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Johnson's Russia List


June 18, 2000    
This Date's Issues: 4374 

Johnson's Russia List
18 June 2000

[Note from David Johnson:
1. The Russia Journal: Alexander Golts, The war that ends ­ over and over again. (Chechnya)
2. Reuters: Swiss prosecutor denies plans to charge Yeltsin kin.
3. The New York Times editorial: The Russians Are Coming. (re
Billington exchange program)
4. Moscow Times: Oksana Yablokova, No Rich Russians on Forbes List.
5. US News and World Report: The Russki files.
6. Marcus Warren: re 4370, 4372 Reznik.
7. Steve Gardner: Genri Reznik, Gusinsky's lawyer.
8. Russia Stirs up Religious Animosity in Chechnya.
10. Newsweek: A Press Lord’s Side of the Story. (Interview with
11. Washington Post: Yevgenia Albats, Democratic Facade in Russia.
12. The Sunday Times (UK): Mark Franchetti, Putin lets loose a new Rasputin.                          (Alexander Voloshin)
13. The Russia Journal: Yelena Rykovtseva, Gusinsky’s arrest brings Russian media together.
14. The Electric Telegraph (UK): Tom Gross and Guy Chazan,
Gusinsky arrest raises fears for Russia's Jews.
15. Executive Intelligence Review: Jonathan Tennenbaum,
Time Is Running Out for the Russian Economy. (Views of Sergei


The Russia Journal
June 17-23, 2000
The war that ends ­ over and over again

Any naive people still left out there who believe official statements on
what’s happening in Chechnya must have begun seriously wondering about
their mental health over recent weeks. Going by official Kremlin
propaganda, there are not one, but two rebellious republics called Chechnya. 

In one Chechnya, large-scale military operations have been completed and a
return to peaceful life is well under way. Moscow is successfully forming
an interim local administration under the respected Chechen religious
leader Mufti Akhmad Khadzhi Kadyrov. And, more than 7.8 billion rubles have
already been allocated for rebuilding the republic. 

In the other Chechnya, attacks against Russian troops and representatives
of federal power are practically a daily occurrence. Within just 10 days,
the mayor of Grozny, the deputy representative of the federal government in
Chechnya, and the deputy commander of the East Military Group came under
attack. This was followed by kamikaze terrorist attacks on Russian
checkpoints. Finally, rebels shot a group of epidemiologists from the
Emergency Situations Ministry. The situation in this Chechnya shows no sign
of returning to normal.

This obviously contradictory official information reflects the fact that
Moscow simply doesn’t know what to do with Chechnya now. Commander of
federal forces in Chechnya Gen. Gennady Troshev was among those who
threatened to resign if the Kremlin began negotiations and stopped military

At that time, the generals promised the president that so long as no one
interfered, they would ensure a military victory. No one interfered, and
now the same Troshev is saying the time has come for political decisions.
It’s the politicians, after all, who start wars, let them end them too. And
even President Vladimir Putin, who just recently excluded any possibility
of negotiations with Chechen President Aslan Maskhadov, is not so
categorical today. But Putin says that the representatives Maskhadov has
named as potential negotiating partners are field commanders with whom
Moscow cannot hold talks.

At the same time, Russian intelligence services have stepped up work with
Chechens who do have authority in the republic. Moscow seems to be looking
for a potential support base in Chechnya. It’s not just chance that Putin
has replaced Nikolai Koshman, former government representative in Chechnya.
Koshman didn’t get on with Bislan Gantamirov and managed to have him
removed. But Gantamirov is one of the few Chechens who has really made his
choice ­ there’s no going back to Maskhadov for him now. People like him
are urgently needed by Moscow.

If there is another possible Chechen leader willing to cooperate with
Moscow, it’s Mufti Kadyrov. There are no other names on the list.

As for the military side of things, the anti-terrorist operation has
fizzled out without fulfilling its main task ­ crushing the resistance of
Chechen separatists. The last real offensive was at the end of May, when
troops under the command of Head of General Headquarters Anatoly Kvashnin
tried to block and liquidate Chechen rebel groups numbering 800 men in the
southern mountainous regions. The Chechens had little trouble avoiding
Russian search groups and slipped through the Russian lines. 

The Russian generals had little choice left but to declare a complete and
definitive victory, thus raising the issue of troop withdrawal. Money
allocated for the operations is also running out. This can be seen by the
way the government hastened "in connection with the completion of
large-scale military operations" to end what were, by Russian standards,
high payments for participating in military operations. 

Around half the soldiers in Chechnya were contract soldiers who had been
promised about 800 rubles for each day of military operations. It’s not
hard to imagine what impact the decision to end these payments will have on
the far from ideal morale and combat readiness of the federal troops.

The generals make reports on their victories but fail to say what has
become of the thousands of rebels they’ve been busy fighting this last
year. These rebels haven’t been killed, and they haven’t been taken
prisoner. Most of them, it seems, have gone back to their villages leaving
just a handful of groups in the mountains to maintain communication
channels and control the secret stocks of weapons and ammunition. This
means that at any moment, armed rebels could appear in any corner of Chechnya.

For the time being, the rebels are sticking to highly visible terrorist
acts. The aim is to prove that even with organized security and
well-guarded command points and other military objects, there’s no
guaranteed safety for federal forces in Chechnya. 

Rather than being halted then, the terrorist campaign could widen. The
Kremlin, it seems, is ready for this. Secretary of the Security Council
Sergei Ivanov said that Russian soldiers will be getting shot at from
behind for a decade to come. The question is, is Russian public opinion
just as ready to accept this turn of events?

