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CDI Library > Johnson's
Russia List |
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May
18, 2000
Johnson's Russia List
#4309
18 May 2000
davidjohnson@erols.com
[Note from David Johnson:
1. Moscow Times: Sarah Karush and Catherine Belton, Putin
to Tighten Grip on Regions.
2. smi.ru: Andrei Levkin, On a Philosophical Aspect
of the Interaction between Free Mass Media and Private Security Services.
3. Reuters: Russians Denounce Threat to Freedom of
Speech.
4. wps.ru/Moskovsky Komsomolets: NEW FSB DEPARTMENT?
5. CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE: The
Putin Presidency: What Can We Expect? A Presentation by Boris Fedorov.
6. Rossiyskaya Gazeta: All Putin Decisions Aim at
'Strengthening Vertical Power'
7. Moscow Times: Yevgenia Albats, Does Raid Show
Putin's Strength or Weakness?.
9. Mother Jones: Jen Tracy, My First Kalashnikov.
Russian schoolkids age 15 and up will soon be supplementing their
pencils and notebooks with semi-automatic weapons.
10. Reuters: Russia c.bank puts administrator at
Most-Bank.
11. Kommersant: Sergie Minayev, WHERE DID THE
DOLLARS GO?]
*******
#1
Moscow Times
May 18, 2000
Putin to Tighten Grip on Regions
By Sarah Karush and Catherine Belton
Staff Writers
In a 10-minute televised address late Wednesday, President Vladimir
Putin
revealed plans for sweeping changes in the way the country is governed
that
would tighten federal control over the unruly regions and cut back the
political clout of the governors.
Putin said he was introducing a packet of legislation to the State Duma
that
would deprive the governors of their seats in the Federation Council, or
upper house, and would provide a mechanism for Moscow to remove them
from
power.
"We are talking about laws that will strengthen and cement Russian
statehood," he said. "The common task of all these acts is to
make both the
executive branch and the legislative branch truly working, and to fill
the
constitutional principles of the separation of powers and the unity of
the
executive vertical with absolutely real content."
Speaking after a three-hour meeting with regional leaders, Putin said
the
bills were a follow-up to the decree he signed at the end of last week
creating seven federal districts, each with its own presidential
representative.
The decree was followed by speculation that measures with more bite were
pending, and Kremlin officials confirmed that they were planning
legislation
on sacking governors and restructuring the Federation Council.
Wednesday's
speech was the first time Putin himself explained his intentions.
"I promised that the government would conduct an open policy and
would
explain to citizens its goals and concrete steps," he said,
referring to his
May 7 inaugural speech.
Putin indicated that the reforms were central to his philosophy of how
the
country should be run.
"This is intended to strengthen the state's unity. It is supported
by
governors, by deputies, by all citizens of Russia. It may be said that
this
is the first time in the country when there is no difference of opinion
on
such a principal issue," he said.
Indeed, few but the governors themselves disagree that regional leaders
wield
too much power, often running their regions like their personal feifs.
Their
position in the Federation Council - where they sit with the heads of
the
regional parliaments, which in many cases are under the governors'
thumbs -
gives them partial control over national legislation and immunity from
prosecution.
"Governors, who control local financial flows and property, also
have legal
immunity as lawmakers, which puts them beyond the realms of any legal
framework and allows them to get up to whatever they want,"
Interfax quoted
Boris Nemtsov, liberal Duma deputy and former Nizhny Novgorod governor,
as
saying.
Putin said the new laws would give Moscow the power to sack them if they
violate federal law. The governors would have the power to dismiss
mayors and
other executives below them.
Regional laws and decrees often conflict with federal legislation and
occasionally the Constitution. Putin said one-fifth of regional
legislation
is in violation of federal law.
"From such seemingly individual issues, little by little,
separatism grows
up, at times becoming a springboard for an even more dangerous evil -
international terrorism," he said.
As for the Federation Council, Putin said its members should not be
regional
leaders, but he did not make clear how they should be chosen.
The Constitution says that the upper house should be made up of one
representative of the executive branch and one representative of the
legislative branch from each of the 89 regions. It does not specify that
the
governors and the heads of parliament must occupy the seats themselves.
However, it was unclear how replacing the governors with their
"representative" would solve the problem of separation of
powers, though it
would deprive them of their immunity.
The bills are not likely to come up against much resistance even though
they
tread considerably on the governors' interests. Prominent Duma deputies
and
regional leaders, most of whom have declared loyalty to Putin, expressed
their support for the measures after his speech.
The Communist speaker of the Duma, Gennady Seleznyov, weighed in soon
after
Putin's announcement to support the measures in an early sign the bills
would
have no trouble being passed by the lower chamber. He said he was
"convinced"
the measure to elect senators to the upper chamber of parliament would
be
supported by the Duma.
"I believe this is a correct decision," he said, Itar-Tass
reported. "It will
enable the Federation Council to work more effectively."
Mintimer Shaimiyev, president of Tatarstan, which is already being
forced to
relinquish much of the freedom it gained during the Yeltsin years, said
he
did not oppose the moves following his meeting with Putin. He said the
majority of regional leaders approved of the laws because they
understood the
measures were aimed at strengthening control over the country.
Sergei Sobyanin, chairman of the upper house's committee on
constitutional
legislation, said if the laws were passed by both the Duma and the
Federation
Council, they could be in force by Jan. 1 of next year.
Putin gave early hints of his plans to rein in the regions in the book
of
interviews, "Conversations with Vladimir Putin," which was
released just
weeks before the March 26 election.
"From the very beginning Russia has been created as a
supercentralized state.
This is fixed in Russia's genetic code, in its traditions, and in the
people's mentality," he said in the book.
