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Johnson's Russia List


April 6, 2000    
This Date's Issues: 4229  4230   4231

Johnson's Russia List
6 April 2000

[Note from David Johnson:
1. AP: Yeltsin Officially Becomes Retiree.
2. Xinhua: Russian Births down by 3.2 Million in Five Years.
3. Reuters: Final results of Russian presidential polls.
4. Election Put in Question. (Communists contesting)
5. Itar-Tass: Putin to Announce His Economic Programme in Annual Address. 
6. Reuters: Putin's hometown stop-was it weather or politics?
7. RFE/RL: Babitsky Calls For 'Nuremburg Trial' On Chechnya.
8. Reuters: EU mission to Russia hopes to open new era in ties.
9. Le Monde Editorial: 'Foul Smell of Restoration' In Russia.
10. Reuters: Russia to outline new economic strategy to IMF.
11. Itar-Tass: Russia Needs USD 1-1/2 Billion from IMF this Year-Kasyanov. 
12. RFE/RL: Julie Corwin, Putin Seeks Greater Control Of Regions.
13. Sydney Morning Herald (Australia): Geoff Kitney, Charity begins at home for the oligarchy.
14. Sydney Morning Herald (Australia): Geoff Kitney, Russia's 10 
most powerful people are seven oligarchs and three regional governors.

15. Jerry Hough on Russia and the US.
16. Michael Carley: Re: 4223, NATO and Russia.
17. Reuters: Russia detains U.S. citizen for spying.

DJ: Some provocative observations and predictions:
1. Expectations of Russians (and many non-Russians) are so low after the
Yeltsin years that ANY change is
invested with excessive hope.
2. Putin is a weak leader for Russia. He is inexperienced, a product of
the corrupt system, unlikely to
inspire Russians after the novelty wears off, and, like his predecessor,
will have to rely on Western money and support to survive. He is part of
the problem, not the solution.
3. The new/old young reformers' economic program for Russia has two main
components: a. Enough superficial "reform" to restart the international
financial aid programs (and linked debt renegotiation) and b. A further
squeezing of the Russian population as the tattered remnants of the Soviet
welfare state are further torn down in the name of reducing the financial
burden on the government. 
4. As a result of its successful experience with rigged elections and
media control, the ruling elite in Russia is filled with self-confidence
about its ability to manipulate public opinion and survive any crisis that
may emerge. The biggest likely crisis will be the rapidly emerging collapse
of illusions about President Putin. The gap between the elite and the rest
of the population will widen.
5. The United States is easily appeased if it sees progress on arms
control. American leaders also want stability in Russia and will
accommodate to whatever authoritarian measures may be required in Russia to
keep the Putin/Yeltsin regime in power. The feel of all this will be much
like the past 10 years. With prodding from Gaidar and Chubais we may even
see a revival of hysteria about red-brown revanchism. There will be an
urgent need for "greater evils."


Yeltsin Officially Becomes Retiree
April 5, 2000

MOSCOW (AP) - Former President Boris Yeltsin officially became a retiree 
Wednesday, receiving his pensioner's card - and a promise that his pension 
will be paid on time, something his own administration was largely unable to 

``I think (the government) will not be ashamed over any delays with pension 
payments that existed in the past,'' the head of the Russian Pension 
Foundation, Mikhail Zurabov, told Yeltsin. 

Zurabov spoke as he handed him the card at the government-owned Gorky-9 
country residence where Yeltsin lives. 

``We will confidently pay pensions to all retirees, including you,'' Zurabov 
said in footage broadcast on Russia's main television channels. The TV report 
did not give the amount of the pension. 

During Yeltsin's nine years in power, Russia's state workers and retirees 
routinely received their pay months late, as the cash-strapped government 
struggled to collect enough revenues to cover even most basic expenditures. 

The payment delays contributed to Russians' wide dislike of their former 

Yeltsin, 69, will get a pension that is lavish by Russian standards - the 
average monthly pension now is about $17.50. 

Shortly after Yeltsin resigned Dec. 31 and named then-Premier Vladimir Putin 
as his successor, Putin signed a decree setting Yeltsin's pension at 75 
percent of his presidential salary, giving him the use of one of the 
state-owned country residencies for life, and allowing him to finance a corps 
of aides out of the government budget. 

Putin became president after winning elections March 26. 

Yeltsin smiled and appeared healthy Wednesday - a sharp contrast to the 
frequently slurred speech and other ailments that marked his last years in 

``Even in this pensioner's post I will serve Russia,'' Yeltsin said, adding 
after a pause, ``with as much strength as I've got.'' 

The ex-president is widely blamed for his role in the 1991 Soviet collapse 
and for severe economic troubles, political turmoil and corruption 
allegations that marked his nine years in power. 

Yeltsin has stayed largely out of public view since his resignation, and did 
not elaborate Wednesday on his future plans. 


Russian Births down by 3.2 Million in Five Years

MOSCOW (April 5) XINHUA - The number of births in Russia went down by 3.2 
million in the last five years, a medical panel said here Wednesday. 

In Moscow alone, the number of births in 1999 shrank 1.7 times as compared 
with the previous year, the Interfax news agency reported, quoting a group of 
health workers specializing in perinatology, a medical field studying 
prenatal problems and problems in the first days of postnatal development. 

At a press conference attended by members of the Russian Association of 
Perinatal Medical Specialists (RAPMS), the panel said the infant death rate 
in Russia is 1.5-2 times higher than that of developed countries. 