(Alexander Golts is a writer for Itogi magazine. He wrote this piece for
The Russia Journal.)


Swiss prosecutor denies plans to charge Yeltsin kin

ZURICH, June 18 (Reuters) - Geneva Prosecutor Bernard Bertossa denied a 
published report that he intended to file corruption charges against two 
daughters of former Russian President Boris Yeltsin. 

U.S.-based Newsweek magazine had reported that Swiss authorities 
investigating whether construction companies had paid kickbacks to win 
lucrative contracts for refurbishing official Russian buildings would soon 
file such charges. 

``I do not intend to do this,'' Bertossa told the SonntagsBlick Sunday 
newspaper, which asked him when such charges were expected against Yelstin's 

``The report published by Newsweek recently is wrong. I can investigate money 
laundering, but corruption in Russia does not fall under my jurisdiction,'' 
he added. 

``What I am investigating is whether illicit payments were made by companies 
like Mabetex. Commissions worth at least $63 million changed hands for the 
renovation of the Kremlin and other public buildings in Moscow,'' the 
crimefighter said. 

Mabetex is one of two Swiss-based construction companies under investigation 
in the case. The other is Mercata Trading and Engineering. 

Newsweek had said Yeltsin's eldest daughter Yelena Okulova and another 
daughter Tatyana Dyachenko, one of the former Russian president's closest 
political advisers when he was in power, were among 14 people soon to be 
indicted in the Mabetex affair. 

Media reports have said the two used credit cards guaranteed by Mabetex, 
which Mabetex and Moscow officials have denied. 

Geneva investigating magistrate Daniel Devaud is set to charge two Swiss 
businessmen next week in connection with the money-laundering inquiry. 

Attorneys for the heads of Mabetex and Mercata have confirmed their clients 
have been called to appear before Devaud next week to be formally charged. 

Swiss authorities handling the probe also issued a warrant in January for 
former top Kremlin official Pavel Borodin, who once headed the Kremlin's real 
estate holdings. 

Borodin has repeatedly denied any wrongdoing and dismissed the bribery 
allegations as groundless. 


The New York Times
June 17, 2000
The Russians Are Coming

James Billington, the Librarian of Congress and a historian of Russian 
culture, has come up with a simple but effective way of advancing democracy 
in Russia. Borrowing a page from the Marshall Plan, which brought young 
German politicians to the United States after World War II, Mr. Billington 
has devised a program that gives thousands of Russian civic leaders a chance 
to see the American political and economic system at work. With $10 million 
from Congress last summer, and a similar amount this year, the Russian 
Leadership Program offers Russians -- many under 40 years old -- a brief but 
intense encounter with a noisy, often messy but remarkably open form of 

An effort like this is easily overshadowed by the great political and 
military issues that dominate relations between Washington and Moscow, and 
$10 million is a microscopic dot in the annual federal budget. But from 
no-frills programs like this can come invaluable gains, including the 
development of a generation of Russian leaders who better understand the 
workings of an independent judiciary or the benefits of private property. 
This summer's 2,000 or so visitors, including 130 members of the Russian 
Parliament, will divide into specialized groups that concentrate on subjects 
like banking, taxation, the rule of law, agriculture and other topics 
relevant to the development of Russian democracy. After a few days in 
Washington the participants will disperse to cities and towns in nearly every 
state, where they will be housed in the homes of their hosts and get a 
firsthand look at the work of mayors, judges, doctors, teachers, farmers and 
political party activists, among others. 

"The story of America is better than the theory of America," Mr. Billington 
likes to say. By inviting Russians here to experience the story, he and his 
Congressional sponsors, most notably Senator Ted Stevens of Alaska, are 
making an important investment in Russia's future. 


Moscow Times
June 17, 2000 
No Rich Russians on Forbes List 
By Oksana Yablokova
Staff Writer

For the second year in a row, none of Russia's financial moguls made Forbes 
magazine's list of the world's billionaires, which analysts said reflects the 
country's worsening reputation as a result of international money-laundering 
scandals and the ongoing consequences of the 1998 financial crash. 

On the list of 200 of the top billionaires, which came out Friday, Microsoft 
chairman Bill Gates once again was named the world's richest person with $60 
billion, even though his personal fortune shrank by a third over the past 

Oracle Corp. founder Larry Ellison was ranked as the second-richest man with 
$47 billion, while Microsoft co-founder Paul Allen was third along with 
investor Warren Buffet with $28 billion. 

Only three years ago, six Russians were included on the Forbes list. Oil and 
media tycoon Boris Berezovsky was the top Russian on the 1997 list with $3 
billion, followed by oil and banking tycoon Mikhail Khodorkovsky with $2.4 
billion, LUKoil's head Vagit Alekperov with $1.4 billion and Gazprom's Rem 
Vyakhirev with $1.1 billion. Industrialist Vladimir Potanin and Media-MOST 
head Vladimir Gusinsky were also included with $700 million and $400 million, 
respectively. In 1998, Potanin was the only Russian left on the list, with a 
personal fortune of $1.6 billion. 

Yevgeny Volk of the Heritage Foundation's Moscow office said Russia's 
involvement in international money-laundering scandals could have 
"discouraged Forbes from advertising fortunes earned by money laundering." 

"Russia has acquired the stable reputation of a country where fortunes are 
made through money laundering," Volk said. He said the absence of Russian 
names on the list also reflects an overall decrease of interest in Russia. 

Anvar Amirov of the Panorama research center pointed to the August 1998 
financial crisis, which sliced into many personal fortunes in the country. 

"Personal fortunes were reduced dramatically following the crisis. The value 
of companies also dropped," Amirov said. 

