September 16, 1999   
This Date's Issues: 3502 • 3503 • 3504

Johnson's Russia List
#3503
16 September 1999
davidjohnson@erols.com

[Note from David Johnson:
1. Reuters: Oleg Shchedrov, Bombs put pressure on Yeltsin, Putin.
2. Itar-Tass: Parliament Envoy Skeptical about YELTSIN'S Resignation.
3. The Moscow Tribune: John Helmer, NEW TERROR, PURE TERROR.
4. Reuters: Julie Tolkacheva, Russia auditor says IMF cash used legally.
5. AP: Greg Myre, Russians: No Bank Evidence Produced.
6. The Times (UK): Giles Whittell, IMF loan 'led to collapse of the rouble'
7. Financial Times (UK) letter from Alexander Voloshin, Slander that stains 
the country's image.
8. Itar-Tass: Yeltsin Orders Ivanov to Uphold RUSSIA'S Prestige.
9. Kevin McElwee: Translating "provokatsiya"
10. Boston Globe: David Filipov, Moscow's usual suspects. Answering blasts, 
police descend on dark-skinned.
11. New York Times: Michael Wines, The Kremlin's Keeper, the World at His 
Fingertips, Is Under a Cloud. (Pavel Borodin)]

*******

#1
ANALYSIS-Bombs put pressure on Yeltsin, Putin
By Oleg Shchedrov

MOSCOW, Sept 16 (Reuters) - The bombs which have killed more than 250 people 
and an Islamic rebellion in Russia's North Caucasus have raised new questions 
in Moscow about President Boris Yeltsin's future. 

Some influential politicians have suggested that Yeltsin, who no longer 
manages Russia day to day because of his poor health, should make way for a 
more effective leader. Others say this would ruin what is left of Russia's 
stability. 

Either way, the linked crises have cast a shadow over Prime Minister Vladimir 
Putin. Russian media have said his inability to stop the violence could be 
used as a pretext to ditch him only weeks after Yeltsin named him as his 
preferred successor. 

The latest rumours have homed in mostly on Yeltsin. 

The New York Times, in an interview published on Thursday, quoted the head of 
the Federation Council upper house of parliament, Yegor Stroyev, as urging 
Yeltsin to resign. 

``If Yeltsin left today, it would be better for the people and political 
parties, and it would be better for him too,'' the newspaper quoted him as 
saying. 

Stroyev, who chairs an extraordinary session of the chamber on Friday, hinted 
to reporters that some of his words might have been misunderstood, but 
stopped short of a direct denial. 

``This is not my article, this an article of the correspondent who wrote 
it,'' he said. ``It is the right of the president and no one else to decide 
whether to resign early.'' 

ANYTHING IS POSSIBLE 

Asked whether the Federation Council, which brings together regional bosses 
and has so far kept out of political squabbling, would consider asking 
Yeltsin to resign, Stroyev answered: ``Anything is possible at the session.'' 

Parliament, which also includes the State Duma lower house, has no legal 
instruments to force the president to resign. A Duma attempt to impeach 
Yeltsin earlier this year failed. 

Putin has said fighting in the southern region of Dagestan and the blasts, 
which the authorities blame on warlords from the breakaway region of 
Chechnya, made Yeltsin's departure unlikely. 

``The Soviet people would not have understood anyone who dared to urge the 
resignation of (dictator Josef) Stalin days after Nazi troops invaded the 
country in June 1941,'' he said in televised comments earlier this week. 

RIA news agency quoted a senior member of the Federation Council, Sergei 
Sobyanin, as saying Yeltsin's early departure would trigger a full-scale 
political and economic crisis undermining hopes for a first electoral 
transition of power. 

But some market analysts were not convinced, saying Yeltsin's resignation 
could be good news for economy. 

``Investors feel that early presidential elections would finally bring about 
much-awaited reforms,'' UFG salesman Michael Stein said. 

KREMLIN HAS DENIED YELTSIN TO RESIGN 

The Kremlin has more than once denied that Yeltsin plans to resign and said 
he would serve his full last term to mid-2000. 

But political analysts have said some members of Yeltsin's immediate 
entourage, known as ``The Family,'' believed his resignation by mid-September 
at the latest was the only way to help a Kremlin-backed candidate to win the 
next presidency. 

Yeltsin has named Putin as his choice for president, but even Kremlin aides 
say the little-known former head of the FSB domestic security service has 
little chance to challenge other heavyweights in the polls. 

Early presidential polls would disrupt the plans of the Kremlin's key 
opponents: former Prime Minister Yevgeny Primakov and Moscow Mayor Yuri 
Luzhkov, undermining the union of two ambitious leaders formed ahead of Duma 
election in December. 

Under Russian election rules a bloc uniting Primakov and Luzhkov would be 
thrown out of the parliamentary race if presidential polls were held early 
and they decided to run. 

According to another unsubstantiated Duma rumour, Yeltsin could retreat to 
hospital on Monday, replacing Putin with maverick Krasnoyarsk governor 
Alexander Lebed, who helped him to win re-election in 1996. Under this 
version, Lebed would later become acting president. 

Lebed, who has been at odds with the Kremlin lately, dropped plans to run for 
parliament earlier this week, hinting he was aspiring to higher things. He 
has better ratings than Putin. 

Some Kremlin aides have said privately Yeltsin also persuaded liberal Anatoly 
Chubais, who now heads electricity utility UES, to return to the Kremlin as 
his chief of staff. 

