July 16th, 2000    
This Date's Issues: 4406 • 4407   •

Johnson's Russia List
#4406
16 July 2000
davidjohnson@erols.com

[Note from David Johnson:
1. Washington Post: Dimitri K. Simes, With Friends Like These, Putin Needs A Smarter Strategy.
2. The Russia Journal: Andrei Piontkovski, The stench of Chechen corpses.
3. New York Times: Eleanor Randolph, Russia's New President Eyes an Unruly Press.
4. The Sunday Times (UK): Mark Franchetti, Chechens beaten on torture train.
5. Washington Post: Peter H. Stone reviews RED MAFIYA:How the Russian Mob Has Invaded America by Robert I. Friedman.
6. The Russia Journal: Mikhail Delyagin, Driving Russia to extinction.
7. Reuters: Russian oligarch says tough to tell what's legal.(Mikhail Khodorkovsky)
8. Matt Taibbi: re Paul Backer/4405 and the New York Times.
9. the eXile: Bubba Does Moscow. (DJ: I missed this at the time. If Americans ever debate Russia policy during the election here's something to think about.)]

*******

#1
Washington Post
July 16, 2000
[for personal use only]
With Friends Like These, Putin Needs A Smarter Strategy
By Dimitri K. Simes (dsimes@nixoncenter.org)
Dimitri Simes, president of the Nixon Center, is author of "After the 
Collapse: Russia Seeks Its Place as a Great Power" (Simon & Schuster, 1999).

For a man who was handed the Russian presidency on a platter in exchange for 
pardoning the widely despised Boris Yeltsin, Vladimir Putin enjoys remarkable 
popularity. His current 54 percent approval rating is essentially the same 
support he received when his authority was confirmed in Russia's March 
elections. But as he prepares to head for the G-8 summit in Okinawa next 
weekend to attempt to reschedule Russia's debt, his honeymoon may be coming 
to an end. 

While Putin himself remains quite popular with the public, approval of his 
policies--as demonstrated by public confidence in his cabinet--declined from 
57 percent to 39 percent in June alone, a drop partly due to the government's 
failure to end the bloody war in Chechnya and to inflation that is suddenly 
accelerating (prices rose 2.5 percent that month).

More ominously for the Russian president, noisy disenchantment is growing 
among the entrenched Russian elites who brought him to power and who have 
formed an important part of the ruling coalition. At the time of Putin's 
election, the elites saw him as the person best able to preserve the status 
quo; in essence, they sought Yeltsinism without Yeltsin. But since he has 
begun to act as if he will not be content as their puppet, many of them feel 
betrayed.

During a recent trip to Russia, I heard complaints from key associates and 
opposition leaders alike that he was trying to do too much, too soon, too 
clumsily--alienating important interest groups in the process.

An economic adviser who knows the president well told me: "To Putin's credit, 
he, in contrast to Yeltsin, genuinely cares about doing what is right for 
Russia, and he appreciates that strengthening the state is a precondition for 
achieving anything. But beyond that, he does not have a well-thought-through 
strategy. And because of his KGB background, he is a bit too inclined to see 
critics as enemies of the state, which undermines possibilities of dialogue 
and compromise essential for actually implementing reforms."

The recent attack on media magnate Vladimir Gusinsky, for instance, at a time 
Putin desperately needed support from the press and Gusinsky's fellow 
tycoons, was mentioned repeatedly as evidence of the president's lack of 
strategic planning.

In his campaign to strengthen the Russian state, Putin's first targets were 
the presidents and governors of Russia's 89 republics and regions. While 
officially elected, these regional leaders have increasingly become 
modern-day feudal lords, controlling everything from local legislatures to 
the economy and the media in their provincial fiefdoms. Moreover, because 
they also hold ex officio seats in the Federation Council, the upper house of 
Russia's parliament, they are simultaneously regional executives and federal 
senators. No wonder the vast majority of Russia's people and all of its major 
political parties favor limiting the power of the regional bosses.

The problem is that these provincial leaders are also the strongest 
constitutional constraint on the enormous powers of the Russian presidency. 
So when Putin put forward legislation to reduce the powers of the governors 
and remove them from the Federation Council (which would also strip them of 
the legal immunity given to all Russian parliament members) even rivals of 
the regional bosses were somewhat uneasy.

Boris Berezovsky, the multimillionaire businessman, legislator and Kremlin 
insider who helped mastermind Putin's ascent, argued against the legislation, 
sensing that he and his fellow oligarchs might be the president's next 
target. Berezovsky was right: On May 11, Russia's tax police raided 
Media-Most, the television, radio and press conglomerate controlled by 
another oligarch, Gusinsky. Gusinsky himself was later arrested, detained 
briefly and released.

In the United States, the action was seen as an outrageous attack on a 
crusading journalist. It was indeed; but most Russians view Gusinsky, who 
used his media outlets to smear business and political opponents, primarily 
as an unsavory oligarch. The view that the raid was part of an "open season" 
on the oligarchs was reinforced last week when prosecutors and tax police 
seized financial documents from Media-Most--but this time simultaneously took 
actions against such major companies as Lukoil, Norilsk Nickel and Avtovaz.

Like the regional governors, oligarchs are key players in the way Russia has 
been ruled since the early Yeltsin period. A small group of rich businessmen 
close to the government, and sometimes in it, the oligarchs were allowed to 
buy privatized state businesses at bargain prices. No level playing field 
will be possible in Russia until these tycoons are deprived of their grip on 
the state--a step promised by Putin during his election campaign, although 
many mistook this for empty rhetoric.