In addition, the death rate of prematurely born babies is even higher. Out of 
the 68,000 babies born on average in Moscow every year, 5,000, or 7 percent, 
are born prematurely. 

Over 200 of these prematurely born infants weigh from 500 grams to 1,000 
grams and more than 70 percent of them die during their first week of life 
and about 50 percent during their first year, the panel said. 

As treatment and care of premature babies often require expensive imported 
diagnostic and therapeutic equipment, the RAPMS called for more funding for 
the purchase of such equipment for Russian hospitals specializing in this 


TABLE-Final results of Russian presidential polls

MOSCOW, April 5 (Reuters) - Following are official final results of Russia's 
presidential election held on March 26 as issued on Wednesday by the Central 
Election Commission. 

A total of 75,181,071 voters cast ballots, a turnout of 68.74 percent. 

Pct of vote Number of votes 

Vladimir Putin 52.94 39,740,434 

Gennady Zyuganov 29.21 21,928,471 

Grigory Yavlinsky 5.80 4,351,452 

Aman Tuleyev 2.95 2,217,361 

Vladimir Zhirinovsky 2.70 2,026,513 

Konstantin Titov 1.47 1,107,269 

Ella Pamfilova 1.01 758,966 

Stanislav Govorukhin 0.44 328,723 

Yuri Skuratov 0.43 319,263 

Alexei Podberyozkin 0.13 98,175 

Umar Dzhabrailov 0.10 78,498 

Against all 1.88 1,414,648 

The outcome, with Putin securing more than 50 percent of the vote, ensured 
his victory in the first round. He is to be inaugurated on May 7. 


April 5, 2000
Election Put in Question

The Communist Party has not given up hopes of contesting the presidential
election results. They have carefully compiled reports of violations of
campaigning laws and ballot rigging by Putin’s team. However, they have
practically no chances of getting the results annulled. 

The Communists are still refusing to accept Vladimir Putin’s election
victory and are prepared to use all means possible to render the results
invalid. Gennady Zyuganov is so serious about the matter that he has chosen
not to attend the PACE session in Strasbourg preferring to submit his
party’s accusations of foul play to the Central Election Committee, the
Council of the Federation and the General Prosecutor. 

The communists say their observers reported too many violations both during
the campaign and on Election Day to let the matter lay. They claim they
have documented evidence of uniform violations ranging from pro-Putin
agitation by local administrations, pressuring observers, irregularities of
voter the registration and the issuing of ballot papers, incorrect counting
of votes and the falsified final results. 

Apparently in Tatarstan particularly inventive methods of falsification
were used. According to the observers, the number of ballot papers printed
exceeded the amount specified by three and a half million. At two polling
stations in the republic members of the local election committee attempted
to slip ‘unregistered’ pro-Putin votes into the ballot boxes and in remote
constituencies, attempts were made to give voters previously filled in
ballot papers. 

Doctors allegedly made a significant contribution to Putin's victory in
Tatarstan: telegrams to the republic’s vice-Minister of Health were
evidently enough to result in 100 percent of patients in the republic's
hospitals voting for Putin. 

Now, having collected enough evidence of the violations to write an
encyclopedia of election rigging methods, the communists now face the
hardest obstacle: to convince the Election Committee to cancel the election
results from certain regions. 

According to Russian law, presidential elections can be nullified if they
are declared invalid in no less than 23 regions. With this clause in mind,
the communists have already gathered the widest range of evidence of
violations. Their meticulous pre-election monitoring claims that serious
violations of laws on campaigning were committed in 25 regions, though
truly grave offenses were only reported in only 9 zones of complete
falsification as the communists call them. 

Besides Tatarstan, the ”zones of falsification” are Bashkiri, Dagestan,
Ingushetia, Kabardino-Balkaria, North Osetia, Kaliningradskaya, Kurskaya,
and the Novosibirsk region. 

In any case, the Central Election Committee, which is obliged to
investigate the communists’ allegations, will have the final say on the
matter of falsification and, as the Committee’s chairman Veshnyakov has
already said, the communists’ chances of getting the results annulled are
practically nil. 


Putin to Announce His Economic Programme in Annual Address. .

MURMANSK, April 5 (Itar-Tass) - President-elect Vladimir Putin said his
economic programme will be laid out in his annual state-of-the-nation
address to the Federal Assembly. 

Speaking at a press conference aboard the nuclear-powered ice-breaker
Rossiya in Murmansk on Wednesday, Putin said the programme "is being

It calls for state regulation in the economy, which means that the
government will have to "comply and guarantee compliance with the rules and
laws that are adopted in the country", Putin said. 

He stressed that "the state will not directly interfere in economic issues". 

At the same time, he noted that there are areas where the state will have
to exert noticeable influence, including the defence sector and the North. 


Putin's hometown stop-was it weather or politics?
By Konstantin Trifonov

ST PETERSBURG, Russia, April 5 (Reuters) - Was it meteorological or 

Russian President-elect Vladimir Putin lived up to his secretive KGB 
reputation on Wednesday by making an unscheduled stopover in his hometown, St 
Petersburg, which the Kremlin said was due to bad weather but which had more 
the look of a political detour. 

The story broke when the Kremlin sparked a minor mid-morning security scare 
by saying Putin had been forced to put down in St Petersburg because of bad 
weather en route to the Arctic city of Murmansk for talks on the economy and 
the navy. 