******
#2
smi.ru
May 17, 2000
On a Philosophical Aspect of the Interaction between Free Mass Media and
Private Security Services
Andrei Levkin, levkin@russ.ru
In contrast to the highly emotional article by Sergei Parkhomenko in the
Monday issue of "Itogi", Leonid Radzikhovsky, writing in
Tuesday's
"Segodnya", is very much coherent and to the point. Analyzing
the coverage by
journalists (not by Media-MOST journalists) of the recent searches in
the
offices of the Media-MOST holding company, he singles out two lines. The
first one consists in the journalists upholding the version of the
events
suggested to them by the FSB (state security service), the second one
can be
concisely summed up as: "'A plague o' both your houses!' - the
Media-MOST
security service is trying to get at the FSB (or is it the other way
round,
after all?). Which of them is the worse? Both are the worse..."
Here is the conclusion of the article: "If the FSB succeeds in
replacing the
top management of the holding, in bringing the company to its knees, in
making it bend its back in a wheel bowing to the authorities, this will
not
mean the downfall of MOST alone. Whether anyone likes it or not, our
freedom
of speech to a large extent rests on MOST (a pun: most means
"bridge" in
Russian - Translator's note). Given all its shortcomings, MOST sets the
standard of criticizing the authorities. Should those latter succeed in
shooting that standard down, all of us - not just the media, but the
whole of
the country - will go down abruptly. This will be Operation Face in the
Mud,
an operation bringing us all closer to the level of Sergei Dorenko,
closer to
a position at the authorities' boot-heels. A nationwide operation. And
the
media will have a tremendously hard time rising up from their position
"on
all fours". In a snap, we will be thrown back to the pre-1991
situation, the
only difference being that, back then, there was a movement towards
freedom
and, right now, a movement away from it.
This is the scope of the problem. This is the kind of appetites our
latter-day puppet-masters and "puppet-eaters" have, whoever
they might be. It
is on the Bridge that we'll say good-bye to the freedom of speech (again
a
pun on the company's name; the phrase itself is an allusion to a popular
Russian love song - Translator's note). Does any of my
impartially-minded
colleagues find this not obvious?"
Comment: It isn't exactly clear what the two paragraphs just quoted are
supposed to be: a piece of self-glorification, traditional for MOST
("Given
all its shortcomings, MOST sets the standard of criticizing the
authorities"), or something in the nature of an appeal to the
public - which,
one should think, ought to need no reminders to understand that the
relations
between the authorities and the freedom of speech can be anything but
tender.
Of course, if the article under review consisted entirely of such
high-flown
verbiage, the case would be hopeless. But no, Mr. Radzikhovsky is quite
outspoken in agreeing that the theory of "the Media-MOST security
service
trying to get at the FSB (or the other way round)" is entirely
plausible,
saying in addition that "MOST is a 'white' business (i.e.
legitimate, on the
square - Translator) possessing a 'roof' that is the teeth of the 'white
business'". I. e. the discussion is being conducted in quite
pragmatic terms.
But, in that case, the question arises: whom does the expression
"Common
Destiny" (chosen as the headline of the article) apply to? Whose
destiny is
common with whose? That of the MOST-owned media with that of the press
in its
entirety (the free press - which fact, in itself, is just great)? Or
that of
the free press with that of the MOST security service? (as may be
inferred
from the following passage: "It's an obvious lie that the FSB is
fighting the
MOST security service, not Media-MOST itself. This kind of logic sounds
like:
'It isn't you I'm hitting, it's just your solar plexus'. The holding
company
Media-MOST is a single organism. Destroying one of its component parts
naturally means destroying the rest of them".)
In other words, the correlation of forces and tensions within the
triangle an
individual mass medium - its security service - the free press as a
whole
clearly calls for further philosophical clarification.
******
#3
Russians Denounce Threat to Freedom of Speech
May 17, 2000
MOSCOW (Reuters) - Hundreds of demonstrators in central Moscow denounced
what
journalists and human rights campaigners say is a growing threat to
press
freedom in Russia.
"We demand freedom of speech," was the rallying cry at the
protest called to
denounce a raid last week by masked, armed tax police on the offices of
Media-Most, a company that controls NTV, the second most watched
television
station in the country.
Protesters in Pushkin Square, traditional site of demonstrations during
and
since the Soviet era, held aloft banners critical of President Vladimir
Putin.
A special edition of Obshchaya Gazeta, only published when press freedom
appears endangered, said in its main headline: "Power without a
face always
relies on the man in the mask."
Officials of the Media-Most company said the raid was intended to
silence its
criticism of Russia's authorities. The media group also owns influential
newspapers and magazines.
The FSB domestic security service, a successor to the Soviet KGB, said
the
police visit was part of a criminal investigation.
"In all my experience, I could not have imagined such a crude,
loutish
demonstration of force, such an open attempt to instill fear in
society,"
wrote Soviet-era dissident Sergei Kovalyov, known as the
"conscience of
Russia," in Obshchaya Gazeta.
Kovalyov wrote that Russians had brought such "sanctions" on
themselves by
showing overwhelming support for Putin in the March presidential
election.
Putin was inaugurated four days before the raid on Media-Most's offices.
The union of journalists wrote that Russia's new media ministry and its
head,
Mikhail Lesin, were attempting "to revive the Communist propaganda
body and
political censors."
Protesters said they would fight for Russia's democracy.
"They are trying to gobble up our democracy, they are hungry and
greedy,"
said Maria, 32. "We won't let them."
Grigory Yavlinsky, the leader of the liberal Yabloko party who finished
third
to Putin in the election, told the crowd the authorities' crimes were
being
"paid for by the people."
