with various media, 
said that Chubais and 779 other government officials had played the GKO 
market while in office. 

"I did not carry out any operations on the treasury bill market while 
occupying official posts, nor did any members of my family," Chubais said in 
a statement. 

Chubais said that he "will not leave these slanderous attacks unanswered and 
will work to assure that Yury Skuratov be punished." 

Chubais said he will ask the Prosecutor General's Office for an explanation, 
and he sent inquiries to Swiss, British and U.S. law-enforcement bodies. 

"I am well aware that this wave of slander and mud-slinging raised against me 
is not an accidental splash, but a well- thought-out and planned action," 
Chubais wrote. 


Livshits: IMF Too Indulgent Toward Russia 

Turin'a La Stampa in Italian
3 September 1999
[translation for personal use only]
Interview with former Russian Minister Aleksandr Yakovlevich 
Livshits by Moscow correspondent Giulietto Chiesa; place and date not 
given: "'The Monetary Fund? It Is Good at Forgiving'" -- first two 
paragraphs are La Stampa introduction 

If there is one man who can claim to have survived 
everything, he, Aleksandr Yakovlevich Livshits, is that man. He is the 
only one still going strong in Boris Yeltsin's entourage since those 
distant days of 1992. He has taken many tosses and had to climb back, it 
is true, but he is still in the saddle even now: a minister without 
portfolio in the Putin government after being deputy prime minister, no 
less, and finance minister with [former Prime Minister Viktor] 
Chernomyrdin and deputy chief of the presidential administration. 

A man of iron, in other words. His name has emerged in the United 
States among the "recyclers" of International Monetary Fund money, but he 
is ignoring the matter with a certain applomb. He granted me an interview 
on condition that I asked no personal questions. 

[Chiesa] All right, Mr. Minister, let us leave the IMF loans aside, but
do you, who have spent all these years in top posts, think of the capital 
flight from Russia in general? How much is getting away? 
[Livshits] $1 billion a month, according to the central bank figures, but
small part is due to loopholes in Russian law that have left scope for 
sham import contracts. 
[Chiesa] It has been going on for years. Can it be added up? 
[Livshits] I would not know, I do not have the figures. I do not think
has them. 
[Chiesa] There is also a theory that might explain the size of the figures, 
which is quite frightening. Might it not be dirty money that comes into 
Russia for laundering and then leaves, so to speak, clean? 
[Livshits] That type of business prefers to cover its tracks, as is
but I do not rule out the possibility of this type of "transit" deal going 
[Chiesa] Let us turn to the IMF. I do not want to cause a row between you
the IMF people, who are good friends of yours, but be frank: Have they 
done as much monitoring as they should have done? For example, they were 
supposed to monitor the budget, fluctuations in the money mass, and calls 
on currency reserves. Did they? 
[Livshits] As a rule, they did. 
[Chiesa] And did the Russian governments give them the real figures? 
[Livshits] In the majority of cases, the governments told the truth. As far 
I know, the IMF was given misleading figures in one case only. It was the 
central bank that massaged the currency reserve figures. 
[Chiesa] What year was that? And who was governor of the central bank? 
[Livshits] It was 1996, and Anatoliy Dubinin was governor at the time. 
[Chiesa] But does the IMF have no means of checking? 
[Livshits] Sure, they have their analysis offices. 
[Chiesa] In other words, there was a breakdown somewhere, but it does not 
look to me as if you have anything to reproach the Monetary Fund for, not 
least because [the government] has received confirmation today that they 
will give it the scheduled loan installment. 
[Livshits] Quite the contrary. The Monetary Fund's main mistake has been to 
have been too fond of us and to have forgiven too many of our sins. 
[Chiesa] Why on earth has such favor been bestowed on Russia? It is not
to be the darling of the International Monetary Fund. 
[Livshits] They saw the enormous scale of the problems we faced, a vast,
country with a terribly distorted production system. They drew the 
conclusion that we needed sympathy and help, and that reorganization 
would be very painful. They should have been stricter instead. 
[Chiesa] I am somewhat astonished that there is so much talk in America of 
the Bank of New York, whereas no one is mentioning Fimaco, an off-shore 
holding through whose hands, it appears, from 30 to 50 billion central 
bank dollars passed. 
[Livshits] Do you want to know the truth? I was economic policy adviser to 
President in 1995 and 1996, and I never heard of Fimaco. I never heard 
that name mentioned. 
[Chiesa] Was it not in the Fimaco labyrinth that the 4.8-billion loan that 
the Monetary Fund granted Russia a few days before the 17 August crash 
ended up? 
[Livshits] No, Fimaco was over and done with in 1998. About half the 4.8 
billion went to the Finance Ministry and the rest to the central bank, to 
top up the currency reserves and defend the currency corridor. That is 
all clear. 
[Chiesa] What about the loans that the central bank granted the Russian
through Fimaco, after which the banks went bankrupt? 
[Livshits] That was nothing to do with last summer. As far as last summer
concerned, I have my doubts as to what happened after 17 August, when the 
government set the 9.5 rubles to the dollar ceiling. There was immense 
panic. The ceiling was broken through. Speculation devoured a few billion 
dollars in just a few days. It was an inexplicable mistake... 
[Chiesa] You are being very kind to Kiryenko. What if it were not a mistake 
but a nice plan to make money? And what if, as some people think, all the 
plans had been laid well beforehand to enable those in the know to make 
billions of dollars by selling short-term securities while they were 
still high? 
[Livshits] I have named no names. I do not know who made those decisions.
rest of your assumptions still have to be proved. The one sure thing is 
that, if they were true, it would be the greatest disgrace for Russia. 