Several previous Kremlin comebacks by Chubais, known as a tough crisis 
manager, have been followed by major political upheavals. Sources in 
Chubais's political party could not confirm his return to the Kremlin. 

The Kremlin press office could not be immediately contacted for comment on 
the latest rumours. 

Nevertheless there are few in Russia ready to believe Yeltsin could agree to 
go. 

``Anything is possible in Russia,'' the newspaper Obshchaya Gazeta said. 
``Except for Yeltsin's voluntary resignation.'' 

********

#2
Parliament Envoy Skeptical about YELTSIN'S Resignation.

MOSCOW, September 16 (Itar-Tass) - The presidential envoy at Russia's State 
Duma lower house of parliament, Alexander Kotenkov, said on Thursday there 
are no possibilities for early resignation of the head of the state. 

"I don't see the real possibility for the president's ahead of schedule 
resignation," Kotenkov told Itar-Tass, emphasizing that under the 
Constitution, such a decision can only be made by the president. 

The parliament has nothing to do with the resignation procedure, except 
impeachment, he said, adding that the bid to oust Yeltsin failed in May. 

Yeltsin therefore can resign due to political or health reasons, while all 
other efforts by politicians of various ranks only remain vain attempts, 
Kotenkov said when commenting on the rumours on the president's resignation. 

At the same time, the envoy noted that these rumours always have negative 
influence, as they do not help stabilize the political situation in the 
country and cause enormous damage to Russia's economy. 

******

#3
Date: Thu, 16 Sep 1999 
From: helmer@glasnet.ru (John Helmer)

>From The Moscow Tribune, September 17, 1999
NEW TERROR, PURE TERROR
John Helmer

Bombs aimed at killing innocent civilians are not new in Russia, whether
dropped from the air, or detonated on the ground.

But the evidence of the three latest blasts in Moscow and Rostov-on-Don --
incomplete and uncertain though it is -- suggests there are newer,
grandiose ambitions at work. 

Nothing in this evidence so far suggests a conspiracy of Kremlin
power-holders, or power-seekers, to stage a putsch in steps; although the
scenario-writers on both sides of the Kremlin wall have been looking
to capitalize on the events, if they can, and if they dare.

Triggering open fighting between security forces loyal to opposing
political factions in Moscow looks to be one of the grandiose motives
in the bombers' minds.

The two Moscow apartment blasts on September 9 and 13, and the Rostov
bomb on Thursday morning, involved transporting and stocking large volumes 
of explosive. They required professional assembly over a lengthy period of 
time, with great secrecy and methodical security. 

Preparing the explosive appears in the Moscow cases to have been the work of 
individuals who rented spaces in the two buildings many weeks ago, 
perhaps as long as six months before. One individual's name has allegedly
been associated with both rentals. 

Initial reports from Rostov suggest a similar pattern of pre-stocking of 
explosive. 

Although bombings of railway stations, rail carriages, cars, and market-places
have been organized outside the Caucasus before, and attributed to Chechen
or clan warfare from that region, none is comparable to the latest modus 
operandi. 

The August 31 bombing of a video-game arcade in the Manezh mall in Moscow 
was almost certainly not a terrorist act of the same design. Like the
earlier bombing this year at Moscow's Intourist Hotel, the evidence suggests 
it was motivated either by a conflict over business, or by factors and 
individuals unconnected to the building attacks that have followed.

Shamil Basayev, the Chechen leader of the recent Dagestan
attacks, is quoted in a recent interview as telling the Czech publication
"Lidove Noviny": "The latest Moscow blast in Moscow is not our work, but 
that of the Dagestanis." This makes a distinction between himself and Khatab,
the Saudi-born fighter who is married to a Dagestani woman; lives in Chechnya;
and is also engaged in the Dagestan campaign. Khatab, in turn,
has been connected by press reports to Osama bin Laden, the Saudi terrorist 
responsible for building bomb attacks on American targets. Despite Khatab's 
denials of responsibility for the Moscow bombings, the operations appear
to be associated with him, his group, or his associates.

Whether he and Basayev have an accommodation on tactics isn't known, and
nothing they say can be taken at face value.

What can be said more confidently is that the planning of the building bomb 
attacks started long before Basayev and Khatab attacked Dagestan. 

Referring to the Russian counter-attacks on Dagestan territory, Basayev
claimed "the time has come when we shall have to settle all our accounts
with Russia." He makes it appear the urban bombing campaign now under way
is an act of revenge in a widening war, triggered by Russian military
tactics.

It is more likely Basayev meant the reverse of what he said. In that
case, the attacks in Dagestan were designed as the preliminary to the 
bombings. What Basayev, Khatab and their men think they are doing is nothing 
less than launching a Russia-wide war to destroy the state, and in the ruins
create their own.

"There is no government in Russia now with which it would be possible to
negotiate," Basayev said in his Czech interview. "The state in effect does 
not exist. The only thing which is left is the police apparatus."

This should be interpreted as the outcome Basayev, Khatab and the others
hope their bombing campaign will demonstrate.

To suggest, as Russian commentaries have done, that bombing isn't the Chechen
style, has led to speculation that the political beneficiaries of
the terror may be the sources of it. Thus, there are suggestions
of complicity or worse on the part of Russian security units loyal to the
Kremlin; or by Boris Berezovsky and Alexander Lebed.

Lebed's claim to be the only man in Russia to be able to negotiate an end to 
this violence is no more grandiose than he usually is -- and no more credible 
than his record at resolving much tamer conflicts in his Krasnoyarsk region.