"When no one knows anything, when nothing is shown, when everyone
is praised,
then it is possible to commit any crime."
******
#4
wps.ru
NEW FSB DEPARTMENT?
Moskovsky Komsomolets,
May 17, 2000, p. 2 ,
The new authorities want to rule Russia in comfort and with dignity.
They do
not wish to suffer from insomnia because in the morning some newspaper
may
publish compromising materials. They are irritated by this possibility.
This
is why the new administration is now considering methods of putting an
end to
information leaks and battles of compromising materials. According to
some
sources, a special Federal Security Service (FSB) department may be
created
whose task will be formulated as something like: "preventing
discreditation
of senior state officials and state authorities in general".
Three elements usually make up a chain of information leaks. The first
is the
source of the leak: as a rule, this is a mid-level state official in the
Presidential Administration or a governmental subdivision who has access
to
the "materials". The second element is the person who
"interprets" the
information, or analyses it, compares it with other data and presents
the
material. This is usually done by the analytical services of major
banks,
financial industrial groups, PR agencies and certain "institutes of
political
research". The third element is a journalist who expresses the
information in
simple form comprehensible to the general public.
The efforts of the new FSB department will focus on the second element.
It is
the easiest to get hold of, since some former employees of security
agencies
can always be found in security services of all banks, financial
industrial
groups and institutes of political research. They may be employed as
agents,
through whom the FSB intends to gain access to databases of the
"suspects"
and study them carefully.
It is not necessary to invent any intricate approaches to the first
element
in the chain - state officials. It is enough to tap their telephone
conversations and fire them at the first suspicion. It is also easy to
deal
with the third element - journalists. Especially since, along with
former FSB
agents, the department will use the most up-to-date technical devices
and
also the whole range of "preventive measures" allowed by law.
The fighters
against compromising materials will be allowed to bribe the necessary
people,
blackmail them, frighten and torture them, kidnap their children...
Of course, after ten years of freedom the idea of such a department
being
created seems absurd. Maybe this is only an unrealistic project of the
"dreamers from Lubyanka", or even misinformation. However,
considering the
current situation in the Kremlin, we believe there is a 50/50 chance of
the
plan to create a FSB department to fight compromising materials becoming
a
discouraging reality.
******
#5
CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE
Russian and Eurasian Program
Vol. 2, No. 3, May 16, 2000
The Putin Presidency: What Can We Expect?
A Presentation by Boris Fedorov on May 15, 2000
Neither dramatic economic reform nor KGB-style repression will
characterize
the new Putin regime in the estimation of Boris Fedorov. Federov,
Chairman
of the United Financial Group and former Russian minister of finance,
criticized both Putin's ardent supporters and excessive critics.
In
contrast to these extremes, Federov presented his own moderate view of
what
to expect from Putin.
Pros and Cons of Putin's Rise to Power
According to Fedorov, Putin is a major improvement over Yeltsin.
At least
he comes to the office daily, arrives punctually to meetings, looks over
government papers personally, and avoids excessive drinking, quipped
Fedorov. He is a well-organized and efficient administrator, as he
demonstrated while working for former Saint Petersburg Governor Anatoly
Sobchak.
To Fedorov, however, Putin appears to be more of a bureaucrat than a
president. He emphasized that Putin is a product of the Yeltsin
political
machinery, but he was not selected to succeed Yeltsin because he
possessed
exceptional leadership qualities. Yeltsin merely ran out of potential
successors after dismissing a string of prime ministers. Putin's
minimal
experience giving speeches and making public appearances particularly
worried Yeltsin's advisors.
Moreover, Putin's presidential campaign gave cause for skepticism about
the
condition of Russian democracy. In Fedorov's view, it showed that
political victory in Russia can be assured by a team of good spin
doctors.
Fedorov additionally noted that it is disconcerting how a bloody war in
Chechnya aided Putin's political popularity. He explained, however, that
the war was not Putin's own creation. The prime minister has no
direct
control over the armed forces. Until Putin became acting president
at the
end of December 1999, others in the Yeltsin administration were
technically
in charge of the operation in Chechnya.
What Putin Wants to Do
Putin wants to improve the efficiency of Russia's political system and
the
well-being of its economy. What is not clear, according to Fedorov,
is
whether he will select the right means to attain these goals.
However,
Fedorov did admit that the program which the Center for Strategic
Research, a government-backed think tank, has developed is good.
It
recognizes that the federal government needs to reassert control over
the
regions, and it is very market oriented.
What Putin Will Do
The key question is whether Putin will be able to implement the reforms
outlined in his program. It is unclear who Putin expects to push through
reforms. Mikhail Kasyanov, acting prime minister, is a technocrat
with
excellent knowledge of external debt issues. He carries out orders
well,
said Fedorov, but he is not a leader. Likewise, Aleksei Kudrin,
the likely
minister of finance, is a competent economist and an honest man, but he
is
not capable of leading the reform effort. Moreover, it is likely
that
Viktor Gerashenko will remain as head of the Central Bank for at least
another year. Gereshanko is a strong personality who has thwarted
reform
attempts before. Fedorov said that he personally approves of only one of
Putin's appointments thus far: Andrei Illarionov, who has become an
economic advisor to Putin.
For Fedorov, the Putin administration is on the verge of missing a
remarkable opportunity. Far more than Yeltsin at the beginning of
his
reign, Putin faces limited opposition. The Parliament will rubber
stamp
the legislation he wants, and opposition governors are "running for
cover."
Putin could even rename the country if he wished, joked Fedorov.