None of the people at Forbes who compile the list of billionaires could be 
reached for comment Friday. 


US News and World Report
June 26, 2000
The Russki files 

The State Department's cops are taking on a big new villain: the Russian mob. 
To better screen out Russian crooks and con men crossing U.S. borders, 
State's Diplomatic Security Service has built a huge database of some 20,000 
suspicious individuals, businesses, and addresses. Since staffers checking 
visa requests spend only 30 to 60 seconds on each application, agents hope 
the new system will sound some quick alarms. But picking out Russia's more 
enterprising mobsters won't be easy. "We're not talking about 
knuckle-dragging thugs," says one agent. "We're talking about Ph.D.'s in 


From: "Marcus Warren" <>
Subject: re 4370, 4372 Reznik
Date: Sun, 18 Jun 2000 

if i am not mistaken, i can add another celebrity to the list of genri
reznik's clients: anatoly bykov of KRaz, currently held in the krasnoyarsk
remand prison after extradition from budapest. i seem to recall from my
first tour of duty out here that he acted for one of the GKChP putschists,
tho i forget which one.


Date: Sun, 18 Jun 2000 
From: Steve Gardner <>
Subject: Genri Reznik, Gusinsky's lawyer

Drawn from several years of news reports, here is some basic information about
Genri Reznik, Gusinsky’s lawyer.

Reznik is a senior partner of the Moscow firm, Reznik, Gagarin, and
Partners, is
Chairman of the Presidium of the Moscow City Board of Lawyers, and was
in 1998, to serve on the National Committee for Holding the Year of Human
in the Russian Federation

Reznik has handled a variety of high-profile cases, but he seems to be
to cases involving freedom of the press and freedom of expression. On
October 24,
1998, Reznik commented in Rossiyskaya Gazeta, "Freedom of the mass media is
main guarantee of all other rights and freedoms."

In 1994, Reznik defended Yegor Gaidar against libel charges arising from
Gaidar’s characterization of Vladimir Zhirinovskiy as a "fascist populist"
in an
Izvestiya article. Reznik managed to have the trial postponed because he,
was "overloaded with current affairs."

In March 1997, Reznik scored two victories for press freedom in a single week.
First, he won a suit in the Russian Supreme Court against the suspension of
accreditation in the State Duma of journalists from the Russian Public
Television. Second, in the Presidium of the Moscow City Court he successfully
overturned a verdict against Moskovskiy Komsomolets journalist Vadim
Poegli, who
had been jailed for accusing Defense Minister Pavel Grachev of corruption.

Beginning in 1997, Reznik was one of the lawyers who defended Aleksandr
the Russian environmentalist, when he was accused of high treason for
a report on incidents in nuclear- powered submarines and radioactive
pollution in
north Russia through Bellona, a Norwegian ecological organization.

In February, 2000, Reznik demanded information from the Prosecutor General’s
office when Radio Liberty correspondent Andrei Babitsky disappeared. When it
became known that Babitsky had been charged with involvement in Chechnya's
separatist movement, and had been exchanged for Russian soldiers held in
Chechnya, Reznik declared "This is barbarity," and said that
"Unfortunately, in
the North Caucasus journalists have been placed on the same footing as
rebels, a
pen on the same footing as a bayonet and this alarms all of us." Reznik
that Vladimir Putin (then the Acting Russian President) was "directly
responsible" for what happened to Babitsky: "We know that Vladimir Putin
was in
the know about what was going to happen. Denials of this are a face saving
exercise. He knew, followed up and approved."


Russia Stirs up Religious Animosity in Chechnya 
June 17, 2000

In his first decree since he claimed presidential control of Chechnya,
Russian President Vladimir Putin appointed Muslim cleric Mufti Akhmed
Kadyrov to direct the region’s administration. Despite the fact that
Kadyrov supported the Chechen war against Russia from 1994-1996, Moscow
hopes he will be instrumental in an impending Russian victory. Russia’s
strategy to divide the majority of the Chechen population from the radical
Wahhabi warriors ­ who are largely responsible for waging the war ­ pivots
on Kadyrov’s ability to mobilize his followers. 

The three actors in the Chechen war until now have been the Russian forces,
the pro-independent Muslim Chechens and the Wahhabi militants, who stem
from an extremely fundamental form of Sunni Islam native to Saudi Arabia.
Almost all Chechens want independence or autonomy for Chechnya, while the
Wahhabis, which include some Chechens, are on a crusade for an independent,
Muslim Caucasus. 

The Chechens had enjoyed a de facto independence from 1996 until the summer
of 1999 when the Wahhabis invaded the neighboring Russian republic of
Dagestan. With the help of local Islamic leaders who strictly oppose the
radical Wahhabism, Russian troops chased the Wahhabis out of Dagestan and
back into Chechnya, in effect beginning the second war for Chechen
independence in recent years. 

Pro-independence Chechens were forced to defend their homeland against the
Russians again, so they took up arms beside the Wahhabis. They do not,
however, subscribe to Wahhabism and are not willing to come under the
political or military leadership of the Wahhabis in the long term. Under
Kadyrov’s leadership, Moscow hopes to exploit this schism. 

Russia is not currently poised for a military victory in Chechnya, which
has led to its current two-pronged approach to the Wahhabi militants:
cutting them off externally and internally. By electing a Mufti to lead the
region, Putin may be able to capitalize on the ideological differences
within the opposition ­ following the Dagestan model. Kadyrov advocates
presidential rule of Chechnya for about two years, but would then want
local elections to restore the region to the type of status granted all the
other republics of the Russian Federation. 

