February 18, 2000    
This Date's Issues: 4116 4117 4118

Johnson's Russia List
#4117
18 February 2000
davidjohnson@erols.com

[Note from David Johnson:
1. Interfax: ANALYSTS FORECAST RUSSIA'S INTERNATIONAL BREAKTHROUGH. (Vyacheslav Nikonov)
2. Reuters: Swiss Ask for U.S. Help on Russia Laundering.
3. Itar-Tass: Russians Wary about Private Property of Land. (poll)
4. Reuters: Putin hits campaign trail in Siberia.
5. Itar-Tass: Govt Approves National Education Doctrine Draft. 
6. Patrick Armstrong: DISSIDENTS AND INFLUENCE.
7. Moscow Times EDITORIAL: EBRD Right To Fight For Its Money.
8. smi.ru: YAVLINSKY READY TO BECOME RUSSIA'S CONSCIOUSNESS.
9. Cameron Sawyer: Stolypin land reform.
10. Itar-Tass: Russian Casualties in Dagestan, Chechnya Amount to 1,500. 
11. Washington Times: Jamie Dettmer, Putin remolds Russia of old.
12. Los Angeles Times: Maura Reynolds, Price of War Heavier for Blind Chechens. They can't work--or find their way--in hazard-filled ruins of Grozny, the capital. 
13. Interfax: KEMEROVO GOVERNOR SLAMS COMMUNIST PARTY.(Aman Tuleyev) 
14. Stratfor: Russia Wins on the Battlefield, But the War Continues.
15. New York Times: Celestine Bohlen, Banking Inquiry Retraces a Trail Reaching Lofty Levels in Moscow.] 

*******

#1
ANALYSTS FORECAST RUSSIA'S INTERNATIONAL BREAKTHROUGH

MOSCOW. Feb 17 (Interfax) - Russia has a realistic chance of a
breakthrough in the international arena without much sacrifice at the
moment, Politika Fund President Vyacheslav Nikonov said on Thursday.
"All we would have to do is to slightly curb our relations with the
so-called rogue states, such as Iraq," Nikonov said at a press
conference in Moscow. Russia-West "relations have obviously thawed," he
said.
Interest in forging ties with Russia has sharply increased in the
West in the past month or two, he said. They "reconciled themselves with
[acting Russian President Vladimir] Putin. They are tired of [First
Russian President Boris] Yeltsin and have realized that they will have
to deal with [Putin] anyway," he said.
"Four trends are prevailing in the Russian politics. They represent
liberalism, leftist nationalism, new isolationism and integration."
Putin is "between the latter two," he said. New isolationists place high
priority on Russia's domestic problems and maintain that Russia lacks
the power for an active foreign policy. Integration supporters "advocate
mild protectionism. They would like to see Russia equally close to
leading international organizations," he said.
A tendency toward "expanded cooperation with Russia is gaining
momentum." The tendency to stifle contacts with Russia is subsiding.
Nikonov warned against "overestimating the role of new deterrence which
Zbigniew Brzezinski is actively pursuing. This school's influence on
U.S. foreign policy is virtually non-existent," he said.
When asked about the upcoming U.S. presidential election, Nikonov
replied that Albert Gore's victory would pave the way for broader ties
with Russia, as well as NATO's expansion. If George Bush Jr. wins, he
"might go further toward Russia and relinquish NATO enlargement."
However, a Republican victory would make bilateral partnership more
difficult. Republicans "would oppose stronger contacts of Russia with
Iran and China in the nuclear sphere so that their country's security
would be preserved," he said.

*******

#2
Swiss Ask for U.S. Help on Russia Laundering

GENEVA, Feb 17 (Reuters) - Switzerland has formally asked the United States 
for judicial assistance with a Russian money laundering investigation 
involving the Bank of New York (BK.N, the Swiss federal police said on 
Thursday. 

Spokesman Jurg Pulver said Geneva investigating magistrate Laurent 
Kasper-Ansermet sent the request to Washington on February 3. It followed a 
visit late last year to Geneva by U.S. investigators probing the 
multi-billion-dollar scam. 

The Geneva judge is investigating possible Swiss connections in the 
international money laundering case. Pulver said 26 million Swiss francs ($16 
million) had been frozen so far at Swiss bank accounts as part of the Swiss 
probe. 

The case is one of the biggest to involve money laundering in U.S. history. 

On Wednesday in the United States, a former Bank of New York Co. Inc. 
executive and her husband pleaded guilty in the scheme, detailing for the 
first time how Russian banks used accounts at the bank to carry out crimes. 

The Russian-born couple -- Lucy Edwards, 41, a former vice president in Bank 
of New York's Eastern European division, and her husband Peter Berlin, 45 -- 
admitted to being part of a wide-ranging conspiracy in which they suspected 
certain Russian banks were so mired in wrongdoing that some employees feared 
customers carrying machine guns. 

Three Berlin-controlled companies, whose accounts at Bank of New York were 
used to launder the money, also pleaded guilty. 

******

#3
Russians Wary about Private Property of Land. .

MOSCOW, February 17 (Itar-Tass) - Russians are rather wary about the 
introduction of private property of land. Only about one third (29.6 per 
cent) believe that this will permit to resolve many economic problems. This 
follows from the results of a public opinion poll, conducted by the ROMIR 
independent research centre, which were received by Tass. 

