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

Johnson's Russia List


May 13, 2000    
This Date's Issues: 4297  4298

Johnson's Russia List
13 May 2000

[Note from David Johnson:
1. AP: Russian Journalist Beaten. (Novaya Gazeta)
3. AFP: Solzhenitsyn says Russia needs to be saved.
4. Moscow Times: Jonas Bernstein, Ski-Mask Politics Will Stay.
5. The Guardian (UK): Ian Traynor, Russia's new strongman puts Stalin back on a pedestal.
7. The Economist (UK): CHARLEMAGNE, Mikhail Kasyanov, Russia’s big new wheel.
8. The Washington Post editorial: A Rotten Start for Mr. Putin.
9. RFE/RL: Paul Goble, Repression By Selective Prosecution.
10. Reuters: Russia's Gorbachev opens new building for fund.
Theoretical Achilles Will Never Outrun the Practical Tortoise.
12. Moscow Times: Catherine Belton, Blueprint Cuts Tax, Social Benefits.
14. St. Petersburg Times editorial: Call This an Election? Don't Make Us Laugh.
15. Media NGO seeks Executive Director in Moscow.]

DJ: "There's no alternative."
Back in Yeltsin's heyday the clincher argument why one should look
favorably upon Yeltsin was that, with all the problems,
"there's no alternative." I thought I would revisit this notion of
alternatives in the context of Vladimir Putin. Let's remember that little
more than a year ago there was a clear alternative to the as-yet obscure
Putin: Prime Minister Yevgeni Primakov. He was the odds on favorite of the
Russian people and by all accounts the likely successor to Yeltsin. Let's
ponder what might have happened if Primakov had been permitted to stay in
power. (And remember that he was ousted with the encouragement of American
officials and young reformers). The likely alternative if it had been 
Primakov and not Putin: no war in Chechnya, a real crackdown on corruption 
at the top, freer and fairer elections for Parliament and president, a more 
open and less manipulated press, less mystery and fear about what the 
future might bring. And perhaps most important, new national policies 
would have developed with broad input from Russian political and policy 
institutions. What is striking about Putin's Russia in May 2000 is that 
important plans and policies are being developed in secret by a handful of 
designated insiders. Very reminiscent of what happened at the beginning of 
the Yeltsin era in 1991. Continuity is the hallmark of the Yeltsin-Putin


Russian Journalist Beaten
May 13, 2000

MOSCOW (AP) - A journalist working for a muckraking Moscow newspaper was 
seriously injured when he was beaten unconscious with a hammer by an unknown 
attacker, police said Saturday.

Igor Domnikov, who works for Novaya Gazeta, was attacked late Friday in the 
entranceway to his southeast Moscow apartment building, police said.

Police said they could not determine if the attack was in retaliation for 
something Domnikov had written. Several journalists have been attacked or 
killed in Russia after writing controversial articles.

The attacker or attackers escaped. Doctors at a city hospital described 
Domnikov's condition as serious, the Interfax news agency reported.

Politicians and journalists have expressed concern about the state of media 
freedom after a police search Thursday of the offices of MOST-Group, whose 
media outlets are critical of the Kremlin.

Novaya Gazeta editor Dmitry Muratov said Saturday on NTV television that the 
attack may have been aimed at another of the paper's journalists, who 
specializes in investigating official corruption. That journalist resembles 
Domnikov and lives in the same building.

Domnikov writes about culture and education.

Novaya Gazeta specializes in investigative journalism and often focuses on 
alleged government wrongdoing. In March, someone broke into its computer 
system and destroyed an entire issue.


Source: NTV, Moscow, in Russian 0400 gmt 13 May 00 

[0025-0300] [Presenter] A journalist was attacked in Moscow last night.
'Novaya Gazeta' [daily] correspondent Igor Domikov has been taken to
hospital with a skull and brain injury. Doctors say he is in a grave
condition. Our crew has just returned from the scene. 

[Omitted: confusion over whether the report is ready] 

[Correspondent] 'Novaya Gazeta' correspondent Igor Domnikov was attacked on
the staircase of this house located on [street name unclear]. The heavily
wounded journalist was found by neighbours. Police say that nobody saw the

The exact time of the attack has not been established, either. Apparently,
the unknown attacker or attackers hit Igor on the head several times.
Doctors say that a hammer was used. Igor lost consciousness and apparently
spent a long time on the staircase. Police who arrived at the scene could
not identify the victim at once. Neighbours did not recognize him, either.
When questioning them, detectives visited Domnikov's flat, but Domnikov's
wife, Margarita, did not recognize her husband from the description they
had provided. 

[Margarita Domnikova] Then something struck me. I ran down to get some
details. I brought photos and said that it was Igor. 

[Correspondent] By that time the journalist had already been taken to the
68th city municipal hospital. Doctors started an operation. Igor's friends
and colleagues launched their own private investigation. 

One of the first theories brought forward by 'Novaya Gazeta' journalists
implies that the attack was planned in advance, but, apparently, the
criminals intended to attack another correspondent of the same newspaper,
Oleg Sultanov. He lives in the section of the apartment block and looks
similar to Igor. 

[Dmitriy Muratov, captioned as 'Novaya Gazeta' editor-in-chief] His
neighbour, with whom I worked directly, as the editor-in-chief, analysed
and investigated corruption links and prices on the market of corruption
services. He looked into why ships were being sold for one dollar in the
Far East. He studied LUKOIL [major Russian oil company]. 

[Correspondent] Igor's wife, Margarita, says that what has happened could
have only been caused by her husband's professional activities. 