But the hiccup in Putin's travel plans dovetailed with apparent manoeuvring 
to secure control of Russia's second largest city -- the former imperial 
capital and the place Putin started his career in the security police and 
local government. 

``In all probability the reason for the stop in St Petersburg is political 
rather than meteorological,'' said a correspondent for NTV commercial 
television in a report from the city. 

He noted the stopover came a day after Putin asked Russia's deputy prime 
minister, Valentina Matviyenko, to pull out of a May 14 gubernatorial 
election in the city after previously giving her his support. 

Then Alexander Afanasyev, spokesman for incumbent St Petersburg governor 
Vladimir Yakovlev, said Putin had actually arrived in his home city around 

``Putin spent the night at home and this morning the governor accompanied him 
to the airport,'' he told Reuters. 

Afanasyev said Putin and the governor, who is standing for re-election, held 
``general talks.'' Yakovlev then told NTV he had spoken to Putin well into 
the night. 

``I got home around 3 a.m.,'' he said. ``We discussed city affairs, Russian 
affairs and the election campaign.'' 

It was not clear why Putin reversed his earlier support for Matviyenko nor 
whether he would now back Yakovlev, an outspoken and controversial figure in 
a city with fading charms and a stubbornly high crime rate. 

Putin asked Matviyenko to stay in Moscow and help form the new government he 
must put together after he is inaugurated as president on May 7. 

A recent opinion poll in St Petersburg showed Matviyenko trailing way behind 

The Kremlin stuck to its version of the day's events but carefully avoided 
saying when Putin had landed in St Petersburg. 

There was no word on where Putin's plane encountered bad weather. Conditions 
in St Petersburg were normal. In Murmansk it was icy and there was heavy snow 
but planes were operating normally for the time of year. 

Putin later arrived in Murmansk. 

Liberal leader Grigory Yavlinsky, who came a distant third in last month's 
presidential election, said Putin's move was ``strange and unpleasant.'' 

``Politics in St Petersburg is turning into a puppet show,'' he said. 


Russia: Babitsky Calls For 'Nuremburg Trial' On Chechnya

Strasbourg, 5 April 2000 (RFE/RL) - An Radio Free Europe/Radio Liberty 
journalist today called for an international tribunal on the war in Chechnya 
to be set up. Andrei Babitsky, who was held in Chechnya in mid-January by 
Russian forces and not released until several weeks later, described the war 
in the Caucasian republic as "a crime against humanity." 

The reporter, speaking in a video linkup with members of the Council of 
Europe in Strasbourg, said a tribunal should be held along the lines of the 
Nuremberg trials after World War II in which top Nazi officials were brought 
to justice. He said the tribunal's function should be to set up a legal 
mechanism to prevent "massive crimes by governments against civilian 
populations in the future." 

Babitsky -- who is charged with possession of false documents -- could not go 
to Strasbourg himself because Russian authorities will not permit him to 
leave Moscow. 


EU mission to Russia hopes to open new era in ties
By Timothy Heritage

BRUSSELS, April 5 (Reuters) - A high-level European Union mission goes to 
Russia on Thursday for talks with President Vladimir Putin which the EU hopes 
will boost relations strained by the Chechen conflict. 

The EU "troika" travelling to Moscow include the first major Western leaders 
to meet Putin since he was elected last month. The team, which includes, 
foreign policy chief Javier Solana, hopes to gain a better understanding of 
Putin's plans. 

EU officials say Putin has a golden opportunity to improve relations with the 
15-nation bloc, particularly if he shifts policy on Chechnya. They hope he 
will clear the way for better cooperation in trade and for bringing stability 
to the Balkans. 

"Now that the electoral process is over, we can really look ahead to how to 
develop the EU-Russia partnership," an EU spokeswoman said. 

EU officials say the key to better relations with Russia is Moscow's policy 
in the six-month-old military campaign against separatist rebels in Chechnya. 

The EU is pressing for an end to fighting and for independent investigations 
into alleged human rights abuses. It wants Russia to fulfil promises made at 
talks in Lisbon last month to allow more access for international officials 
to Chechnya. 

"We will be looking for fulfilment of Russian promises made in Lisbon and 
will put to them our demands for an international presence," the spokeswoman 

She said the EU would also hope to hear Putin's response to demands by the 
United Nations human rights chief Mary Robinson for an independent inquiry 
into the allegations of human rights abuses in Chechnya. 

Putin, who did not receive Robinson when she visited Russia this week, has 
sent at best mixed signals on Chechnya. He owed his election success largely 
to public support for the Chechen campaign and any change of policy would be 
a risky move for him. 


The EU team groups Solana, External Relations Commissioner Chris Patten, 
Portuguese Foreign Minister Jaime Gama and French Foreign Minister Hubert 
Vedrine. Portugal holds the EU's rotating presidency, which France takes over 
later this year. 

They are scheduled to hold talks with Foreign Minister Igor Ivanov on Friday 
morning and meet Putin in the afternoon. 

The talks are also partly intended to prepare for Ivanov's visit next Monday 
to Luxembourg, where he will meet the 15 EU foreign ministers. 

At the meetings on Friday and Monday, the EU will seek better coordination of 
joint efforts in the Balkans. 

The West regards Russia as a useful mediator in Yugoslavia because of its 
traditional ties with its mainly Orthodox Christian, fellow Slavs there, and 
wants to keep Russian troops in the international peacekeeping force in 
Kosovo province. 