Primakov Interviewed on Election Plans 

5 September 1999
[translation for personal use only]
Recorded interview with former Prime Minister Yevgeniy Primakov 

Presenter: Yevgeniy Kiselev] Now comes the 
promised interview with [former Russian prime minister] Yevgeniy 
[Begin recording][Presenter in recorded interview in garden] Yevgeniy 
Maksimovich, how do you feel now? We know that you had an operation. 
Please tell us what kind of operation it was and how you are now. 
[Yevgeniy Primakov] I will start with the letter I have received from 
Madeleine Albright. It was a very warm letter. She wrote that she thought 
about me a lot after my spine operation, and that she wanted to meet me 
and so on. I have replied to her. She sent her letter via the American 
embassy and I sent mine via Ushakov, our ambassador to Washington. My 
reply was the following: I was touched by her kind letter and I also want 
to meet her, but at the same time she should tell the CIA that she was 
given the wrong information. I had an operation not on my spine, but on 
my leg, on the hip joint that was causing pain. It was replaced by an 
artificial one. I was operated on in Switzerland by a great doctor, 
Professor Hans [as received], and I feel good now. Let us go for a swim. 
I do not need a walking stick now. And right after the operation I had to 
walk on crutches. I do not feel any pain now. 
[Q] When does your leave end? 
[A] It is good that you have come now, because you would not see me here 
in a few days. By 10th September I will be in Moscow. 
[Q] What have you agreed upon with [Moscow mayor] Yuriy Luzhkov and 
[Tatarstan President] Mintimer Shaymiyev? What are the conditions of your 
[A] You may believe it or not, but there was not a single word said 
about the division of roles. You are probably hinting at the presidential 
[Q] Not necessarily. Although I was planning to ask you about that as 
[A] No, we did not mention it at all. My only condition from the very 
beginning was that I would not join either of these two organizations 
[Fatherland and All Russia movements]. I have made a decision not to join 
any of the movements due to the election. If there had been a coalition 
bloc sufficiently open to many others I was ready to join it. 
[Q] And what are your plans? Will you work in the State Duma after the 
[A] Undoubtedly I am going to join the State Duma. The question is, 
whether I shall stay there or not. I just want to say that preparation of 
bills and work in the State Duma in general is not just the work of the 
factions represented there. I think that our bloc coordination council, 
established recently, will keep on working whether its members become 
deputies or not. 
[Q] Thus you do not exclude the possibility of rejecting the deputy's 
seat in the Duma after elections? 
[A] I do not exclude such a possibility, but I cannot give you a direct 
answer right now. 
[Q] There are two types of rumours now. On one hand, they say that 
Primakov is an ideal candidate for the speaker's position in the newly 
elected Duma. On the other hand, they say that Primakov will never agree 
to take this position, because he got fed up of it at the USSR Supreme 
Soviet, where he chaired one of the houses. How things are in reality? 
[A] Indeed, I got fed up. I had more than enough. You know, when I 
joined the Supreme Soviet, I graduated from the academy and thought that 
I might be some sort of moderator who would control the discussion, call 
upon the next speaker, comment on each speaker, call on the others to 
touch upon the subjects that seemed important to me and so on. But when I 
tried to do that, I heard cries like "Who are you to tell us what to do? 
Just give us the floor - that is your job. We do not need your comments." 
Of course, a speaker, or a house chairman does a lot of work behind the 
scenes. At the same time these everyday sessions are equal to taking a 
daily flight from Moscow to Tokyo. Because I would have to sit for 
exactly the same amount of time. At least when you are on the plane, you 
can have a drink, lean back, have a nap. 
[Passage omitted: Primakov recollects that he sometimes fell asleep due to 
the monotony of the sessions] 
[Q] So the candidates may feel comfortable. If any of them wants to be 
in the Duma speaker's chair - 
[A] I am not going to compete for it. But if we win a serious number of 
seats, we shall have our own candidate [for this position]. So I do not 
want them to feel that safe about it. 
[Q] Do you have any prognosis for how many votes your bloc may get in 
[the parliamentary] elections? 
[A] I think that it will be good if we get one third [of the votes] 
taking into account the single-seat constituencies and the possible 
rearrangement of the votes caused by the fact that some blocs or 
movements will not win the elections. If we get more it will be even 
[Q] Thus this is the outcome you would like to get? 
[A] Yes, personally, I would like it to be that way. There are people 
among us that think this can be only the minimum result, that we may get 
an even bigger number [of votes]. Let's wait and see. 
[Q] Who are your potential allies in the future [State] Duma? what do 
you think? You know the disposition of forces. 
[A] I think that there should be more pragmatism in the Duma. More deeds 
than words. Everybody is tired of words. We need deeds. To make the deeds 
happen the Duma should be more flexible and unite with sound forces. I 
consider only the uttermost extremists from the left and right wings to 
be unhealthy forces. 
[Q] Who are they? 
[A] I would not like to name them but I think that we are not going the 
same way as those who use being in opposition to turn society back to a 
totalitarian regime. We are not going the same way with those who are 