[Dvornikova] He was fighting all the time, without comparing his own weight
to that of those he was writing about. He writes - I don't want to use the
past tense - very sharply and he never calculates the consequences. 

[Correspondent] Moscow police detectives visited the 'Novaya Gazeta'
offices. In the presence of witnesses they confiscated documents. The
detectives said they want to establish whether Igor had possessed any
material whose publication could threaten his life. 

[Moscow police detective, unnamed, with his back to the camera] We don't
reject the theory that the crime was caused by his professional activities.
We are working on this theory, but a number of other theories are being
studied, too. This includes an ordinary murder with a view to robbing the

[Correspondent] The doctors of the 68th hospital are currently fighting to
save Igor. His condition is being described as grave. But the doctors say
they have detected positive changes in the last several hours. Igor is
getting better. 

[Video shows the scene; Domnikov's flat and office] 


Solzhenitsyn says Russia needs to be saved

MOSCOW, May 13 (AFP) - 
Nobel laureate and former Russian dissident Alexander Solzhenitsyn has 
expressed his deep despair for the future of his home country, in an 
interview with a a newspaper here 

Famous for his condemnation of Stalin and Soviet Russia, the Nobel laureate 
and literary titan, is just as scathing in his criticism of modern-day Russia 
on the Novaya Gazeta newspaper's Internet website.

"Our whole apparatus is rotten. Corruption has caused everything else to rot. 
Not one step has been made against corruption. Why? Because they're all 
involved. They are drenched in it and there's no way out," Solzhenitsyn told 
the newspaper.

"The huge reforms that were hailed have left half the country's population in 
poverty. And now we are hearing the same words from the new power. What an 
encouraging conclusion."

Solzhenitsyn, 81, who returned to Russia in 1994 after spending 20 years in 
the United Stated in exile, is best known for writing "The Gulag 
Archipelago", a devastating account of life in the Soviet gulag prison camps.

Since his return, he has continued to voice the opinion that the 20th century 
was a catastrophe for Russia, frequently criticising former Russian president 
Boris Yeltsin for ruining the country with economic reforms.

With the new century and new president Vladimir Putin, the writer does not 
consider Russia's future any brighter, saying: "The new president said we 
will continue with the reforms. What does this mean? That we will continue 
looting and destroying Russia till the end?

"Everyone knows that hidden financial magnates control the Kremlin. We 
haven't yet heard that the new power will stop this way of working."

Solzhenitsyn also blames the so-called oligarchs for the proposed change in 
federal legislation to allow the free sale of agricultural land, nationalised 
since 1917. 

"All we have left is the land. The magnates' greedy hands are now reaching 
out for Russian land. Having stolen billions of dollars, they now need to 
hide it somewhere. It is obvious that the law is being prepared for the 
magnates. What normal person can afford to buy even a tiny piece of land? No 

Despite spending his life condemning the Soviet Union, Solzhenitsyn's 
conservative and nationalist tendencies lament the loss of the republics, 
saying "as Yeltsin hugged with dictators, he abandoned 25 million of our 
people, cut off by the CIS borders, left as foreigners in a foreign land".

He blames Yeltsin for bringing about the demise of the government and the 
economic, cultural and moral life of the nation, which has been "either 
destroyed or looted".

"We are abandoning our valuable far north and treating our sparkling far east 
as a hateful attachment. And all this is under a screen of democracy.

"Privatization has meant that our valuable national companies have been given 
away for one to two percent of their actual worth. Nobody tells us whether 
the stolen 98 percent will ever be returned or if it is already lying 
somewhere in a foreign bank," bemoaned Solzhenitsyn.

"Russia desperately needs to be saved. The international machinations of the 
new power have still not emerged and that is frightening."

While Solzhenitsyn still enjoys respect for his literary skills and his 
opposition to communism, his pessimistic comments are often overlooked by the 
new generation of Russians.


Moscow Times
May 13, 2000 
PARTY LINES: Ski-Mask Politics Will Stay 
By Jonas Bernstein 

Cognitive dissonance is back, in a big way. On Thursday, it was literally 
wafting out of the news wires, where reports about how the Council of 
Europe's foreign ministers were feeling "positive" about developments in 
Russia nuzzled comfortably up against items slugged: "Armed tax police raid 
Russian media group." It was there in the images of President Vladimir Putin 
exchanging pleasantries with CNN founder Ted Turner while masked guys holding 
little Uzi-like automatics guarded the front entrance of Media-MOST's 
headquarters on Bolshoi Palashevsky Pereulok. (Why, after all, let petty 
concerns like press freedom or journalistic solidarity get in the way of 
weighty deliberations about nuclear disarmament, not to mention the chance to 
do some good business.) 

On Friday, the newly inaugurated head of state - or, rather, his press 
service - finally got around to commenting on the Media-MOST raid. "The 
president is firmly convinced that freedom of speech and freedom of the media 
are immutable values," Putin's statement read. "A free press must exist as an 
important guarantee of democratic development. As for the investigation of 
criminal cases, all are equal before the law, regardless of the kind business 
they may be involved in." Wow! An endorsement of press freedom and the rule 
of law, all in one! Somebody tell Fitch IBCA to raise Russia's credit rating 
another notch. 

