Center for Defense Information
Research Topics
CDI Library
What's New
CDI Library > Johnson's Russia List

Johnson's Russia List


September 9, 1999   
This Date's Issues: 3489 3490   

Johnson's Russia List
9 September 1999

[Note from David Johnson:
1. The Guardian editorial: Yeltsin is unfit to govern.
2. Moscow Times: Andrei Piontkovsky, Yeltsin Will Surrender in 2000 Ballot.
3. Komsomolskaya Pravda: Why Are Special Detachments Being Mobilized?
4. Wall Street Journal: E. Wayne Merry, Reinventing Russia: Al Gore'sMisguided Quest.
5. John T. Alexander: comments on the Russian economy.
6. Paul Backer: A win for the little guys, some IMF accountability onRussia, at last?
7. The Guardian (UK): Jonathan Steele, Yeltsin may quit now.
8. Financial Times: John Thornhill, Moscow elections brought forward.
9. The Times (UK): Franco Venturini, Russiagate boosts Luzhkov.
10. Bloomberg: Corruption in Russia Bringing Human Rights Abuses, Report

11. New book: The Russian Language Today.
13. New York Times: Jeffrey Sachs, Calling the I.M.F. to Acccount.]


The Guardian (UK)
9 September 1999
Yeltsin is unfit to govern 
The chaos grows and he is unable to cope

The latest upsurge in fighting in the Caucasus and the tempestuous row in 
Moscow that ensued have again brought into sharp focus the question of Boris 
Yeltsin's fitness to govern Russia. Long-standing concerns about the 
president's health cannot entirely explain, or excuse, the intemperate 
broadside fired at his generals after Chechen and Wahhabi Islamic separatists 
once again seized territory in Dagestan and blew up a barracks, killing at 
least 64 people. "How did we lose a whole district in Dagestan?" Yeltsin 
asked. "This can only be explained by the carelessness of the military." He 
went on to demand that the rebel "degenerates, bandits and murderers" be 
crushed "quickly and harshly". Unsurprisingly, this outburst was followed 
yesterday by a stepped-up Russian bombardment of villages and hamlets in both 
Dagestan and Chechnya (where unlike in East Timor there are no UN observers 
or western journalists to witness the carnage). 

Yeltsin appears to have learned little or nothing from Russia's experiences 
in Chechnya between 1994 and 1996 when tens of thousands of civilians were 
killed, and the Russian army was humiliated in a losing fight to prevent 
independence. A Russian escalation in Dagestan can only play into the hands 
of extremists (reportedly backed by the notorious Saudi terrorist, Osama bin 
Laden) who at present appear to have scant popular support for their idea of 
a unified, Islamic state in the Caucasus. Nor does Yeltsin seem to make a 
link between the army's performance now and the precipitate decline in its 
numbers, budget, professionalism and morale during the years of his 

The fighting in Dagestan is but one of several crises which Yeltsin is 
currently mishandling. His government, led by his latest appointee as prime 
minister, Vladimir Putin, has finally been forced to acknowledge that 
billions of dollars in public money, including much siphoned off from foreign 
loans, has been embezzled by officials, businessmen and organised crime. At 
first Putin insisted these allegations were an American-inspired plot to 
destabilise Russia. He now at least accepts that "a problem exists". It would 
be hard not to, given that the Duma-backed prosecutor-general, Yuri Skuratov, 
has announced that nearly 800 federal officials, including Anatoly Chubais, 
the former deputy prime minister and free-market champion, and Andrei 
Kozyrev, the former foreign minister, are being investigated in connection 
with the money-laundering scam. 

Yeltsin may be hoping that Putin, his chosen successor as president, will 
also protect him and his two daughters from investigations linking them 
personally to pay-offs worth up to $15m allegedly made by a Swiss company in 
return for government contracts. The continuing mismanagement of the economy 
which lurches from one IMF debt rescheduling to the next; the failure to 
restructure industry and reform the tax system; and the upsurge in crime (not 
merely white-collar) are just some of the other issues Yeltsin has flunked. 
In foreign policy, too, the recent Yeltsin record represents a sad 
falling-off. Ignored over Iraq and sidelined over Serbia, he is now heading 
for another row - this time with the US over Russia's failure to ratify the 
Start II arms reduction accord and its opposition to changes to the 
anti-ballistic missile (ABM) treaty. 

This December's general election will give the Russian people a chance to 
speak out on all of this. But Yeltsin's own presidential term runs on to next 
June. Things could yet become a lot worse. 


Moscow Times
September 9, 1999 
SEASON OF DISCONTENT: Yeltsin Will Surrender in 2000 Ballot 
By Andrei Piontkovsky 

Russians publish articles and editorials nearly every day that express 
concern over Boris Yeltsin's possible plans to stay in office by 
unconstitutional means. But I think this danger is seriously overstated. 

Yeltsin will leave his post in 2000, maybe earlier. Not because Boris 
Yeltsin, as a person of deep democratic convictions, is not capable of 
political adventurism, but because Yeltsin possesses none of the resources - 
neither political, military, nor even physical - necessary for such actions. 
During his clash with parliament in 1993, Yeltsin's position was far stronger 
than it is today. (In April 1993, more than half the Russian population 
supported him in a referendum.) Even so, back then his power was hanging by a 

As an experienced politician, Yeltsin understands that this time, any effort 
to grasp at extraordinary measures can only lead to catastrophe for him 
personally, just as he understands that a democratic transfer of power will 
solve the problem of his future place in Russian history textbooks as well as 
his personal security. 