"We want Russia fully engaged in the Balkans," the EU spokeswoman said. 

The EU delegation in Moscow will also explain to the Russian authorities the 
Union's plans to create a military rapid reaction force of up to 60,000 
personnel by 2003 to tackle international crises. 


Le Monde Editorial: 'Foul Smell of Restoration' In Russia 

Paris' Le Monde 
March 29, 2000
[translation for personal use only]
Unattributed editorial: "Putin, What For?" 

It is not a plebiscite. In short, it is a 
very modest result giving Vladimir Putin the opportunity to confirm his 
accession to the Russian presidency. It is far from being the triumph 
promised by the polls. The score reflects a certain level of mistrust 
on the part of the population toward a secret man whose cover was not 
blown by the election campaign. On the contrary, everything was done to 
prevent any debate. It was as if [the election] was a matter of 
ratifying a "fait accompli": the 31 December 1999 resignation of Boris 
Yeltsin and the designation of his successor. 
Other than the war in Chechnya - this is already a big liability - we 
do not know what the new president is capable of, what he wants, what he 
thinks. Some interpret his KGB past as a certificate of honesty and 
perceptiveness while others see it as proof of excessive dishonest 
compromise with the old regime. The former are obviously naive and the 
latter are perhaps unjust. Vladimir Putin declared when he surrounded 
himself with old KGB friends from Saint Petersburg that it was not a 
question of ideology. We would really like to believe him. He is not 
driven by ideology and certainly not communist ideology. Of his 
passage through the "services", he seems to have learned the methods, the 
way of thinking and the exercise of power, a notion of interpersonal 
relations that sanctions all types of brutality, cynicism, lies, and ... 
There is a reason why he reveres Iouri Andropov, the KGB boss who 
distinguished himself in hunting down dissidents in the 70's and then 
acquired the reputation of a "reformer" during his brief stay in power in 
the 80's. The few months that Vladimir Putin was prime minister and 
then acting president have a foul smell of restoration. It is certainly 
not a question of returning to the soviet regime. Putin and his 
followers cannot and do not want to do it. On the other hand, they do 
not seem to shy away from heavy-handed or dishonorable methods to impose 
their points of view and cut down their adversaries. The propaganda, 
the importance given the security services, and the military recall the 
old days. 
Does Vladimir Putin want to use authoritarianism to rebuild the 
Russian state, which has been undermined over the past ten years by 
corruption and carelessness, and to modernize the economy? If a return 
to a controlled economy is rejected, then in order to sort things out the 
president will have to confront the oligarchs who made fortunes selling 
off national resources and squandered international aid. It requires 
real reforms favoring the development of small private businesses, the 
appropriation of land by the peasants, and openness for foreign 
investments. This would still not be democracy but it would already be 
the opposite of arbitrary government which is not in the interest of the 
Russian population, which is better informed than we often think, nor is 
it in the interest of the international community. 
The latter would be wrong to support stability in Russia rather than 


Russia to outline new economic strategy to IMF
By Svetlana Kovalyova

MOSCOW, April 5 (Reuters) - Russian economists will outline the country's new 
economic strategy at a conference this week attended by International 
Monetary Fund and World Bank officials, a senior Russian legislator said on 

A 10-year plan which is expected to be adopted by Vladimir Putin after he is 
inaugurated as president on May 7 is being worked out by the Strategic 
Research Centre think tank, chaired by liberal economist German Gref. 

However, few details have been revealed. 

"It will be the first public discussion of the issues, which have been worked 
out by Gref's Centre during the last three months," Alexander Shokhin, head 
of the banking committee of the State Duma lower house, told a news 

IMF Acting Managing Director Stanley Fischer arrived in Moscow on Wednesday 
for a three-day investment conference, also due to be attended by World Bank 
Vice-President Johannes Linn. 

Shokhin said the conference would give everybody a chance to exchange views 
on Russia's strategy. 

The IMF and World Bank might also get first-hand information about Russia's 
economic situation at possible meetings with Putin, First Deputy Prime 
Minister Mikhail Kasyanov and the Central Bank chairman Viktor Gerashchenko, 
he added. 

These meetings, if they take place, would also give Russian authorities a 
chance to influence international lending organisations as they consider new 
loans for Russia that have been delayed pending implementation of reforms, he 

The IMF's Managing Director designate Horst Koehler said last week Putin and 
his new government should implement reforms before the Fund resumes lending. 

The IMF put last year on hold a $4.5 billion loan programme to Russia, citing 
lack of structural reforms. 

Shokhin doubted Russian and IMF officials would discuss resumption of the old 
lending programme agreed last July, because the economic and political 
situation in Russia has changed considerably since then. 

"The old programme was a programme of a different government, even a 
different president. Now there should be a new programme," he said. 


Russia Needs USD 1-1/2 Billion from IMF this Year -Kasyanov. .

MOSCOW, April 5 (Itar-Tass) - Russia will need 1.5 billion U.S. dollars --
two standard tranches -- from the International Monetary Fund (IMF) this
year, First Vice-Prime Minister and Finance Minister Mikhail Kasyanov said. 

The Prime-Tass news agency quoted Kasyanov as saying in an interview with
Kommersant to be published on Thursday that if Russia did not get the
money, the government's plans to settle accounts payable would not be
implemented in full. 

"Meanwhile, their implementation is very important, because this will
improve the situation in the country, increase the monetization of the
economy and reduce the share of barter transactions -- the root cause of
the failure to execute the budget properly," he said. 