However, if Putin does not take advantage of this window by summer, this
opportunity will be lost. Parliament will disband for the summer,
and in
September when it reconvenes it is unlikely to be as supportive of the
Putin regime as it is now. Likewise, most major politicians are
now
waiting to find out whether Putin will appoint them to his
administration,
so they are limiting their criticism. Once Putin forms his
cabinet, those
left out will become much more vociferous. Meanwhile, critiques
who are
remaining silent out of fear will unleash their attacks on Putin once
they
realize that his regime is not willing to overuse KGB-style scare
tactics.
The Economy
Russia's economy seems to be doing well. Oil prices are high,
inflation is
down, and a devalued ruble has spurred economic growth. The
problem,
explained Fedorov, is that high oil prices and a devalued ruble will not
last for long. The good economy is lulling Russia's elite into a
false
sense of security.
Part of Russia's economic rebirth is ostensibly due to increased tax
collection; supposedly 60 percent of Russia's taxes are now collected in
cash. However, Fedorov questioned why this is considered good when
100
percent of taxes were collected in cash in 1993. The real issue is
why
cash collection was down to 25 percent a few years ago. Fedorov
also
argued that collecting taxes in cash matters little if dollarization is
increasing. The government can collect more rubles, but if more
transactions are taking place in dollars every year, the government is
still losing revenues.
As for the economic component of Putin's program, Fedorov agreed with
its
concepts but argued that it will not be enough. It does not
promote
structural reform, says almost nothing about monetary policy, and does
not
provide many concrete proposals. Indeed, he argued that some of
its
proposals will be downright meaningless. For example, currently
there is a
social tax in Russia of 40 percent of the wage bill. Nearly all
Russian
companies have developed schemes to avoid paying this tax. If this
social
tax is reduced to 35 percent, it is a step in the right direction, but,
asked Fedorov, will companies really start paying the tax?
Finally, Fedorov emphasized that Putin's background is in the field of
national security, not economics. He only arrived in Moscow in
1996. It
will take time for him to build a capable administration and form the
connections that genuine reform requires. Consequently, people
should not
expect that a new presidency will mean a dramatically revamped economy.
Putin and the Oligarchs
Fedorov explained that Putin knows he must distance himself from the
oligarchs. However, he is a cautious man, so this will occur
slowly.
Fedorov noted that as head of the FSB, Putin fired many top-level FSB
officials. He has shown that he can be tough; it is unlikely that
he will
be the puppet of anyone.
Putin Flouts the Law?
Fedorov commented that he finds it unlikely that Putin was personally
behind the May 11 illegal raid on Media-Most Group's offices.
Instead, he
argued that Media-Most was investigating two high-level FSB officials,
so
it is possible that the FSB decided to retaliate. Another feasible
scenario is that someone in the FSB thought that a raid on Media-Most
would
please Putin, and decided to carry it out to curry his favor.
Fedorov
suggested that Putin should fire whomever is responsible for the FSB's
actions. If Media-Most magnate Vladimir Gusinsky has actually
committed a
crime, he should be investigated, but not using illegal methods.
Summary by Jordan Gans-Morse, Junior Fellow with the Russian and
Eurasian
Program
******
All Putin Decisions Aim at 'Strengthening Vertical Power'
Rossiyskaya Gazeta
16 May 2000
[translation for personal use only]
Article by Mikhail Kushtapin under the "Topic of the Day"
rubric:
"The Long Expected. And the Unexpected?"
The new president's ceremonial entry into office is
still fresh in our minds. Following the inauguration and the
May
holiday ordinary business has recommenced. The Russian
president's
first edicts have not disappointed the expectations of Russians who in
casting their vote for Vladimir Putin were voting above all for the
instilling of order in the country and for strong authority which could
defend everyone from the highhandedness of bureaucrats and ensure the
supremacy and dictatorship of the law at all levels of society.
But it is one thing to talk about order and the
triumph of the law
quite another to instill that order. We have been speaking
about this
for the last 10 years while simultaneously noting instances of the
destruction of the federation, the weakening of the authority of the
center, and the transformation of some regions into feudal fiefdoms
where
complete anarchy flourishes and where the heads of administration have
become used to being guided by their own ideas -- even ideas about the
Constitution of the Russian Federation.
Vladimir Putin set about instilling order not with
the grandmothers
selling carrots and knitted socks in the markets but first of all
suspended an edict of the president of Ingushetia and the government of
the republic and a decree of the head of administration of Amur Oblast
which violate the Russian Federation Constitution not only because they
encroach upon the competence of the federal center but also because they
affect the rights of citizens (see Rossiyskaya Gazeta, 13 May 2000).
Moreover, the head of state has told the Bashkortostan State Assembly to
bring the republic's constitution into line with the Russian Federation
Constitution and federal laws. A new Russian presidential
edict on the
creation of seven federal districts was signed Saturday.
That is to say, all Vladimir Putin's latest decisions
are directed
toward one end -- strengthening the vertical power hierarchy.
And this
above all else means that the country must live and be governed by laws
which are uniform and common to all regardless of which region you live
in, which post you occupy, and which factories, shipping companies,
newspapers, or television channels you own. But is this not
also the
core of democracy in any civilized state?!
The responses to the Russian president's first moves
have been
positive in general. However, it is no secret that at local
level not
everyone has greeted Vladimir Putin's initiatives with enthusiasm.
In particular, Erik Bugulov, the Moscow
representative of North
Ossetia, tactfully told an ITAR-TASS correspondent that in correcting
the
existing situation "no new mistakes must be made or new stupid
actions
committed." It cannot be ruled out that
many of us today are wondering
how
serious the new Russian president's desire to instill order in the
country is. Edicts are one thing, but the most important
thing is how
they will be carried out, whether the solution of the problem will be
seen through. After all, regional leaders have become
accustomed in
recent years to all the Kremlin's moves to instill order remaining
essentially just an empty declaration. Some governors and
presidents
have only been concerned with obtaining special privileges, the point of
which has amounted in practice to protecting their own region from
interference from the center.