It is in this context that most Russians viewed the attack by Putin's 
government on Gusinsky. True, he is probably not the worst among the 
oligarchs and his media empire has recently played the role of a much-needed 
alternative voice. But average Russians hate the oligarchs, and their chief 
complaint was not that Gusinsky was arrested, but that the others were not 
locked up with him.

The Russian political elites saw a further message in the arrest: If neither 
the governors nor the oligarchs were to be immune from prosecution, then what 
could prevent the development of a new dictatorship built around Putin, a 
former KGB lieutenant colonel, and his colleagues in the security services?

Even Communist Party leader Gennady Zyuganov--no friend of the 
oligarchs--said to me, "Either we respect democratic methods and observe 
fundamental human rights or everything will turn into a brawl. We agree that 
there is a need to fight corruption and to strengthen the authority of the 
state, but in the name of what? In order for five new people to be in charge 
of everything?"

Putin has tried to provide a reassuring answer. Last weekend, addressing the 
Russian Federal Assembly, he said, "Only a strong and effective--if someone 
does not like the word 'strong,' then let us say an 'effective and 
democratic'--state is capable of defending civil, political and economic 
freedoms." But he also declared that the state is "responsible for 
everything," and seemed to define the state as that branch of government 
under his direct control.

One reason for apparent inconsistencies in Putin's attitude is the divided 
nature of his ruling coalition--a group that reflects his own mixed past, 
including his tenure in the KGB, work in the reform-minded St. Petersburg 
government, and role in the Yeltsin political machine. His team thus includes 
economic reformers, members of the so-called "family"--the officials and 
bankers who were Yeltsin's cronies--and the heads of security services.

The problem of Gusinsky's arrest showed how disparate these team members are. 
The economic reformers were unhappy because it upset Russia's international 
partners and interfered with attempts to reschedule debts and lure investors. 
Members of the "family," though eager to cut Gusinsky down to size, opposed 
the arrest because it violated the unspoken immunity granted to 
oligarchs--like themselves.

But to the security component of the Putin coalition, Gusinsky looked like an 
enemy of the state. In its view, his mocking television programs almost dared 
the authorities to demonstrate that the new Russian president could not be 
kicked around.

Though Putin was traveling in Europe at the time--trying to cultivate 
investors and to mobilize support against missile defense plans--few Russians 
believed him when he said Gusinsky's arrest caught him completely by 
surprise. Still, the action appeared halfhearted and without the full weight 
of the government behind it. Most mass media were severely critical. Within 
days, the Kremlin concluded that there was no alternative to backing off.

Gusinsky was quickly released--so quickly that Putin did not even have a 
chance to come home and get credit for ending the embarrassing episode. "The 
whole action was so incompetent that one could suspect that some people close 
to the president wanted intentionally to undermine him," former prime 
minister Yevgeny Primakov told me.

Most of Putin's advisers would privately agree. But that does not mean that 
Gusinsky is off the hook. Rather, as last week's new seizure of financial 
documents from Media-Most suggests, the authorities have decided that it may 
be easier to strangle Gusinsky's empire economically.

Diverging views inside the Putin camp, and the Russian president's own 
apparent ambiguity on the right balance between freedom and discipline, give 
an opening to the United States to affect the direction his government takes. 
But the Clinton administration's record on promoting democracy in Russia is 
dismal. "The U.S. government has acted as if we are total idiots: It was 
giving us lecture after lecture about building a free society based on a free 
market while staunchly supporting a small group of people most prepared to 
accommodate Washington's preferences," charges Grigory Yavlinsky, a leader of 
the democratic opposition.

What is needed is a consistent, pragmatic, yet high-minded American policy. 
Most importantly, the United States needs to communicate a simple truth in 
Okinawa next weekend: For Russia to reverse its decline, a friendly attitude 
of Western governments, citizens and investors is essential, and that 
attitude will never develop if the "dictatorship of laws" that Putin promised 
either leads to instability or increasingly appears to be just a dictatorship.

*******

#2
The Russia Journal
July 15-21, 2000
SEASON OF DISCONTENT: The stench of Chechen corpses
By Andrei Piontkovsky (andrei@isa.ac.ru)

President Vladimir Putin gave his marshals and generals a public dressing
down for not being sufficiently effective in their actions in Chechnya. But
the Russian military elite, it seems, does not agree with their
commander-in-chief’s criticism.

Public statements made on TV the next day by commander of the federal
forces in Chechnya Col. Gen. Gennady Troshev looked, at any rate, like a
disguised polemic with Putin. Troshev described how the mountainous regions
of Chechnya, where the dispersed remnants of rebel groups are reckoned to
be hiding, were under continuous artillery and aviation fire. As proof of
how effective his chosen strategy is, he proudly cited the words of local
people – "the stench of corpses is growing stronger all the time."

This immediately calls to mind the well-known story of the general who was
so stupid that even the other generals noticed. 

But in this case, what’s more important is that the simple-minded and
talkative general put his finger right on the tragic essence of the
military, political and moral situation in Chechnya and in Russia.

An egg-headed military analyst with a paper for intellectuals can’t
understand: "The security structures are giving the impression of not being
interested in undertaking any form of active measures to achieve cardinal
change in the operative situation in Chechnya. The deadlines for conclusion
of military operations in Chechnya have long since been passed, tens of
thousands of terrorists have been exterminated, but the deafening thunder
of explosions still rocks from time to time the political situation in
Chechnya."