Let's accept, for the moment, that the allegations that Media-MOST's security 
service engaged in illegal electronic surveillance are true. If so, the law 
enforcement and judicial authorities would be obliged to take the case to 
court in a reasonable amount of time. The authorities' record here is not 
encouraging. The investigation of the murder of television journalist 
Vladislav Listyev, for example, has been going on for five years, with no 
apparent results. And the history ofcases similar to the one brought against 
Media-MOST on April 26 is not encouraging. What ever happened, for example, 
to the case involving Atoll, the private security firm that shared offices 
with the Sibneft oil company and was raided last year for allegedly 
eavesdropping on various officials and VIPs? Anybody out there know? 

The problem, of course, is that the legal system is so thoroughly politicized 
that many otherwise intelligent local observers speak of this as if it were 
normal. The newspaper Nezavismaya Gazeta, for example, which is part of Boris 
Berezovsky's media empire, drew the obvious parallel between the Media-MOST 
raid and the Sibneft/Atoll case. Putin, it wrote, can either prove the 
Media-MOST case in court or drop it and "hush up the scandal" - as, the paper 
implied, happened in the Atoll case. Taking it to court is unlikely, the 
paper concluded, given the realities of Russian "paper work." So the second 
option is likely. 

What was notable about Nezavisimaya Gazeta's comments was its almost 
reflexive assumption that Putin should decide the fate of such cases, and 
that such cases can never be successfully adjudicated because of "paper 
work." The record of the last decade, of course, suggests both assumptions 
reflect reality, but let's not dance around what that implies. It means the 
rule of law does not exist in Russia, and cannot under the current system. 

The raid elicited other examples of refreshing frankness in the Russian media 
- such as the following comments from Izvestia's Georgy Bovt. 

"What is freedom of speech in Russia?" wrote Bovt. "The product of civil 
society? Or a form of coexistence [between] oligarchical clans that use the 
mass media as a battlefield for resolving contradictions? [Media-MOST chief] 
Vladimir Gusinsky has never been engaged in the media business in its pure 
form, although he came closer than anybody else did to creating 'the Russian 
CNN.' He always - like any of our oligarchs - built all business (including 
media) on special relations with the government. The authorities themselves 
are zealously protecting exactly this kind of capitalism - where the rules of 
the game, tenders ... and their results are determined by the Bureaucrats." 

The bottom line of Nezavisimaya Gazeta's and Bovt's comments? That Putin's 
promises to create a level playing field, chase the oligarchs from the 
corridors of power, etc., are empty sloganeering. Largely aimed, they might 
have added, at the Western businesses, media moguls, credit rating agencies 
and heads of government who, yet again, see Real Reform just over the 

It would be petty to wish them ill. Live long and prosper. Just watch out for 
the guys in the ski-masks. 


The Guardian (UK)
13 May 2000
[for personal use only]
Capital letters 
Russia's new strongman puts Stalin back on a pedestal 
Ian Traynor in Moscow 

First there was May Day, the holiest holiday in the communist calendar. Then 
there was the Orthodox Easter, the most sacred feast for religious Russians. 
Next came Victory Day, another long weekend of partying on what is the most 
important national holiday - marking the conquest of Nazi Germany in a 
country that otherwise has little to celebrate these days. 

Moscow is nursing a gigantic hangover after three long weekends that 
inevitably merge into each other. Workers marching under the red flag blur 
into processions of long-bearded priests who morph into military parades. 
Into the middle of the carousing came the inauguration of the new president, 
Vladimir Putin, making May 2000 the bumper party season for the New Russia. 

This profusion of ritual provides symbols and portents that offer clues as to 
who the New Russians think they are. Memorials unveiled. New coins minted. 
Flags raised and songs sung. 

Poring over the rites of the New Russia, however, is confusing and 
contradictory. Take the national anthem, for example. The old Soviet anthem 
which replaced the Internationale in 1943 on Stalin's orders was ditched when 
the Soviet Union collapsed in 1991. Boris Yeltsin's choirmasters came up with 
a 19th century tune, The Patriotic Song of Glinka. 

Standing among the old soldiers on Red Square the other day as the band 
struck up, I half expected the veterans to burst into song, but they did not, 
of course, because it's an anthem without words - for the simple reason that 
no one can agree on what it should say. 

There have been 500 text submissions during the 1990s, but every suggestion 
has offended someone, so putting words to the music has been put off. 
Besides, the parliament, until recently dominated by communists, has refused 
to accept the Glinka, just as it threw out the white, blue, and red tricolour 
as Russia's national flag, and the heraldic double-headed golden eagle. Too 
Tsarist, you see. 

If words and flags are too divisive, one figure has emerged as the 
unlikeliest of healing symbols - Stalin. The dictator, it seems, is proving 
useful to Mr Putin. He opened his Red Square address to the war veterans with 
exactly the same words Stalin used in 1945. 

Mr Putin unveiled a Kremlin plaque dedicated to 17 war heroes - top of the 
list was Stalin. A couple of days before that the central bank issued 
commemorative coins for the holiday featuring Stalin alongside Churchill and 

A new bronze bust of Stalin is planned for Russia's main war memorial. And 
two days ago, Mr Putin became the first Russian leader in decades to hold a 
meeting at the Volynskoye dacha outside Moscow where Stalin lived and died. 

Understandably, not everyone is delighted by Mr Putin's dalliance with the 
architect of the gulag. Least of all, a bunch of Georgians who want the 
remains of the most infamous Georgian of all returned to his native soil. 

It was in 1956 that the Stalin statue was taken down from its pedestal in the 
Georgian town of Khashuri, home to the Djugashvili clan. The 5ft likeness has 
been tended at home by a Georgian war veteran ever since. Last week the 
statue was re-erected. 