This pernicious trend has reached the point whereby
not only oblasts,
krays, and republics now live according to their own laws but major
commercial structures too have imperceptibly turned into "separate
states
within a state." With their own politicians,
newspapers, television
channels, and even special services.
The current hysteria surrounding Media-Most is
instructive in this
regard. The recent searches carried out in this holding
company's
offices as a result of which listening devices and the recordings of
conversations of dozens of Russian politicians, journalists, and
officials have been seized from Gusinskiy's security service are
presented by the media under this oligarch's control as noting less than
an attack on freedom of speech by the new president of Russia.
It turns
out that laws are to be carried out only by ordinary citizens, while the
owners of regions, newspapers, and shipping companies know better.
The
universal lament can be explained today only by the fact that throughout
these past years we have championed democracy while in practice building
it [only] for select politicians, businessmen, and officials -- for
those
who have manipulated our affections in endless election campaigns
Now there is a chance, there is another attempt to
prove that we have
the same country for everyone, the same laws for everyone.
******
#7
Moscow Times
May 18, 2000
POWER PLAY: Does Raid Show Putin's Strength or Weakness?
By Yevgenia Albats
My first reaction to what happened to Media-MOST last Thursday - that
spectacle of men in black masks - was shock. Is everything really going
to
happen according to such a primitive scenario? Is the Chekist leaning of
the
new leadership really going to surface so quickly? Are those people
right who
think that 10 years of life in a more-or-less democratic country mean
nothing
to Vladimir Putin and that he and his colleagues are going to take
revenge
for the failure of the KGB nine years ago?
The fact is that after the unsuccessful and ill-organized August 1991
putsch,
they were booted out of power and forced to serve those whom they had
been
taught to hate, whom they had followed, for whom they had destroyed
careers
and lives. Is it really going to be that primitive and banal?
I also thought about Boris Yeltsin; I'd be curious to know what he felt
observing that bacchanalia organized around Media-MOST.
It was Yeltsin who wrote in Dec. 21, 1993 in one of his famous decrees:
"The
organs VChK-OGPU-NKVD-KGB-MB [i.e., the Security Ministry, now known as
the
FSB] have proved unreformable. Attempts at their reorganization in the
past
years have proved cosmetic. ... The system of political police has been
retained and can easily be reestablished."
How should Yeltsin feel today, a man who saw the danger of maintaining
the
political police but who nevertheless handed over power specifically to
one
of its representatives, in so doing entrusting his life's work, the
transformation of Russia into a democratic country, to the hands of
those who
think about democracy least of all?
Now the question is this: What conclusions will the new leadership draw
after
the Media-MOST raid? Thus far, the president has been hiding behind his
press
office's announcement, which contains much rhetoric about the necessity
of
maintaining a free press, but not a word about what happened May 11.
It's obvious that any business in this country, including a business
dealing
with the media, is conducted with legal infractions. And all legislation
today is constructed in such a way that the government can find fault
with
those businesses it doesn't like, and wink at those it does. Putin
didn't
notice the redividing up of the aluminum market - accomplished by
Sibneft,
which is close to the leadership - but suddenly remembered legislation
when
the issue arose of that displeasing Media-MOST.
This is life according to mafia principles: The Godfather forgives those
he
wants to forgive, and snuffs out those he doesn't.
Violating the secrecy of investigation, FSB representatives showed some
documents they claimed were obtained during the search of Media-MOST. It
is
pure bluff. Those transcripts of bugged conversations were on sale in
late
1998 for as much as $60,000. There was no buyer, but some transcripts
found
their way into a newspaper. The sellers were former KGB employees, some
of
whom were then fired from MOST security. Thus, if the FSB wanted to
pursue
the law, it would have had to carry out the search long ago. Therefore,
the
current raid has nothing to do with the law. It's a clear attempt to
frighten
those journalists who have yet to show loyalty to the new Kremlin
administration.
It's not important whether Putin personally gave the command to conduct
the
operation to intimidate Media-MOST or whether it was done without his
knowledge. The latter possibility is actually even more frightening: If
the
president isn't made aware of such undertakings, it means the country
has
elected a weak person. Now Putin will have to demonstrate that he is a
real
president and not a marionette whose strings are pulled by those who
surround
him, with and without epaulettes. A weak president, and one with the
training
and mentality of the KGB, would be a tragedy for the country.
Yevgenia Albats is an independent, Moscow-based journalist.
******
#8
May 15, 2000
Kompanyia
Natalya KAGALOVSKY:
"The Anti-Russian Tide Swept Over the Bank of New York"
(interview by Yelena
Sitnikova)
[translation for personal use only]
The former Vice President of an American bank may put an end to its
business
in Russia.
The widely publicized case of the Bank of New York has ended with
nothing.
The scandal that has been going on for almost a year resulted in the
indictment of Peter Berlin, chief of the Benex company, as well as his
wife
and associate Lucy Edwards, accused of $ 1.8 mln. tax evasion.
Apparently,
such an insignificant outcome of this case led to so much disappointment
on
the American side, that even the final court session, originally due May
3,
was postponed indefinitely. The Russian parliament's hearings on the
"BoNY
case", initiated and organized by the Duma Committee on Credit
Institutions
and Financial Markets headed by Aleksander Shokhin, were also postponed
until summer. Meanwhile Shokhin managed to have a conversation with
James
Leach, the head of the analogous committee in the U.S. Congress, who had
initiated the hearings on the Russian mafia money laundering via the
Bank of
New York in September last year. As a result of their meeting, it became
clear that American politicians have lost the need to inflate the
scandal
any further. Moreover, it became obvious that all this story, while
painting
Russia in rather dark colors, gradually turns against its instigators
themselves - that is, against the United States and the Bank of New
York.