Kasyanov said the Finance Ministry had no debts to the population. "Wages
have been paid. There still remains a debt to the military -- compensations
for the delayed food allowances between 1997 and 1999. We are also heavily
in debt for the fulfilled defence contracts". 

Kasyanov believes that Russia will be able to settle foreign debts without
IMF loans next year, but economic growth will slow down without borrowing
from the IMF. 

"There will be no tragedy if we lose foreign sources of financing, of
course, and this is very likely in April and May and, probably, in June",
Kasyanov said. 

At the same time, he warned against making assumptions that there will be
no loans from the IMF. Avoiding loans would be correct from the standpoint
of settling debts as soon as possible. However, from the point of view of
developing the country and achieving macroeconomic targets this course of
events should be avoided, he added. 

Budget revenues must be used to promote internal development, finance
social spending and encourage consumer demand, which is a source of growth,
he said. 

Kasyanov said there would be no borrowing from the Central Bank in April or
May, although theoretically it would be possible to borrow one billion U.S.
dollars from the Bank of Russia without too much harm to the economy, as
follows from a joint analysis with the IMF. 


Russia: Putin Seeks Greater Control Of Regions
By Julie A. Corwin

As Russia and the world wait for President-elect Vladimir Putin to make some 
decisive policy moves, leaders in Russia's far-flung regions already know 
what to expect. During his three months as acting president, Putin initiated 
changes in how Moscow manages its relations with the periphery. And as 
RFE/RL's Julie Corwin reports, he is making no assurances that a major 
overhaul will not occur. 

Prague, 5 April 2000 (RFE/RL) -- Before Vladimir Putin became president, and 
even before he took over the Federal Security Service, he headed the 
Kremlin's Control Department. There his investigators uncovered 9,000 cases 
in which federal money totaling some 3 trillion rubles ($104 billion at the 
current exchange rate) had been spent by the regions for purposes other than 
those intended. Putin's rise to power has made regional leaders 
understandably nervous. 

Governors of all political stripes moved with breakneck speed to back Putin's 
presidential campaign and form their own branches of the Putin-backed Unity 
movement. Some even suggested that the presidential term be lengthened and 
the federation reformed into a smaller number of more manageable units. But 
rather than reassuring the fretful regional chiefs, Putin as president has 
been promising change from the very beginning. 

One month after his appointment as acting president, Putin dismissed more 
than 20 presidential representatives to Russian regions, replacing them with 
his own appointees. In the weeks that followed, the Justice Ministry 
announced the formation of a commission to check the compliance of regional 
laws with federal legislation; the Interior Ministry reorganized its 
structure, subordinating all of its regional criminal police units to Moscow 

As if to demonstrate that Putin could exert financial pressure on the regions 
to fall in line, the Finance Ministry announced stricter controls over 
regional finances, and the Tax Ministry announced expansion of its project to 
maximize information about the regions' tax-paying capabilities. 

Only last week, German Gref, the head of the Center for Strategic Research, a 
think-tank set up by Putin to develop his economic strategy, told reporters 
that the relationship between the federal government and regional governors 
will be revised. 

Mikhail Krasnov is an analyst at the Center for Strategic Research. He told 
RFE/RL that Putin's plan is to force regional bosses to implement federal 
legislation and put an end to differing local laws and practices: 

"It's all about building in a sophisticated way a unified system of executive 
power. As far as sanctions go, they are absolutely needed because we are 
suffering incredibly, firstly because we do have a legal system, but there's 
no accountability. So from my point of view, we should not destroy the system 
for electing governors. What we should have are federal agencies that would 
not let anybody violate federal laws, and whoever violates them must suffer 
the consequences for his actions."

So far, Putin's only concession to maintaining the status quo has been 
rejection of the idea of appointing -- rather than electing -- governors, as 
some regional heads had suggested. The president-elect noted that the Russian 
population has "gotten used to its right to influence who will be its leader."

Since Putin will not appoint regional leaders, he may have to rely on less 
obvious means of controlling them. The Russian daily "Vedomosti" suggested 
last month that new legal measures being introduced to tighten federal 
control over regional finances may make regional leaders "docile" without the 
necessity of more overt administrative measures. After all, only a handful of 
Russia's 89 regions contribute more in revenue to the center than they get in 

But previous attempts at recentralizing Russia have generally failed -- 
stymied in part by the sheer size of the federation. 

Jean-Robert Raviot is a Russian-affairs analyst with the Paris-based 
Institute for Political Science. Raviot says that re-establishing tight 
central control over the regions may not be possible because the present, 
loose system is far more in keeping with Russia's complex realities:

"I think it's impossible, really. They (Russia) went too far away [from 
centralized government]. It's absolutely impossible. First, because the 
regions are very different, different economically, from the point of view of 
financial resources and even from the point of view of the population, 
demographically, etcetera -- the Russian Federation is a territory totally 

Still, Putin may have one advantage that Russian rulers after Stalin lacked: 

Putin's conduct of policy in Chechnya and in the presidential elections 
suggests he has a tendency toward overkill and is uncomfortable leaving 
anything to chance. In 1998, when Kalmykia's President Kirsan Ilyumzhinov 
challenged the then weak Yeltsin government by announcing that his republic 
considered itself outside of the federation and would no longer transfer its 
federal taxes, Moscow responded harshly, dismissing its federal treasury 
official there and suspending all aid. 