Therefore I consider it high time to think about the upcoming presidential 
elections, about who will compete for power and what will be decided then. 

The main issue of the 1996 elections was Communism. But today, no one 
believes a Communist candidate's victory in 2000 is realistic. This may seem 
paradoxical. The reality of Russian bandit capitalism, so openly displayed 
urbi et orbi for the last four years, would consign the left to an 
unqualified political victory. A modern leftist party, led by someone like 
Alexander Kwasniewski, would long ago have taken power in Russia. 

But the leadership and the apparatchiki of the Russian Communist Party belong 
to the same generation of Soviet nomenklatura as the "strong managers" who 
form the basis of the system of bandit capitalism in Russia. And they and 
others have shown themselves incapable of answering the challenges Russia 
faces on the eve of the 21st century. 

Despite opinions to the contrary, the foundations of bandit capitalism in 
Russia were laid not in 1992-94 by the "young reformers," but in 1989-91 by 
the party nomenklatura, which carried out a massive operation to convert its 
collective political omnipotence into enormous economic power for its 
individual members. Hundreds of thousands of people gathered at rallies in 
Moscow, St. Petersburg and other cities protesting against the Communist 
regime. But entirely different people clambered to power on their backs: 
Members of the old nomenklatura, which by that time was slightly diluted by 
new appointees. A system was established in the country whereby power and 
money were cynically and shamelessly combined. 

The very same people are now gathering force as the new "party of power," 
Fatherland-All Russia. How symbolic that this bloc is led by our dear Yevgeny 
Maximovich Prinakov, who every day grows more and more like our dear Leonid 
Ilyich Brezhnev. The Brezhnev era nomenklatura wants to project its power 
into the 21st century. 

The unexpected union between Grigory Yavlinsky and Sergei Stepashin was not 
accidental. Both were born in the 50s. The main issues in the next 
presidential election will be generational, and those born in the 50s will 
stand up to those born in the 20s and 30s. 


Russia Today press summaries
Komsomolskaya Pravda
September 8, 1999
Why Are Special Detachments Being Mobilized?
Komsomolka sources in the FSB and the Interior Ministry reported that
special troop reservists are being mobilized in utter secrecy. Mobilization
is being performed under the pretext of the escalating situation in the
Northern Caucasus. But in reality, there are apprehensions that these
detachments may be thrown into the political war which would follow if the
President resigns from office before the end of his term and presidential
elections are conducted simultaneously with the Duma elections in December. 

There is a plan, according to which the President will announce his
resignation in September, in order to destroy all parliamentary election
blocs. Primakov, Zyuganov and Yavlinsky will have to start their own
presidential campaigns. Then, according to law, the blocs that they are
heading now will not be able to participate in the Duma elections. This
turn of events can cause strong political tensions which would require
presence of special troops. 

This scenario is unlikely to take place in reality. It is much more
probable that the President achieves an agreement with his real successor
Yevgeny Primakov. 


Wall Street Journal
September 8, 1999
[for personal use only]
Reinventing Russia: Al Gore's Misguided Quest
By E. Wayne Merry, a former State Department and Pentagon official. He is
director of the Program on European Societies in Transition at the
Washington-based Atlantic Council of the United States.

With each new revelation of Russian money laundering or the failures of
reform, accusing fingers point at Vice President Al Gore. Why? Aren't the
State and Treasury departments more likely culprits? Obviously Mr. Gore is
a partisan political target, but the real reason he finds himself in the
hot seat is his involvement in a little-known government body called the
Gore-Chernomyrdin Commission.

The commission is a bilateral coordinating mechanism co-chaired by the
American vice president and whoever is the Russian prime minister
(originally Viktor Chernomyrdin). It meets formally twice a year in
alternating capitals, but the working level never stops. The American
delegations travelling to Moscow total 700 to 800 officials, including many
hangers-on who never see the inside of a meeting room. The Russians, from
poverty and good sense, are more austere in their staffing.

The Gore-Chernomyrdin Commission was launched early in the Clinton
administration as the keystone of its partnership with Boris Yeltsin's
government. The new administration recognized that vested interests and
bureaucracies on both sides were stuck in Cold War thinking. The idea was
to engage the No. 2 man in both political systems to force initiatives
through their respective red-tape factories. Expectations were high. Indeed
similar commissions were created for Mr. Gore to co-chair with Ukraine,
Kazakstan and South Africa.

Political and economic reforms in Russia have largely failed, and part of
the blame must go to Mr. Gore and his commission. Over time the commission
has taken on a bureaucratic life of its own; it now impedes rather than
encourages innovation. U.S. agencies cannot conduct normal cooperation with
Russian counterparts because the commission needs fodder for its
twice-yearly summits: new programs to unveil, documents to sign, photo-ops
for the principals. New areas for cooperation are very limited and for the
most part were exhausted long ago, but even initiatives of real merit are
deliberately delayed to pad the press conferences. No program or project is
ever deemed less than a success; every project gets at least an A-minus.

U.S. staffs are under constant political pressure to increase the
"deliverables" for each meeting--regardless of whether these
taxpayer-supplied goodies will do Russia any good. I have conducted
negotiations at the defense ministry in Moscow to offer programs and
funding we knew the Russians did not want and would not accept, but we
could not take "no" for an answer. (The Russians must have concluded that
we were either arrogant, naive, or in search of spying opportunities.)