Then the Stalin supporters said they wanted the remains of the mummified 
corpse transferred to Georgia from their spot at the Kremlin wall because 
"so-called democratic Russia was spitting on the grave of the great son of 
the Georgian people". Mr Putin is not spitting. He's flirting. 

Nikita Mikhalkov, a film director, has called for Volgograd to revert to its 
earlier name of Stalingrad. Perhaps he could write the 501st script for the 
Glinka melody. It was his dad, Sergei, who wrote the words for Stalin's 
anthem in 1943. 



Moscow, 13th May, ITAR-TASS correspondent Larisa Reznikova: Almost half of
the inhabitants of Russia are not inclined to position themselves in any
part of the political spectrum. This has been shown by a poll carried out
by the independent research centre, Romir, the results of which have been
passed on to ITAR-TASS. 

According to the poll, the centrists have the largest number of supporters
amongst the Russian population: 20.8 per cent of respondents supported them. 

Some 2.1 per cent of the population consider themselves to be extreme
left-wingers. Twelve and a half per cent of those polled consider
themselves leftists or people whose views are inclined to the left. 

Some 18.1 per cent of citizens consider themselves right-wingers or people
whose views are inclined to the right. According to the poll, radical
right-wing views are virtually nonexistent amongst Russians. 

Romir carried out the poll using a nationwide representative sample of
2,000 people. 


The Economist (UK)
May 13-19, 2000
[for personal use only]
Mikhail Kasyanov, Russia’s big new wheel 

UNDER doddery Boris Yeltsin, Russian prime ministers were the men who more
or less ran the country, interrupted by the odd snarl from the Kremlin. The
job was exciting but usually brief. In the nine years of his presidency, Mr
Yeltsin got through six prime ministers. Only one lasted more than a year. 

For Mikhail Kasyanov, whom the undoddery Vladimir Putin nominated as acting
prime minister after the presidential inauguration on May 7th, things look
set to be rather different. Whereas the jealous Mr Yeltsin could manage
only a few hours’ work a week, and usually sacked his prime ministers for
becoming too popular, Mr Putin is both fully in charge and less neurotic; a
well-regarded government will bolster his standing. 

The first big question facing Mr Kasyanov is the role of the new
government, due to be announced later this month. Will it be a political
entity, as in the Yeltsin era, or a merely administrative one, as in Soviet
times, when its job was to carry out the orders of the Communist Party?
There are signs that Mr Putin’s thinking tends towards the latter, with a
powerful Kremlin handing down instructions. A document published by a
Russian newspaper last week, supposedly leaked from the Kremlin, also
suggested a central role for the security services in managing politics,
and a new “political council” to corral the main political parties behind
Mr Putin. Few Russians, so far, sound shocked. 

Even so, this would still leave Mr Kasyanov with the daunting task of
creating an efficient government, something Russia has never enjoyed in its
history. The lower ranks of the civil service—backward, ill trained and
underpaid—are a swamp of waste and corruption. At the top, the ministries
in recent years have mostly been autonomous baronies. Ministers and top
civil servants all too often treat their work as a source of speedy
enrichment rather than public service. Many people in ministries dealing
with natural resources, for example, are “owned” by one or other of the big
companies involved, which in turn often belong or are linked to the
self-important tycoons known as oligarchs. The fusion of their political
and commercial interests in the upper reaches of power has had pernicious

An early test will be whether Mr Putin replaces the most spectacularly
incompetent and greedy figures, and with whom. A shuffle in January bumped
some from the Yeltsin era down a notch or two, but fell far short of a
clean-out. Despite talk of bringing in “market-minded professionals”, Mr
Putin has yet to make a drastic break with the previous gang; admittedly,
finding experienced, able, honest candidates would be hard at the best of
times. The soberest hope is that the businesslike Mr Kasyanov may try to
nudge his government away from the worst habits of the past. 

What else will he manage in the Russia murkily emerging under President
Putin? Views on the 42-year-old Mr Kasyanov differ. Born in Solntsevo,
outside Moscow, a town with the reputation in Russia that Palermo has in
Italy, he spent the first decade of his career as an obscure bureaucrat,
perhaps—like so many of Mr Putin’s early favourites—with links to the
intelligence service. In his main job since communism’s collapse,
renegotiating Russia’s foreign debts, he sharpened his excellent English,
while proving a quick-witted and decisive deal-maker. 

Thanks partly to such qualities, Russia managed the unusual feat of
restructuring its debt to western banks twice in three years. That was a
striking achievement, given that its public finances were actually looking
relatively sound. But he was lucky too. “A lot of the records he set were
rather wind-assisted,” notes a foreigner who often dealt with him. “People
[in the West] didn’t want those negotiations to fail.” 

Competent fixer that he is, it is too soon to say whether Mr Kasyanov’s
talent goes beyond manipulating the conflicting greed, fear and impatience
of western bankers. The bits of government he has worked in, chiefly the
Finance Ministry, are not stellar examples of openness and efficiency. Even
though Mr Kasyanov is not said to have been involved in the unorthodox
financial practices of the Yeltsin years, which included unaccounted-for
international loans, off-the-books government spending and mysterious tax
breaks for well-connected companies, he has not gone out of his way to
attack them. He condemns corruption, but seems to define it narrowly, in
terms of specific cases of wrongdoing, rather than as something endemic to
a rotten system. 