If tens of thousands of terrorists have been exterminated, than at least
five times more civilians must have lost their lives. This is the classic
correlation of military and civilian losses in this type of conflict. What
do the hundreds of thousands of these people’s relatives feel as the stench
of the corpses of their loved ones grows ever stronger? For some reason,
the intellectual analyst with his call for more action doesn’t think about
this.

A popular TV show host takes this logic of corpses to its natural and
unavoidable conclusion: "It’s time to understand that there are no
civilians in Chechnya. All males over the age of 10 must be seen as
bandits. Then the war will be over in two weeks."

"The wives of bandits are also bandits," adds General Vladimir Shamanov. 

And then there’s the joke of the day published in the country’s largest
tabloid: "A Russian pilot is asked, ‘how do you tell civilian installations
from military targets in Chechnya?’ ‘Very simply. You approach a village
and fire a rocket at the biggest shed. If bearded men jump out, it’s a
military target. If women and children appear, it’s civilian.’ ‘And if the
men don’t have beards?’ ‘Then the plane is off course.’"

At this point, millions of readers are supposed to start laughing.

The most august "wipe out in the shithouse" has given the nation the right
to lack of thought, sensitivity and honor. Mass moral idiocy flows smoothly
into mental deficiency and vice versa. The stench of corpses is becoming
ever stronger.

(Andrei Piontkovsky is director of the Center of Strategic Research.)

*******

#3
New York Times
July 16, 2000
[for personal use only]
Russia's New President Eyes an Unruly Press
EDITORIAL OBSERVER / By ELEANOR RANDOLPH
Russia's New President Eyes an Unruly Press

Moscow's best journalists, never a particularly sunny lot, now talk ominously 
about a return of Soviet-style controls on the press. They fear, with some 
reason, that the Kremlin wants to restore its choke hold on Russia, not 
simply by bringing order to government and business, but by setting limits 
for the country's struggling new media. 

President Vladimir Putin has repeatedly promised that he intends to make 
press freedom a cornerstone of Russia's infant democracy. But in recent days, 
the former K.G.B. agent has added some disturbing new definitions for the 
word "free." 

During his first annual state of the nation address on July 8, Mr. Putin 
talked about how "freedom of journalism has become a juicy morsel for 
politicians and major financial groups. . . ." He criticized media owners who 
were trying "to settle scores" through their publications or were using their 
powerful voice as "a tool for fighting government." Such tactics, the Russian 
president said, create a "phony freedom." What is needed, he said, are the 
legal and economic conditions for a "civilized information business." 

The trouble is that one person's "civilized information business" is 
another's censored media. If Mr. Putin imposes his favored version of a 
"free" press, no matter how lofty he thinks his aims, there will not be a 
free press in Russia. To gain this most basic liberty for his country, Mr. 
Putin will need something that may be hard for a former Soviet official to 
comprehend -- namely a high tolerance for obstreperous and even offensive 
media. 

At this stage in its liberation from Soviet censors, Russian journalism 
offers about as much variety and inconsistency as the Internet. The same 
publication can print important news and barely rewritten corporate press 
releases or pornography. Verified facts are often coupled with rumors in an 
effort to sell more papers. Still, this untidy mix is an important stage in 
the media's transition. At its worst, the new Russian media are still vastly 
better than in the old days when truth came only in state-approved shadings. 

Owners of Russia's biggest media outlets have also used their power unwisely, 
aiming at political enemies in a vengeful way that is not unheard of in the 
West but which ultimately undermines their own credibility. During the 1996 
presidential race, for example, Russia's new media barons commandeered the 
airwaves and headlines on behalf of President Boris Yeltsin, either 
criticizing, mocking or virtually ignoring his Communist opponent. The 
argument at the time was that the press was fighting for its life against a 
return of Communism. When Mr. Putin complains that news organizations are 
settling scores and fighting the government, he may be describing this 
tendency, especially by the large media company run by Vladimir Gusinksy. 

But trying to drive independent news organizations out of business or into 
submission is not the answer, if Mr. Putin wants a truly free press. The 
owner of some of the best and most independent news publications in Russia, 
Mr. Gusinsky has become the target of a series of investigations of alleged 
financial improprieties. Mr. Gusinsky, who also runs the only national 
television network in the country that is fully independent and steadfastly 
critical of Mr. Putin, was jailed for a few days last month. Mr. Gusinsky's 
many talented journalists fear he will be forced out as head of his 
Media-Most company and replaced with someone less willing to challenge the 
new president. 

The warning flags in Russia have already drawn international concern. A group 
of journalists, primarily from the World Press Freedom Committee and the 
Committee to Protect Journalists, visited Moscow last week, mainly to protest 
governmental threats to the media. The Westerners also advised Russian 
journalists to improve their standards of ethics and professionalism, to stop 
using their voices as a political or public relations club if they want "to 
claim their vital place in building a free and democratic society." But those 
problems should be fixed by the journalists and media barons, not by the 
Kremlin. 

*******

#4
The Sunday Times (UK)
16 July 2000
[for personal use only]
Chechens beaten on torture train 
Mark Franchetti, Chervlyonnaya, Chechnya 

SHUFFLING across his dusty front garden in a pair of torn slippers, Mikhail 
Huchiyev looked like a ghost as he recounted the horrors he had endured on a 
Russian "torture train" in the breakaway republic of Chechnya. 

