July 19th, 2000    
This Date's Issues: 4410 • 4411   •

Johnson's Russia List
#4411
19 July 2000
davidjohnson@erols.com

[Note from David Johnson:
1. Christian Science Monitor: Fred Weir, In Russia, privacy is a 
commodity. Journalists bought, posted 140 dossiers on the Web to 
expose domestic spying. 
2. Moscow Times EDITORIAL: Resignation Is a Logical Response. 
3. Reuters: Berezovsky quits Russian parl't, vows opposition.
4. BBC MONITORING: RUSSIAN POLITICIANS, BUSINESSMEN REACT TO TYCOON 
BEREZOVSKIY'S PROPOSED PARTY.
5. Mickey Berdy: mushrooms, sex and risk.
6. BBC MONITORING: MOST RUSSIANS BELIEVE PUTIN WILL PACIFY CHECHNYA - 
POLL.
7. Reuters: Russia bombs rebels, pro-Moscow Chechens argue.
8. Reuters: New China-Russia axis seen limited in scope.
9. The Globe and Mail (Canada): Gordon Pitts, Alliance aims to aid 
Russian corporate revolution. A joint university program will give 
directors and academics training in governance to take back to their 
companies and institutions.
10. Nathan Arnold: Re: JRL#4402, #4408 Berezovsky and #4406 
Khodorkovsky.
11. Wall Street Journal: Andrew Higgins, Kremlin Official Seeks 
Amnesty For Chaotic Privatization Era.
12. Moscow Times: Yulia Latynina, Today's Jackals Will One Day 
Be Devoured.
13. Vremya MN: Sergei Rogov, DOES RUSSIA NEED UNILATERAL 
DISARMAMENT?]

******

#1
Christian Science Monitor
July 19, 2000
In Russia, privacy is a commodity
Journalists bought, posted 140 dossiers on the Web to expose domestic spying. 
By Fred Weir, Special to The Christian Science Monitor

Mikhail Kozhokin is furious. The editor in chief of Izvestia, one of Russia's 
largest daily newspapers, has just discovered that he and his entire family 
were kept under surveillance by unknown agents who followed them for months 
in 1998, listened to their telephone conversations, and questioned neighbors, 
acquaintances, and co-workers about them. 

Mr. Kozhokin learned this by accessing the Internet, where two weeks ago a 
group calling itself FreeLance Bureau posted his secret dossier - along with 
those of 139 other prominent Russian journalists, politicians, celebrities, 
and business tycoons - on its Web site. "The people who did this call 
themselves journalists, but they are nothing of the kind," he says. "They are 
witting or unwitting accomplices in the mass violations of people's rights 
that are going on in this country." 

The 90 megabytes of raw intelligence data suggest that domestic spying - of 
both the official and private varieties - is thriving in post-Soviet Russia. 
Those who have seen slices of their personal lives plastered across 
cyberspace range from Alexei II, Patriarch of Russia's Orthodox Church; 
Justice Minister Yuri Chaika; and influential media and oil tycoon Boris 
Berezovsky to Jonas Bernstein, a Moscow-based American journalist who writes 
for The Washington Times newspaper. The posted material includes 600 
surveillance reports, transcripts of phone conversations, pager records, and 
researched "biographies" of the hapless subjects. All of the information is 
at least two years old. 

Posting private details a 'duty' 

The Web site's editors say it is just a tiny fragment of the domestic 
intelligence data they found floating around on Russia's private market, and 
they insist that they have amended the material to remove any truly damaging 
or intimate information. 

"We did this to illustrate the methods of the security services and to warn 
people of how widespread domestic spying really is," says Alexei Chesnakov, 
one of the three former journalists who posted the data on the FreeLance 
Bureau site. He says all the materials were gathered by private security 
firms and not by official police forces or successor agencies of the former 
Soviet KGB. 

However, he adds, the group purchased the whole package from a serving 
officer of a state intelligence service, whom he refused to name. "We 
consider it our professional duty to make these materials public, a service 
to our country and our readers." Mr. Chesnakov would not say how much was 
paid, but Russian press reports have suggested an amount as high as $50,000. 

"Virtually all banks and big businesses in Russia have their own private 
security firms gathering kompromat - compromising materials - on their 
competitors, on politicians, on just about anyone who might be pressured or 
smeared to the benefit of the company," says Pavel Yevdokimov, deputy editor 
of Spetznaz Rossiya, a sort of weekly trade journal for Russia's special 
services. "From being a monolithic police state, Russia has turned into a 
spying bazaar with hundreds of players." 