Lebed's is not the only ambition to have been set on fire by the
bombings. Grigory Yavlinsky, the centrist parliamentary leader, and Sergei 
Stepashin, the ex-prime minister, have made an equally
strong pitch for themselves to replace Prime Minister Vladimir Putin.
Moscow Mayor Yury Luzhkov has moved to show that, if a state of
emergency is introduced, he will be the one to regulate its terms
in the capital.

The outcome is that the balance of power between President Boris Yeltsin and
his opponents, and between the Kremlin, the Duma, and the regional governors,
has hardly shifted. Yeltsin is receiving much of the popular
blame for starting the Chechen violence in the first place. Former prime
minister Yevgeny Primakov continues to lead the presidential election polls. 

These trends were evidently unnerving Yeltsin and his advisors before
the bombing started. That does not mean they launched the bombings
as a desperation measure.

It appears more likely that the bombing campaign, which can be expected to 
continue in other cities around Russia, is pure terror, with no
negotiable objectives. It is motivated by individuals who believe
that by killing large numbers of people, and defying the security services, 
they can destroy the Russian state entirely. Once that is accomplished, 
their grandiose ambition is to create their version of an Islamic state
headquarted in the Caucasus.

What the Russian government can do to limit the likelihood of the next 
attack is small, unless the police are lucky, and the attackers make 
mistakes. Since their bombs are probably already in place, all they need to 
do is to despatch another midnight signal, and the next bomb will detonate. 

Document checks and heightened perimeter and building security will protect 
locations the attackers do not plan to hit. Building inspections in one city 
won't protect another.

Rising frustration and anger directed at Caucasians, already
obvious in the streets, can be expected to fuel the very social 
disintegration which the terror campaigners are counting on. 

The factional political conflicts inside the Kremlin and government, the 
opposition from parliament, and fights between the oligarchs, will further
disrupt central authority. Bloodthirsty suspicion will multiply everywhere.

Prime Minister Putin's statement this week to the Duma declaring
an end to the Khasavyurt accords (which halted the Chechen war in 1996) 
indicates, first of all, that Putin is confident Yeltsin will not 
return Lebed, the Khasavyurt negotiator, to power. 

Secondly, Putin appears to be endorsing the military policy of isolating 
Chechnya, and Chechens (or Caucasians) everywhere in Russia, as the primary
security policy the government will pursue. Of course, this plays into the 
hands of the terrorists, because it antagonizes the Caucasian populations 
throughout Russia. It encourages copy-cat violence and fresh acts of 
rebellion. It fails to halt the bombings, thereby demonstrating the
impotence of the security forces and the government standing behind them.

This is a policy for bringing about the worst of all possible
worlds, driven by men as mad with power as those who have ruled Russia
for the past eight years.

******

#4
INTERVIEW-Russia auditor says IMF cash used legally
By Julie Tolkacheva

MOSCOW, Sept 15 (Reuters) - Russia's Audit Chamber, which investigates the 
use of public funds, has no evidence that an International Monetary Fund loan 
to the country last year was misappropriated, an Audit Chamber official said 
on Wednesday. 

Russia received a $4.8 billion loan from the IMF in July, 1998, which, unlike 
previous funds, went not to the finance ministry but mostly to the central 
bank to support the rouble. 

"If we speak from the point of view of the law, this is all legal," auditor 
Eleonora Mitrofanova told Reuters in an interview against a background of 
fresh allegations that IMF loans to Russia may have been misused or spirited 
abroad. 

Mitrofanova said the central bank, whose use of reserves is now being 
examined by IMF experts and international accountants PricewaterhouseCoopers, 
sold much of last year's IMF loan to commercial banks. 

"It was legal, but absolutely ineffective," she said. 

IT DIDN'T HELP ROUBLE 

The rouble crashed anyway in the August economic crisis just weeks after the 
loan was disbursed. 

The Audit Chamber, acting on a request from the Prosecutor General's Office, 
launched its investigation into the central bank this year after a 
parliamentarian suggested not all of the IMF money may have reached Russia. 

The prosecutor's office also alleged that central bank reserves had been 
managed by an obscure offshore subsidiary called Financial Management Co 
(FIMACO) in the Channel Islands. 

The central bank denied any wrongdoing, and a report by international 
accountants PricewaterhouseCoopers showed nothing illegal. But the IMF said 
Russia had misreported reserve data in 1996 as a result of the central bank's 
use of FIMACO. 

PricewaterhouseCoopers is expected to make another report on the central 
bank's handling of funds before the IMF approves the next tranche of a $4.5 
billion loan approved in July. 

The Audit Chamber's investigation finished in mid-June, before a scandal 
erupted last month over alleged Russian money-laundering through the Bank of 
New York <BK.N>. 

U.S. authorities are investigating the suspected laundering, which newspapers 
say may have included IMF cash. 

The Bank of New York is cooperating with the investigation and no one has 
been charged with any wrongdoing. The IMF says it, too, is investigating but 
it has no evidence of its loans being involved. 

The Audit Chamber, which answers to the State Duma lower house of parliament, 
said it checked on whether money went abroad from central bank accounts and 
on how the central bank used its reserves. 

MONEY WENT TO COMMERCIAL BANKS 

The Audit Chamber report on last year's loan showed that, out of the $4.5 
billion, the finance ministry received $1.0 billion for current budget 
expenses, a move which the IMF did not object to. 

Mitrofanova said an exact check on how the central bank had used the 
remaining $3.5 billion was impossible, because the money was mixed in with 
the rest of the bank's reserves. 