Not yet 30, his eyes are lifeless and his speech, frequently interrupted by a 
tubercular cough, is slow and uncertain. Two red scars across the side of his 
neck show where he twice tried to take his life with a razor blade to escape 
his tormentors. 

Huchiyev, back home after five months in detention, was one of hundreds of 
Chechens tortured by the Russian forces on the train, whose existence has 
been kept secret by the Kremlin. 

Last week he and other former inmates revealed for the first time the 
conditions suffered by the men and women held on the train - first used more 
than half a century ago to transport political prisoners to the Siberian 
gulag - as it stood at the railway station in Chervlyonnaya, 10 miles north 
of the capital, Grozny. 

Russian forces have long been accused of maltreating suspected rebel 
prisoners at so-called filtration camps, most notably at Chernokozovo prison 
in the north of the republic, where human rights groups claim men have been 
raped, beaten and killed. 

Accounts by former inmates suggest that, if anything, life was even worse on 
the train, whose four carriages were used to hold up to 150 inmates at a 
time. Inside, prisoners were held in near-darkness in groups of up to 15, 
sharing tiny cells with six wooden beds and no windows. 

Guards repeatedly sprayed tear gas through a narrow metal grate, leaving 
inmates gasping for air and crying with pain. Each prisoner received just two 
small biscuits of crushed cereals a day and two litres of water. 

"We were treated and beaten like animals," said Huchiyev, a former 
water-melon seller arrested last December when Russian forces surrounded his 
village of Grebenskaya, 20 miles from Grozny, and rounded up all the men. 

"During questioning the beatings always got worse whenever I said I didn't 
know any fighters. The guards got really angry and used a wooden table leg or 
rifle-butt as a truncheon." 

A further humiliation came during the single visit to the lavatory that they 
were allowed each day. 

"The guards would make us run down the corridor, beating us with truncheons 
all the way to the end of the train," he said. "Then they would count till 10 
and, regardless of whether we had managed to relieve ourselves, they would 
drag us out and beat us back to the cell." 

The train was first parked in Chervlyonnaya in February. It was cut off from 
the outside world by two rows of barbed wire, an anti-aircraft gun, several 
tanks and round-the-clock armed patrols. At night its windows were blacked 
out to protect it from possible rebel attacks. 

Rumours soon began to spread of abuses being committed. Then, in March, a 
railway worker found a note in the snow written by a prisoner listing the 
names of dozens of inmates. 

For weeks afterwards, relatives seeking loved ones detained by the Russians 
tried to approach the train but were turned away at gunpoint. 

"The worst times were always at night," said Ruslan Biterbiyev, another 
Chechen held on the train. "The guards got more nervous and were nearly 
always drunk. That's also when they would turn their attention to the women 
who had been detained at checkpoints because they had no documents. 

"My cell was one down from the one the women were held in and I couldn't see 
what was going on. But it was clear that they were being raped. They screamed 
and pleaded, begging the guards to stop, telling them that they would never 
be able to look their fathers in the eye. 

"One of the women managed to pass us a message to tell us that a pregnant 
girl had suffered a miscarriage. One month after I was released I heard that 
she had been buried by her parents. She was 26." 

On another occasion Biterbiyev, who was released after a week on the train, 
saw guards drag a man out of his cell. His head was banged several times 
against a steel corner until blood gushed from a deep wound. The guards 
stopped only after he had lost consciousness. 

Former inmates claim people from Chernokozovo were also temporarily held on 
the train while the camp was visited by an international human rights 
delegation investigating reports of torture and rape. Dozens of prisoners who 
bore obvious signs of severe beatings appeared to have been driven by truck 
to the train so that they would not be seen. Last month the train moved from 
Chervlyonnaya. Although its location remains a secret, some locals believe it 
is now parked in Khankala, the largest Russian military base in Chechnya, on 
the outskirts of Grozny. 

The decision to move appears to have been prompted by concerns over security 
following attacks on Russian positions. "So long as the war continues that 
train will be used as a detention camp and the torture will continue," said 
Rasul Kaisultanov, another former inmate, who left the train with three 
broken ribs and internal bleeding. 

"To the Russians, if you are Chechen you must be a criminal. As far as they 
are concerned, we are all animals." 

******

#5
Washington Post
July 16, 2000
Book World
Crime Tsars
By Peter H. Stone
Peter H. Stone is a staff correspondent for the National Journal.

RED MAFIYA
How the Russian Mob Has Invaded America
By Robert I. Friedman
Little, Brown. 296 pp. $25.95

In Red Mafiya, New York freelancer Robert I. Friedman, who has broken several 
important stories about the emergence of the Russian mob in the United 
States, tells a chilling tale of how over the last two decades Russian 
criminals have often been in the vanguard of international money laundering, 
drug dealing and weapons sales. Friedman provides a detailed road map of 
inroads made by Russian organized crime into U.S. communities from Brighton 
Beach to Miami Beach, and infiltrations of such major institutions as Wall 
Street and the National Hockey League. Russian mobsters present a unique and 
new kind of threat, in the author's eyes, because they have built a strong 
international organization that stretches from Moscow to Israel to the United 
States, one combining old-fashioned brutality with high-technology skills.