Another big question hangs over his friendship with Russia’s most
influential oligarch, Boris Berezovsky. One reform-minded former deputy
prime minister, Boris Nemtsov, says that Mr Kasyanov’s appointment would
mean “the continuation of the oligarchs’ rule”. Though Mr Putin has said he
will “eliminate” the oligarchs “as a class”, the early signs are not
encouraging. The Putin-Kasyanov duo have in effect run Russia since
January, during which time Mr Berezovsky and his chums have added the
aluminium industry to their empire, without even token resistance from the
government’s anti-monopoly watchdog. 

Like Mr Putin, Mr Kasyanov is by Russian standards well travelled and well
informed. Like Mr Putin, he gives the strong impression of believing
politics is a zero-sum game: one side’s gain is always the other’s loss.
And like Mr Putin, he shows little interest in human rights, and has so far
had trouble matching words to deeds. “We are working out a very ambitious
reform programme to be implemented immediately after the presidential
elections,” Mr Kasyanov promised a plutocrats’ gathering in Davos in
January. So far, the programme is a mystery. 

Mr Kasyanov will certainly provide a confident face to Mr Putin’s Russia,
smooth or abrasive as required. His government may be less shambolic than
past administrations. It may well condone more authoritarian and ruthless
methods than those of its post-Soviet predecessors; there is no sense of
the squeamish about Mr Kasyanov. But will he deliver? Not unless he shows
much more enthusiasm for genuine economic, political and moral regeneration. 


The Washington Post
13 May 2000
A Rotten Start for Mr. Putin

PRESIDENT Vladimir Putin was sworn in May 7 having promised to establish a 
"dictatorship of law" in Russia. Four days later, his government gave an 
exhibition of what that phrase might mean insofar as it applies to freedom of 
the press. Heavily armed men, wearing government-issued camouflage uniforms 
and concealing their identities behind black ski masks, burst into the Moscow 
offices of Media-Most, the leading independent news organization in Russia. 
They herded employees into a cafeteria and then searched company offices, 
carting away documents, videotapes and equipment.

Russian officials offered vague and contradictory justifications for the 
raid, alluding to Media-Most's purported disclosure of commercial secrets or 
supposed wiretapping by the company's private security force. The threadbare 
rationales only made more credible the supposition that Mr. Putin was seeking 
to intimidate, and hence silence, one of the few information sources left in 
Russia that still offers an outlet for opposition politicians and objective 
coverage of both the war in Chechnya and high-level corruption. Media-Most 
controls NTV, a national television channel, and Sevodnya, a newspaper that 
recently published an account of business dealings by a deputy director of 
the Federal Security Service--the successor organization to the KGB, of which 
Mr. Putin is a thoroughly unapologetic veteran. (In the interest of full 
disclosure, readers should know that Media-Most also publishes a weekly 
newsmagazine in partnership with the Washington Post Co.'s Newsweek.)

Facing criticism in Russia, Mr. Putin tried to distance himself from the 
raid. His press agency said that "the president is firmly convinced that 
freedom of speech and freedom of the mass media are immutable values." But 
this isn't the first time Mr. Putin has given reason to question his faith in 
such values. To Mr. Putin, Andrei Babitsky, the Radio Free Europe/Radio 
Liberty reporter who broadcast critical stories about Russian forces in 
Chechnya and then was abducted by them, was "working directly for the enemy." 
While Mr. Putin was still acting president, two newspapers, Kommersant Daily 
and Novaya Gazeta, received formal Kremlin warnings for publishing interviews 
with the Chechen leader Aslan Maskhadov.

The Clinton administration thus far has found much to like in Russia's new 
president, despite his KGB past and his conduct of the brutal war in 
Chechnya. Many supporters of democracy in Russia have found more reason for 
skepticism. The raid on Media-Most does nothing to allay the skeptics' fears. 


Russia: Analysis From Washington: Repression By Selective Prosecution
By Paul Goble

Washington, 12 May 2000 (RFE/RL) -- Newly inaugurated Russian President 
Vladimir Putin appears to have embarked on a strategy long favored by 
authoritarian leaders: the selective prosecution of his opponents for actual 
legal violations.

That chilling conclusion, only four days into Putin's term, is suggested by a 
police raid yesterday on a major Russian media group that has long been 
critical of Kremlin policy in general and of Putin's specific approach to a 
variety of issues.

Early Thursday morning, armed tax police searched the headquarters of the 
Media-MOST group, a media giant lead by Vladimir Gusinsky. This group 
controls NTV television, Ekho Moskvy radio, the daily "Segodnya" and the 
weekly magzine "Itogi."

The Federal Security Service said that the raid was simply intended to find 
evidence of tax irregularities, what an FSB spokesman insisted was "a regular 
financial offense."

And during the course of the day, FSB officials reported finding not only the 
evidence they said they were looking for concerning tax violations but 
indications of other criminal activity, including the use of unauthorized 
eavesdropping devices. 

But Gusinsky and his supporters, who have often been the objects of critical 
official attention for their critical coverage of the government, quite 
naturally viewed this police action in a very different way. 

Gusinsky suggested that "it is obvious that what is happening is a factor of 
political pressure." And another MOST leader, Igor Malashenko, said that this 
action "contradicts the norms of Russia's constitution and is against freedom 
of speech." 

Because of the nature of the Russian political and economic system over the 
last decade, both the FSB and Gusinsky are in some sense right.

Given confusion over tax policies and the underlying corruption of Russian 
society, virtually no firm in that country has been able or willing to always 
conduct its affairs in full compliance with the law.

And consequently, the authorities are likely to be able to find evidence 
justifying prosecution almost anywhere they choose to look.

But it is precisely because the authorities have the possibility to pick and 
choose whom they will prosecute that Gusinsky and the Media-MOST team have 
the better part of the argument.