Still worse, Washington has increasingly politicized its own internal
analyses of Russian reform so as not to rock the commission boat. As first
publicly exposed by James Risen in the New York Times and by former Central
Intelligence Agency official Fritz Ermarth in The National Interest, the
CIA repeatedly warned the White House of massive corruption on the Russian
side, to no avail. One report implicating then-Prime Minister Chernomyrdin
(formerly head of the famously corrupt national gas monopoly Gazprom) was
returned with a barnyard epithet scrawled across the front in the vice
president's hand.

During 1993-94, when I was in charge of the U.S. Embassy's reporting on
Russian politics, there was an unmistakable shift in the Clinton
administration's priorities, from "tell us what is happening" to "tell us
that our policy is a success." On the political side, I believe we told
Washington the truth (with full support from the embassy leadership). On
the economic side, the commission had (in Mr. Ermarth's words) a "chilling
effect" because the same people were responsible for implementing the
commission's agenda and for evaluating the Russian reform process--an
inherent conflict of interest.

As a result, I personally saw dozens of draft reports on economic problems
that were never transmitted, while the Treasury representative blocked a
negative assessment of Russia's capacity to introduce a market economy
rapidly by arguing it would "give Larry Summers a heart attack." As Robert
Kaiser has reported in the Washington Post, my successor had similar
experiences from 1994 to 1997.

The commission should long ago have gone out of business. Why doesn't it?
The answer lies in the domestic politics in both countries.

Rather than a way of using the power of the vice president to advance
Russian relations, the commission became an instrument to advance the
political career of the vice president. Mr. Gore became the superminister
for Russia with his future presidential campaign in mind, so he could claim
another achievement--remaking Russia into a market economy--to go along
with reinventing the federal government and inventing the Internet.

The commission served a similar purpose for Mr. Chernomyrdin, giving the
dour apparatchik a major foreign-affairs role not called for in the Russian
constitution. The result was a relationship built on shared personal
ambitions rather than on mutual national interests, and a personalization
rather than an institutionalization of ties.

Mr. Gore's association with the new Russia is now proving a political
liability. So with each new Russian scandal, the vice president's spokesmen
assert he was not informed, not engaged, not responsible. Mr. Gore
undertook to reinvent Russia. Can he really claim not to hold the patent?


Date: Wed, 8 Sep 1999 
From: John T. Alexander <>
Subject: comments on the Russian economy

Dear David, May I offer some comments on the Russian economy from a
visiting consumer's perspective, as my wife and I just got back from three
weeks in Russia on two cruises from St. Petersburg to Moscow and back. I
am an historian by training and also have a certificate of regional
specialization from Indiana's Russian and East European Institute, and my
wife has an MA in Slavic Languages and Literatures, was born in Slovakia
where she lived until 1953 and she still has many relatives there and
visited them again in June. To get to the point: reports of Russia's
economic demise are greatly exaggerated. We were both impressed by how
prosperous St. Petersburg and Moscow and some of the cities in between
looked. Granted that foreigners are now in a shapper's paradise with the
decline of the ruble, but the variety and diversity and abundance of goods
is still impressive. The volume of building in downtown Moscow is
huge, esp. of cafes and other eating establishments. The giant fleamarket
at Izmailovo is a wonder to behold, and prices of quality goods such as
Lomonosov porcelain are exceptionally low as compared to the same good in
the US. Book and CD prices are also low, and all sorts of souvenirs are
also very reasonable, such as dolls, carved wooden figures, metal
soldiers, Russian pottery. IN the tastefully decorated TSUM department
store I stumbled on a condom dispenser, the first I've seen in Russia. Now
there's progress! Tourism from the West is down about thirty percent, the
Russian report, and it's hurting those in the tourism industries. Our ship
was making its last run of the season in early Sept. and had cancelled two
others scheduled. Without sounding like a travel agent, let me just add
that visiting Russia via cruise boat is a convenient and not terribly
expensive way to see a lot in a short period. Russians are still very
hospitable and friendly, and many are quite proud of their country and
delight in the freedoms now available. Cordially yours, John T. Alexander,
Department of History, University of Kansas, Lawrence, KS.


From: "Paul Backer, Esq." <>
Subject: A win for the little guys, some IMF accountability on Russia, at
Date: Wed, 8 Sep 1999 

(republication by request only)

There was a significant piece of good news on Russia this week, IMF
announced an investigation into how its funds were used in Russia.

Anyone unfamiliar with IMF's history in Russia would be unimpressed with
this news, after all isn't every lender interested in where its money goes?
But for the IMF this announcement represents a significant concession to
critics demanding for years that IMF do so. IMF is the lender most
borrowers would love to have. A lender who after years of revelations and
admissions of loan diversion, deception and defenestration, continued to
lend absent meaningful supervision or a coherent reform policy or
objectives. IMF's critics were amazed at its equanimity in the face of
massive malfeasance and failure to achieve goals in seeming violation of its
own Charter requiring that IMF lend with adequate safeguards. Quite simply,
the IMF appeared to have the desire, nay, need to lend without any idea of
what it wanted in return.

The nadir of IMF intellectual bankruptcy in Russia was reached a few months
ago when, with more or less a straight face, Russian government and IMF
officials were apparently deep in discussions on TV, Radio and newspapers
whether the failure to pass a gas pump tax would derail the most recent IMF
loan of $4.5 billion and whether that would lead to yet another collapse of
Russia. The effort to take the "your gas pumps or your life" debate
seriously must have strained the credulity of even the most IMF friendly
Russia analysts. And the times have hardly been that friendly to the IMF.