Starting in the late 1970s, the Russian mob began to gain power in the 
Brighton Beach section of Brooklyn. Long known as a solid working-class 
Jewish community, Brighton Beach was transformed in the 1970s with the 
arrival of some 40,000 Russian Jews, a number of whom had extensive criminal 
backgrounds. The community's character changed, too, as such organized-crime 
haunts as the Odessa, a nightclub owned by Marat Balagula, sprang up. In 
partnership with a few other Russian wiseguys, Balagula masterminded one of 
the biggest tax scams in U.S. history by collecting gasoline taxes through 
phony corporations and never paying the Internal Revenue Service what was 
owed. Eventually in 1989, he was arrested for credit-card fraud and received 
an eight-year sentence; a few years later he received an additional 10 years 
for evading taxes on the sale of four million gallons of gasoline.

Then there's Semion Mogilevich, whom Friedman dubs the "Brainy Don." 
Mogilevich, who has an economics degree from Lvov University, has created an 
international network of criminal enterprises, including arms sales and drug 
running, that's known as the Red Mafiya. Relying on extensive political and 
police connections in Hungary, Israel, Russia and other countries, Mogilevich 
has in recent years shuttled among these nations (and even visited the United 
States despite a State Department visa ban), in and out of various criminal 
scams. Perhaps most notably, Mogilevich's name surfaced in the laundering of 
billions of dollars through the Bank of New York.

While digging into the Russian mob's operations, Friedman received two death 
threats, including a $100,000 contract on his life reportedly put out by 
Mogilevich. While several of the mobsters profiled by Friedman are in prison, 
the Russian mafia appears to be flourishing in the United States and abroad. 
In Friedman's eyes, the FBI was slow to respond and still needs to put more 
resources into the fight. Not until 1994 did the New York FBI set up a task 
force to deal with the Russian mafia.

Through interviews with law enforcement officials and Russian mobsters and 
research into classified intelligence reports, Friedman does a first-rate job 
of showing why FBI director Louis Freeh has said that the Russian mob poses 
an "immense" threat. At times Friedman tends to generalize very broadly, and 
the book would have benefited from more documentary evidence. Still, Red 
Mafiya serves as a useful guide to understanding one of Russia's most 
dangerous exports.

******* 

#6
The Russia Journal
July 15-21, 2000
Driving Russia to extinction
By Mikhail Delyagin, director of the Institute for Problems of Globalization
Columnist Mikhail Delyagin predicts catastrophe if the nations birth rate
continues to slide.

Leading Russian population experts say the country is in the middle of a
demographic catastrophe that will make its impact felt on sections of
society within the next five years.

At the same time, Russia’s reformers, who are responsible for bringing the
country to this state, have no interest in the extent and consequences of
this disaster becoming widely known. That is why the national census has
been postponed twice and is now scheduled to be carried out in October
2002. The official reason given is lack of money – a rather pitiful excuse
when expenses are no more than $1 per person and even such poor countries
as Belarus and Kazakstan have found the money for a national census.

The thing is, the Russian authorities have something to hide – the
birthrate hit a low in 1999, with 1.2 million births, 1.75 times lower than
the death rate.

Since World War II, Russia has experienced two population booms. During the
war years, birth rates fell sharply as, unlike German soldiers, Soviet
soldiers were rarely given leave to go home. This was compensated for by a
baby boom just after the war. The second surge in birthrates came between
1984-1987. 

But the advent of radical market reform rules out a third boom, which could
have been expected between 2009-2012. The annual birthrate will stabilize
at around 1.2 million, and the annual mortality rate will be around 2
million. This makes for a natural population decrease of about 800,000
people a year. Migration, which at the beginning of reforms made up for 80
percent of the natural decrease, has already dropped to only 20 percent.

By 2005, the number of 18-year-olds eligible for military service will peak
at 1.28 million and then will drop sharply to only 700,000 in 2012. It
makes no sense, then, to haul students off to the army – there isn’t going
to be any increase in potential conscripts. From 2005, falling numbers of
young people will cause universities to close and create a crisis in the
Army if it hasn’t gone professional by then.

Russia’s problem is that it has the falling birthrates of wealthy countries
combined with the poverty of developing countries. This will make it
difficult for Russia to resist the demographic pressure coming from its
southern and eastern neighbors. At the moment, 8 million Russians face at
least 80 million Chinese in the two countries’ border region. In 20 years,
Iran and Afghanistan will have the same population as Russia, and their
migration north will push north in their turn the ever-growing populations
of the Central Asian countries. In 50 years, the population of India and
China will number more than 3 billion, and each person there will have
600ths of a hectare, while each Russian has a whole hectare. 

But the government closes its eyes to all this. Instead, the reformers
discuss the problem of 2 million "surplus people" in Russia’s far north.
The liberals’ program has no place for these people because they can’t look
after themselves. Getting fuel and other supplies to them is expensive,
moving them and finding new occupations for them is even more expensive.
Thus, the solution is for them to gradually die out, which will only add to
the demographic disaster.

It is the inhuman economic policy carried out since the beginning of
reforms that is to blame for this situation. Today’s reformers have no
intention of changing course. The foundation of the government reform
program is decreasing state spending – seen as the main instrument for
stimulating economic growth.

State spending commitments currently amount to around 60 percent of GDP,
and commitments actually fulfilled a total of 52 percent of GDP. By 2010,
fulfilled commitments are to be cut back to 32.5 percent of GDP, most of
which will be at the cost of regional budgets. 

The main cuts will be to social spending, and this will lead to a situation
of "social default" on the part of the state. The government program
intends to allocate financing for social spending by volume rather than by
aim, making it senseless and insufficient. Only families with incomes under
the living minimum will be eligible for any kind of benefits. The planned
introduction of private healthcare and education for people earning more
than the living minimum isn’t accompanied by guarantees of quality. 