Kadyrov’s job now is to convince his Muslim followers not to support the
Wahhabis in any way. He must remind the Chechens that, although they want a
free Chechnya, conspiring with extremist militants is not the way to get
it. For one, if the Wahhabis continue to fight, so will the Russians; and a
negotiation similar to the one of 1996 will be out of the question. 

Second, the Chechens already had independence, and the Wahhabis put it at
risk. Kadyrov must convince the Chechens not to allow the Wahhabis to take
cover in their villages, and not to send their fathers, brothers and sons
off to join the battle that has plagued southern Chechnya for almost nine
months. The Chechens do not need to become pro-Moscow; they just need to be
anti-Wahhabi. The effect would be the same for Russia as if they had
physically eliminated a portion of the opposition. 

Many Chechens, however, will not be willing to return to the days of
Russian leadership. Hence, the Kremlin appointment will drive a wedge
between the Muslim Chechens who support independence and those who support
Kadyrov. However, there is an element of risk in this part of the Russian
strategy. Alone, this won’t be enough to win the war for Russia. And, in
the longer term, whether Russia wins the war or not, Moscow is helping to
further fracture an already splintered society with a history of armed
conflict between ethnic and religious groups. 


Date: Fri, 16 Jun 2000



FELLOWSHIPS: The Woodrow Wilson International Center for Scholars announces
the opening of its 2001-2002 fellowship competition. The Center annually
awards approximately 21 academic year, residential fellowships to scholars
and practitioners with outstanding project proposals in the social sciences
and humanities on national and/or international issuesCtopics that
intersect with questions of public policy. Fellows work from offices at
the Wilson Center in Washington, D.C. where they interact with policymakers
and with Wilson Center staff who are working on similar issues.

LENGTH OF APPOINTMENT: Fellows are generally in residence for the entire
U.S. academic year (September through May), although a few fellowships are
available for shorter periods of time, with a minimum of four months.

ELIGIBILITY: For academic applicants, eligibility is limited to the
postdoctoral level and, normally, to applicants with publications beyond
the Ph.D. dissertation. For other applicants, an equivalent level of
professional achievement is expected. The Center welcomes applications
from a broad range of scholars, including women and minorities.

CITIZENSHIP: Applications from any country are welcome. All applicants
should have a good command of spoken English.

STIPEND: The Center tries to ensure that the stipend provided under the
fellowship, together with other sources of support (e.g., grants or
sabbatical allowances), approximate a Fellow's regular salary. 

FACILITIES AND SERVICES: Woodrow Wilson Fellows are assigned a private
office and provided with an IBM-compatible computer and a part-time
research assistant for the duration of their fellowship. Professional
librarians assist with access to the Library of Congress and other research

DEADLINE AND INFORMATION: The application deadline is October 1, 2000. For
further information and applications, please contact us by e-mail
(; telephone (202/691-4170), FAX (202/691-4001), or
by writing to: Scholar Selection and Services Office, Woodrow Wilson
International Center for Scholars, One Woodrow Wilson Plaza, 1300
Pennsylvania Avenue, NW, Washington, DC 20004-3027. 

WEBSITE INFORMATION: The application can also be downloaded from the Wilson
Center website at:


Newsweek web site
June 18, 2000
A Press Lord’s Side of the Story 
‘The Kremlin,’ warns Gusinsky, ‘would like total control’ 
June 18 — Vladimir Gusinsky, the head of the Media-Most holding company,
talked with NEWSWEEK contributor Yevgenia Albats after he was released from
Butyrka prison. Excerpts: 

Why were you arrested?
I was called up by the office of the prosecutor general to provide
explanations about materials they obtained during the search [May 11] of
the Media-Most offices. [The investigator and I] talked for an hour or so.
And then he said: “My boss would like to talk to you.” I said, “Sure.” He
said, “Some other people too are expecting you [in the office next door].”
I went with him without any hesitation even though I was a little
surprised. In the next room was investigator Nikolaev who handled the case
of the Russian Video company [the case on which now Gusinsky is accused of
embezzling $10 million]. He said: “Sit down. We have something to show
you.” Immediately four operatives entered the office. They handed me a
warrant of arrest. I was stunned. Just several months ago, on Nov. 2, the
same investigator, Nikolaev, questioned me about the same case. He said, “I
do not have any claims against you.” So now I yelled at him: “Did you lie
then? Or do you lie now?” Then I asked: “May I call my lawyers?” “No.” “My
family?” “Give us a number,” they said, “we will call for you.” I said:
“No, I am not going to give you the numbers of my family.” Then they called
the office [Media-Most] and sent a fax informing my lawyers. But it was
after 6 p.m., and by the time I got to Butyrka [prison] it was too late for
the lawyers to come: all official institutions, prison included, are closed
by 8 p.m.

How were you treated in prison?
Fine. Both prison guards and inmates showed respect. The woman who
took my fingerprints suggested that I wash my hands right afterward. It was
a clear sign of respect. The next day I was in a room with three men. One
of them was covered with tattoos from upside down, and had ugly golden
teeth. I did not feel exactly comfortable. But he said, “Vladimir
Alexandrovich, we are for you, we are concerned for you, you hold out.” You
know, these people, both prison guards and inmates, have seen so many
people who were put in prison just for doing nothing, that they immediately
grasped that I was there because the authorities just happen to dislike me.

How were the conditions in prison?
Bad. But I should not complain. Prison officials did their best. But
the situation there is catastrophic. They do not have money to feed
inmates, they do not have simple medicine. I decided while still sitting in
my cell that I will do some sort of a charity fund for Butyrka.

Do you think President Putin knew about your upcoming arrest?
I believe he did.