According to the results of the public opinion poll, only 14.5 per cent of 
the polled "totally agree" with the opinion that "many economic problems may 
be resolved by introducing private property of land," and another 15.1 per 
cent "would rather agree" with it. 16.7 per cent answered "yes and no." 14.5 
per cent "would rather not agree" with this way to resolve the problem, while 
16.1 "totally disagree" with it. It is noteworthy that many of the polled -- 
23.1 per cent -- found it difficult to answer the problem. 

Some 40 per cent of Russians believe that the state should give a free hand 
to the privately owned sector of the economy, 21.7 per cent of the polled 
totally agree with it. 19.2 per cent "would rather agree". 19 per cent 
answered "yes and no." 17 per cent "would rather not agree," while 8.5 per 
cent totally disagree with it. The number of the polled, who found it 
difficult to answer that question, was also rather high: 14.7 per cent. 

ROMIR conducted the all-Russia public opinion poll according to a 
representative selection principle. 2,000 people were polled. 

*******

#4
Putin hits campaign trail in Siberia
By Gareth Jones

MOSCOW, Feb 18 (Reuters) - Acting Russian President Vladimir Putin, tipped to 
win next month's presidential election, hit the campaign trail in Siberia on 
Friday, plugging his favourite theme of a strong state and vowing to get 
tough with corruption. 

Russian television showed the usually taciturn Putin, an ex-KGB spy, kissing 
children and helping them unwrap presents. 

Keen to play up his human side, he also paid his respects at a memorial for 
more than 80 people killed when a plane slammed into a block of flats in the 
city of Irkutsk in 1997. 

Putin told regional leaders that Siberia remained mired in poverty despite 
its rich natural resources. ``The economic successes of the region are 
modest...More than four million people live in extreme poverty,'' he said in 
televised comments. 

Interfax news agency quoted Putin as saying he wanted to encourage the 
creation of large companies able not only to extract the region's mineral 
resources but also to develop and sell them on Russian and world markets. 

Interfax also quoted Putin as reiterating support for the creation of a new 
bank to support Russian agriculture. 

Putin, cleared on Tuesday by Russia's Central Election Commission to run for 
president on March 26, has said he will unveil his programme on February 25. 
He has given no details yet but has said he wants to focus on reviving 
Russia's moral fibre. 

PUTIN BACKS REFERENDUM ON LAND REFORM 

His remarks in Irkutsk suggested he favoured an active role for the state in 
Russia's economy, although he also supported a call by the liberal Union of 
Right-Wing Forces (SPS) party for a referendum on private land ownership. 

On Thursday the Central Election Commission turned down the SPS request on a 
legal technicality. Russian farmland remains largely in the hands of the 
state. Constitutional guarantees of land ownership apply mostly to small 
plots of land. 

Putin said land reform deserved support because it was aimed at ``making the 
state more efficient.'' 

He also backed SPS demands that deputies in the State Duma, the lower house 
of parliament, forgo immunity from criminal prosecution. ``I believe there 
should not be absolute immunity (for lawmakers),'' he said in his televised 
remarks. 

Putin repeated his pledge to crack down on corruption, seen as an obstacle to 
economic recovery. ``Without the fight against corruption, there can be no 
progress in the economy,'' he said without elaborating. 

Speaking later to cultural workers in Irkutsk, Putin spoke out against any 
return to Soviet-style censorship. 

``There can be no censorship...Any censorship undermines the foundations of 
democratic society,'' Putin said. He also vowed to increase spending on 
Russia's cash-strapped arts. 

Seeking to dispel liberals' fears about his KGB past, he has said the only 
dictatorship he favours is ``dictatorship of law.'' 

But his tough conduct of the brutal war in Chechnya, the strong support he 
receives from state media and his commanding opinion poll lead have made 
liberals and journalists nervous. 

*******

#5
Govt Approves National Education Doctrine Draft. 

MOSCOW, February 17 (Itar-Tass) - The Russian government approved, on the 
whole, a draft doctrine to develop national education, at its meeting on 
Thursday. 

The educational doctrine expresses "the state policy in the field of 
education, reflecting new conditions under which education functions at 
present, the responsibility of social partners in the issues of quality and 
professional education, and the upbringing of new generations," the 
government information department said. 

According to the doctrine, education is a priority. The document defines the 
obligations and rights of the state and bodies of power at all levels on 
assisting the citizens in using their constitutional right to receive 
education. 

It also states an all-out support for the education system, educational 
institutions and teachers. 

To meet the interests of citizens of the multi-national state, the doctrine 
has to create conditions for comprehensive education, ensure real equality of 
rights and an opportunity for each individual to raise educational level 
throughout life. 

The program comprises three phases. At the first -- before the year 2003 
--the program will require at least 6 percent of the Gross Domestic Product, 
including 1 percent of the GDP to fund federal educational institutions. 

At the second stage, until 2010, allocations will amount to 8 percent of the 
GDP, including 1.2 percent for the funding of federal educational 
institutions. 

The funding at the third stage, until 2025, will amount to at least 10 
percent of the GDP, including 1.5 percent to finance the federal educational 
establishment. 

Rector of the Moscow State University Viktor Sadovnichy called the draft "a 
constitution of Russia's education system." It fixes the main idea -- that 
education is available and free for all, he noted. 

However, Acting President Vladimir Putin, speaking at the government meeting, 
criticized the declarative nature of the draft. 

Putin said that despite the fact that the work on the document has been going 
for five years now "declarativeness has not been avoided in some aspects in 
this draft doctrine". He urged Cabinet members to "creatively" approach the 
education doctrine elaboration process and "make concrete proposals" as to 
how to improve it, since "education matters concern everyone". 