These policies will not halt the demographic disaster, on the contrary,
they will only make it worse, decreasing not only the number of people in
Russia, but also the quality of the remaining population.

*******

#7
Russian oligarch says tough to tell what's legal
By Peter Henderson

MOSCOW, July 14 (Reuters) - The head of Russia's second largest oil company, 
one of the fabled oligarchs untouched by this week's crackdown on top 
businessmen, said on Friday it was no longer clear what was legal in 
post-Soviet Russia. 

Mikhail Khodorkovsky, head of YUKOS oil <YUKO.RTS>, known for deep reserves 
and blistering battles with shareholders crying foul, told a briefing Russia 
had yet to work out a clear set of laws and informal precedents were now 
gone. 

"Current legislation is incomplete and does not allow you to clearly 
determine the border between what is legal and what is illegal," he told a 
briefing. 

Business empires, however soundly built, could nonetheless find themselves on 
shaky ground, he added. 

"Major financial industrial groups have strong legal structures, but these 
legal structures can only be based on the laws that exist," he said. 

The heads of Russia's largest oil, auto and metals companies and the biggest 
independent media group have been targeted by government tax officials and 
prosecutors recently in what is seen as a Kremlin crackdown. 

Khodorkovsky, often grouped among the so-called oligarchs in Kremlin sights, 
joked that his position was like that of a pedestrian threading between cars 
and thinking about accidents. 

"If you worry and think about it all the time, then that is bad. You need to 
calm down. If you are not worried and sure that it will never happen to you, 
then you don't pay attention to accident statistics." 

He said the main problem for business was that law enforcement agencies no 
longer played by a set of informal rules for business. 

Much of the gains by Khodorkovsky and other major businessmen were made in 
relatively short periods of time as Russia privatised in a near legal vacuum. 

Some of those privatisations have now come under question, with prosecutors 
challenging that of metals giant Norilsk Nickel and the Audit Chamber, which 
reports to parliament, on Friday questioning 1992 sales of shares in national 
power utility UES. 

Khodorkovsky said tax legislation and privatisation both were up in the air. 

"While there was bad legislation and precedential rights, it was possible to 
get by in some way. Today the the law as before is bad, contradictory, 
inadequate, but in addition the system of precedents has been put in 
question," he said. 

"Given that today the president of the country has not taken a decision about 
political limits, has not set a new system of precedents, and law enforcement 
agencies have rejected the old system of precedents, without doubt the 
political risks of doing buisness in the country have risen." 

*******

#8
Date: Sun, 16 Jul 2000 
Subject: Paul Backer/4405
From: "Matt Taibbi" <exile.taibbi@matrix.ru>

What a strange set of critical skills Paul Backer has. He reads closely
enough to notice that Michael Wines left the word "Deputy" out of his
description of Anatoly Chubais as a former prime minister, but not closely
enough to see that the rest of the article was a giant, steaming, hissing
pile of bullshit. After reading Backer's note I went back and read the
Wines article and found no less than nineteen shameless lies in it. Among
those are the suggestion that the AvtoVaz raid represented a genuine attack
on the interests of Boris Berezovsky; the idea that Chubais is "reviled" by
ordinary Russians merely for being a "symbol of Russia's economic collapse"
and not because he robbed the country blind (in fact, no mention of
Chubais's improprieties is made in the piece); and the absolutely
preposterous theory put forward at the end of the piece, that Putin is
making these raids in a populist tactic to score points with the "very
poorest" Russians. Here's that end passage:

'And if that is not enough, he said, the Kremlin has an obvious reason to
soak 
the very richest Russians: The very poorest ones, who vastly outnumber them 
at the polls, have been salivating at the prospect for close to a decade. '

"It's just popular," Mr. Nikonov said. "It's absolutely perfect politics. 
People in the streets are absolutely delighted with this."'

What polls? The election's over. The raids didn't start until they were
over. Beyond that, if there's one thing Putin has made clear, it's that he
and his team consider the public's opinion not worth courting in any normal
way, preferring instead to solicit votes via coercion, media manipulation,
and exclusion of opponents from the public debate. Vladimir Putin a
populist? The man doesn't kiss babies, he asks to see their documents. The
idea is ridiculous, and furthers the illusion that Putin is a normal
democratic politician, something he patently is not. 

Wines also mentions that Putin has not pressed forward with the Pavel
Borodin prosecution, and neglects to mention that Putin was Borodin's
deputy. This has to be a conscious omission.

As for Wines's reporting being "some of the best reporting on Russia"...
Well, let's take a look at the article Backer cites. In it, Wines sits next
to the cappuccino machine in his wall-to-wall-carpeted NYT office, rehashes
some wire copy, then has his intern place telephone calls to a couple of
hired corpses from reactionary think tanks, who in turn inform him that the
people "on the streets" are thrilled about Putin. This is, I think you will
agree, something like a parody of intellectual inquiry.

It's fascinating the way people cling to this legalistic view of
journalism, as though factual errors are the only kinds of mistakes
journalists can make. Facts are unimportant enough in journalism that the
checking and re-checking of them can safely be left to green subordinates,
i.e. copy editors. But no copy editor could ever be responsible for making
an article intellectually dishonest. That privilege is reserved for the
reporters, which is why he gets paid more than the copy-editors-- and why
people should pay more attention to flaws in arguments than to factual
blunders.