The likelihood is dwindling that Ilyumzhinov or one of his peers will risk 
making even a less dramatic statement and discovering President Putin's 

(Sophie Lambroschini in Moscow contributed to this report.) 


Sydney Morning Herald (Australia)
1 April 2000
Charity begins at home for the oligarchy

Even the church is no longer a sanctuary in a country where greed rules.
Russians, already used to seeing most of the wealth carved up between a
privileged few, are now seeing imports of all types at a near standstill
because of a charitable fund connected with the Russian Orthodox Church. 

The fund is reportedly trying to corner the cargo business and milk the
profits from the import of 100,000 tonnes a year of cheap consumer goods,
mostly from China. 

According to the Moscow Times, the charity is a front for Russia's first
aspiring female "oligarch", Gulya Sotnikova, who transferred her air cargo,
tourism and investment business to the church's Charitable Fund for
Reconciliation and Accord in 1997 under a deal approved by Patriarch Alexy

Until recently, Russia's cargo agencies - which import goods and clear them
through Customs - have managed to pay very little duty to the nation's less
than diligent Customs officers. But a couple of weeks ago the Government
increased duties by 400per cent, a stunning blow to the cargo agencies. 

Except for Sotnikova's, that is. As a charitable fund it is exempt from
import duties, which means it can undercut its competitors. 

Zameran Kurtani, owner of one of the rival businesses whose future is in
peril, has no doubt that Sotnikova is being backed by someone in the
Government. He has called on President-elect Vladimir Putin to overturn the
duty increase and preserve competition in the industry. 

The story has a familiar ring. Cosy deals between well-connected figures
and politicians have seen much of post-communist Russia's wealth funnelled
into the accounts of a few now fabulously wealthy individuals known as the

The top 10 control Russia's key industries, particularly in resources,
energy, banking and the media - the few sectors of the crumbling industrial
structure that remained viable after communism collapsed. 

Like the best-known oligarch, Boris Berezovsky - who has effective control
of the massive Subneft oil company, controls the main national television
network, has a large stake in Aeroflot and is estimated to be worth
$A5.8billion - some were managers of state-owned enterprises in Soviet days. 

Rem Vyakhirev, who owns a big part of the world's largest natural gas
producer, Gazprom, was the minister responsible for the gas industry in the
last Soviet government. 

Some had no connection with the industries from which they now make
fortunes. Vladimir Gusinski, who controls a banking and media group, used
to be a theatre director. 

The oligarchs got their start by setting up private banks and financial
institutions with government-directed funds in the early 1990s. 

Billions of dollars that passed through their books have never been
properly accounted for. Several billion marked for the reconstruction of
Chechnya after the first war with Russia simply vanished. 

In the mid-'90s, as the Yeltsin administration moved to privatise Russia's
biggest industries - oil and gas - the oligarchs established rigged
"loans-for-shares" schemes that plugged them into vast revenues. 

State-owned enterprises were auctioned at giveaway prices. The giant Yukos
oil company, which turns over billions a year, was acquired by Mikhail
Khodorkovsky, 36, for the equivalent of $A265million. 

Through a variety of means - including share transfers, asset stripping and
tax evasion - the oligarchs have ripped great wealth out of these

BUT this looting produced no action from Boris Yeltsin, who formed close
political connections with several of the oligarchs, especially Berezovsky,
after their media organisations manipulated the news to help him win the
1996 presidential election. 

What has been called the rape of Russia has undermined faith in democracy
and liberalised markets, destroyed investor confidence and made bribery and
extortion the norm. 

Putin has promised to change all this. He promised before this week's
presidential election that the oligarchs would "cease to exist as a class"
when he was leader. He also said he would bring under control regional
governors, some of whom are more corrupt than the oligarchs. 

Putin's image as a strongman in the Chechen war has encouraged Russians to
believe he can and will take these people on. 

His first test may come soon after his presidential inauguration next
month, when the licence for ORT television, the main national network and
Berezovsky's most powerful political weapon, comes up for renewal. 

Russians will be watching closely to see how much has changed. 


Sydney Morning Herald (Australia)
1 April 2000
Moscow: Russia's 10 most powerful people are seven oligarchs and three
regional governors. They are: 

Boris Berezovsky A former car dealership owner worth an estimated
$A5.8billion, he part-owns Sibneft oil, has a controlling interest in
Aeroflot, and controls the ORT television network. Best-connected of the
oligarchs through friendship with Boris Yeltsin's daughter, which gave him
access to the Kremlin and membership of "the family", Yeltsin's inner group
of advisers. 

Vladimir Potanin A former junior Soviet trade official, he is now, at 34,
known as Russia's "baby billionaire". He established Uneximbank after the
end of the Soviet Union and is credited with masterminding the loans-for-
shares scheme that handed Russia's oil and gas industry to the oligarchs.
Owns 85per cent of the Sidanko oil company. 

Roman Abramovich A former Finance Ministry official, Abramovich, 36, is a
business associate of Berezovsky and, like him, a member of "the family".
The boss and main shareholder of Sibneft oil, he recently took control of
the aluminium industry. 

Vladimir Gusinski A former theatre director, he is head of the MOST
banking and media empire, which includes the NTV television network and
Gegodriya newspaper. Worth more than $A1.5billion. He is a rival of
Berezovsky, and backed the liberal candidate Grigory Yavlinsky in the
presidential election. 