The investigation showed the central bank sold $10.7 billion from the end of 
July, 1998, until December, to commercial banks as it tried to prop up the 
rouble. 

"Something bad could have started only after the money was sold to commercial 
banks, but this is not IMF money any more," Mitrofanova said, adding some of 
the banks were already deeply in trouble. 

The central bank sold $3.4 billion through exchanges, while most of the 
funds, $7.3 billion, were sold directly to commercial banks. 

"It is clear that the money fled the country. It is clear that all the 
country took money abroad during that period," Mitrofanova said. 

She doubted Russia could stem capital flight without tackling its causes. 
"For as long as the current political situation, the tax regime and the 
feeling of psychological instability exists, we shall be tilting at 
windmills." 

******

#5
Russians: No Bank Evidence Produced
September 16, 1999
By GREG MYRE

MOSCOW (AP) - Russian investigators visiting the United States and Britain 
say those countries have not produced any evidence of an alleged Russian 
money laundering scheme at a U.S. bank, according to reports today.

President Boris Yeltsin's government has been on the defensive following 
media reports that Russians were allegedly involved in laundering up to $10 
billion through the Bank of New York. The reports have also said that the 
Russian government may have mishandled money loaned by the International 
Monetary Fund.

The reports have described it as potentially one of the biggest money 
laundering cases ever uncovered in the United States. However, no one has 
been charged, and U.S. and British authorities have refused to discuss their 
investigations.

A Russian delegation, led by Viktor Ivanov, deputy director of the Federal 
Security Service, the country's main security agency, has been meeting with 
U.S. officials this week in Washington to study the case, but they have 
received little information, according to the ITAR-Tass news agency.

``U.S. law enforcement agencies did not show any documents that could confirm 
reports on the Bank of New York case,'' Ivanov was quoted as saying in 
Washington.

``We came to the United States hoping to see the documents which are cited by 
the mass media,'' he added. ``Many newspapers make references to reliable 
sources at the FBI, the Department of the Treasury or other institutions. I 
feel obliged to say that the information obtained from those `sources' has 
not been confirmed in any way.''

Russia is riddled with corruption, and capital flight from the country, both 
legal and illegal, has contributed to the economy's abysmal performance.

Russian authorities have agreed to cooperate with the United States, Britain 
and other countries, but have shown no real enthusiasm for conducting their 
own investigation. The Russians have mostly called on the Western countries 
to provide proof of any wrongdoing.

Meanwhile, Russian Finance Minister Mikhail Kasyanov said in London that the 
allegations were part of a campaign to discredit Russia.

``We are ourselves deeply interested in exposing the facts of illegal capital 
outflow of Russia or bringing to light the business activities which violate 
world financial legislation,'' the finance minister told ITAR-Tass.

But he added, ``not a single fact vouching for Russian companies' involvement 
in illegal transactions has been cited.''

Kasyanov was in London for talks on restructuring Soviet-era foreign debt 
that Russia cannot afford to repay.

Russia's Foreign Minister Igor Ivanov criticized reporting by the Western 
media today and said he would defend Russia at the upcoming U.N. General 
Assembly session.

The U.S. House of Representatives' Banking Committee plans hearings next week 
on the alleged money-laundering scheme. The U.S. Senate Foreign Relations 
Committee also plans to hold hearings soon, with topics to include corruption 
in Russia.

******

#6
The Times (UK)
16 September 1999
[for personal use only]
IMF loan 'led to collapse of the rouble'
FROM GILES WHITTELL IN MOSCOW

A MULTIBILLION-dollar IMF loan that was meant to prop up the rouble only 
hastened its collapse, according to new information from Russia's former 
Prosecutor-General. 

It was the first concrete allegation from within Russia to support those that 
have deepened Western mistrust of the country's elite since last month. $3.9 
billion (£2.4 billion) of a $4.8 billion IMF loan transferred Russia's 
central bank in July last year never reached Moscow, Yuri Skuratov said in an 
interview published yesterday. 

The money was transferred instead to accounts at the Bank of New York held by 
18 Russian commercial banks that helped to precipitate Moscow's financial 
crash with heavy selling of Russian Treasury bills, he alleged. American 
investigators claim that up to $10 billion of Russian aid and mafia money has 
been laundered through the Bank of New York. 

In an attack on President Yeltsin, Mr Skuratov also said he had written a 
memorandum setting out in detail the fate of the doomed loan, but that the 
President had never read it. Mr Skuratov was forced to resign in February 
after opening an investigation into alleged payments to the Yeltsin family by 
a Swiss firm in return for Kremlin building contracts. The latest allegations 
come amid further potential embarassment for the Yeltsin administration: The 
New York Times reported that Swiss authorities have searched the offices of 
two firms suspected of helping Boris Berezovsky, the oil and media magnate, 
to move hundreds of millions of dollars of Aeroflot earnings into Swiss bank 
accounts. 

Mr Berezovsky is a member of the President's inner circle and Aeroflot's 
president is Valeri Okulov, Mr Yeltsin's son-in-law. The Aeroflot affair has 
been a headache for the colourful Mr Berezovsky for months, but Mr Skuratov's 
claims about misused IMF money may prove the more damaging for Russia. 

The $4.8 billion loan, part of a much larger IMF bailout package, was meant 
to help Russia's central bank to support the rouble through large-scale 
intervention in Moscow's money markets. In fact only $417 million was traded 
openly, the rest being sold to the 18 private banks at advantageous rates, Mr 
Skuratov told The Moscow Times. He named two of the banks as Uneximbank and 
SBS-Agro. 