********

#6
Date: Thu, 17 Feb 2000
From: Patrick Armstrong <ab966@issc.debbs.ndhq.dnd.ca>
Subject: DISSIDENTS AND INFLUENCE

One point on whether or not Soviet dissidents were influential. The
Politburo minutes that have been made public show that the Politburo
spent quite a lot of time discussing what to do about them. While I
don’t suppose the geriatrics on the Politburo read much, I assume that
their staffers did. The dissidents did have a rather highly placed
audience. Who knows what these people near the top thought when they
read the samizdat? Certainly by 1985 there don’t seem to have been many
people in the Soviet system at the top who were prepared to defend it.
So the dissidents might have had quite a lot of influence after all.
Some researcher ought to be able to test this hypothesis by talking to
Gorbachev, Yakovlev and their people.

*******

#7
Moscow Times
February 18, 2000 
EDITORIAL: EBRD Right To Fight For Its Money 

The Moscow Times is in no position to judge the dispute between Runicom and 
the European Bank for Reconstruction and Development. 

The EBRD is claiming that Runicom SA - a Geneva-based oil-trading company set 
up in 1995 for Russian oil major Sibneft - owes the EBRD $58 million. 
Meanwhile, Runicom and Sibneft say that the debt has been repaid and that 
Runicom has no intention of paying that debt twice. 

In many ways the allegations from both sides are reminiscent of countless 
business disputes in Russia, but there is a crucial difference here. 

The difference is that the EBRD is one of the crusading multinational lending 
organizations that poured billions of dollars into Russia in the early to 
mid-1990s. 

There has been very little return for most of the money that the EBRD and its 
"big sisters" - the International Monetary Fund and the World Bank - funneled 
into Russia. 

In that deluge of wasted cash - most of which has demonstrably gone to line 
the pockets of the oligarchs created and nurtured by the Yeltsin era - a $58 
million debt seems like such peanuts that you could expect the EBRD to simply 
wash its hands of the affair, especially after losing two Russian court 
cases. 

Instead, the bank is fighting tooth and nail to try and secure victory in 
this dispute. 

The EBRD has already suffered several failures in its investments in Russia. 
It has gained little return on its $100 million loan to KamAZ autoworks, its 
$35 million credit to Chernogorneft, or its $35 million stake in Tokobank. 

But these woes pale compared to the abject collapse of most of the efforts by 
the IMF and the World Bank. 

The IMF is busy backing confusedly away from Russia over a range of political 
and economic issues - the Chechen war, the FIMACO and Bank of New York 
scandals and the 1998, crash to name but four - all of which are tied to 
previous failures. And it is hiding all of those reasons behind the 
unconvincing mantra that Russia needs to push economic reforms more 
vigorously. 

Meanwhile, the World Bank is still looking at loaning fresh cash to Russia - 
lining up smaller bundles of cash to hand over to essentially the same 
bureaucrats who have already misspent previous credits. 

The EBRD's stance at least promises to bring about some real, if incremental, 
change to Russia's business environment. 

It has also shone a rare but welcome spotlight on the murky links between the 
financial and industrial arms of the oligarchical conglomerate based around 
Sibneft. 

- Garfield Reynolds 

*******

#8
smi.ru
18:42 17.02.00
Mass Media
YAVLINSKY READY TO BECOME RUSSIA'S CONSCIOUSNESS 
The Spanish paper El Pais has published a large interview with the leader of 
the "Yabloko" party, Grigory Yavlinsky. As usual, Yavlinsky attacks the war 
in Chechnya, calling it "criminal and undeclared", as well as saying it has 
given rise to a military hysteria in Russia. Yavlnsky also gives a piece of 
his mind to his recent colleagues in struggle in the Duma - the Union of 
Rightist Forces. In his opinion, the URF leaders "pretend to be liberal 
democrats, but have revealed themselves to be national-populists and 
defenders of the interests of large property owners, not champions of human 
rights. Such a switchover to extreme Right positions has allowed them to get 
the voices of the aggressive electorate". Speaking of the reasons that have 
compelled him to take part in the presidential campaign, Yavlinsky said that 
he knows enough about the Acting President "to consider himself duty-bound to 
contest the presidential chair with Putin" and once again confirmed the 
readiness of "Yabloko", if the necessity arises, to assume the role of 
"Russia's conscience" at any moment. 

Comment: El Pais calls Yavlinsky the most peace-loving, liberal, democratic 
and Europeanist leader of all the Russian political figures. However, even 
the most Yavlinsky-friendly Western media cannot ignore either the failure of 
his party in the parliamentary election or his current presidential rating of 
4 per cent. But, if one listens to Grigory Alexeyevich Yavlinsky himself, it 
is the Russian voters that are to blame for all the failures of "Yabloko" - 
the Russian voters, whose paramount desires are the restoration of Russia as 
a Great Power and bringing the war to a victorious end and who will have 
nothing of the "system of European values" defended by his party. Curiously, 
and as usual with him, Mr. Yavlinsky offers no specific measures to turn 
Russia into a prosperous country, except immediately stopping the war in 
Chechnya, but he compensates for it by branding as traitors of democracy all 
those who would like to bring Russia into Europe by a route different from 
that envisaged by "Yabloko". All of which leads one to the conclusion that it 
is Vladimir Putin, after all, that the URF will eventually back in the 
presidential election.
El Pais: La guerra de Chechenia es un crimen

*******

#9
From: Cameron Sawyer <CSawyer@gvasawyer.com>
Subject: Stolypin land reform
Date: Thu, 17 Feb 2000 