What helped you to get out?
First of all the support of the journalists from [all over the
world]. Second, the support of the Russian businessmen, as well as those in
the other countries. Third, the strong stand that American administration
took—I did not expect that to happen. Fourth, the support of the world
Jewish community. I am grateful to all the people who came to my support.

Do you expect more arrests of oligarchs?
I have few doubts that if someone’s business is not favored by the
president’s close entourage, this business will be in danger—if not taken
away from him. The Kremlin would like to establish total control over the
country, and will not tolerate any opposition voices. I have
reliableinformation that the Kremlin is considering further arrests.
Lukoil’s Vagit Alekperov and some executives from Yukos [another oil
company] are being considered. In any case, it is clear that either we stop
them [those forces who would like to impose a strong hand over the
society], or all of us will end up in [Butyrka]. 


Washington Post
June 18, 2000
[for personal use only]
Democratic Facade in Russia
By Yevgenia Albats (
The writer is a Moscow-based independent columnist.

MOSCOW. The fierce, largely silent war of the new Russian administration 
against the society it governs is coming out into the open. The most dramatic 
sign of this development is the arrest of Vladimir Gusinsky, independent 
media owner and leader of the country's Jewish community. 

Until now, many in the Russian political elite have tended either to play 
down the Kremlin's attacks on the organizations of an open society or even to 
approve of them as necessary steps for economic reform. The notion, even 
among many who called themselves liberals, was that economic growth would 
come at the cost of some political freedoms.

Gusinsky, to his credit, was among the few who openly rejected such a 
bargain. Now he's done some time in jail, and the message is obvious: No one, 
not even the well off and well established, can feel safe anymore.

For several months now, the government of President Vladimir Putin has been 
designing a new domestic policy that goes under the name of "managed 
democracy." Basically, what this means is that democratic institutions are to 
be preserved in form but are to have their essence altered in such a way that 
they will in effect be representatives of the state--loyal, obedient and 
indebted to those who have chosen them. The Kremlin's administration chief, 
Alexander Voloshin, even invented a word for the organizations that fit into 
this form of "democracy"; it is dogovorosposoniye, meaning, roughly, "with 
whom it is possible to cut deals."

The first moves in implementing this policy were successful. To the Kremlin's 
amusement and amazement, the pro-government party Unity--created specifically 
for last year's parliamentary elections--finished second in the race, thus 
ensuring presidential control over the legislature. Another such party 
reportedly enjoying intellectual and financial support from Kremlin-connected 
businesses has just been established on the left of the political spectrum, 
under the name "Russia."

And what about those civil organizations that won't cut a deal? The Kremlin 
has been efficient in dealing with them, too. Some, such as Grigory 
Yavlinsky's Yabloko party, were smeared on the Kremlin-controlled (and 
heavily watched) TV channels. Others lost access to the mass media and were 
marginalized (the fate of many human rights and environmental groups).

Even some government acts that might seem to answer the calls for reform have 
really been meant to achieve the opposite. For example, a move to reduce the 
size of the state bureaucracy has in practice meant cutting those 
governmental agencies--most notably the Ministry of Ecology--designed to 
protect the society from actions of the state monopolies.

Meanwhile, dissenting voices are being stilled. Those who continue to speak 
out are replaced by Kremlin-selected figures. The range of such activities is 
wide. National human rights commissioner Oleg Mironov, appointed by the Duma 
and a strong critic of the federal government's human rights violations in 
Chechnya, has lost his access to President Putin. The Kremlin simply 
appointed its own presidential human rights representative in the Caucasus, 
someone who turned out to be less concerned about the misdeeds of the army.

The Russian Jewish Congress, an umbrella charity foundation that unites under 
its banner several dozen secular and religious Jewish organizations, has 
received similar treatment. As an attempt to fight the Congress's leader, 
Gusinsky, another Jewish organization has been created under the Kremlin's 
patronage: the Federation of Jewish Communities. It has been enjoying special 
treatment by government officials.

The same day Gusinsky was arrested, this organization (formed under the 
leadership of the Habbad Lubavitcher movement, which accounts for only 5 
percent of Russian Jews) elected a new chief rabbi of the country, apparently 
chosen by the Kremlin as acceptable.

Complaints of government interference are being heard from the Muslim and 
Catholic communities. On May 11 the Jesuit-run Inigo Centre in Siberia was 
raided by tax agents toting guns and wearing black masks--an action similar 
to the one conducted the same day against Gusinsky's corporation.

At bottom, of course, the administration knows that all its attempts to 
subvert the civil society will be hindered so long as a free press exists in 
Russia. By arresting Gusinsky, owner of some of the country's most outspoken 
media outlets, the Kremlin made it clear that it does not plan to tolerate 
opposition voices and will accept no limits on its efforts to turn the 
society once again into obedient cowards. Thus the KGB mentality--in which 
disrespect for law, violations of human rights and a contorted view of ethnic 
minorities are characteristic--is gaining.

But these people should not celebrate their victory just yet. Nine years of 
democracy have not gone for nothing in this society. The fight is still ahead.


The Sunday Times (UK)
18 June 2000
[for personal use only]
Putin lets loose a new Rasputin 
Mark Franchetti, Moscow 

SOME describe Alexander Voloshin, the secretive head of the presidential 
administration, as Russia's new Rasputin. Last week he emerged from the 
shadows when he was accused of ordering a media mogul's arrest, casting 
serious doubt on President Vladimir Putin's commitment to a free press. 
The seizure on Tuesday of Vladimir Gusinsky, 47, the owner of Russia's only 
independent media group, on suspicion of embezzling $10m appalled liberal 
opinion at home and overshadowed Putin's first state visit to Spain and 

Gusinsky was freed from the Butyrka remand prison late on Friday, but has 
been ordered to remain in Moscow. 