His remarks will support what has become conventional wisdom in Moscow's 
Western banking community despite fierce denials from Russian officials - 
that private banks and privileged individuals frantically sold short-term 
Treasury bills known as GKOs in the weeks before last year's crash because of 
inside information that the Central Bank was about to default on the GKOs. It 
did, and the crash followed. 

The Russian Central Bank has claimed it is common practice to intervene on 
currency markets through inter-bank transfers rather than open trading. One 
Western analyst agreed yesterday that this might be true elsewhere, but not 
in Russia, where the credibility of the banking system was already in tatters 
six months before the crash. 

******

#7
Financial Times (UK)
14 September 1999
Letter
RUSSIA: Slander that stains the country's image 

>From Mr A. Voloshin. 

Sir, 

A number of mass media have recently unleashed an unprecedented campaign 
designed to discredit the Russian Federation and the president of the Russian 
Federation as head of state and as an individual. The aim of the slanderous 
accusations is to link the president and his close relatives to some invented 
"financial scandal", to stain the image of Russia in the eyes of the 
international community. We have to state with regret that the 
above-mentioned material has also been published in your newspaper.

The administration of the president of the Russian Federation does not 
comment on false and filthy fabrications. But taking into account the scale 
of this campaign, we call on you to consider thoroughly all the consequences 
of such action.

We are convinced that all ill-intentioned accusations against the president 
of the Russian Federation are of an exclusively political nature. This means 
that all attempts to link the name of Boris Yeltsin to the so-called 
"financial scandal" constitute a political provocation.

We urge you, as editor of the Financial Times, to bear in mind that in order 
to defend the honour of the president of the Russian Federation and put an 
end to the campaign of slander, damaging the reputation of our country, the 
administration of the president of the Russian Federation is prepared to use 
all the force of international law. The flood of lies should be stopped.

Fighting corruption and defending democracy and rule of law remain the 
priorities for the president of the Russian Federation. Nothing can distract 
him from pursuing these objectives.

A. Voloshin, 
head of the administration of the president of the Russian Federation, 
67 Kensington Palace Gardens, 
London W8 4QP, 
UK

******

#8
Yeltsin Orders Ivanov to Uphold RUSSIA'S Prestige.

MOSCOW, September 16 (Itar-Tass) - President Boris Yeltsin has ordered 
Russian Foreign Minister Igor Ivanov to prevent separate publications from 
throwing a shadow on Russia. 

Ivanov told journalists about this presidential instruction immediately after 
his Thursday meeting with the head of the Russian state. 

The minister said that "the president ordered him to actively explain at the 
upcoming session of the U.N. General Assembly what was actually happening in 
the country in connection with some publications that had lately appeared in 
the West". Apparently having in view the publication about the scandal around 
the "Bank of New York", he noted that the Russian president believed "these 
publications should not be allowed to throw a shadow on Russia, on Russia's 
relations with other countries". According to Ivanov, Boris Yeltsin had 
ordered him "to exert active efforts to prevent this". The minister said the 
Russian authorities were "ready to check any facts" that were adduced in the 
said publications. 

The Russian foreign minister said that he was planning to meet 
representatives from the New York Times during his visit to New York. 

He informed journalists that he would take the floor during the meeting of 
the U.N. Security Council, which is to be held in the course of the General 
Assembly session. His speech will be devoted to international relations. 
Moreover, Ivanov said that he would hold about forty bilateral meetings with 
the foreign ministers of other countries in the course of the session of the 
U.N. General Assembly. 

******

#9
From: Kevin McElwee <exile.op_ed@matrix.ru>
Subject: Translating "provokatsiya"
Date: Thu, 16 Sep 1999 

False cognates are always a problem in translation, and the Russian word 
"provokatsiya" is particularly tricky, being what I would call a semi-false 
cognate. In light of recent events, this word has been appearing in the 
Russian press with ever greater frequency. Without exception (that I have 
seen), translators have rendered this word into English quite literally as 
"provocation," which can be misleading (somewhat less so in the case of the 
"Jamestown Foundation Monitor" for 14 September, for example, which opted 
to use "provocation" with quotation marks attached). In fact, the word is 
often used not in the general sense of "incitement," but instead with the 
rather more restricted meaning of "frame-up."

For example, when the Prosecutor General referred to the search of his 
residences as a "provokatsiya," it was specifically a "frame-up" that he 
had in mind. On the other hand, similar reference to the bombing of an 
apartment building could have either meaning, depending on who is being 
blamed (Chechen/Dagestani terrorists = provocation/incitement; Russian 
security services posing as Chechen/Dagestani terrorists = frame-up).

Lest this should be interpreted as undue criticism of the many translators 
whose uncredited work largely makes the Johnson Russia List possible, allow 
me to say that this comment is intended more as a note on interpretation to 
the List's readers.

Kevin McElwee
Opinion Czar, "the eXile"
Moscow

******

#10
Boston Globe
16 September 1999
[for personal use only]
Moscow's usual suspects 
Answering blasts, police descend on dark-skinned
By David Filipov

MOSCOW - ''Operation Whirlwind'' descended on the Kiev Market around
lunchtime 
yesterday, as several dozen burly men clad in black leather jackets and black 
ski masks, and armed with truncheons and submachine guns, swarmed through one 
of Moscow's busiest street bazaars.