Following is the text of the Stolypin land reform ukaz, in my opinion
absolutely sensible and eerily relevant to the current situation: 

THE STOLYPIN AGRARIAN REFORM 
Ukaz of 9 November 1906 
On Peasants Leaving the Land Commune (obshchina) 

By Our Manifesto of 3 November 1905, the levying on the peasantry of
redemption (vykup) payments for allotment land (nadel'naia zemlia) is
abolished from 1 January 1907. From this time such lands are exempted from
the restrictions placed on them as a result of the redemption debt and
peasants receive the right freely to exit the Land Commune and to acquire
as individual householders (domokhoziain) the rights of personal ownership
of holdings from the Land Commune's allocation. We command...that the
following rules be established: 
* 1. Each householder who has allotment land in communal ownership
(obshchinnoe vladenie) can at any time ask for his portion of such land
to be confirmed as his individual property (lichnaia sobstvennost'). 
* 2. In Land Communes where there has been no redivision (peredel) of the
land in the 24 years preceding the application by individual
householders to change from communal to individual ownership, each such
householder shall have confirmed as his individual property not only the
kitchen garden (usadebnyi uchastok), but also all the holdings of
communal land in his permanent possession apart from those which he
rents.... 
* 6. Demands to have areas of communal land registered as individual
property (art. 1) are made through its elder (starosta) to the Land Commune
which is obliged, within a month of receiving the application and by a
simple majority vote, to indicate those portions of communal land which are
the individual property of the householder...If the Land Commune does
not within this period enact such a decision, then on the request of the
householder making such an application, all the steps required will be
taken on the spot by the Land Captain (zemskii nachal'nik) who resolves all
quarrels arising from it and his decision on the subject is final.... 
* 12. Each householder who receives portions of communal land...under the
present rules has the right at any time to demand that the Land Commune
allocate him, in place of these portions, a corresponding portion, if
possible in one place. 

******

#10
Russian Casualties in Dagestan, Chechnya Amount to 1,500.

MOSCOW, February 17 (Itar-Tass) - Federal forces lost some 1,500 servicemen 
in the course of the anti-terrorist operation in Dagestan and Chechnya, the 
first deputy chief of General Staff, Colonel-General Valery Manilov told 
reporters on Thursday. 

Although the command focused on minimising the losses, they still could not 
be avoided, Manilov said. 

He said more than 200 settlements had already been liberated in Chechnya, and 
that local self-rule had been organized in 130 settlements. 

There are practically no ruined structures in 80 percent of these 130 
settlements; and four out of five Chechen towns were liberated without "the 
use of massive force," according to the General. 

He stated that terrorists acting from the territory of the (Chechen) republic 
of Ichkeria, had carried out more than 100 attacks during its existence. 

A total of 1,584 people suffered in the attacks. Of those, one third were 
children, Manilov said. 

The General said 62 gangs numbering 3,500 had rampaged over Chechnya in the 
past few years. Specializing in hostage-taking, they captured more than 1,500 
people across Russia and more than 10,000 ethnic Chechens. 

The war in Chechnya against Russia is organized and sponsored by 
international terrorist organizations, which pay for the training of 
mercenaries, Manilov said. 

A majority of Russians, being aware of it, support the anti- terrorist 
operation, despite the efforts by the West and some interested parties to 
reverse the public opinion, he said. 

There are many veterans of the previous war in Chechnya, who volunteered to 
take part in the present anti-terrorist operation. Manilov confirmed the 
information by presidential aide Sergei Yastrzhembsky that 30 percent of 
federal troops in the North Caucasus serve under contracts. 

Speaking about the leaders of terrorists gangs, Shamil Basayev and Khattab, 
Manilov said they will be captured or destroyed. 

"It should be expected, because Russian secret services have been given this 
task," the General said, adding that there are more and more chances to 
capture the terrorists' leaders. 

As Basayev and Khattab know about it, they are constantly on the run and even 
announce themselves killed, in order to avoid punishment, Manilov said. 

Also on Thursday, Russian Defense Minister Igor Sergeyev said Chechen leader 
Aslan Maskhadov should have long been outlawed. Sergeyev was commenting on 
Maskhadov's threats to stage acts of terror in Chechnya and Russia. 

He should have long been put on Interpol's wanted list, Sergeyev said. 

In his view, Maskhadov is "the same gangster as Basayev, Udugov, Yandarbiyev 
and Khattab;" there is no difference between them. 

He emphasized that measures are underway to prevent subversive operations by 
militants. 

The operation in Chechnya will be competed in the near future, Sergeyev 
noted, adding that "it is necessary to finish the bandits in gorges and 
mountains which the federal groups commanded by Generals Shamanov and Makarov 
are successfully doing." 

Meanwhile, federal prosecutors told Itar-Tass that a probe is underway into 
an intercepted radio message allegedly made by Maskhadov. If the Chechen 
president has indeed made the statements threatening Russia, prosecutors may 
institute criminal proceedings against him.