There were conflicting re-ports about the extent to which Putin may have been 
involved. The president claimed he had not been informed of the arrest and 
called it "excessive". However, leading political and business figures said 
Voloshin was trying to destroy Gusinsky's empire and silence the press. 

The tycoon was arrested hours after Putin had left for the West. Mikhail 
Kasyanov, the prime minister, was in St Petersburg and Vladimir Ustinov, the 
prosecutor-general, was also away. 

"With Putin out of the country at the time, Voloshin was the man running the 
show," said Yuri Luzhkov, the mayor of Moscow, who demanded Gusinsky's 
immediate release and offered to take his place in jail if he tried to flee 
the country. "It's a test to scare society." 

Boris Nemtsov, a former deputy prime minister and a leading liberal 
politician, agreed. "The president is informed about such actions. But the 
man behind it all is Voloshin and his subordinates in the prosecutor's 
office," he said. 

"Voloshin heads a powerful group of Kremlin insiders bent on consolidating 
and concentrating the country's economic resources into their own hands. 
Putin is discrediting himself by not doing anything about it." 

Since his appointment as head of the presidential administration in 1998, 
Voloshin has become one of the most powerful people in the country, although 
a recent poll suggested that 50% of Russians did not know who he was. 

First under Boris Yeltsin, the former president, and now under Putin, he has 
shown himself to be a ruthless operator with a unique talent for in-trigue. 
Brought into the Kremlin by Boris Berezovsky, Russia's most controversial 
oligarch, he is close to Tatyana Dyachenko, Yeltsin's daughter and closest 
adviser, and to Roman Abramovich, an oil and aluminium mogul also rumoured to 
wield great influence in the Kremlin. 

A brilliant manager, Voloshin - who is divorced and, at 44, still lives with 
his mother, a university lecturer - is credited with defeating attempts to 
impeach Yeltsin. He also discredited Luzhkov as a presidential candidate 
through a relentless media campaign and played a pivotal role in Putin's rise 
to power, advising him on his election campaign. 

It was not long before he clashed with Gusinsky, whose newspapers, NTV 
television channel and radio station backed the mayor during the campaign, 
investigated allegations of Kremlin corruption and criticised the war in 

The final straw may have come last month when Gusinsky publicly accused 
Voloshin of offering him a $100m bribe to stop criticising the Kremlin. The 
allegation came days after police raided the offices of Media-Most, 
Gusinsky's holding company. 

"With Gusinsky it's a question of personal vendetta," said one source. 
"Voloshin wants to destroy him and has been giving one-sided briefings on him 
to Putin, supplying him with dirt and whispering in his ear that he is an 
enemy to be dealt with accordingly. 

"What happens to Voloshin in the near future will be the litmus test of 
Putin's presidency. If he sacks him, it will mean Putin is becoming his own 
man. But if Voloshin stays, it shows Putin is still dependent on those who 
brought him to power." 


The Russia Journal
June 17-23, 2000
Gusinsky’s arrest brings Russian media together
By Yelena Rykovtseva, Media Editor for Obshchaya Gazeta

In sending Vladimir Gusinsky to prison, the authorities have done the
Russian press a great service. The press has long been divided along lines
of conflict that follow the views of their respective owners. But now, this
quarreling press has found an issue around which it can unite. 

Only a shock such as that caused by the arrest of media magnate Gusinsky
could serve as that issue. Previous Kremlin attacks on the press met with
only dispersed resistance. When Radio Liberty journalist Andrei Babitsky
was handed over to Chechen rebels by the federal authorities, half the
press called it an arbitrary act and a breach of human rights, while the
other half said he worked for the enemy, and so he was treated like the
enemy would be.

When masked men burst into the offices of Media-MOST, half the press called
it a threat to freedom of speech, while the other half said "what freedom
of speech? This is just a routine check of private security structures." 

This "other" half of the press was the media belonging to Boris Berezovsky
or controlled by the Kremlin. But the masks are off now. Today, everyone,
even Gusinsky’s enemies, has concluded that there really is a direct link
between his arrest and the opposition line taken by his media empire. 

Not all the press, however, has the same reasons for now defending
Gusinsky. For Berezovsky’s media, the main reason is fear that the same
thing could happen to their boss. For the "pro-Kremlin" media, it’s a shock
that the authorities should be so harsh, a shock at the punishment chosen ­
Gusinsky is being held in Moscow’s least "prestigious" prison ­ and the
very fact that someone who doesn’t represent a direct threat to society
should be sent to prison, even if a criminal investigation has been
launched against him.

But ultimately, it’s not why the Russian press has come to a common
position that is important, but that the fact is there. It’s a shame only
that the price for this solidarity of the press has been so high ­ that
it’s come at the expense of the founder of an independent media in Russia.

But we shouldn’t forget that Gusinsky is a figure who has also united
forces of a different kind. The list of those whose interests have been
touched upon by Gusinsky’s media is impressive. There’s the Army, which is
irritated by NTV’s critical coverage of the war in Chechnya. The Federal
Security Service is jealous of Media-MOST’s security services, which, it
seems, are better equipped than the state intelligence services. The
Prosecutor General’s office seeks revenge for losing the court case brought
by Media-MOST over the search of its premises. 

There’s also the Cabinet of Ministers. Prime Minister Mikhail Kasyanov is
understandably annoyed at NTV for making his nickname ­ Misha 2 percent ­
known to the broad public. The Presidential Administration is also feeling
vengeful as its head, Alexander Voloshin, openly called a "grey cardinal"
by NTV, is depicted as Putin’s puppeteer in NTV’s satirical "Kukly" show,
and is linked to a number of recent scandals.