The men were officers in an elite Moscow police detachment, and their sudden 
arrival was part of the city's response to a series of bombings that have 
claimed more than 200 lives in Moscow, in the worst outbreak of terrorist 
attacks here in memory.

But yesterday's crackdown also had the look of a shakedown.

Moscow authorities say that the blasts were the work of rebels from Chechnya, 
so the officers rounded up anyone - vendors, shoppers, bystanders - who had a 
dark complexion such as someone from the separatist Caucasus Mountains region 
might have. The police lined their suspects up against a wall for a body 
search and checked their identification documents.

For a few lucky ones, the episode ended there. About 20 others were led away 
to a large holding cell by the market's entrance, joining hundreds who have 
been detained in Moscow over the past two days.

For the rest, yesterday's raid on the Kiev Market ended as they often do in 
Moscow: with a payoff.

''A couple of officers took me on a little walk, they pretended to study my 
documents, then they told me I had to pay them 800 rubles,'' or about $32, 
said Galib Rozayev, a merchant who has been working at Kiev Market for four 
years. ''They aren't thinking about catching the people who planted the bomb. 
They've already forgotten about the bomb. They just want money.''

There was nothing wrong with Rozayev's documents, or those of 10 of his 
colleagues who were forced to pay yesterday. Citizens of the former Soviet 
republic of Azerbaijan, they have the residency permit required to live and 
work in Moscow. Their only crime was that they look, at least in the eyes of 
Moscow police, like the Chechen-backed militants who are battling Russian 
troops in the Caucasus region of Dagestan.

What makes this possible is something that has long attracted the attention 
of human rights monitors in Moscow: the institutionalized racism toward 
people who moved here for a better life from homes in southern Russia and the 
former Soviet republics of the Caucasus and Central Asia.

Polls show many Muscovites believe ''blacks,'' as dark-skinned people from 
those regions are called here, are the cause of their city's problems with 
crime and corruption. Politicians like Yuri Luzhkov, the popular Moscow mayor 
and a likely presidential candidate, encourage these attitudes. Luzhkov has 
publicly blamed two Chechen rebel leaders for the explosions - they deny it - 
and has called on the Kremlin to cordon off the breakaway region, which is 
nominally still a part of Russia but has stopped obeying the federal 
government since the end of a two-year civil war in 1996.

As Muscovites struggle to overcome the fear caused by two blasts in the past 
week that flattened two apartment buildings and killed more than 200 people, 
Luzhkov and other politicians have demanded action. The city police have 
responded with Whirlwind, a massive operation of road checkpoints, random 
document checks, apartment searches, and increased raids on busy public 
places like the Kiev Market.

The result has been an expensive annoyance for people such as Galib Rozayev, 
whose documents are in order. More bureaucratic hassles may lie ahead. 
Luzhkov has ordered that all of what Moscow calls its estimated 2 million 
guests reregister, and has set a time limit of three days that city officials 
acknowledge is far too little time for the job. 

It is even worse for people such as Sergei, a businessman who is part 
Dagestani and has no valid Moscow residence permit. For him, the increased 
raids have forced him to hide out in a friend's apartment and avoid taking 
the subway.

Police do not care that Sergei, who did not give his last name, is a partner 
in a telecommunications firm, has a university education, and speaks with a 
Moscow accent. All they see is that he is dark-skinned.

''It's all based on the way you look,'' he said. ''They don't stop criminals 
this way.''

The residence permit Sergei lacks is a Soviet-era document that has been 
repeatedly declared illegal by Russia's Supreme Court under the 1993 
constitution that proclaims freedom of movement for Russian citizens. Human 
rights monitors have repeatedly criticized Moscow for that, too. But the 
police have not stopped checking the residence rule.

''The way it is being enforced, it seems that it is more a source of 
additional income than to bring order,'' said Diderik Lohman of the Moscow 
office of the New York-based Human Rights Watch. ''It's also questionable how 
useful a way to stop terrorists it is to stop people in the streets and check 
documents.''

Yesterday, the Kiev Market was raided three times. Each time, Nabi, a 
cigarette and food vendor from Azerbaijan who gave only his first name, was 
hit for a small fine that was in reality legalized extortion.

''I've been living in Moscow for four years,'' Nabi said. ''Do they think I 
want to blow myself up? Do they expect to find some bomb in my sausage?''

But the raids have the support of many Muscovites - people such as Alexander 
Abashkin, director of the Kiev Market. He favors Luzhkov's idea, backed this 
week by Prime Minister Vladimir Putin, of surrounding Chechnya with troops 
and putting a so-called quarantine on the rebellious region.

But what about the 100,000 Chechens who live in Moscow?

''We'll have to isolate them,'' Abashkin said, recalling Joseph Stalin's mass 
deportation of Chechens to Siberia during World War II. ''Stalin was able to 
do it in 1944 with a division of secret police and a few trains.''

Moscow police say Operation Whirlwind has been a success. Alexander 
Veldyayev, Moscow's deputy police chief, said yesterday his troops had 
detained 27 people suspected of being accomplices in Monday's blast and in 
another explosion four days earlier. The earlier blast has claimed 93 lives, 
and at least 118 people were killed in the explosion this week.

Luzhkov ordered police to redouble their efforts. Police have already 
searched the basements and cellars of Moscow's 30,000 apartment buildings. 
Yesterday Luzhkov told them to do it again.

Police also said authorities have found a truck that may have been involved 
in bringing explosives to Moscow. Police suspect that explosives may have 
been transported to the capital in bags labeled as sugar.