They properly point out that they have been singled out from among all the 
other potential targets of investigation. And they plausibly suggest that the 
government has done so not out of a concern for law enforcement but rather to 
build its power.

Even a cursory examination of the Russian media scene suggests that 
Gusinsky's operation was no more "illegal" than that of other media barons, 
but his group does have one characteristic the others don't: it has been very 
critical of the Kremlin.

Now, the Thursday raid suggests, the Kremlin has decided to respond -- and to 
do so by using the respectable provisions of the law itself rather than brute 
force to move against freedom of the press and those who seek to defend it. 

Such a strategy has three major advantages for a leader like Putin who has 
made it clear that he wants to ensure his control. 

First, it can be used to silence or break those who oppose his regime, either 
by tying them up in legal cases or financially ruining them. 
Second, actions of this type against such groups intimidate others who might 
be thinking about opposing him. The latter can see what the costs are of 
doing so and often will decide to remain silent or otherwise go along. 
And third, because such actions are cloaked in mantle of legality, they often 
escape any criticism from democratic governments. Such regimes can and do say 
to themselves that in such cases, the police are only enforcing the law. 
But for all three of these reasons, this "legal" threat to media freedom and 
to other forms of freedom which rely on it may be even more insidious and 
threatening than the direct application of force would have been. 

For that reason, Thursday's raid on Media-MOST may prove to be an even more 
significant turning point in Russia's political development than last 
Sunday's inauguration of Vladimir Putin as president. 


Russia's Gorbachev opens new building for fund

MOSCOW, May 12 (Reuters) - Mikhail Gorbachev, former president of the 
now-defunct Soviet Union, was feted on Friday by leading figures of 
``perestroika'' reform era at the opening of a new building for his think 

Russian television stations showed a beaming Gorbachev cutting the ribbon to 
the central Moscow facility built by a Turkish firm with the help of proceeds 
from his books and donations from well-wishers. 

Among the sponsors present was Ted Turner, founder of the U.S. Cable News 
Network, who met newly-inaugurated Russian president Vladimir Putin on 

Gorbachev said the building had been a dream of his wife Raisa, who died last 
year. Accompanied by his daughter Irina, he made light of matters, pointing 
to his own offbeat fund-raising. 

``I tried hard and that meant resorting to outstanding actions like Pizza 
Hut,'' he said, referring to a television advertisement he made for the 

``There are so many receptions in Moscow that all the vodka drunk could 
provide help for plenty of needy people.'' 

Among those attending the opening were Yevgeny Primakov, a top Soviet 
Communist Party official and a prime minister in the post-Soviet period, plus 
a long list of academics, led by Alexander Yakovlev, a top ideologist of 
perestroika reforms. 

Among foreign guests was former Israeli Prime Minister Shimon Peres. Putin 
did not attend, but NTV television said his bodyguards had examined the 
building to ensure it was safe. 

Gorbachev took over as Soviet leader in 1985 and battled against the 
conservative wing of the Communist Party to ram through reforms that 
dismantled the one-party system, freed the press and ended restrictions on 

He survived a coup attempt by hardliners in August 1991, but the forces it 
unleashed led to his downfall and the leaders of Russia, Ukraine and Belarus 
pronounced the Soviet Union dead within four months. He resigned on Christmas 


Date: Fri, 12 May 2000 
From: "stanislav menshikov" <> 

"MOSCOW TRIBUNE", 12 May 2000
Theoretical Achilles Will Never Outrun the Practical Tortoise
By Stanislav Menshikov

Now that Vladimir Putin is safely installed in the Kremlin let us make a
reasonable guess as to the nature of his first actions be in the economy.
The range of forecasts runs from dictatorship a la Pinochet to liberal
brands of monetarism depending on which set of advisers one has in mind.
As a result, there is a strong belief in some quarters that the country is
set for a second round of shock therapy which, unlike the disastrous Gaidar
first round, will this time unlock the door to prosperity. These forecasts
may well go wrong for the simple reason that Putin is very much his own
adviser and chooses to work with a broad spectrum of political and
business interests rather than follow any particular line of economic

Proof of this approach abounds across the board. Take for instance, Michael
Kasyanov, the new prime-minister, sure to be confirmed by parliament.
Unlike Gaidar in his time, Kasyanov is not a newcomer to top economic
governance and has intimate knowledge of how the old planning and new
post-Soviet mechanisms work. Unlike Chubais, he never mixed the Exchequer
with ideology institution and his own pocket. Not only is he an expert in
practical deeds domestically and internationally. He is also sceptical
about the policy package that may emerge from the group presided over by
German Gref. He has made it clear that Gref's package will never see the
light of the day before his government bureaucracy spills it through its
own filter. 

Unlike Yeltsin's long-time premier Viktor Chernomyrdin, who was also a 
practical man who used to Gasprom, Kasyanov is not a traditional
Soviet-type engineer from whom former Gosplan chiefs were recruited, and
therefore knows something about the management of the macroeconomy which is
very different from running a factory or pipeline. In short, the government
is a source of economic advice for Mr. Putin that is far superior than a
group of self-styled liberal economists.