The IMF in an effort to explain its inexplicable policies has gone through
three major stages. Initially, the IMF shrugged off critics of its Russia
lending by stating that it had no reason or duty to know what happens to
lent funds. IMF officials on and off the record stated that it isn't their
job, that they are in the business of giving lump sums to governments and
helping on policy per their Charter, not the petty mercantilism of actually
tracking or "micromanaging" what happens to the money. For me personally,
the funniest comment on the theme was when a rather "exhausted" IMF official
at a reception stated that, "What you fail to understand is that we (IMF)
are not some nickel and dime investment bank, we are fiscal diplomats."
That's lucky, diplomats don't get fired for doing a bad job, they get to
write articles advising the world to "calm down".

The increasingly evident failure of IMF policy reflected in the abysmal
economic and regulatory situation in Russia increased the storm of criticism
of this approach. Critics felt that lent funds consisting of taxes
collected all over the world should not be wasted absent some effort at an
accounting, objective performance milestones or program evaluation. Not
only is doing so reckless, it seriously prejudiced Russia's chances for
rational economic development and undermined the prospects enforcement of
corporate, finance and securities laws. The head of the FKTzB, Vasiliev
commenting on Russia's regulatory climate stated that, Russia has fine laws
the tragedy is that they are not enforced.

Critics, including myself hold that dumping billions into a country whose
government repeatedly proved itself stunningly arrogant in its treatment of
IMF funds as a credit line for those in power promoted the criminalization
of Russian economy, effectively preventing the development of meaningful
corporate, finance and securities law enforcement. After all, if those in
power get billions without any meaningful effort on law and regulatory
enforcement, why would they want to make it more difficult for themselves to
make off with public and private funds?

Responding to mounting criticism, the IMF shifted to "they made us do it"
vein of self-apologism. Regular readers of the JRL, newspapers or magazines
witnessed the recent flurry of "informed IMF officials" or the more
ubiquitous "persons knowledgeable of the IMF" leaking that "U.S. made us
lend" or the even more popular "they made us lend even though we as economic
professionals thought it's a bad idea". It is never entirely clear who the
"they" are or what sort of a professional lends against own judgment.

Predictably, this IMF approach drew a pained reaction from Western and U.S.
officials reluctant to share the IMF's hair shirt. These prominently
include Al Gore's camp desperate not to be held responsible for billions of
dollars and historic opportunities lost in Russia. This is rather important
to Gore's political survival. Aid to Russia is one of the very few areas
where the "father of the internet" clearly exercised a leadership role
through the GCC and other initiatives. Gore simply can't afford to have one
of his few exercises of leadership to be inextricably linked to the IMF's
Russia mess. There may even be some truth on Gore's side, while insiders
fairly readily admit that Gore and Clinton very actively promote lending,
they profess shock that the IMF lending to Russia was apparently modeled on
a brown paper bag filled with used bills.

The third IMF response to the crescendo of scandal, revelations and
criticism by its traditional critics and increasingly, national governments
is on a purely human level ... touching. The IMF has engaged in a concerted
effort to take credit for everything that didn't happen in Russia. A
basically sound strategy as the IMF would be very hard pressed to point out
to positive things that did happen as a result of its policy. Recently, the
IMF stated that thanks to it being engaged in Russia, Russia is not
communist or in the middle of a civil war and even has elections and stuff.
While that is true there is sadly no convincing or even moderately
unconvincing evidence that IMF lending had anything to do with any of the
above. It is difficult for example to explain how the IMF's most recent
loan that will be used largely by the IMF to pay the IMF acts to prevent a
Communist take over or that but-for IMF lending there would be no elections.
In the same vein, one looks with giddy anticipation to IMF claims of credit
for Anna Kornikova's good looks and tennis skills, continuing photosynthesis
across Russia and water flowing down hill. All these things are also to
some degree important to Russian life, and yet, perniciously the IMF still
gets no credit.

But, finally, years after initial questions were raised and a month after
the Bank of New York scandal, after the IMF's numerous self serving letters,
denunciations of editorials in the U.S. and abroad, flat statements that
either things simply could not be better or that they are terrible, but the
IMF did not know or had a duty to know, IMF or that it's not our job, the
IMF appears willing to try and find out what may have actually happened. Or
what did you want us to do, abandon Russia to the wolves? Years, and months
later, IMF is at the point where any responsible lender would have started,
investigating what actually may have happened.

However, that is not enough. We as concerned members of the public must
ensure that the IMF does not squander this opportunity for meaningful
reform. We must insist that the investigation be conducted by independent
outside staff consisting of financial and legal experts not IMF employees or
contractors. We must insist that the IMF actually INVESTIGATE and not
prepare another audit that takes all representations and documents presented
to it as true and complete. We must insist that the IMF formulate
meaningful policy objectives with a chance of promoting tangible corporate,
finance and securities law enforcement in Russia able to lower capital
flight and create an environment supporting investment by Russian and
foreign investors. We must insist that the IMF finally become and remain

As a young professional, I have devoted a very large share of my working
life to working on the cause of reform and development in the Former Soviet
Union and most others on the JRL have a personal and/or professional stake
in Russia's future. If nothing else, we all have a humanitarian duty not to
stand by while Russia becomes the first semi-feudal state in Europe in over
a century where workers are effectively tied to their employer by chronic
non payment or payment in goods or below subsistence level salaries. It is
simply good politics to help develop democratic free market allies and
trading partners and IMF lending has to be a key part of this effort, but it
must be responsible, tracked and targeted lending. Lending that is more
than the transfer of public funds into the pockets of a favored few looking
to enrich themselves while they madly scramble to hold on to power.