trying to return society back to the command and administrative system. 
Besides, there are people, I would call them pseudoliberals, that are 
dragging [the country] in the direction of the Chicago [economic] school. 
They are also called the Chicago boys and they are very proud of it. They 
completely deny the regulating role of the state. We are not going the 
same way as them either. 
[Q] Nevertheless, in a way you were getting on well with [Anatoliy] 
Chubays in the government, were you not? 
[A] I don't think that Chubays belongs to the people that I have 
mentioned above. Chubays has a complicated personality. He is a clever 
man and a good manager. I don't see any unacceptable traits in him that 
would prevent Chubays from being our ally on a number of issues. 
[Q] Are you going to take part in the presidential election of the year 
[A] Honestly, I have not decided yet. I do not exclude it but I have not 
taken the decision yet. There are many "buts", many variable factors, as 
they say. These factors may influence my decision. One of them is the way 
our bloc goes through the [parliamentary elections]. If the bloc gets a 
decent position and is widely supported by the people, there will be one 
picture. If it is not so, the picture will be absolutely different. 
[Passage omitted: repeats about the factors.] 
I never hurry when making a decision. 
[Q] Still Yuriy Luzhkov in an interview he gave our programme in July 
this year said that his position regarding his personal participation in 
the presidential elections has been stated by him more than once in 
public. He said that he was not going to participate in presidential 
elections if there is another candidate who would be optimal from his 
point of view. When I asked his if Primakov was such a candidate, he said 
straightforwardly: Yes, he is. And when asked whether he would not run 
for the presidency if Primakov participates, he said that he would not. 
[A] I would not like him to be tied down by these words. I would rather 
see him with more room to manoeuvre. I consider him to be a praiseworthy 
person. As for myself, I have not made up my mind yet. 
[Q] Have you discussed this issue with him? 
[A] Never. Some people may think that I am not sincere, but this is 
true. This subject was never discussed. I think that it would not be 
right for us to start this discussion now, before the parliamentary 
election. We must deal with the main issue now, that is to win more seats 
in the State Duma. 
[Q] Do you foresee such a scenario that the new Duma may practically 
change the government? The procedure is obvious: a vote of no confidence 
is passed, the president cannot dissolve the Duma if he does not agree 
and practically- 
[A] As far as I understand, after the new Duma election the government 
should resign automatically. 
[Q] It seems that the Constitution is not very clear about it. 
[A] Maybe, but in any case there should be certain changes in the 
government. The government may operate properly only if it has the 
support of the State Duma majority. Ministers and deputy ministers should 
not be appointed without the prime minister. The Duma should have more 
possibilities to influence the process of the government formation. The 
ministers should depend more on the Duma. At the same time certain 
functions are more becoming to the premier than to the president. 
[Passage omitted: Primakov provides some examples] 
[A] Thus there are a number functions that should be redistributed. It 
seems that the president is also thinking about it. 
[Q] There is an established opinion that it is possible to change the 
constitution, to change legislation the way you are saying, only before 
the presidential elections. After the elections the new president would 
not like to change anything. 
[A] I am not so sure. If the president is a realistic person, and I hope 
that the present president has a realistic approach, and the future 
president will have the same attitude, then it may happen now or under 
the new president. The sense of the presidency is not in collecting most 
of the functions in one hand, but to effectively influence the 
development of this country. 
[Q] I would like to go back. Most probably this is your first big TV 
interview for the last four months after your resignation in May. So how 
did it happen and why were you sacked? 
[A] To be frank, I think that there were political motivations in it. I 
think the reason lies in the fact that some people in the president's 
entourage were providing non-objective information about me and the 
government. I can tell you, for instance, that I can mention the head of 
the [presidential] administration, [Aleksandr] Voloshin among these 
[Q] Do you bear a grudge against anybody? 
[A] No. I have used this time to have an operation, and I got rid of my 
pain. And I could not have afforded to leave for two months if I had 
remained prime minister. I have finished my 500-page book, where I 
describe my work in intelligence and with the Foreign Ministry. I would 
not have been able to do it if I was not sacked. So I do not bear any 
[Q] But you did at first? 
[A] It was just unpleasant at first. I would not say I bore a grudge. It 
was unpleasant because I had big plans that were not fated to be realized 
- not personal plans of course, but plans for the government's work. 
[Omitted: Primakov says changing the government often does the country no 
good; he was upset for Prime Minister Sergey Stepashin when he was sacked 
and he thinks highly of Prime Minister Vladimir Putin; asked how he views 
Yeltsin's statement that he wants Putin to succeed him, he says everybody 
wants to name a successor; Primakov says he thinks he is popular because 
people believed in his government] 