*******

#9
the eXile
May 25-June 8, 2000 
Bubba Does Moscow

President William Jefferson Clinton will arrive in Moscow next Saturday,
June 3, for his first face-to-face meeting with Vladimir Putin. No angry
mobs will be waiting to stomp him at the airport. No columns full of
proletarian marchers bearing signs reading “Yankee Go Home!” will hold up
his motorcade on his way in to the Marriott. There will be no need for a
food-taster when he eats Putin under the table at the inevitable
first-night Kremlin banquet. No, Bill Clinton will be safe in Moscow, and
not only from actual physical threats, but, for the most part, from
criticism as well. Whatever resentment Russia feels toward our illustrious
leader will be below the surface-well below the surface.

But make no mistake about it: when Bill Clinton arrives in Moscow next
week, he does so as a conquering Emperor. He is a Roman Caesar visiting the
front, with his new general, Vladimir Putin, reporting to him on the
progress of the campaign. It was under Bill Clinton’s watch that the old
bipolar arrangement was left behind forever, and global power became firmly
centered around a conspiracy of elites. Under this new system, the Russian
nation became a vast, impoverished colony, the overwhelming majority of its
population utterly beholden to a rapaciously corrupt group of vicious
criminals. 

Bill Clinton was the patron of those criminals. He provided them with
continual funding in the form of loans, in exchange for a relaxation of
Russia’s international ambitions during a period of expanding American
influence. It was a symbiotic relationship. He scratched their back; they
scratched his. And in the meantime, Russia went to hell.

Throughout Russia’s history, the country’s most violent leaders have often
retained relatively good reputations among the majority of the population
even during the most repressive eras, because the people often steadfastly
refused to believe that the leader was even aware of the atrocities being
committed by his subordinates. It’s one of the great cliches of Russian
politics: “If only the Tsar knew!”

Bill Clinton’s going to get off easy when he visits next week, mainly
because people think that this aw-shucks good ol’ boy from the American
south, this perma-smiling blowjob connoisseur, couldn’t possibly have been
aware of how badly his policies failed here in Russia.

But he knew. The Tsar knew. And here’s what he knew, a short list of all
the Clinton policies toward Russia that will go down in history-if future
historians have any scruples— as his administration’s biggest mistakes:

1. His government pursued policies that were designed to destroy Russia
economically and emasculate it geopolitically, thereby squandering
absolutely in the space of eight years any and all goodwill Russians felt
toward America at the end of the Cold War.

It’s hard to pinpoint exactly when the U.S.-backed decimation of the
Russian state began, but a good place to start might be in the Yegor Gaidar
era. Among other things, the U.S. advised Yegor Gaidar’s government to free
prices before the privatization of industry, effectively depriving Russians
of their savings overnight as ordinary citizens scrambled to buy basic
necessities at ballooning prices from monopolistic industries. American
advisers subsequently helped design the voucher privatization campaign and
the early direct privatizations, which were theoretically supposed to be
the more egalitarian stages of privatization, but mainly resulted in the
transfer of property from workers to government insiders and Western
investment companies like Credit Suisse. The presence of large numbers of
official American advisers in and around the Russian State Property
Committee during this period left Russians forever with lingering
suspicions that Westerners used to insider information to buy up the most
promising properties. Subsequently, the Clinton administration did not cut
off aid or even verbally protest in any way after the notorious
loans-for-shares auctions, insisting repeatedly that Russia was “on the
right road”. By 1996 it became clear that the whole notion of “shock
therapy”, which was the brainchild of Harvard economist and key U.S. policy
adviser Jeffrey Sachs, had foreseen the instant creation of a super-rich
propertied class which would use its resources to block any move back in
the direction of communism. By Yeltsin’s second term the plan was more or
less perfectly fulfilled, as Russia became a “free market” nation run by a
small coterie of obscenely rich private industrialists sitting atop the
back of a nation of de facto indentured laborers.

The Clinton government also, of course, pushed IMF/World Bank policies
which insisted upon mass layoffs of state workers, an end to as many state
industrial and agricultural subsidies as possible, the termination of
advantageous trade relationships with other former Soviet Republics, and
the immediate exposure of Russian industry to international competition,
which it had no chance of defeating in the short run. The result of all
this was obvious and unavoidable; Russian industry collapsed, decimated by
Western competition, creating the worst depression ever observed in an
industrial nation, with GDP falling almost 50% from 1989 levels by the end
of the 1990s.

2. It turned a blind eye to corruption, both among its own officials and
among the Russians, helping to create a criminal state.

The Clinton administration’s record in dealing with Russia-related
corruption couldn’t possibly be worse. There was not a single prosecution
of an American official connected with Russian aid or Russian finance
throughout Clinton’s tenure. U.S. officials were conspicuously careless
when it came to adhering to any kind of ethical standards in the
administration of Western aid. The Clinton Administration early on granted
Harvard University’s Institute for International Development (HIID) $57
million contract to administer American financial aid without a tender,
citing “national security” reasons. USAID subsequently cancelled HIID’s
contract after irregularities were discovered, but the government never
brought the central figure in the scandal, Jonathan Hay, to trial. Anatoly
Chubais’s organizations continued to receive Western aid money even after
he was caught improperly using U.S. money to advertise his political party,
Russia’s Choice, in the early 1990s. The FBI sat on the Bank of New York
investigation for nearly six months, only proceeding with the matter when
British law enforcement officials leaked news of the story to the press;
the investigation has since apparently been halted following the
indictments of a pair of low-level BoNY employees (in Lucy Edwards and
Peter Berlin) who clearly played very peripheral roles in the scandal. In a
celebrated incident, Vice President Al Gore handed back a CIA report
detailing the corrupt activities of then-Premier Viktor Chernomyrdin. Gore,
whose name was indelibly linked to Chernomyrdin’s through the
much-ballyhooed Gore-Chernomyrdin commission, had scribbled “Horseshit” in
the margins of the report before flinging it back at the CIA.