As an invitation to discussion, is there a group or are there individuals
interested in working together to formulate and promote (at least partially)
self-sustaining, institutionalizable projects that receive tangible support
within Russia and can promote corporate, finance and securities law
enforcement indispensable to a viable and open market economy? Or are we
doomed to continue to suffer public funds wasted on projects with no
quantifiable performance standards and the IMF staggering through its varied
stages of anger, acceptance, denial, bargaining ...?


The Guardian (UK)
9 September 1999
[for personal use only]
Yeltsin may quit now 
Jonathan Steele in Moscow Don't be surprised if the Russian president plans 
an 'abrupt resignation'

It is November 7, the anniversary of the Bolshevik revolution of 1917. 
Russians wake up to the news that Lenin's body was removed from the mausoleum 
on Red Square during the night. Acting on a decree from President Boris 
Yeltsin, officials bundled the corpse into a coffin, and flew it to St 
Petersburg, where it was buried at dawn next to Lenin's mother. The Kremlin 
press secretary says an Orthodox priest officiated. 

As nationwide protests build, with the Communist party calling for marches in 
every town and hamlet to denounce the dastardly Yeltsin, the president goes 
on television to announce an even bigger sensation. The steam goes out of the 
protests before they have barely begun. "I am resigning as president, and am 
handing power to the prime minister, as the constitution demands," he tells a 
stunned Russian public. "My job is done. I have brought Russia democracy. The 
last symbol of communist rule is gone. It is time for a new generation to 
carry the baton." 

It sounds fanciful but, according to a one-time close confidant of Boris 
Yeltsin who still admires him and retains good contacts with the Kremlin, it 
is high on the list of departure scenarios which the president's advisers 
have drawn up. "Don't underestimate Yeltsin's continuing competition with 
Gorbachev. Gorbachev went down in history as the man who buried the iron 
curtain. Yeltsin wants to be remembered for burying communism," the source 

Rumours have been circulating in Moscow for weeks that Yeltsin might declare 
a state of emergency and try to cling on to power by cancelling the upcoming 
elections to parliament, or even the presidential ones due next summer. But 
that would destroy his reputation as a constitutional figure and condemn him 
to a life under virtual siege in the Kremlin. He would be denounced by every 
political movement of any note, including those who once supported him. He 
would be pilloried in the media, and might even face a mutiny from sections 
of the security forces. It would also guarantee that, when he eventually 
died, there would be revenge against his family. 

This is why the "abrupt resignation" option has been gaining ground as a 
preferable strategy. It would be in line with the constitution, and would 
wrong-foot the opposition. One version is that Yeltsin would do it by 
mid-September so that presidential elections, which have to be held within 
three months of any incumbent dying in office, resigning, or being impeached, 
could be held on the same day as those for parliament. This would make it 
hard for the likely contenders to get their acts together, since almost all 
have already declared as candidates for parliament. 

The recently appointed prime minister, Vladimir Putin, who becomes acting 
president if Yeltsin resigns, would have time to stamp himself in the public 
mind and get himself elected as president. 

For Yeltsin to resign in early November has even more advantages. With 
presidential polls in February under this option, Putin has even more time to 
become known. In either case, Putin would solve Yeltsin's most pressing 
worry. As acting president, he could issue a decree giving his predecessor 
legal immunity, just as Gerald Ford did when Richard Nixon resigned. 

Whichever theory is borne out, the basis for all of them is Yeltsin's 
unpredictability. It prevents him being a lame duck and keeps him in the full 
glare of attention, where he loves to be. In any other country a president 
who approaches the end of his term sees his power slip away. In Yeltsin's 
Russia this is not the case. 

The current scandal over allegations of money-laundering, the widely 
acknowledged corruption throughout the economy and the power of the financial 
oligarchs have highlighted the weaknesses in Russia's fledgling market 
system. Its politics are in equally poor shape, and even if Yeltsin ends his 
term constitutionally, the legacy of democracy which he will leave behind is 
feeble. The freedoms which Russia won under Gorbachev a decade ago have taken 
root as people accept them as normal and irreversible but Yeltsin has done 
nothing to strengthen them. 

The campaign for the Duma, now under way, shows how far Russia is from a 
clear party system. The Communist party is the only one with any regional 
branches in significant numbers, and even these are fading as the leadership 
becomes more Moscow-centred and accepts the pattern of campaigning, largely 
through radio and television. The other parties are small and dominated by a 
handful of strong personalities. Inflated male egos seem to make it 
impossible for Russian politicians to join forces with ideological allies. 

The electoral system, which borrows from Germany by requiring parties to get 
5% of the vote if they are to enter parliament, was meant to encourage the 
formation of large and stable parties. It has not yet worked. The election is 
being fought between a series of "blocks" which are merely alliances of 
convenience between various small parties and many of the blocks are likely 
to break up once their candidates get into parliament. 

Of course Yeltsin cannot be blamed for all this, but he did not help the 
process of forming a modern parliament when he created a constitution which 
gives MPs and parliament as a whole, a minimal role. He has snuffed out 
political debate by taking control of national television, and letting 
oligarchs buy most of the newspapers. 