The new president has also quickly defined his own sphere of economic
management in a very non-classical way. In the difficult area of
monopoly-oligopoly-competition he has shown how he prefers to deal with
emerging crises. He has brokered a careful compromise between the main two
natural monopolies, Gazprom and RAU UES. Putin's theoretical advisers were
not even asked for their views on that matter. When Illarionov, top Kremlin
adviser, publicly ventured unsolicited comments on how to break down both
natural monopolies, the president cut him down immediately. Our hunch is
that Putin knows practical economics better than his formal adviser. Where
Illarionov sees dismembering natural monopolies as a sure way to restrain
energy prices through competition (a theoretical approach), the president
has the gut feeling that losing natural monopolies at this stage of the
game may deprive the government of any control over these prices and
therefore in the short-term bring about more inflation rather than less (a
practical approach). Putin's approach to the case of extreme concentration

in aluminium is another case in point where the solution defies abstract
theory but is basically sound.

For the same reason it is not reasonable to expect from the new president a
series of "big leaps forward" in economic reforms. Putin has stated his
view on the need to tread cautiously in land reform simply to widely
divergent regional experiences so far. The much popularised tax reform
widely expected this summer is a project that the Finance ministry, rather
than theoreticians, have been elaborating over the years and which has
partly cleared the Duma. This is not a leap forward by any reasonable
measure but slow yet sure snail-pace advance. Those who believe that tax
reform of this kind will turn the economy around in no time are bound to be

But this down to earth activism is exactly what enamours the Putin with the
business community. Consider the London based Fitch IBCA international
agency which has just revised two positions upward Russia's international
creditability rating. In the world of financiers such an increase is
considered unprecedented. In practical terms it is bound to reopen world
markets for Russian Eurobonds, something that most experts did not expect

Why this sudden turnaround? One point upward revision was accorded for the
Putin-Kasyanov record so far which speaks for itself. GDP, currency
reserves, balance of payments, personal income, industrial production,
stock market advances, primary government surplus, rouble stability on all
these counts Putin-Kasyanov have beaten pessimistic predictions. The second
upward point was given for improving the predictive estimation of the
Russian economy. The business community now believes that things in Russia
will improve. And optimistic predictions usually tend to help the economy
rise, at least in the short. run.

In the longer run, matters will depend on Putin's policies. If he refutes
other crazy theoretical advice like bankrupting 40 per cent of Russia's
enterprises, or reducing by half social expenditure in the budget, he is
probably safe. Theoretical Achilles will never outperform the pragmatic
tortoise if he runs the wrong way.


Moscow Times
May 13, 2000 
Blueprint Cuts Tax, Social Benefits 
By Catherine Belton
Staff Writer

A blueprint for the economy, due to be completed within a week, calls for 
slashing income tax to a flat rate of 12 percent to 13 percent, combining 
payroll contributions to social funds into one reduced tax, abolishing 
turnover tax and wiping out all tax benefits, an official at the center 
preparing the plan said Friday. 

The program being prepared by the Center for Strategic Research would also 
slash numerous social benefits - including housing subsidies and free 
transport - and is bound to face a rough ride through parliament, said Arkady 
Dvorkovich, the economist in charge of mapping fiscal and budgetary policy 
for the think tank. 

If the blueprint is followed, the economy will grow 70 percent over the next 
decade, according to "conservative" estimates made by the center, said 

The long-awaited program aims to deregulate the economy by reducing state 
interference in commercial activity and making it more efficient in the 
sectors where it is most needed. It would cut red tape and level out the 
playing field for economic competition, Dvorkovich said. 

The program places top priority on achieving a deficit-free budget for 2001 
based on changes to the tax laws and spending cuts that need to be pushed 
through parliament by the end of this year, he said in a telephone interview 
from the center's secluded dacha just outside city limits, where leading 
economists have gathered for a final push to complete the plan. 

The plan is due for presentation to a team of officials from the 
International Monetary Fund due to arrive in Moscow on Monday, said Martin 
Gilman, head of the IMF's Moscow office, in remarks reported Friday by 

The center's program maps out a long-term economic strategy under three 
subheadings: modernizing the economy, social reform and reform of the power 
structure itself. 

Its prescription for the economy is likely to meet strong resistance from 
entrenched interests in the bureaucratic, regional and financial elites. 

Even Dvorkovich hesitated when asked whether he thought the program would cut 
any ice. 

"It seems to me that if at least the tax reforms are pushed through, then 25 
percent of the plan's success is ensured," he said after a long pause. 

The cuts would reduce the tax burden by 20 percent of gross domestic product 
in nominal terms, down from 43 percent, Dvorkovich said. However, in real 
terms, the tax reduction will be much smaller at around 3 percent of GDP 
because the taxes targeted for cuts and liquidation are in reality not paid 
anyway, he added. 

Reductions in payments to social funds, such as for pensions and health 
insurance, would mean the aggregate payroll tax burden would drop from some 
40 percent to 35 percent, said Oleg Vyugin, a former first deputy finance 
minister who is now in charge of macroeconomic policy for the center, 
speaking in a recent telephone interview. 

At least one critic has already howled that these cuts are not enough. 

"If they were cut to 20 percent, then a lot of companies would not have any 
interest in hiding wages any more and all of a sudden there would be a flood 
of funds in from the gray economy," said former Finance Minister Boris 
Fyodorov at a news conference Thursday. 

"But a cut to 35 percent changes nothing, and means the government is going 
to miss a unique opportunity," he said. 

The new government faces a tough task pushing Part II of the Tax Code through 
parliament according to schedule in the second quarter of this year. The 
State Duma has so far been bogged down in battling over more than 1,000 
amendments to Part I of the code, and further amendments to Part II could 
further confuse matters. 

Nevertheless, think tank members say it is imperative for the Tax Code to be 
passed soon so that new laws will be in place by Jan. 1, 2001. Otherwise, 
they cannot come into effect until Jan. 1, 2002. 