******

#11
Washington Times
February 17, 2000
[for personal use only]
Putin remolds Russia of old 
By Jamie Dettmer 

MOSCOW — Acting President Vladimir Putin's appointments of former KGB 
agents and members of the present internal security agency have prompted 
fears that the new leader plans to re-create an authoritarian Russia modeled 
on the old Soviet system.
Adding to the concern, Mr. Putin recently signed a number of laws to 
expand the power of security agencies such as the FSB, the successor to the 
once-dreaded KGB.
One decree signed over the weekend appears to revive the Soviet-era 
practice of assigning "political commissars" to front-line military units.
Early last month, in a move little noticed outside Russia, Mr. Putin 
gave quiet approval to a law giving Russia's police and security agencies 
real-time access to all e-mail and electronic commerce carried by Russian 
Internet providers.
That move earned a sharp rebuke from human rights activist Yelena 
Bonner, widow of Soviet dissident Andrei Sakharov.
"This means Russia has become a police state," Mrs. Bonner said.
Andrei Piontkovsky, director of the Moscow-based Center of Strategic 
Research and a friend of the pro-reform Yabloko party leader Grigory 
Yavlinsky, fears the worst.
He said that if liberals are mistaken about Mr. Putin's true intentions 
and go too far in giving him the benefit of the doubt, it could prove "fatal."
Most of the former state security officers appointed by Mr. Putin come 
from the acting president's hometown of St. Petersburg, where he served in 
the mid-1990s as deputy governor.
They include Viktor Ivanov, former director of the FSB's internal 
investigations unit, who now oversees personnel matters in the Kremlin.
The city origin of the appointees has sparked a debate here.
Is Mr. Putin merely stacking the government with trusted hometown pals, 
in much the same way that Boris Yeltsin brought in colleagues from 
Yekaterinburg, or is there something more sinister afoot?
Some analysts argue that the new Russian leader is creating a "Putinburg 
on the Moscow River" rather than putting in place a cadre of hard-line 
advisers more interested in strengthening the state than in protecting and 
widening Russia's fragile system of civil liberties.
Journalist Yevgeniya Albats, a liberal commentator and the author of a 
respected study of the KGB, cautioned that Mr. Putin should be judged on his 
future actions and not on his own past as a career KGB officer or on his 
current pick of former spies to fill key Kremlin posts.
"We should not judge KGB officials by their affiliation because that was 
how they judged us in the past. We do not want to repeat their legacy," Miss 
Albats said.
Nevertheless, many Russian journalists see ominous restrictions on press 
coverage emerging since Mr. Putin was appointed prime minister in August and 
then became acting president when Mr. Yeltsin resigned Dec. 31.
Provincial newspapers investigating local officials have been shut down 
for suspected fire-safety violations.
Investigators have attempted to force one feisty Moscow political 
reporter into a psychiatric asylum.
Reporters covering the war in Chechnya face travel restrictions and 
constant harassment.
Andrei Babitsky, a correspondent for U.S.-funded Radio Liberty who 
reported on the rebel side of the Chechen war, was detained by Russian troops 
and subsequently traded to Chechen rebels for Russian prisoners. Mr. Babitsky 
still has not been seen for a month since Russia officially acknowledged it 
had taken him captive.
Now, many Russian journalists are wondering what will happen after 
presidential elections next month, when Mr. Putin is almost certain to win a 
four-year term. His promises to restore order resonate with voters, most of 
whom worry more about empty pockets and rampant crime than civil liberties.
"The optimists think [the pressure on the media] is connected to the 
Chechnya war and the election campaign. The pessimists think it's the 
beginning of something bigger," media analyst Oleg Panfilov told the 
Associated Press.
Mr. Putin and the security agencies have seen their powers expanded in 
several fields.
The weekend decree that raised eyebrows assigns FSB units within the 
military such tasks as "the elimination of negative phenomena within the army 
environment."
The catchall phrase could include monitoring the political views of 
military officers or even "unsanctioned contacts with the press," according 
to Izvestia newspaper.
In all, 40 percent of Mr. Putin's Kremlin appointees either served in 
the KGB or work for the FSB.
They include Nikolai Bobrovsky, a deputy to the chief of the prime 
minister's secretariat, who studied with Mr. Putin in the KGB's Institute of 
the Red Banner; Sergei Golov, deputy head of the foreign relations section of 
the president's business management department, who served also with Mr. 
Putin in the FSB; Nikolai Patrushev, FSB director, who worked for the KGB 
Leningrad Region Department since 1974; and Sergei Ivanov, now secretary of 
the Kremlin's Security Council.
Mr. Putin has not eased fears recently by declining to condemn the role 
of the NKVD, the KGB forerunner, in Stalin's 1937 purges.
"One must not keep pretending that we do not need state security 
bodies," he said "One needs to understand what makes them work against their 
own people."

*******

#12
Los Angeles Times
February 17, 2000 
[for personal use only
Price of War Heavier for Blind Chechens 
Russia: They can't work--or find their way--in hazard-filled ruins of 
Grozny, the capital. 
By MAURA REYNOLDS, Times Staff Writer