In an ominous development, Yeltsin's press minister closed St Petersburg 
television down for two days last week because he did not like a political 
broadcast which criticised his friends. Modelling themselves on the Kremlin's 
overwhelming powers, Russia's regional rulers are turning themselves into 
feudal barons. Russian analysts call it "monopolism". In many places it is 
worse than what Yeltsin has done on a national scale. Once elected, governors 
crush any potential rivals by giving favours to local business, taking 
control of the media and, in the most lurid cases, using contract killers to 
threaten potential opponents with death. 

Republics such as Tatarstan and Bashkyria have gone back to being virtual 
one-party states. They do not even bother to have an ideology, as the Soviet 
communist party did. It is simply the "party in power". The process began in 
the republics which have presidents rather than governors, but is appearing 
in the Russian regions. There is increas ing evidence of fraud being used to 
swing elections. 

The best that can be said is that half the Russian parliament is elected in 
constituencies rather than on "block" lists. The absence of parties means 
that a high number, perhaps as many as 100, independents will be elected. 
This provides a chance for new views to be heard. 

Young Russians see little danger of the country reverting to the 
authoritarianism which Mikhail Gorbachev's reforms destroyed. Russia's 
frontiers are open to the world and you can say what you like. But the new 
generation takes it for granted that it will live in a country where 
corruption is pervasive and power remains unaccountable. 


Financial Times
9 September 1999
[for personal use only]
RUSSIA: Moscow elections brought forward 
By John Thornhill in Moscow

Moscow's city assembly yesterday brought forward mayoral elections by six 
months to December 19, prompting a flurry of speculation about President 
Boris Yeltsin's political intentions.

The move would appear to clear the way for Yuri Luzhkov, the capital's 
popular mayor, to retain his post and then run for the presidency in the 
summer of 2000 if he so desires. The new election date would coincide with 
elections to the Russian parliament, also set for December 19.

Had Mr Luzhkov's four-year term been left to run its full course until June 
next year, he would have been forced to choose between contesting either the 
presidential or the mayoral elections. The latest development has added grist 
to rumours that Mr Yeltsin might try to wrong-foot his opponents by resigning 
in the next few days and calling presidential elections for December 19 also.

Such a plan would give Vladimir Putin, the prime minister who has been chosen 
as Mr Yeltsin's preferred successor, three months in office as acting 
president to increase his popularity with the electorate. It would also 
discomfort Mr Luzhkov and force him to choose between running for mayor or 

However, Mr Putin yesterday dismissed the rumours as "strange, to say the 
least", while some political analysts were also sceptical. They argued it was 
inconceivable Mr Yeltsin would chose to relinquish power early and stake 
everything on the unlikely prospect of the lightweight Mr Putin winning the 

"This retirement scenario has been doing the rounds of Moscow but with all 
the scandals swirling around the country, it would be a particularly bad time 
to bow out," said one observer.

The growing wave of financial scandals overwhelming Russia has finally 
prompted a substantive response from the Kremlin. Igor Ivanov, foreign 
minister, said a top level Russian delegation would fly to the US on Monday 
to discuss allegations that criminal money had been laundered through the 
Bank of New York. The delegation will be headed by Sergei Ivanov, deputy head 
of the FSB, the domestic intelligence service.

Mr Luzhkov's move to run for Moscow mayor in December has been criticised by 
his opponents on the grounds that he had committed to a four-year term when 


The Times (UK)
September 9 1999
[for personal use only]
Russiagate boosts Luzhkov 
>From their own correspondent: Franco Venturini of Corriere della Sera 

Why have the Russian corruption affairs exploded only now, given that 
everyone has known about the activities of the Russian kleptocracy for years? 

One might claim that judicial investigations have their own rhythm and that 
the proofs of corruption are only now coming out. But in Moscow, no one takes 
the simplest explanation to be the right one. In reality, the storm of 
scandals now battering at Yeltsin's door is intended to marginalise the 
non-reformed Communists who control the Duma, and to place in the hands of a 
"new centre", composed of Yuri Luzhkov and Yevgeni Primakov , the task of 
stabilising this crazy giant of a country. 

For Russia, as for the West, Tsar Boris is not merely a card which has been 
dealt, his presence has become positively dangerous. He gives the process of 
financial globalisation a bad name, he is putting tens of thousands of 
nuclear warheads into a state of general insecurity, and he can be "used" 
better now before the election campaign in a certain another country gets 
under way (any reference to America is entirely intentional). 

So it is just as well to turn the tables now, rather than wait passively for 
the next ten months until the Russian presidential elections, and to rely on 
a newly elected Duma in December to make the subsequent scramble for the 
Kremlin less explosive. 

Russian politics has become an open war between two sections of the KGB: 
Vladimir Putin's men , who are loyal to Yeltsin, against Primakov's men who 
are also close to Luzhkov. The campaign for the dual poll in December 
(parliamentary elections) and July (presidential elections) is thus turning 
into a contest between skeletons in the cupboards and compromising judicial 
dossiers. It coincides with the simultaneous race for the White House. This 
is a dangerous scenario for Russia and an unacceptable one for America, 
people say in Moscow. 

The Communist Party led by Gennadi Zyuganov is likely to play a determining 
role in these elections. Zyuganov may not succeed in winning the presidential 
election but he might get through the first round. Can the future of Russia 
be allowed to depend on a paleo-ideological Communist Party, given that 
Russia is the world's second largest producer of oil and the biggest producer 
of gas, and just when the battle for the black gold of the Caspian Sea and 
its distribution routes is getting under way? The answer of those Muscovites 
who think about such things, needless to say, is no. 