Natalya Kagalovsky-Gurfinkel, former Vice President of the Bank of New
York
and a casualty of this scandal, filed a lawsuit against the bank in
Savyolovsky District Court in Moscow. She charged the administration of
the
bank of damaging its honor, dignity and business reputation. As a
compensation, it demanded the bank to pay her $ 270 million. Let us note
that, in order to satisfy this lawsuit, the court is entitled to arrest
the
bank's assets in Russia. And the Bank of New York's assets in Russia
consist
of the shares of Russian enterprises for which the BoNY issued the
so-called
ADRs, American Depositary Receipts. Hence the concern of those Russian
companies that obtain their ADRs from the BoNY. Almost all Russian ADR
issuers (including LUKoil, RAO "UES", Gazprom, Mosenergo,
Rostelekom,
Tatneft, Surgutneftegaz) did it with the participation of the BoNY, for
the
total value of $ 1 billion. Kompanyia (Ko) managed to interview Natalya
Kagalovsky, one of the key figures in this story.
Q: It's been already eight months since the beginning of the scandal. It
seems, there is nothing left from the erstwhile flame of passions...
A: Officially, the scandal is not over yet. But there is little of it
that
is of concern to me. Because the scandal was unrelated to what I was
doing.
Everything was fine with my work, and this was confirmed by the
investigation into these matters. ... Everything that happened to place
in a
different department of the bank, and the persons responsible for it in
the
bank's administration are well known. But their names were not given out
to
the press, because unlike myself they have no Russian family names.
Q: What do you think, were the publications in the American media
sanctioned
from the above? Was it a deliberate campaign of smear against Russia, or
was
it something else?
A: The investigation began long before all this information emerged in
the
media. Therefore, I believe that the media leak was sanctioned. But it's
difficult for me to tell whether there were political or other reasons.
But
it is striking what happened afterwards. When The New York Times
reporter
called tha bank and inquired about the investigation and the exorbitant
sums
of money involved in the case, the bank's reaction of unexpected and
inexplicable. Instead of explaining that all these Russian accounts
belonged
to the other part of the bank, they suspended me as the senior bank
official
dealing with the Russian business. And this was immediately reported to
the
media. ...
Q: But, after all, what is your opinion - why were you suspended from
your
position?
A: The reason is that I am Russian and married to a Russian. And I am
sure
they did it deliberately - in order to mislead the public and the
oversight
authorities by inducing them to pursue the so-called Russian trail. As
became obvious, the BoNY administration miscalculated. They did not
foresee
that the scandal would reach so far and that they will be swept over by
the
anti-Russian tide.
Q: In your opinion, was all this just your personal story, or a
deliberate
organization of a scandal that touches upon Russia's national interests?
A: It is difficult for me to judge about the roots of these
developments.
But one must say that, over the past two or three years, anti-Russian
trends
were being fueled in the United States. All these permanent talks about
the
"Russian mafia", "bandit capitalism", thievery and
corruption in Russia...
And when the scandal flared up, everyone who wanted to do it used it as
a
pretext. ... I don't know what these people wanted to achieve, but it is
obvious that all these talks ignited the anti-Russian hysteria, I would
even
say, a panic. I couldn't even imagine that this might occur in America.
Q: Don't you think that Russians are also partly to blame for what
happened?
A: I think Russians are to blame for what followed. Because, instead of
some
sort of a civilized rebuke, at first there was no reaction in Russia at
all,
then we heard some weak pronouncements to which no one in the U.S. paid
any
attention. Nothing serious was done to put an end to scandal or to
channel
it in a different direction.
Q: Perhaps, the reason is that everybody in Russia knew about the
existence
of the "grey" financial schemes of tax evasion and about the
amount of money
involved in these operations?
A: Well, this is not a Russian invention, as you know. The schemes for
tax
regime optimization are being used in all countries. However, in other
countries there are no such large-scale scandals.
Q: What is your impression, did Americans finally understand what they
did
by inflating the scandal to such proportions?
A: I believe they now have a clearer idea, and that they have drawn some
conclusions. ... It's obvious that the scandal is evaporating by itself.
...
Q: What is the current stage of your lawsuit?
A: Everything is normal. True, BoNY tries to introduce some delays in
the
proceedings. This is a standard situation. But I have no doubt that the
court will make
the only right decision.
******
Mother Jones
The MoJournal
May 16, 2000
My First Kalashnikov
Russian schoolkids age 15 and up will soon be supplementing their
pencils and
notebooks with semi-automatic weapons.
by Jen Tracy
'A' is for assault rifle...
Students in the United States are known to bring their own guns to
school. But
starting next year in Russia, the government will be providing
schoolchildren
with assault rifles and grenades.
Under a recent decree by President Vladimir Putin, Russian schoolboys
age 15
and up will be given mandatory military training classes, to better
prepare
them for eventual service in the armed forces.
Though schoolgirls won't be expected to learn the ins and outs of
automatic
weapons, they will be required to learn basic medical techniques for
helping
wounded soldiers in battle.
In February, while campaigning for a tougher Russian military, Putin
addressed
students Russia-wide on national television, reminding them that Russia
has
always had a citizen-based army and that "it was people rather than
the army
who fought."
"A man should know what the armed forces are, that's a must,"
he said.
Apparently, that includes boys and girls.