Date: Tue, 7 Sep 1999 
From: "Tanya Samoiloff" <> 
Subject: Hello Russia #46

September 06 1999
"HELLO RUSSIA" is INDEPENDENT NEWSLETTER, which brings to you from
Khabarovsk the PICTURE OF RUSSIA for better understanding of policies,
cultural environment, and the events.
- To subscribe send mailto: with "Subscribe" in
subject line.

(Alexander Samoiloff, September 06, 1999)
During the last week Russian press have started to talk about Yeltsin's
Family scandal, which burst out in the western press.
So, I imagine myself a Russian who has no access to Internet, don't read
NYTimes or Carrera della Sera, and receive information only from our
national sources.
The first time I heard about the scandal was on Tuesday. Alexander Lifshits,
answering over radio to the question about sudden growth of dollar exchange
rate, said that he could not understand the reasons. Our economy is in the
beginning raise up and there's no any political scandal. To the question
about "New York Times publication of money laundering by Russian Mafia" he
said that our law-enforcement are working on this problem, but don't believe
that someone could laundry 10-15 billions. On the same day Victor
Chernomyrdin assured me that he also doesn't believe in that. All through
this week among the massive information related to the events in Dagestan
and Kirgizia I heard something shortly about a calumny in western press.
Than on Sunday at 10 p.m. on ORT channel, instead of the expected latest
news, Sergei Darenko has offered me the following show:
As an opener-upper he shows me war in Dagestan and assures that all
population is on the side of Federals, and that Russian pretty soon will win
this war.
Than I saw our new Premier Vladimir Putin, who was more evasive and
political. To the question about money laundering Putin said that this
scandal is part of USA presidential campaign, and he considers it
unimportant for us. Today Russian law-enforcement is working hard against
Russian Mafia in contact with foreign services. Putin said that couldn't
make any judgements about this issue as it needs careful investigation.
Than I saw a very short clip of Skuratov, who also said that this accusation
requires careful investigation.
After some reasonable reveries that such big sum simply can not be stolen,
Sergei Darenko makes a hint that this could be a trick, which in billiards
is called Carambolle. You send your ball on the other side, it returns back
and kicking your side reaches the target. Putin confirms that Soviet KGB
previously many times used such misinformation trick. Darenko continues
explaining that many former KGB men, who used such tricks, are now working
in big business companies and ranks of political opposition parties. (I
understand his words as a hint that Evgeny Prymakov could initiate the
But Putin avoids the direct answers and only repeats that this case needs
more careful investigation.
Than Darenko ponders who may be interested in this scandal: "Our Communists
are too weak and down as be able to cooperate with western press. But there
may be some other political forces?" With that he shows me Yuri Luzhkov,
face in sharp dark tones on the gloomy background: a marvelous graphic
designer's work to show a villain. Luzhkov sharply says that he believes
western press. He thinks that every person, who is accused of having foreign
accounts must openly tell us is it true or not. If it is not true, than the