Vagit Alexperov The former Soviet deputy minister for oil and gas and
graduate of the Azerbaijan Petroleum Institute heads Lukoil, another of
the big oil firms, and has substantial personal financial interests. 

Mikhail Khodorkovsky A former Soviet bureaucrat, he owns a large stake
in Yukos, Russia's largest oil producer. He established Menatep Bank, the
subject of money-laundering allegations. 

Mintimer Shaimiyev President of Tatarstan in the Ural Mountains, he is
arguably the most powerful regional governor. Yeltsin gave him almost
unlimited autonomy and powers to head off the threat of Tatarstan fighting
for independence, and he has used these to establish an authoritarian
regime that pays no revenue to Moscow. 

Yevgeny Nazdratenko The president of Primorye region, the easternmost
region of Russia whose capital is Vladivostok, he runs an authoritarian and
corrupt regime that returns nothing to Federal coffers, despite its
potential to be a door for Russia to markets in Japan, China and the United
States. Strongly backed Yeltsin's presidency in return for total autonomy. 

Rem Vyakhirev The minister for gas in the last Soviet government, he has
6per cent of Gazprom, the world's largest gas producer, and owns 29
regional newspapers. Reported recently to have acted with other senior
Gazprom figures to set up a private investment company for their interests
to put them beyond reach of Federal authorities. 

Leonid Gorbenko President of Kaliningrad, Russia's westernmost region and
its door to central and western Europe, where high levels of official
corruption and dubious business deals and tenders have scared off
investors. One Israeli businessman has reportedly been given control of the
region's port under a deal with the Government. Yeltsin turned a blind eye
to Gorbenko's deals in return for political loyalty. 


Date: Wed, 5 Apr 2000 
From: "Jerry F. Hough" <>

I remember when Stalin was limited by the Politburo oligarchs, 
when Khrushchev had no power within the Presidium, when Brezhnev was the 
prisoner of the collective leadership or nomenklatura and hence it would 
not matter who succeeded him, when Gorbachev was impotent before the 
conservative opposition. Indeed, I remember that Yeltsin has been 
totally weak for the last decade because of his health and the power 
of oligarchs. Russia has always been a fortunate country in 
never having a dictator. I agree with Andrei Liakhov that Yeltsin will 
be as weak as his Communist predecessors and as he has been the last 
decade. If Yeltsin has control of the military--and the military is 
jealous of the KGB forces--, if those closest to Yeltsin (Abramovich,
Berezovsky, Chubais) still have access to huge money and are having their 
position solidified in the various economic deals being made, if those 
like Voloshin have great political power, it is interesting to speculate
on where Putin's power will come from. 

>From the time of Truman and his good old Joe statement of 1948, 
American presidents have always had the self-interest in saying that the 
Russian ruler with whom they are dealing is the best there is and that 
all his bad actions or his inactions are the result of other evil 
forces. Wherever power is, Gore and his supporters will say that things 
are going well in Russia if they possibly can. In foreign policy, the 
American press is little more independent from any Administration than ORT 
unless there is an enormous opposition or the opposite party takes 
another position. And the press's own interest is in having Russian 
politics being a good melodrama.

In a sense it does not matter whether Putin or Yeltsin rules. 
What matters is policy. That which is awful about the possibility of 
Yeltsin ruling is that we may have the same policy as the last decade. 
Everyone should agree that it was the worst of all worlds--a 
non-monetarized, subsidized economy with no real private property in which 
investment was totally neglected. 

The US is quietly making a series of concessions to Russia and its 
"oligarchs." The deal over Tiumen oil is the most obvious. The 
question is whether there are understandings. One may argue against the 
Chinese reform, but it has been inexcusible that any Russian reform has 
not included agricultural reform. At lunch the other day with my 
Russian friend, we ate chicken. Beef even for a Muscovite, he said, 
was too expensive. Soy is a good protein substitute, but too 
expensive. Thank God for Tyson's chickens, he said. When we compared 
prices, they are less than half the price of Tyson's in the US. It is
that kind of subsidy to the big Russian cities, designed to benefit
privileged politically-connected oligarchs in both countries, that needs
to end. If we tell Putin/Yeltsin, our aid is conditional on economic 
reform in agriculture, it will happen. If we say subsidy of investment
is better than subsidy of consumption, it will happen, and it will 
benefit the American export market in technical equipment.

Bush has some 200 electoral votes in the South, mountains, and 
prairies almost wrapped up. He needs another 65-70, and Pennsylvania's 
25 is a likely part of it if he chooses Ridge for VP. Gore has the 
coasts. The battleground is the Midwest. Let us pray that both 
candidates understand that the destruction of Russian agriculture has 
destroyed its market for Midwestern food grain. Perhaps if Bush 
and his people begin hammering this point, even this Administration will 
push Yeltsin/Putin to initiate agricultural reform. If it is more of 
the same, the Russians will continue to talk about private sale of land 
as a substitute for agricultural reform, they will continue to espouse the 
old IMF line on stabilization and find new forms of subsidies. We 
need to understand that the best is the enemy of the good and that a 
continuation of the last decade cannot be in American security or 
economic interests. 


Date: Wed, 05 Apr 2000 >
From: "Michael J. Carley" <>
Subject: Re: 4223, NATO and Russia

Matti Taibbi has a rare, if abrasive talent at exposing western hypocrisy 
toward Russia, though few people appear to take him seriously, since the 
hypocrisy flourishes. At the risk of wasting my time, may I point out the 
latest bit of NATO hypocrisy. I refer here to the statement by NATO 
Secretary-General Lord Robertson (JRL #4223) that NATO is "concerned by 
[Russia's] confrontational tone". Although it is apparently hard for most 
western commentators to see the situation as Russians see it, this latest 
comment from NATO must cause even polite Russians--those at least who can 
afford to worry about such things--to curse the west.