Classes have not yet begun, as schools are still
waiting for their shipments of weapons and other necessary supplies. But
the
Education Ministry says at the latest, everything will be ready for the
new
school year starting Sept. 1.
It's not a new concept in Russia. Rather, it's a revival of Soviet-style
military training that was abolished in 1991. And though most Russians
over
age
25 learned in secondary school how to get the most out of a Kalashnikov
and a
box of grenades, today many parents and teachers are arguing that it is
perhaps
something their children shouldn't be spending their time doing --
especially
by decree. Education professionals, meanwhile, fear the programs will
drain
resources from Russia's already-strapped schools.
Nonna Chernyakova holds the rank of lieutenant in the Russian reserves.
She
can
strip a Kalashnikov and reassemble it in a matter of minutes -- handy
skills
she learned back in her school days. At the age of 14, in the far
eastern city
of Vladivostok, Chernyakova said she learned to field-strip and assemble
Kalashnikovs, throw grenades, write propaganda leaflets and even
interrogate
captives.
Students would cheat on their military exams by drawing schemes of an
American
motorized infantry division on their legs from the knees upward, where
their
skirts covered the pen marks, she recalled. "Our thighs contained
information
about Russian weaponry that would have been a Godsend for any American
spy,"
she said.
But today, Chernyakova is the mother of a 13-year-old boy, and she
doesn't
want
him to spend his school years learning to kill so that he can later be
sent
off to someplace like embattled Chechnya.
Chernyakova is not happy that her son is gleefully anticipating the
start of
the classes in Vladivostok. "He envied me that I had a chance to
shoot a rifle
or dismantle a Kalashnikov," she said. "He doesn't understand
that it is not a
game people play for fun. Anything military has ultimate goal to kill
people."
Still, for some parents, the rejuvenation of military training in
Russian
schools is no cause for alarm.
Olga Losceva, 30, is not at all worried that her seven-year-old daughter
may
end up expertly firing a Kalashnikov at her Moscow school's target
range.
"I went through the classes myself," Losceva said. "They
were fun and not
nearly as serious as most of our other classes. I had a blast learning
to
dismantle and shoot a Kalashnikov and it never led to anything bad. I
don't
see
any reason for my daughter to need to master a Kalashnikov, but I'm not
afraid
of it happening."
"If anything, the classes are potentially a waste of time and the
children
just
enjoy them because it means they're not sitting in a boring classroom,
listening to a boring teacher," Losceva added.
In St. Petersburg, classes on what to do in case of an explosion or gas
leak
had been put on hold, but are now being revived for younger children in
preparation for the real military training classes.
Anna Badkhen, a Moscow-based journalist whose 11-year-old sister is now
getting
a preview of the military training classes to come in St. Petersburg,
said her
younger sister, Sonya, has so far enjoyed these classes. She and her
friends
had "fun" putting on the white respirator masks and pretending
their lives
were
in danger, said Badkhen. Sonya's mother, Marina Badkhen, however, was
less
convinced. "On the one hand, I believe the children need to have
certain
knowledge about ... how to act in an extreme situation," Badkhen,
47, said.
"On
the other hand, the idea of the class turns my stomach, since it reminds
me of
the old times ... of the militarization of the society."
Some teachers are up in arms about the decree as well.
Pavel Mikov, a history teacher and an activist of the local Memorial
human
rights group in the Urals town of Perm, told The Moscow Times that
mandatory
military training tramples the constitutional rights of children who
might be
morally opposed to military service and war.
"The subject is designed for brainwashing," he said. "It
violates the most
profound civil right -- freedom of beliefs."
According to the decree, which came from directly from the Defense
Ministry
and
did not involve the Education Ministry, state schools are required to
provide
at least two to three hours of military training per week.
The Education Ministry has no objections to the decision according to
its
spokesman, who said it was "neither good, nor bad." Moscow
city education
officials, however, are protesting the decree not on ideological
grounds, but
on economic ones.
Officials at the Moscow Education Committee, which oversees the city's
schools,
say that the costs of rifles, gas masks and special classrooms for
military
training will take a hefty bite out of the already-meager education
budget.
Russia's schools are drowning in financial problems. Buildings are
dilapitated,
mildew pervades classrooms, computers are few, and many schools cannot
even
afford to offer their children lunch, or even cafeteria facilities for
paid
lunches. In Russia's remote areas, like Siberia, classrooms often do not
even
have heat. Spending what little budget money there is on gas masks,
Kalashnikovs and grenades would cripple these schools.
Even Russia's estimated 650,000 orphans and 400,000 homeless children
are not
exempt from the decree.
For years, military units have been effectively "adopting"
orphans and
homeless
children. Last February that practice was legalized by the government.
Under the new rules, Defense Ministry units and other security agencies
can
now
take in boys as young as 14. The boys can stay as long as they want
until they
become adults.
Unit commanders are required to see that the boys are fed, issued
uniforms and
put through high school, which is compulsory in Russia. The boys are not
obliged to perform military service.
The Ministry refused to estimate how many orphans are now in uniform,
but
Education Ministry officials estimated that thousands of boys will now
find
shelter in military units over the next few years.
So it is children who will raise up Russia's military under Putin -- the
orphans trade in a life of starvation and loneliness for a nice new
uniform, a
place to sleep and promises of military glory. The schoolchildren strap
on
their gas masks and happily toss grenades to get out of math class --
too
young to know what they are preparing themselves for.
*******
#10
Russia c.bank puts administrator at Most-Bank
By Peter Henderson
MOSCOW, May 17 (Reuters) - Russia's central bank said on Wednesday it
had
imposed temporary administration on Most-Bank, a financial institution
related to a media group often critical of the Kremlin and which was
raided
last week by police.