accused must submit a calumny claim. "Otherwise, - said Luzhkov - I believe
western press".
Than Sergei Darenko shows me a Russian newspaper (I never heard about this
newspaper before) which accuses Luzhkov of having individual foreign account
of over 600 million dollars. Dorenko makes a comment that Luzhkov is for
such long time the Mayor of Moscow, and sure this post is a good gravy
Yet they don't tell me straight, at his point I find out those two villain
boys Prymakov and Luzhkov, who in plot with alien US circles have sent the
calumny Carambolle through the western press to destabilize situation in our
After that on the screen shows nice looking smiling face of Borodin, who for
half an hour assures me about absurdity of western accusations, and that he
or any other Kremlin leaders never had any illegal deals or foreign
accounts. Together with Dorenko they concentrate my attention on the
absurdity of accusations against Yeltsin himself (without mentioning of
other names). Yeltsin could not have any bank accounts and a credit card at
all. Dorenko says: "From the times when Boris Nikolayevich became the First
Secretary of Sverdlovskaya Oblast he never needed money and never had it in
his pocket. He never saw a credit card. If somebody will show him a credit
card, he will think that it is may be some kind of entrance pass or
membership card".
This show took in total one hour of my time instead of the expected national
and world evening news.
Of cause, I describe it all in a pretty primitive schematic way. But I
think that this is the way many plain Russians have seen it. Sure, the
producer of this perfect show deserves the Oscar, but I want to make him
only one remark: "Today many Russians simply don't believe what official
propaganda says and often it produces a negative effect.

(Tanya Samoiloff, September 06, 1999)
On the background of the official propaganda war of Russian and Western
media related to the Yeltsin's Family scandal we read the following:
Newspaper "Segodnya"
Alexander Boreiko, September 04, 1999
New Chairman of the State Committee of Telecommunications Leonid Reiman
yesterday made a statement that his Committee, together with the Ministry of
Press, TV and Radio Broadcasting and Telecommunications, have an intent to
establish control over Russian Internet.
According to Mr. Reiman, this authorities now "are considering the question
of licensing and regulating of promotion of information in Internet
This idea is not a new one. Few projects were previously submitted for
consideration to State Duma. But the authorities were inclined towards a
voluntary registration of Internet Mass Media.
Today the approach to this problem has changed, yet the authorities today
have limited possibilities. The acting Law on Telecommunications doesn't
allow licensing and control of information in Internet. According to Leonid
Reiman, this problem soon will be solved. It would be enough to issue a
decree of the government about licensing and regulation of Internet.
I don't think that this statement needs many comments. Does it mean a return
to the times of censorship? Nobody can say that now in Russia we have
freedom warship, freedom from want and fear. But it sounds that Russians are
losing the last freedom: the freedom of speech and expression.



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