Considering the eastern expansion of NATO (into Poland in particular), 
United States' "security concerns" in the Caucasus and Caspian region, and 
NATO's aggression against Yugoslavia (let's call a spade a spade), who is 
being "confrontational"? "Give me a break," Matt Taibbi might say. It 
seems to me that the "law of the strongest" prevails, as it always has, 
and that NATO calculates that it can get away with its own 
"confrontational" approach to Russia. Self-respecting Russians are not 
fools, and those in government understand, or should understand that only 
Russian political, economic, and military strength will curb NATO's ambitions.

One often hears western assurances that it does not want a weak Russia, but 
the evidence suggests that this is precisely what the west wants. You do 
not have to be a Russian, to be persuaded of this fundamental precept of 
western policy. The railing against Russian war fighting in Chechnya is a 
case in point. Here is the west defending the lawless, murderous, 
felonious Chechen government. The European Union and the United States say 
Russia must negotiate with the felons or face sanctions. Because what the 
west wants is a weak Russia, and a lawless, violent Chechnya will be a 
running sore of instability threatening Russian territorial integrity. The 
west's reassurances about not wanting a weak Russia are belied by its 

And what about the recent statement from the European Union that Russia 
should keep hands off the Baltic? Peter the Great must have spun in his 
grave. Russia has had and still has legitimate security concerns about the 
Baltic states. A strong Russia would not tolerate a NATO presence in the 
Baltic, and NATO would not dare to attempt to implant itself there. In the 
present circumstances if NATO does attempt to move in before Russia is 
strong enough to prevent it, that presence will be a constant source of 
Russian hostility toward the west.

What we see in the west now is school boy bullying: NATO expansion, United 
States' use of force in Iraq, Afghanistan, Sudan, the US/NATO attack on 
Yugoslavia and the destruction of its civilian infrastructure. These 
actions would not have been possible against strength, and indeed would not 
have taken place. Would the United States and NATO dare to attack Russia 
over Chechnya the way they attacked Yugoslavia over Kosovo? The Russians 
can shoot back, the Yugoslavs could not; the answer is obvious. So the 
United States and the European Union are forced to use the "human rights" 
wedge to interfere in Russian domestic affairs. The gambit is transparent.

School boy bullying is not good policy. And it is dangerous when the 
victims of such bullying, dare to punch the bully in the nose.

Michael J. Carley
University of Akron


Russia detains U.S. citizen for spying
By Gareth Jones

MOSCOW (Reuters) - Russia's FSB domestic security service said Wednesday it
had detained a U.S. citizen and a Russian accomplice for suspected
espionage, a move likely to further strain Moscow's troubled ties with

In a statement, the FSB said the American, whom it did not name, was the
head of a private firm who had earlier worked for U.S. intelligence. The
Russian was described as a specialist in defense technology at a Moscow

``Materials obtained during the course of the investigations shows the
foreigner deliberately established contacts over a long period of time with
Russian scientists in Moscow, Novosibirsk (in Siberia) and other cities of
our country with a view to collecting information comprising Russian state
secrets,'' the statement said. 

It said investigators had found a large quantity of incriminating documents
on the U.S. citizen, including technical plans of different equipment and
recordings of conversations with Russian citizens working in the defense

The statement said the investigators had found a large amount of foreign
currency on the detained Russian citizen. 

In Washington, the State Department did not identify the American. But
spokesman James Rubin told reporters a U.S. consular official had seen the
man and he ``appeared to be in good health.'' Rubin said the suspect hoped
to resolve the matter quickly. He offered no additional details. 

Commercial NTV television quoted sourcessaying that agents waited outside
the American's office, detained his Russian contact and then raided the
office. Documents on sophisticated rockets for submarines were seized as
was $30,000, NTV said. 

RIA news agency quoted FSB sources as saying the American could face a jail
sentence of 10 to 20 years if convicted. His Russian accomplice could face
a maximum seven years in jail. 


The incident is the latest in a steady series of espionage scandals to
erupt in Moscow over the past few months. 

In November, Russia ordered U.S. diplomat Cherie Leberknight to leave the
country after saying it caught her red-handed with a collection of James
Bond-style gadgets trying to obtain military secrets from a Russian citizen
in a Moscow park. 

A little later, Washington expelled a Russian diplomat. 

Last month, Russia said it had uncovered an alleged Russian spy working for
Britain. It said he had been recruited in Estonia and had provided
information on the race for Russia's March 26 presidential election and on
Russian spies in the West. 

Relations between Russia and the West, especially the United States, have
been badly strained over the past year by sharp differences on Kosovo,
Chechnya, arms control and other issues. 

The FSB, one of the successor bodies of the Soviet-era KGB, has accused
foreign intelligence services of stepping up their activities in Russia
despite the end of the Cold War. 

It says it foiled the activities of 65 foreign spies and prevented 30
Russian citizens from selling secrets to foreigners in 1999, a sharp
increase from the previous year. 

President-elect Vladimir Putin, 47, headed the FSB for a year until his
appointment as prime minister last August. He had worked as a KGB spy in
East Germany in the late Soviet period. 



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