The central bank said in a statement that the temporary administration,
effective immediately, was intended to stabilise MOST-Bank's finances
and to
protect depositors and creditors. The central bank was Most's main
creditor,
it added.
A spokesman for Media-Most, the firm raided last week, said temporary
adminstration would help the bank, which had been hurt by association
with
the media group.
``Most-Bank could be associated with Media-Most,'' spokesman Dmitry
Ostalsky
said by telephone, adding that the media group was a client of the bank
but
not a shareholder. Both are part of the larger Most Group headed by
media
magnate Vladimir Gusinsky.
``We hope that under the temporary adminstration the bank will live
through
this propagandistic attack of government powers and can function
normally,''
Ostalsky said.
Most-Bank was unavailable for comment, though an official within Most
Group
who asked not to be identified said it and other shareholders had asked
for a
temporary administrator.
``Shareholders in Most-Bank appealed to the central bank with such a
proposal, in order to save the bank,'' the official said.
Media-Most was raided last week by armed tax police, which the company
said
was an attempt to stifle free speech at its flagship television channel,
NTV,
and other media outlets often critical of the Kremlin.
Many journalists and politicians sharply criticised the raid, saying it
was
an attack on independent media.
Some analysts saw it as a war among oligarchs, businessmen who run
financial
industrial groups. Others speculated that Putin might be allowing or
implementing action against the oligarchs.
Police said they were carrying out a criminal investigation and denied
there
was any political motive. The search occurred just four days after
President
Vladimir Putin's inauguration.
CENTRAL BANK TO FORM PLAN
Interfax news agency quoted central bank Deputy Chairman Georgy
Luntovsky as
saying the Most-Bank matter was economic, not political.
``The bank has financial problems,'' he said, adding the temporary
administration would assess the bank for a month and that Most-Bank had
a
large branch network which should be saved.
The central bank statement said the adminstrators would prepare a
proposal
for the bank. ``The Bank of Russia will take necessary measures to
ensure its
normal functioning,'' it said.
Alexei Zabotkine, a bank analyst at Moscow brokerage UFG, said the move
could
be a political one aimed at Gusinsky rather than the commercial press.
``Maybe it is a personal attack on Gusinsky, not on the media business
of
Most Group,'' he said.
******
Kommersant
May 13, 2000
[translation from RIA Novosti for personal use only]
WHERE DID THE DOLLARS GO?
By Sergei MINAYEV
The Russian Federation's Central Bank has
published an
official survey dealing with the population's
under-the-mattress dollar savings and corporate dollar assets
that had been amassed by late 1999. Well, their volumes had
dwindled by $1 billion. Consequently, one can safely say that,
contrary to the government's statements, the 1999-vintage
economic performance was rather bad.
Until now, Russia's powers-that-be used to
claim that the
year 1999 was pretty good, as far as the country's economy is
concerned. Judging by official statistics, Russia had, at long
last, begun to grow richer last year. The recession was
replaced by economic growth, what with the national GDP
swelling by more than three percent. The government and the
Central Bank of Russia kept claiming that the situation was
really bad during the 1998-vintage economic-and-financial
melt-down. However, owing to the rouble's devaluation and
sky-high oil prices, the situation had improved considerably
throughout 1999.
And now the Central Bank of Russia has
published the
relevant statistics dealing with Russia's balance of payments
and external debts. It therefore turns out that hard-currency
cash volumes inside the non-banking sector had shrunk by $0.8
billion over the "bad" 1998 period, dwindling by another $1
billion during the apparently "good" 1999 period. Well, this
means only one thing -- Russia's citizens began to sell more of
their hard-currency savings, while scaling down hard-currency
purchases. As a matter of fact, the volume of such purchases
had hit an all-time low during the second quarter of 1999 (over
the last five years), accounting for just 7.2 percent of the
population's total expenditures. All in all, the afore-said
hard-currency purchases had made up for 8.5 percent last year,
with the respective 1998 share being 12.4 percent.
As a result, Russian banks had deemed it
inexpedient to
import the same impressive hard-currency volumes, as before,
halving such imports -- that is, from $20.7 billion in 1998 to
just $11.7 billion last year. Among other things, local banks
had imported only $8.3 billion worth of hard-currency cash over
the entire 1999 period, what with the respective 1998-vintage
volumes being $16.2 billion.
There can be only one explanation here.
Russia's citizens
have always preferred to hoard their hard-currency savings for
a rainy day. In fact, even the poorest social strata used to do
this. Well, that rainy day did arrive last year, with ordinary
Russians' salaries failing to increase by a sizeable margin. At
the same time, local inflation levels were really impressive,
especially if one studies consumer prices in stores, rather
than all kinds of the Statistics Committee's surveys.
Consequently, the hard-up people of Russia had to sell their
dollars in order to make ends meet.
Did Russia have to print additional roubles in
1999 for
the sake of eliminating cash shortages? Well, this issue seems
irrelevant just because the local money supply was really
impressive last year. Otherwise Russian stores wouldn't have
raised their prices time and again. You see, price hikes tended
to outpace wage raises. Owing to drastic import cuts, this
country used to lack various goods throughout the entire 1999
period. Russian-made goods didn't save the day because,
strangely enough, they tended to become more expensive on a par
with their foreign-made equivalents.
Russia did chalk up certain economic growth
last year.
However, it turns out that a more substantial production
increment didn't make the ordinary Russian man-in-the-street
any richer. By all looks, the people of Russia have become a
bit poorer. Otherwise they wouldn't have had to part with their
dollar savings in order to make ends meet. Anyway, Russia
didn't witness any economic prosperity over the entire 1999
period. Therefore one has every reason to say that the overall
economic situation was pretty bad last year.
********
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