GROZNY, Russia--When the Russians started dropping bombs on Grozny last 
fall, Marina Seferova went outside with a pot of red paint and in large, 
uneven letters wrote "Home for the Blind" on the side of her concrete 
apartment block. 
But if the librarian hoped that would earn some favorable treatment from 
Russian forces, she was out of luck. It seems, the residents of the Chechen 
capital say, as if the Russians suffered from a blindness of their own. 
"The federals aimed well," says 42-year-old Pakhurdin Daniyalov, an 
amateur radio engineer who lost his vision to glaucoma when he was 3. "They 
aimed at those like us who were least able to resist." 
For the last few months, about 15 of Grozny's blind residents have 
huddled in a three-room apartment on the first floor of the building, cared 
for by a dozen volunteers such as Seferova who once worked for the Chechen 
Society for the Blind. 
They're all that's left of what was once a community of hundreds of 
people without sight--engineers and craftsmen with apartments, jobs and lives 
of their own. Week after week, those who could find a way out fled. Those who 
remained were those few without family or any place to go. 
The bombs struck Grozny's sighted and blind with equal destruction. But 
in the aftermath, the blind are at a severe disadvantage. They can no longer 
navigate in the ruins of their city or their homes, where landmarks have been 
obliterated and new hazards lurk all around them. 
They can do little except wait for help. 
"All we do is sit here," says 53-year-old Lyubov Zhilyayeva, perched 
stiffly on a metal bed across from a handful of others. She wears a gray 
knitted cap and gray knitted leg warmers. "We sit here like this all day long 
and hope maybe someone will talk to us." 
Their neighborhood is a wasteland. 
The trees outside the house are branchless. The trunks are charred 
black. The walls are gouged and speckled from sprays of shrapnel. Chunks of 
concrete have spilled down from upper balconies onto lower ones. One shell 
knocked out an entire section of the top three floors, exposing a kitchen to 
the outside like a dollhouse, the dishes still in the cupboard. 
The blind can't see all that. But they can feel that the ground is no 
longer a friend. It is uneven from rocket holes and strewn with shattered 
bricks and bits of twisted metal. The sighted can step around such hazards. 
For the blind, they are as impermeable as a barricade and as dangerous as a 
minefield. 
"We can't go anywhere anymore. We can't do anything. We can't even 
repair the place ourselves," Daniyalov says. "No one has responsibility for 
us anymore. We want to know--who is going to give us a place to live? Where 
do we go?" 
In many ways, the story of the home for the blind is the story of the 
city as a whole. 
Once upon a time, the blind in Grozny lived in this apartment block and 
in a nearby dormitory and held jobs at a nearby radio assembly plant, candle 
factory and metal workshops. They had a club, concert hall and a library with 
shelves and shelves of books on tape and in Braille. 
They were people like Zhilyayeva, a former construction worker. She lost 
her sight to an unidentified infection 20 years ago and lost her husband four 
years later. With no children, she built a new life for herself among 
Grozny's blind, living in the dormitory and working in the radio factory. An 
ethnic Russian, she felt at home among the mix of Chechens and other peoples 
from the Caucasus in the neighborhood. 
"I was completely independent. I could do all the same things as a 
seeing person--the cooking, the laundry. I didn't need anything from anybody. 
I could get around on my own," she says. "Now I can't go anywhere." 
After Chechnya declared independence from Russia in 1991, funding for 
the blind faded, but the community kept things going on its own. In 1994, the 
first Chechen war began. It lasted two years, leaving the radio plant in 
ruins and damaging most of their living quarters. But the residents rebuilt 
the candle factory and figured that they'd get by. 
Then the second war began last fall. Unfortunately for the blind, the 
Chechen separatists chose as their stronghold the Oktyabrsky section of town, 
which is also where the blind live. It is less than a mile away from Minutka 
Square, the epicenter of the fighting until Russian forces captured the 
capital early this month. 
"I won't say it around the Russians, but the rebels weren't bad to us," 
Seferova says. "They gave us flour and sugar, and when they left, they gave 
us their food. At least they bothered to find out who we were." 
The Russians didn't. She says they appeared to have confused the home 
for the blind--No. 41--with a rebel headquarters at No. 31. During the 
bombing, the home was hit more than the rebel house. 
By January, only the 15 blind residents remained along with their 
friends and caretakers. For most of the month, the bombs came without pause. 
They huddled together, hungry, in the basement, where the sounds of the 
bombardment drove them nearly crazy. 
"What you see on the screen at the horror movies, we hear with our 
ears," Daniyalov says. 
On Feb. 1, a rocket struck right outside the building. The impact blew 
in the basement's door, which hit a 60-year-old resident in the head. They 
feared that he would die. 
"There was a panic," recalls Seferova, the librarian. "The blind 
couldn't see, and they fell all over each other as they rushed to the far 
side of the basement." 
Fearing that the basement's ceiling would collapse, they then fled 
upstairs. But one nurse ducked back downstairs to retrieve the bread they had 
left baking on the stove. Just then, a second shell struck, the basement's 
ceiling collapsed, and she was buried. 
The shelling continued for another week. Only when it stopped could they 
retrieve her corpse. 
The volunteers have put plastic over the broken windows in the 
building's only intact apartment on the ground floor. They have built a stove 
from a metal box and fry lavash--the local flat bread--on it. They live 
mostly off foods scavenged from the other apartments. 
Once a day, they make an expedition across the street and bring back 
porridge that the Russian Emergency Situations Ministry started distributing 
last week. 
They have drawn together in a makeshift extended family whose members 
have melded their fate. 
"I won't leave them. I can't," Seferova says. "Many people don't know 
how to relate to the blind. They think they are defective or like children. 
But once you get drawn into their world, you learn how wonderful they are, 
how talented and active. You can never leave them. You can never quit." 