But Veldyayev also said that while police still believe the people who 
ordered the explosions were ''Chechen fighters,'' they now think the culprits 
''used people with Slav appearances'' to carry out the bombings, raising more 
doubts as to the usefulness of raids such as that on the Kiev Market.

Meanwhile, Russian television stations played a tape of a person they said 
was an anonymous caller who claimed responsibility for the bombings, and 
called them a response to Russian attacks on villages in Dagestan and 
neighboring Chechnya.

''Not a single bomb dropped by Russian pilots will remain unpunished,'' said 
the caller, who claimed to be from a previously unheard-of group called the 
Dagestan Liberation Army. There was no independent confirmation of the claim, 
and Chechen officials continued to deny any connection between the fighting 
in southern Russia and the bombings in Moscow. 

*******

#11
New York Times
September 16, 1999
[for personal use only]
The Kremlin's Keeper, the World at His Fingertips, Is Under a Cloud 
By MICHAEL WINES

MOSCOW -- By most accounts, Pavel Pavlovich Borodin is a nice guy. The 
Kremlin's property manager plays Ed McMahon to President Boris N. Yeltsin. He 
is self-effacing. He is loyal. Legend says he is the one person who can tell 
Yeltsin jokes to Yeltsin and come away with belly laughs instead of his head 
on a stick. He has five children, four of them adopted; three dogs, two chins 
and an agreeably crooked grin. 

"A very pleasant man," said Mikhail Berger, editor of the Moscow daily 
Sevodnya. "A typical Sibersky muzhik" -- in Western terms, the sort of fellow 
who would make a good fishing buddy. 

And not someone who, as Swiss and Russian prosecutors keep whispering to 
reporters, has pocketed millions in bribes and -- just perhaps -- passed some 
of the take to Yeltsin himself. Borodin and Yeltsin have firmly and 
repeatedly called the accusations politically motivated "rubbish." 

But as people learn just what it is that the Kremlin property manager does, 
his denials inevitably lose traction. For whatever his guilt or innocence, 
one fact is clear: Borodin is unequivocally, far and away the Russian that 
people would most love to bribe. Forget Russia. Few people on earth have this 
much largesse at their fingertips. 

Borodin's job is the upkeep of the Russian Federation's assets -- that is, 
its land, its palaces, its dachas, farms and apartments; its fleets of 
automobiles, aircraft and yachts; its hospitals, spas and buildings; its 
antiques, art, and its furniture factory. 

There are some 200 ostensibly profit-making businesses, from tailors to 
undertakers. There is also a stake in a $12 billion Arctic diamond mine. 

Borodin has estimated the value of his empire at $600 billion and change -- 
the change being scores of millions of dollars in embassies and other 
property in 78 foreign nations -- and he is aggressively proud of his 
stewardship. 

"All property I accepted in 1993 was in terrible condition," he told the 
weekly journal Argumenty i Fakty in 1998, on the fifth anniversary of the 
creation of his department. "When I entered this office and opened the door, 
it fell off. I opened a window and it fell, too." 

The odds of that happening today would seem sharply reduced, for Borodin has 
spent freely and with Yeltsin's blessing to wipe away decades of Soviet 
grime. Shabby Government-owned hotels in Moscow have gotten five-star 
face-lifts; ministries have moved into freshly marble-sheathed headquarters; 
the upper and lower houses of Parliament have gotten new homes. 

After tanks shelled and set afire the White House, the towering former 
Parliament building overlooking the Moscow River, during a coup attempt in 
1993, Borodin personally oversaw the building's conversion into executive 
offices. 

Most of all, he has lavished attention on the Kremlin. According to the 
parliamentary Audit Chamber, much like Washington's General Accounting 
Office, Borodin's department spent $823 million in the last few years 
restoring Kremlin palaces, churches, administrative offices and Yeltsin's 
Kremlin residence to their tsarist splendor. 

At the time, the Government could not pay pensions to its teachers, miners 
and soldiers. Nor could its hospitals afford medicine. Borodin nevertheless 
calls the work a bargain: the Kremlin had not been renovated since the 19th 
century, parts were sinking at a rate of two inches a year, and the Soviets 
had endowed its finest rooms with the grandeur of a high-school gymnasium. 

At $14,087 a square meter for Yeltsin's residence and offices, the cost was 
far less than the United States has spent renovating its own White House, he 
argued. 

It is said that Borodin likes to tell of the time he took President Clinton 
on a Kremlin tour, saying "yes;" "certainly;" "of course," as his guest asked 
time and again whether this inlaid table or that statue was genuine marble or 
wood or gold. 

Finally, Borodin is said to have stopped Clinton. "Everything in the Kremlin 
is the complete, genuine article," he supposedly said, "including the 
President." 

Squirreled among those hundreds of millions of dollars, Russian and Swiss 
investigators now say, is the evidence that threatens Borodin's career and 
Yeltsin's historical legacy. 

Most of it centers on Mabetex Project Engineering, the Lugano, Switzerland 
company which landed a healthy share of the Kremlin renovation project -- a 
reported $30 million for work on Yeltsin's residence, and an undisclosed 
amount for work on adjacent palaces and churches. 

In June, the Moscow newspaper Versiya printed photographs of Borodin's 
passport and his signature -- or a decent forgery of it, as he insists -- 
among ownership documents for a Lugano, Switzerland, bank account being 
investigated for money laundering. The account, the newspaper said, was 
opened jointly with Borodin's daughter and Beghet Pacolli, Mabetex's current 
president. 