3. It supported the development of an overtly undemocratic style of
government in order to isolate and protect U.S. interests from the wishes
of the Russian people.

For all the talk about “reform” in the nineties, the Clinton administration
generally relied on Presidential decrees issued by Boris Yeltsin to get
U.S.-backed legislative inititatives into the books. (This is not
surprising, of course, since Clinton himself has issued more Executive
Orders than any other two American presidents combined). It supported
Yeltsin when he bombed the White House, and helped him author a
constitution which gave him the power to dissolve the Duma, effectively
declawing the parliament. The United States never once protested abuses of
press and speech freedoms by the Yeltsin government, helping bring about a
situation in which Duma elections in 1999 and presidential elections in
2000 were decided mainly on the strength of gross manipulations of public
opinion. In fact, the Clinton administration’s absolute indifference to
Russian violations of democratic principles-can anyone remember the Clinton
government complaining about voter fraud, censorship, or workers’
rights?-might be the most striking feature of this administration’s Russian
policy. Almost overnight, America went from being a nation deeply concerned
about the treatment of each and every last Soviet dissident, to being a
country totally indifferent to the fate of tens of millions of Russians who
suffered violations of rights most Americans would consider inherent on a
daily basis. It was this indifference that cost America the average
Russian’s faith in American values. This happened exclusively on Clinton’s
watch; when Bush left office, America was still the good guy in these
parts. It is worth noting that the Clinton administration in the United
States loudly lamented the difficulties it faced in its first term when it
tried to create a national health care system; in Russia, however, the
United States supported IMF reforms which actually destroyed an existing
national health care system, leaving the vast majority of Russians without
access to good care or medicines.

4. It made far too many strange bedfellows.

Actually, some of the Clinton administration’s unseemly relationships
predated its actual ascension to power in America. Al Gore, for instance,
had a longstanding relationship-through his late father, the U.S. Senator
Al Gore, Sr.-with the late industrialist and reputed Soviet agent Armand
Hammer. When ABC news correspondent Bob Zelnick tried to write a book
detailing Gore’s relationship to Hammer, Gore spokesmen told him flatly it
would be very displeased if he were to continue pursuing the matter. When
Zelnick ignored him, he quickly got an ultimatum from his employers at ABC,
who told him that his broadcasting contract would be canceled if he
continued with the book project. Zelnick resigned and published the book,
entitled “Gore: A Political Life”, anyway. Strobe Talbott, the first
ambassador to Russia nominated by Clinton, had a longstanding relationship
with reputed Soviet double-agent Viktor Louis, a relationship he was
questioned at length about in Congress prior to his subsequent confirmation
as Deputy Secretary of State. Clinton’s team maintained close contacts with
Chubais even as mountains of evidence of the latter’s corruption piled up.
In general, the Clinton administration’s unflagging devotion to figures
like Chubais, Gaidar, and Sergei Kiriyenko-each of whom seldom recorded
approval ratings above two or three percent in national polls— severely
damaged the American reputation in Russia. As author Anne Williamson notes,
“The U.S. made a big mistake when continually supported the most hated
figures in Russia.”

5. It made the world a much more dangerous place.

Without a doubt, the Clinton administration’s biggest mistake with regard
to relations with Russia was the war in Kosovo. The ramifications of that
action are not obvious, but they will be more and more telling as time
wears on. Clinton’s mistake in Kosovo was not only in firmly establishing
the U.S. in Russia’s eyes as an immediate military threat; that had become
obvious to Russia long before that, through the expansion of NATO right up
to Russia’s borders (in particular the courtship of Ukraine and the
Baltics) and the various Partnership for Peace programs and numerous joint
military exercises which led to Russians seeing U.S. military maneuvers all
around their border. Its mistake was also not limited to the failure to
consult Russia about the Kosovo attack, though this also helped firm up
Russian enmity to the U.S. The war also humiliated Russia’s top brass, as
well as its hitherto apolitical youth, to such a point that it made the
Second Chechen War that much more plausible, even necessary in the eyes of
many in Russia. No, what was probably the worst thing about the Kosovo
attack was that it convinced other countries around the world that it would
only be able to protect itself against U.S. attack by owning its own
nuclear weapons. As Williamson says, “Kosovo made it almost inevitable that
other countries would try to acquire nuclear weapons from Russia. The
attack made nuclear weapon ownership the standard for sovereignty.” Having
destroyed the rest of Russia’s domestic industry through its economic
programs, the Clinton administration almost singlehandedly revived the
Russian military-industrial complex by creating markets for Russian weapons
in third world countries spooked by the NATO action in Yugoslavia. 

Most Russians naively believed the Clinton Administration’s early rhetoric
about its intention to embrace Russia as an equal and an ally, but eight
years later, most polls show that Russians view NATO as a military threat
to their nation. Rather than building a lasting alliance, the Clinton
Administration succeeded in creating the impossible: it laid the
foundations for a second, albeit lop-sided and unpredictable, Cold War.

*******