Finally, there’s President Vladimir Putin himself. Putin and his
predecessor, Boris Yeltsin, are completely different when it comes to
criticism in the press. Yeltsin, of course, didn’t exactly like being
attacked, but he never publicly spoke out against the press and never
sought revenge against it. 

Putin behaves differently. He feels insulted by the arrogant and ironic
treatment he receives from NTV. His entourage didn’t hesitate to request
that NTV remove Putin’s puppet from its Kukly show. Putin himself, at a
meeting with Spanish businesspeople, launched a public attack on
Media-MOST, saying the company’s debts were higher than they are in reality
and accusing it of too great an "appetite for credit."

After statements like these, no one can believe that Putin is taking an
objective stand in this affair with Gusinsky. When the interests of so many
power structures come together, it’s no good expecting a peaceful
settlement to the conflict. 

There is a third force that could play a certain role in this conflict ­
the Russian public, people who watch TV and read newspapers. So far, there
isn’t any unity among this group. Some of the liberal intelligentsia
definitely would defend Gusinsky because his name is associated with NTV
and with magazines and newspapers they respect. 

But there is also an "aggressive majority." These are poor people who have
a tough life and for whom the news that an oligarch has been arrested
brings them a certain feeling of satisfaction. The arrest of someone rich
is moral compensation for their poverty. What’s more, the popular TV
channel ORT and its popular host Sergei Dorenko did much to turn public
opinion against Gusinsky with their talk of his "pro-American and
pro-Israeli " views ­ seeds that took hold easily in the fertile soil of
Russian xenophobia. 

Now Dorenko has promised to do a bit of back-pedaling in his next programs
and protest against Gusinsky’s arrest. But will he be able to change so
quickly and easily the negative public image of Gusinsky his channel has so
assiduously helped shape?

If the public can rise above the primitive slogan of "beat the bourgeoisie"
and unite with the press, it would give Gusinsky a real chance of winning
his battle with the authorities.


The Electric Telegraph (UK)
June 18, 2000
[for personal use only]
Gusinsky arrest raises fears for Russia's Jews
By Tom Gross in Jerusalem and Guy Chazan in Moscow
THE harassment of Vladimir Gusinsky, the Jewish media magnate charged with 
embezzlement, is being linked to attempts by the Russian government to 
exacerbate a split among the country's Jews and curb their influence in 
public life.

Mr Gusinsky was unexpectedly released from jail on Friday night, after being 
charged, after an international outcry against his arrest last Tuesday. 
Several Israeli cabinet ministers and dozens of members of parliament led 
accusations of false imprisonment against Russia's security services. 

Tel Aviv's intervention came as Vladimir Putin, the Russian president, sought 
to replace Adolf Shayevich, Russia's chief Rabbi and a man with close links 
to Mr Gusinksy, with Berel Lazar, a more compliant representative from an 
obscure sect of ultra-orthodox Jews.

The World Jewish Congress in New York said Mr Gusinsky's arrest was part of a 
disturbing pattern of pressure against Jewish interests in Russia. It said: 
"The Jewish community has noted with distress the ongoing attacks by 
government-owned and other media against Gusinsky and the Russian Jewish 

Russian Jewish leaders believe that this is just the start of a general move 
against groups that dare to be independent of the government. "They've 
started with the Jews because we're the most vulnerable," said Alexander 
Osovtsev, vice-president of the Russian Jewish Congress. "We're the first to 
be attacked, but we certainly won't be the last."

Mr Gusinsky is seen as a "soft target" because the government could hope for 
anti-semitism among Russians to dampen outrage over his detention. Israel's 
Interior Minister, Natan Sharansky, a leading human rights activist and a 
political prisoner in Russia before emigrating to Israel in 1986, called on 
Russia's ambassador to Israel to express his concern over Mr Gusinsky's 
treatment. Mr Sharansky said that "it raised all kinds of fears over civil 
liberties in Russia".

Ehud Barak, the Israeli Prime Minister, said he would contact Kremlin 
officials and ask them to ensure that Mr Gusinsky's arrest would not harm the 
Russian Jewish Congress, of which Mr Gusinsky is chairman. In addition to 
being the vice-president of the New York-based World Jewish Congress, Mr 
Gusinsky is a leading figure among the 1.2 million Jews in Russia, where he 
has spearheaded the drive to revive Jewish life after decades of repression.

Mr Gusinsky, 47, runs the Media-Most conglomerate. He is the grandson of a 
wealthy Jewish industrialist who was executed during the Russian revolution. 
He lost several family members during the Holocaust, and is the main backer 
behind the Holocaust museum and memorial being built in Moscow.

Russia's Jews, who have begun to emerge from decades of Communist repression 
fuelled by endemic anti-Semitism, found a powerful liberal mouthpiece through 
Mr Gusinsky's media outlets. Aided by Mr Gusinsky's news organisations, they 
now represent a liberal and independent force that has been critical of 
Russia's abuse of human rights.

Mr Putin, in what is perceived as an attempt to reassert Kremlin authority 
over Russia's Jews, backed Rabbi Lazar, whom he hopes will be more compliant. 
Mr Gusinsky was arrested just five hours before Rabbi Lazar was appointed 
"Chief Rabbi" by Habad, an ultra-orthodox sect seeking to rival the Russian 
Jewish Congress.

The Kremlin was first accused of interfering with Russia's Jews last month 
when Rabbi Shayevich was not invited to Mr Putin's presidential inauguration 
on May 7. His place was taken by representatives of Habad.