This month, the Italian newspaper Corriere della Sera said prosecutors 
believe Pacolli placed at least $2.85 million in the same account in 1995, $1 
million of which was then shunted to a bank account in Budapest. The paper 
stated that Russian investigators believe that account was controlled by 
Yeltsin. 

It also has been widely reported -- and not denied by the Swiss -- that 
investigators there found the names of Yeltsin and his two daughters on 
Mabetex credit cards seized during a raid on the company's offices early this 
year. A former debt collector for Swiss banks has said he saw charge slips 
bearing the Yeltsin signatures, but did not estimate the value of the 
purchases. 

On the record, Swiss authorities have said only that Borodin is implicated in 
their investigation. The Kremlin has denied that Yeltsin has any foreign bank 
accounts whatsoever, but has been silent on the question of credit cards. 
Borodin has promised to sue Corriere della Serra for libel. 

Pacolli, the Mabetex president, insisted this week in an interview with The 
Washington Post that the so-called Borodin bank account was used only by 
Mabetex, partly to pay employees working in Kosovo. The $1 million supposedly 
shunted to Yeltsin in Budapest actually went to an advertising and 
public-relations firm, he said. 

Pacolli has allowed that he secured credit cards for several senior Russian 
officials, including Borodin but not the Yeltsins. In any case, he said, the 
cards were used to cover expenses when Russians came to Lugano for contract 
negotiations -- an expense he said was stipulated in all contracts with 
Borodin's office. 

There have been more than a few such contracts, for Pacolli and Borodin did 
business even before Borodin came to Moscow in early 1993. 

For Borodin, who will turn 53 next month, the trek to the Kremlin was all 
uphill. Born only 400 miles east of Moscow, he grew up in Tuva, a remote 
patch of Siberia on the Mongolian border where life is so hard that even 
today most men die before age 50. Borodin began working at age six, first on 
a farm, then in a brick factory, then moved to a Volga River city for an 
agricultural education. 

He wound up in Yakutsk, a city of 250,000 built atop eastern Siberian 
permafrost that is a center for Russian gold, diamond and tin mining. There 
he shot up the ranks of a state-run mining company, went to Communist Party 
school, entered politics and won a seat on the city council. By the time 
Yeltsin came to visit Yakutsk in December 1990, Borodin was mayor. 

"Yeltsin asked President Nikolayev who cared for the city, because all the 
buildings were heated well and everything was okay," said Berger, referring 
to President Mikhail Y. Nikolayev of the Sakha republic whose capital is 
Yakutsk. "Nikolayev said that we have a bright mayor, Borodin. And very soon, 
Borodin was invited to Moscow." 

First, however, Borodin met Pacolli, who had set up Mabetex months before 
Yeltsin came to Yakutsk and was scouring the democratizing Soviet Union for 
business. 

In Borodin, he found some: according to the Mabetex web site 
(www.mabetex.com), "a dairy project in Yakutsk was followed by the government 
administration hall, a pediatric and maternity hospital, a business center, 
an administrative building and production plant for the Precious Metals and 
Stones administration, the central plant for the treatment of sewage 
disposal." 

Some of those projects, as well as a hotel and other Mabetex ventures in 
Yakutsk, were undertaken by other governments or after Borodin left. On the 
other hand, Mabetex has found business with Borodin in Moscow as well. 
Besides the Kremlin renovations, the company won contracts to rebuild the 
fire-gutted Parliament building, to outfit new offices for the upper and 
lower houses of Parliament and to renovate a Government-owned hotel in 
downtown Moscow as part of a venture between Borodin's office and a Swiss 
hotel chain. 

Mabetex's web site lists other projects in Russia as well, from a pharmacy to 
an outpatient clinic to housing projects, but their genesis was not 
immediately known. Borodin has said that the firm has had only six contracts 
from his office in six years and that its total business with the Russian 
Government is a minuscule fraction of the billions that have been spent. 

It is true that Mabetex does not live and die by the Kremlin's beneficence. 
Among many other jobs, the company has built much of an entire city in the 
former Soviet republic of Kazakhstan, on a spot chosen by the nation's 
President for a new capital. 

Officially, the inquiry into Borodin and Mabetex involves a single contract, 
for the renovation of Yeltsin's offices. Unofficially, those Russians who are 
jaded by scandal -- and that is most of them -- say it would be naive to 
think corruption could be so compartmented. 

Grigory Yavlinsky, the iconoclastic leader of the Yabloko political faction, 
said in an interview that the notion that Yeltsin would abuse a credit card 
is laughable. Yeltsin with a credit card, he cracked, "is like a bear with a 
violin." 

But real corruption is different. "No one doubts that if in Russia someone 
builds a fence, then half of the fence, even if it is being built for a 
kindergarten, will be stolen," he said. "This was known in Soviet times, and 
it is known now. If there is reconstruction at the White House and the 
Kremlin and the Duma, then half of the money is stolen. Every child knows 
that." 

That is the mindset Borodin is up against -- that, the mounting evidence, and 
a bit of dark history, too. For the last time anyone seriously campaigned 
against Government corruption, in the final days of the Soviet Union, a 
senior Communist official and his retired predecessor leaped from their 
apartment balconies to their deaths. 

Moscow newspapers speculated at the time that the two were fearful that 
"shady financial operations" would come to light. Both men had run the 
Business Department of the Communist Party Central Committee -- the office 
that preceded the job of Kremlin property manager. 

*******