******

#13
KEMEROVO GOVERNOR SLAMS COMMUNIST PARTY

MOSCOW. Feb 17 (Interfax) - The Russian Communist party has become
a political structure that talks a lot but does nothing, Kemerovo region
Governor and candidate for the Russian presidency Aman Tuleyev has said.
Tuleyev slammed the party and its upper stratum, which, as he put
it, "settled very comfortably into warm offices, with privileges and
trips abroad," at a press conference in Moscow on Thursday.
"The upper stratum betrays regular communists. The members of this
stratum received their positions in the State Duma for nothing, having
gotten there on the [party] roll. I am against the practice of first
secretaries, who are engaged in nabbing privileges in the Duma, running
for parliament," Tuleyev said.
The Communist faction of the previous Duma, which had a controlling
block of votes, the influence of the "red governors" and Yevgeny
Primakov as prime minister, still did nothing for the country, he said.
"The Communist Party's faction at the Duma could have done a lot of
necessary and useful things for Russia and its people, such as passing
economic bills making it possible to speed up reforms in the production
sphere, as well as improving the people's social status," Tuleyev said.
Regarding his relations with the Communist party leadership,
Tuleyev noted that he has "friendly relations with Gennady Zyuganov, but
some rifts are apparently growing." "Though I cannot say my relations
with him have not worked out. No. It is my relations with his entourage
that have not worked out, for it behaves even worse than politburo," the
governor said, stressing that he is running for president on his own and
is not going to share his votes with anybody.

*******

#14
Stratfor Commentary
Russia Wins on the Battlefield, But the War Continues 
0125 GMT, 000217 

Recent changes in both Chechen and Russian battlefield tactics suggest that
Russia has succeeded in sealing the Georgian border, thus paving the way for
a final battlefield victory in Chechnya. Chechen forces are turning to
guerrilla warfare; Russian tactics are responding to this change. As the
tactics of both sides adjust, the potential rises for sporadic and heated
battles with high casualties. 

Fighting in Chechnya now focuses on a handful of
strategic locations. The conflict at
Duba-Yurt remains intense as Russian forces continue attempts to push their
way directly into the Argun Valley. While the Chechens may launch attacks
elsewhere in Russia, Duba-Yurt is the scene of the last large-scale
battle in
Russia’s second war in Chechnya. Russian forces have now overpowered the
Chechens on the battlefield, forcing them to fight
a full-scale guerrilla war. 

As the Chechens disperse, Russian air power loses its effectiveness.
Previously in the war, Russia often launched more than 120 sorties a day
throughout Chechnya. Now the number hovers between 30 and 50 daily; attacks
consist of either high-tonnage bombs against fortified rebel positions or
are directed at the continuing battles around Duba-Yurt. 

Russian forces largely control the Vedeno valley as well as significant
portions of the Argun. Emboldened by recent victories at Grozny and
Alkhan-Kala and the severe injuring of Chechen leader Shamil Basayev,
Russian
forces are intensifying their offensive and pushing ever deeper into
southern
Chechnya. They are beginning to move into a maze of side valleys that branch
off from the Vedeno and Argun valleys. To facilitate these clearing
operations, Russia has activated two reinforced flamethrower battalions to
help eliminate resistance in the mountain caves of Chechnya’s south. These
actions would be unthinkable if Russia had not managed to finally sever the
Chechens’ traditional supply line through Chechnya’s border with Georgia. 

Aside from continuing efforts to secure strategic choke points at Itum-Kale
and Duba-Yurt, the Russians are now engaged in anti-guerrilla actions marked
by increased efforts at targeting collaborators within civilian
populations. 

The Chechens have scattered their forces and have begun engaging in
hit-and-run attacks against targets of opportunity, such as the Feb. 16
attack on the Russian held village of Elistanzhi in a side valley of the
Vedeno. This new strategy allows the Chechens to husband their resources
until such time as they can reestablish supply links via passes that will
become accessible after the spring thaw. 

Beyond Russia, the Chechens are changing their strategy as well. Seilam
Bechaev, the first vice chairman of the Chechen parliament, is in Washington
meeting with American lawmakers and diplomats. Officially, he is asking for
humanitarian aid. Unofficially, he is likely establishing contacts for
Chechnya’s soon to be needed government-in-exile. The fact that the
United States agreed to host Bechaev at the State Department indicates a
quiet, implicit support for Chechnya. This sets the stage for a protracted
U.S.-Russian diplomatic struggle. 

While Russia claims it will soon withdraw many of its troops from Chechnya,
it will need significant manpower to fight an anti-guerrilla war.
Consequently, Russia is still pouring troops into southern Chechnya –
additional paratroopers, flamethrowers and special forces – hoping to
annihilate the rebels before they can escape Russian scrutiny.
Simultaneously, Russia is redoubling its efforts across the foothills of
southern Chechnya to root out collaborators and impinge upon the militants’
ability to disappear into the general population. In the short term the
Russian strategy will result in even higher casualties on both sides. While
Russia claims – correctly – to have won control of the battlefield, it will
continue to bleed from continuous, random guerrilla attacks. 

*******

#15
New York Times
February 18, 2000
[for personal use only]
Banking Inquiry Retraces a Trail Reaching Lofty Levels in Moscow
By CELESTINE BOHLEN

MOSCOW, Feb. 17 -- In a city where banks sprout like mushrooms, and die just 
as fast, the money-moving network described in the unfolding Bank of New York 
case quickly branches into a web of control and ownership. Some strands reach 
to the highest levels of Russian finance and government. 
And adding to the flavor, the two Moscow banks that figure prominently in the 
accounts of Lucy Edwards and Peter Berlin -- the couple who pleaded guilty in 
New York on Wednesday, opening a new window in the case -- were not really 
banks at all, according to Russian bankers and United States investigators.

They were front companies that allowed ingenious schemes for funneling money 
out of Russia beneath the radar of customs and tax officials, and into one of 
three accounts set up at the Bank of New York. 

Such specialty banks are a key element of the economic chaos that resulted 
from the disintegration of the Soviet system. The most rudimentary mechanisms 
and controls were absent, and winners emerged with huge holdings and 
fortunes. 