The only credible alternative seems to be the "new centre" alliance between 
Primakov, Luzhkov and the regional governors. It is therefore imperative to 
ensure that Zyuganov does not win the parliamentary elections in December and 
that he loses control of the Duma. 

This brings us to the present story. To weaken Yeltsin it is necessary to 
strengthen the Fatherland-All Russia party which Primakov and Luzhkov have 
founded. It is also necessary to exploit the continuing embarrassment of 
Zyuganov at his failure to impeach Yeltsin in the Duma and thereby to attract 
the protest vote against both poverty and the worldwide humiliation these 
scandals have brought. If in December the influence of the Communists emerges 
weakened, the path to the Kremlin will thus be easier for forces which are 
neither extremist nor (for the time being, anyway) tainted by scandal. In 
other words, Russiagate will have been useful for everyone. 


Corruption in Russia Bringing Human Rights Abuses, Report Says

Washington, September 8 (Bloomberg) -- Murder for 
hire, torture, and Internet spying are among the human rights abuses that are 
increasing in Russia, according to a new report from a group of humanitarian 

These groups conclude that deep-rooted corruption is causing wide 
humanitarian abuses -- abuses that are ``inter-related'' to allegations of 
money laundering there, a leader from one of those human rights monitoring 
organizations said. 

Russia shouldn't ``reasonably expect continued economic assistance, by 
governments, international banks, or private enterprise unless and until it 
takes credible steps toward serious reform,'' said Micah Naftalin, national 
director of the Union of Councils of Soviet Jews. 

The annual human rights report, issued to the U.S. Congressional Commission 
on Security and Cooperation in Europe, comes as Russia faces heightened 
scrutiny because of allegations of participation in a $10 billion 
money-laundering scheme. 

U.S. law enforcement authorities are looking at whether illegally obtained 
funds were circulated through the Bank of New York by associates of a Russian 
crime syndicate, and whether aid from the International Monetary Fund was 
caught up in this money- laundering scheme. 

Widespread corruption in Russia, which is viewed as the cause of any 
potential financial scandal there, was cited by human rights monitoring 
groups as the source of rampant humanitarian abuses. 

``The entire system of power is not only ignorant but also corrupt from top 
to bottom,'' said Ludmilla Alexeeva, chairman of the Moscow Helsinki Group. 
``Laws are not carried into life, and citizens' constitutional rights are 
constantly violated by officials of all power levels.'' 

Abuses Specified 

Some of the human rights abuses highlighted by monitoring groups include: 

-- Torture, especially in pre-trial, investigative isolation wards. Torture 
and pre-trial incarceration are the refuge of incompetent and corrupt 
policing and investigating, Naftalin said. Reports of increased torture are 
contributing to a ``near- total breakdown'' in public confidence and a fear 
of the police in Russia. 

``The regional reports are practically overflowing with the facts of beatings 
at the militia-stations... about false confessions being literally beaten out 
of people and about court decrees made on the foundation of such 
confessions,'' Alexeeva said. 

-- A willingness to eavesdrop on personal and commercial telephone, e-mail, 
fax and Internet communications. National security has been the official 
justification for this, Naftalin said. 

-- Habitual murder for hire, a phenomenon which is still new for Russia. 
``Judging by the actions of the criminals and the line of business of their 
victims, it is possible to say that the assassinations of Russia are 
connected with struggles for power in political and economic structures,'' 
the report concludes. 

The annual human rights report to the Congressional commission was developed 
in response to Russian President Boris Yeltsin 's 1996 decision to establish 
an official network of regional human rights organizations. 

In addition to the Moscow Helsinki Group and the Union of Councils for Soviet 
Jews, the Human Rights Institute and 30 human rights non-government 
organizations in the Russian region contributed to the report. 


Date: Wed, 08 Sep 1999
From: Alastair Renfrew <> 
Subject: New book: The Russian Language Today


The Russian Language Today, Larissa Ryazanova-Clarke (University of 
Edinburgh) and Terence Wade (University of Strathclyde). Routledge. 1999. 
384 pp. GBP18.99/GBP60. 

This book is the first major analysis in English of recent dramatic 
developments in the Russian language and provides the most up-to-date 
guide to the contemporary language. 

The authors focus on radical changes in Russian vocabulary and the plethora 
of new words that have entered the language, mainly from American English 
-- especially in the field of business and economics, but also in technology, 
the mass media, fashion, sport and life-style. There are also substantial 
chapters on developments in grammar, word formation procedures, name 
changes and the present state of the Russian language. 

Supported throughout by extracts from contemporary and literary sources, 
this is an essential text for all students and teachers of the Russian

‘The publication of the book is an important event. It will be essential 
reading for all those interested in this topic.’ 
-Professor V.G. Kostomarov, Rector, Pushkin Russian Language Institute, 

‘This is a marvellous and much-needed contribution.’ 
-Professor J. Ian Press, University of St Andrews 

‘An extremely useful book ... for both students and teachers -- indeed 
everybody who is interested in how language reacts to political, 
economic and social changes during this transitional period in Russia.’ 

-Svetlana le Fleming, University of Northumbria. 

INSPECTION COPIES available from Sarah Pocklington, Inspection 
Copies Requests, Routledge, 11 New Fetter Lane, London EC4P 4EE or 
fax 0171 842 2306. E-mail: sarah or visit 
internet site: Queries to 0171 842 2241. 