Shortened early v ersions of the program presented by the center - founded 
last December under the leadership of First Deputy Property Minister German 
Gref - have been leaked to local newspapers this week. 

Those versions map out plans to improve corporate transparency by introducing 
international accounting standards, tightening laws on operations through 
offshore zones and transferring all budget fund transactions to the federal 
treasury by the first quarter of 2001. 

Segodnya provided a point-by-point version of the plan complete with 
deadlines for legislation and warnings about resistance each measure could 
encounter. The changes were likely to meet stiff resistance from regional 
governors, who would face a squeeze on local budgets, and from powerful 
businessmen who thrive off existing tax benefits, the paper reported. 

Dvorkovich said Friday that the plans published in the media have already 
been altered, but that the main points remain unchanged. 

"Only details and nitty-gritty points are under consideration now," he said. 

The plan also proposes to significantly reduce state spending - a measure 
repeatedly called for by presidential economics adviser Andrei Illarionov as 
one of the best ways to boost economic growth. 

Dvorkovich would not say by how much state expenditure was going to be cut. 

A version of the plan published in Friday's Kommersant called for state 
spending to be kept to a maximum of 30 percent of GDP - a level that would 
still be above the optimal level of 20 percent, according to Illarionov. 

Dvorkovich said a major priority for this year would be to cut from the 
budget all those expenditures that the government regularly fails to meet. 
That means pushing unpalatable bills through the Duma to abolish some 
benefits for veterans, children and others - including free transport. 

Those spending items would be replaced by funds specifically addressed to 
take care of those most in need. By cutting out "virtual" expenditures, the 
government would finally have an honest budget, Dvorkovich said. 


Date: Fri, 12 May 2000 
From: "Jeffrey Thomas" <JThomas@CSIS.ORG> 


CSIS - 1800 K Street, NW - Washington, DC 20006
Tuesday, May 23, 3:30-5:00 PM, at CSIS

Speaker: Speaker: Clifford Kupchan, US Department of State

Topic: Clifford Kupchan, Deputy Coordinator of U.S. Assistance to the New
Independent States (NIS) at the Department of State, will assess the
effectiveness of US efforts, drawing on examples from Ukraine, Russia,
Central Asia, and the Caucasus. He will focus on programs that promote
market and democratic reform, on "lessons learnt" from the past eight
years, and on future directions for US assistance. He will speak off the

Admission: Free, but please register with Jeff Thomas by telephone
(202-775-3240) or fax (202-775-3132)


St. Petersburg Times
May 12, 2000
Call This an Election? Don't Make Us Laugh

AND so one of the most drab, dismal, lackluster election campaigns in 
post-Soviet history draws to a close, and the sooner the better.

What the St. Petersburg electorate has been treated to over the past six 
months is a disgrace. First, Gov. Vladimir Yakovlev tries to move elections 
forward to coincide with State Duma elections in December 1999, after 
lawmakers at the Legislative Assembly apparently used the votes of absent 
colleagues to push the date change through.

Then this is struck down by the country's highest court for reasons that 
obviously have nothing to do with democracy or the law, and everything to do 
with the friction between the Kremlin and the Fatherland-All Russia 
"alliance," which looked threatening at the time but now seems a distant 
memory, blasted apart by state-controlled media.

This is followed by two Kremlin-backed candidates chickening out of the race 
for highly spurious reasons, leaving the local opposition to cast round 
frantically and in some confusion for a united candidate a fortnight before 
the vote, who is then blatantly smeared on Petersburg Television without even 
the pretense of fair, objective reporting.

Anyone who wanted a reminder of just how badly this city is served by its 
local station needed to watch nothing more than Thursday night's pre-election 
"report," praising Yakovlev for fixing a few roads (apparently not enough to 
stave off the last-minute tarmac panic that hit the city just before the 2000 
World Ice Hockey Championship), and trying to quash the notion that this is a 
dangerous city to do business in - the day after yet another local 
businessman is shot in the head just outside his apartment.

Knowing what to say about St. Petersburg's "media" is difficult. Supporters 
of both sides - whether or not sanctioned by the official parties and 
candidates - have indulged in the outrageous practice of printing rags not 
worth the name of newspapers, and stuffing them in the letter boxes of local 
residents who have no choice in receiving them.

Freedom of speech is a concept that The St. Petersburg Times defends to the 
hilt, but which has to be treated with responsibility. Organizations like the 
City Electoral Commission are supposed to rein in the kind of abuse that has 
been leveled at both Yakovlev and Igor Artemyev, but in the commission's 
case, it is either unwilling or unable - or both - to do anything.

This is not to mention the more respectable city newspapers, who generally 
illustrate their preferences by the news they leave out, rather than by what 
they include.

The sad conclusion is that as an exercise in democracy, this election has 
virtually nothing to recommend it - as will be evinced by the low turn-out on 
Sunday. Meanwhile, long may people continue to publish Moya Stolitsa and 
Mayak. If we ever run out of something to line the cat tray with, we will 
know where to turn.


Date: Thu, 11 May 2000 
From: "Conrad Hohenlohe" <> 
Subject: job announcement in Moscow

Media NGO seeks Executive Director.

The National Press Institute, an independent Russian non-profit organization
that supports Russian media, has a staff of 50 at 6 offices throughout
Russia. See Candidates should have 10 years management
experience, native Russian and Fluent English. The position is available
immediately. Salary is commensurate with experience. Please send letter and
resume by May 31 to or to the attention of the Search Committee
at fax +7 (095) 246-7502.


Web page for CDI Russia Weekly:


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