Some entities belong to a single company or industry that needs a special 
line of credit, and are called pocket banks. Others are political banks, born 
of the embrace between Russian business and government that has given new 
meaning to crony capitalism. And sorting out which is which and who owns what 
is an accountant's nightmare. 

In this case, according to documents filed Wednesday in New York, the two 
banks prominently mentioned by Ms. Edwards and Mr. Berlin, Flamingo and 
D.K.B., were the children of two other banks, M.D.M. and Sobinbank, which 
enjoyed the backing of well-connected patrons in Moscow, some with close ties 
to the Kremlin, others linked to the Moscow City Hall. 

Sobinbank was no phony institution. Founded in 1990, it had a lobby and 
customers and had been put together by a collection of larger, powerful 
Russian banks, including SBS Agro, a bank headed by Aleksandr Smolensky, who 
had ties to Boris A. Berezovksy, Russia's master political intriguer, 
financier and media mogul. 

It is not known whether those powerful patrons invented, used or even knew of 
the elaborate money transfer schemes through front companies controlled by 
Mr. Berlin -- Benex, BECS and Lowland. Much of the $7 billion that moved 
through them belonged to Russian importers looking for ways to pay foreign 
suppliers without alerting Russian authorities to the real value of their 
contracts. 

But there is also evidence that the same schemes were used by criminals to 
launder money, and by rich Russians to park profits overseas, in offshore 
havens. 

The more fully Ms. Edwards, the former Bank of New York vice president, and 
her husband, Mr. Berlin, cooperate with federal authorities, the more nervous 
many of Russia's top bankers are likely to become. 

"I am certain that if these two continue to talk, they will be able to say a 
lot about illegal activities, the participants in which would include well 
known financiers and public figures," said Yuri I. Skuratov, Russia's former 
prosecutor general. His ouster last winter by the Kremlin set off successive 
waves of financial scandal here that culminated last August when the federal 
investigation of the Bank of New York became publicly known. 

But sorting out the facts in the chaos of Russian banking is. at the least, a 
formidable task. With lax reporting standards, weak laws and a high mortality 
rate among banks -- if not bankers -- paper trails meander through tangles of 
shifting owners and sometimes disappear. 

Consider this thicket of accounts and relationships: in the documents filed 
in United States District Court on Wednesday in Manhattan, both M.D.M. and 
Sobinbank were mentioned as participants in wire transfers to the Benex and 
BECS accounts. And the same documents show that money transferred to Benex 
and BECS between February 1996 and the fall of that year went through an 
account at the Bank of New York held by M.D.M., the Russian initials for 
Moscow Business World bank. 

In August 1996, Lucy Edwards allegedly opened an account for Sobinbank that 
was later substituted by an account for D.K.B. 

Two years later, money from Flamingo went to yet another account at the bank 
set up by Ms. Edwards and her husband, in the name of Lowland, via Sobinbank 
of Moscow. 

Last fall, acting on a tip from federal investigators in the Bank of New York 
scandal, Russian agents swooped down on Flamingo, and scooped up $430,000 and 
3.3 million rubles in loose cash lying around its offices, unaccounted for 
and otherwise undocumented. Russia's prosecutors have since brought criminal 
charges against Flamingo for "illegal banking activity." 

In October, after the Flamingo raid, Moscow police officials began an 
investigation at Sobinbank headquarters during which they opened up safety 
deposit boxes held in the vaults. In one, held by a deputy director of an 
institute connected to the Russian space program, they found $1.6 million in 
cash and 6 kilograms of gold ingots. No charges have been brought against 
Sobinbank. 

Arthur Andersen audits of SBS-Agro, which is now virtually bankrupt, 
described Sobinbank in the late 1990's as a subsidiary of SBS-Agro, which the 
auditors found also owned 20 percent of the shares in Flamingo. 

In time, Sobinbank also became partly owned by Manezh, developers of 
Manezhnaya Ploshchad, the vast and ambitious underground shopping mall at the 
foot of the Kremlin that was a pet project of Yuri M. Luzhkov, the Moscow 
mayor, and one of his favorite businessmen, Umar Dzhabrailov. Other 
shareholders include Lukoil, a major Russian oil company; Energia, a company 
that builds spacecraft; and two other, smaller banks. 

Later, both M.D.M. and Sobinbank shared a patron: Aleksandr Mamut, a 
soft-spoken young lawyer and banker who is closely tied to a group nicknamed 
the Family, an inner circle of advisers to President Boris N. Yeltsin and his 
daughter, Tatyana Dyachenko. 

In 1997 Mr. Mamut, who had his own bank, known as K.O.P.F., became a member 
of the Sobinbank board of directors, where he remained until taking the 
chairmanship of the M.D.M. board last year. In each case he appears to have 
helped draw significant clients, including Sibneft, an oil conglomerate; 
Almazy Rossii-Sakha, Russia's largest diamond company; and Energia, the space 
program company. 

Some argue that the scheme survived because it had the benefit of powerful 
political patrons in Moscow. But the Russian banker familiar with the scheme 
said that the Benex accounts' good reputation also came from the protection 
that Benex seemed to enjoy at the Bank of New York, which had significant 
business in Moscow. "They established a niche," he said. 

Interviewed last fall, the Sobin bank president, Aleksandr Zanadvorov, 
insisted that he had never met either Ms. Edwards or Mr. Berlin. 

"As I understand it," he said, "Benex and BECS worked actively with Russian 
banks and Russian companies. If anyone wanted to, they could drag a lot of 
banks and companies into this." 

******

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