On May 31, Mr Shayevich, Russia's Chief Rabbi since 1993, said he was 
summoned to a Moscow hotel by Habad leaders who urged him to step down in 
favour of Mr Lazar. He said: "They offered me bribes, saying they had 
excellent ties with the Kremlin." Jews say that government tactics are 
reminiscent of the Soviet era, when communists exerted total control over 
Jewish communal life.


From: "Rachel Douglas" <>
Subject: EIR article, Russian economy
Date: Sun, 18 Jun 2000 

Executive Intelligence Review
Vol. 27, No. 24
June 16, 2000
Time Is Running Out for the Russian Economy 
by Jonathan Tennenbaum

In an interview published in the Russian weekly
magazine {Sobesednik} on May 23, and widely commented upon
in the Russian media, the head of the State Duma's (lower
House of Parliament) Economic Policy Committee, Sergei
Glazyev, warned that Russia is headed for a new disaster,
unless a radical correction is made in the economic
policies which have prevailed since the removal of Yevgeni
Primakov's government in May of last year. Otherwise,
within a maximum of a year and a half to two years, the
physical basis for rebuilding Russia's devastated economy
would be gone. ``It's time for people to understand, that
without a mobilization of production, without an
aggressive and rapid introduction of new technologies, we
will never move off the dead point,'' Glazyev said. In the
meantime, he warned, Russia is about to repeat the
disastrous pattern of 1994-98, when an inflow of
speculative capital created the GKO (government bonds)
bubble, which burst in the Summer of 1998, wiping out
countless businesses and banks. ``The crisis we are on the
threshold of now, will be much worse than in August
1998,'' he declared. ``It will be connected with the total
wearing out of all plant and equipment.''
Glazyev's interview came shortly before Andrei
Illarionov, just moved from his post as Economic Adviser
to the Russian President to become Presidential Envoy to
the G-7 countries, arrived in Washington to present a
glowing picture of an alleged ``economic miracle'' in
Russia. After claiming a miraculous budget surplus,
growing hard currency reserves, foreign investment of $9
billion already this year, and a promised GDP growth rate
of 5%, Illarionov called for setting up a currency board
for Russian on the model of Chile. Although Illarionov's
claims are exceptionally extravagant, and not in agreement
with the more sober statements of Prime Minister Mikhail
Kasyanov, the story of an alleged ``economic miracle''
going on in recent months has circulated widely in the
press, both inside and outside Russia.
Glazyev, one of the most respected young economists
in Russia, had a very simple rejoinder: ``What growth?'' he
asked. ``We are experiencing an economic shrinkage.''
Glazyev explained that there had indeed been a certain
real growth in industrial production after the August 1998
collapse of the Russian financial system, up to December
of last year. ``As is well known, this growth was connected
with the sharp increase in the competitiveness of domestic
goods and import-substitution, caused by the devaluation
of the currency by a factor of three,'' he said. ``The
inertia of this growth, while weakening continuously,
continued until December.'' After a slight spurt connected
with the fact, that the population temporarily had more
money to spend, the crucial indicators turned negative.
``We are experiencing contraction, not growth, and it is
impossible to make a medium-term prediction under present
conditions,'' Glazyev said. The problem, he stated, is that
the government after the fall of Primakov, has stopped
intervening into the economy. ``Judging from the first
months of 2000, the present government does not differ in
any way from that of [former Prime Minister Viktor]

- Why Economic Growth Was Reversed -
Glazyev identified three factors behind the recent
reversal of the post-August 1998 economic growth.
``First, the pressure of the monopolists, especially
in the areas of metallurgy, chemical industry, and gas and
oil processing. After May [1999] the structure of prices
drastically changed, and the prices of construction
materials and chemical raw materials rose to world
levels.... The inflationary increase due to the increase
in raw materials and fuels amounted to {5% per month}
during the second half of 1999. This means that the costs
of production of all products of manufacturing industries
have grown by nearly one-and-a-half times in the course of
half a year.'' Glazyev explained that the Primakov
government had kept to a ``strict policy of stopping any
increase in the prices of fuel.'' Industry responded with a
rapid upswing, which stopped beginning May 1999, as a
result of the increase in prices of raw materials and oil.
The government withdrew its financial support of the
producers and went over to supporting the monopolists, as
has been usual in recent years. That means the oligarchs.''
The second cause of the present shrinkage, according
to Glazyev, is a ``sharp and significant increase in the
cost of credit.''
``The third reason, why there has been no Russian
economic miracle, is particularly obvious: The control
over the flow of capital out of the country has weakened
considerably.... According to my estimates,'' said Glazyev,
``last year 40% of all investable capital accumulation left
the country.''
When asked about Western promises to invest in
Russia, Glazyev replied that, indeed, the Russian
financial market had once again become attractive to
speculators. But, as in the first half of the 1990s, the
speculative money coming into Russia ``will not reach the
productive sector, but will circulate in financial
pyramids.'' The expectation that Russian enterprises would
become profitable, under a continuation of present
policies, Glazyev denounced as ``a myth.... At current fuel
prices, the production of gold is already unprofitable.''
Glazyev denounced the recently completed economic
program of German Gref--another adviser to Russian
President Vladimir Putin, recently elevated to a
ministerial chair--as ``re-chewed neo-liberal doctrine,''
and asked why the government was not listening to the
Russian Academy of Sciences, which had put forward real
solutions for the country's economic problems. ``Above all,
we need an elastic monetary policy, oriented to the
requirements of production. The channeling of financial
flows into the productive sphere and the refinancing of
enterprises.'' Otherwise, Russia's decline into the status
of just a raw materials exporter will soon become


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