Date: Wed, 08 Sep 1999
From: Neil Munro <> 
Subject: Russian Elections


If you want up to date information about what Russian electors are
thinking, you can find it at a new Website of VCIOM, Moscow, and the
Centre for the Study of Public Policy. It gives full details of the
latest VCIOM public opinion poll from August and trends in public
opinion too. Since nothing is ever simple in Russia, the website links
public opinion data to the way in which the electoral system converts
popular preferences into public office.

If you want to see more, click on:

Comments and suggestions about the site are very welcome, as we will
continue to develop it in the run up to the Duma and presidential

Professor Richard Rose, CSPP

Neil Munro, Centre for the Study of Public Policy, U. Strathclyde,
Glasgow G1 1XH,
Scotland WWW:


New York Times
September 8, 1999
[for personal use only]
Calling the I.M.F. to Acccount
Jeffrey D. Sachs is the director of the Center for International Development 
at Harvard and serves as an economic adviser to many developing nations. From 
December 1991 to January 1994, he advised the Russian Government. 

CAMBRIDGE, Mass. -- Treasury Secretary Lawrence Summers has wisely called for 
a review of International Monetary Fund lending to Russia before any more 
money is wasted. The I.M.F. programs have been a failure -- a mix of 
incompetence and neglect of Russia's sordid corruption. 

Here are some questions that the Treasury Secretary and Congress should have 
answers to before we proceed with any more lending. 

First, why did the I.M.F. turn a blind eye to the transfer of oil and gas 
companies to cronies of the Russian Government? It was widely reported, for 
example, that a huge stake in Gazprom, the Russian natural gas monopoly, was 
given away during 1994-95 to associates of Viktor Chernomyrdin, then Prime 
Minister, at a cost of billions (or even tens of billions) of dollars to the 
Russian Government. 

Billions more were effectively given away, in full public view, in 1995 in 
equally crass "loans for shares" deals mainly involving oil companies. Why 
didn't the reports -- in the Russian press as well as the American press -- 
on these questionable deals appear to prompt any soul searching by the I.M.F. 
as it shoveled billions of dollars to Russia at the same time, and as it 
fulsomely praised Mr. Chernomyrdin as a friendly partner in reform? 

Second, have the I.M.F. or other agencies looked into other allegations of 
high-level corruption? For example, Switzerland is investigating accusations 
by Russian prosecutors about possible kickback payments from a Swiss 
construction company, Mabetex, to Kremlin officials to get Russian contracts. 

Third, why did the I.M.F. lend $11.2 billion to Russia in July 1998, on the 
eve of the country's currency collapse? Much of that money ended up abroad, 
squandered in a useless defense of an overvalued currency. According to the 
terms of that loan, Russia's reserves were to rise by several billion 
dollars. In fact, the reserves fell far short of the target, reflecting huge 
capital flight. Was the loan at the behest of top Russian insiders? Or of 
American investors, eager to escape the losses of an inevitable devaluation? 
Or simply a reflection of another I.M.F. misjudgment? 

Fourth, why haven't the I.M.F.'s member governments called for an external 
review of the effectiveness of the fund's lending program in Russia? After 
all, the I.M.F. made huge mistakes from the very start of its involvement in 
1991. Consider just one example. The fund was deeply misguided in delaying 
the introduction of a new Russian currency after the collapse of the Soviet 
Union. That mistake delayed the end of Russia's high inflation, angering the 
public and helping to lead to the dismissal of reformers from the Russian 
Government at the end of 1992. Ancient history, one might say, except that 
the official in charge of the I.M.F.'s Russia program in 1992, John 
Odling-Smee, is still in charge today. 

Fifth, how can we rely on an organization that fails to make structural 
changes after a decade of continuing failure? For example, the I.M.F.'s 
executive board is supposedly the agency's watchdog, but it is fed documents 
prepared by the fund's staff itself and thus has incomplete information. 

The I.M.F., of course, wants to limit any review to a narrow question: was 
its own money misused by the Russian central bank? Officials say that an 
investigation the I.M.F. began Monday is unrelated to allegations that 
Russians illegally diverted I.M.F. money through the Bank of New York. 

The Treasury Secretary and Congress should insist on a much broader review. 
The I.M.F. programs have failed -- at an enormous cost to the Russian people 
and ultimately to global security. 

Many types of foreign institutions involved in Russia have faced the issue of 
corruption. In 1995, more than a year after I resigned as an adviser to 
Russia, I became director of a university program involving dozens of 
overseas advisory activities, including an ongoing project in Russia. When I 
received information concerning the probity of individuals involved in the 
Russia project, I quickly closed it down. When there is even a hint of 
corruption, it is important to move rapidly and openly. 

Russian reform was always going to be against the odds. The Soviet system 
left the people impoverished, divided, confused and victimized by systematic 
cruelty and corruption. The Russian Government, especially after reformers 
were pushed out of real power in 1992 and 1993, has been dominated by 
recycled Communists, including spymasters like Yevgeny Primakov, the former 
Prime Minister. 

Western policy, to be sure, has had notable successes: Russia has remained 
peaceful vis-à-vis the rest of the world, and the country is much freer today 
than at any other time in its history. 

The Clinton Administration shares credit for these outcomes. But the turmoil 
in Russia and the unnecessary costs to this generation of Russians have been 
enormous; the dangers are still great. The West could have done much more to 
raise the chances for successful reforms. 



Return to CDI's Home Page  I  Return to CDI's Library