Kompromat can be held in reserve, or leaked to friendly journalists. "Russia 
has the most entertaining media in the world," says Vladimir Petukhov, an 
analyst with the Institute for Social and National Problems, an independent 
Moscow think tank. In recent years, Russian TV has broadcast videotapes that 
allegedly showed a former justice minister romping in a sauna with naked 
women, and the country's former top prosecutor in a similar situation. 
Transcripts of telephone conversations between government leaders and their 
aides have been splashed across newspaper front pages. "Nowhere else does 
such juicy stuff get shown so regularly," says Mr. Petukhov. 

Despite the resources that go into spying on individuals, the product can be 
riddled with errors. Mr. Bernstein, the only foreigner whose surveillance 
profile appears on the Web site, complains that his watchers got many details 
wrong, including which newspaper he worked for, his marital status, and the 
allegation that he is "connected to the CIA." 

In a recent column in the English-language Moscow Times, Bernstein said he 
was surprised to find that both his landlady and the middleman who helped him 
rent his Moscow apartment are described in his file as agents of Russian 
state-security organizations. 

Kozhokin was disturbed by the information on his family life, with 
biographical details of his wife and in-laws, records of phone conversations, 
and even the names of the schools his children attend. "This is very painful 
to read," he says. "It's clear there is no protection for anyone, no decency 
at all." 

Analysts say the problem has been getting worse in Russia, although President 
Vladimir Putin's growing crackdown on illegal activities among Russia's 
business elite could have the effect of trimming freelance-spy activities. 
But "the cure could be worse than the disease, if it means giving more power 
to the state-security organs," says Chesnakov. 

Before entering politics, Mr. Putin was a spy for the KGB in Germany, and 
headed its successor, the Federal Security Service, or FSB. In Soviet days, 
the KGB was a vast organization with hundreds of thousands of agents embedded 
in every corner of society. After the demise of the USSR, the force was 
broken up and its foreign spying functions spun off. The present-day FSB is 
much leaner, with about 80,000 employees keeping tabs on the country's 146 
million people. But it is proportionately still one of the largest domestic 
counterintelligence forces in the world. (The FBI, to which the FSB roughly 
corresponds, has some 28,000 full-time employees for a US population of 275 
million.) 

Agents for hire 

Experts say the materials posted on the FreeLance Bureau Web site probably 
fell into the hands of the FSB through recent raids on private security 
firms. It's not certain how they ended up on the private market, they say. 
But, like all government employees in Russia, security agents are desperately 
underpaid and the temptation to make a quick illegal profit is strong. 
Chesnakov says he has seen a price list for hiring the skills of serving FSB 
officers, offering full surveillance for $500 per day and recording of 
telephone conversations for $200 per day. 

"There is a huge community of surveillance specialists, and not as much 
difference between the private and official ones as you might expect," says 
Mr. Yevdokimov. "Private security firms are all staffed by former KGB 
experts, while those presently serving in state organs are usually available 
for hire in the private sector. They all know each other, and frequently work 
together." 

As for the former journalists who posted the huge compendium of kompromat, 
Kozhokin is unforgiving. 

"Perhaps they think they were making a good point, but all they've done is 
revealed how compromised journalism in this country is by its association 
with secret agencies," he says. "The Russian people have come to associate us 
all with this sort of mud and filth, and they will probably never trust us 
again." 

******

#2
Moscow Times
July 19, 2000 
EDITORIAL: Resignation Is a Logical Response 

It's all the same to us if Boris Berezovsky wants to resign his post at the 
State Duma. We suspect it's probably even a good PR move for him. 

As a Duma deputy he was characterized as a businessman who was hiding behind 
parliamentary immunity (even though that immunity was useless to him, because 
if any prosecutor had ever asked, the Duma would probably have stood as one 
to strip him of it). 

Now, however, he is a businessman and a media magnate again f at a time when 
memories of the troubling arrest of NTV's Vladimir Gusinsky are still fresh, 
and the newspapers and newsweeklies trumpet headlines this week like "We, the 
Entrepreneurs, Must Be Put in Our Place" (The cover of Berezovsky-owned 
Kommersant Vlast this week) or "Who Provoked the War on Business?" (the cover 
of Ekspert). 

Berezovsky says he has resigned his seat in parliament to protest Kremlin 
treatment of oligarchs and governors (the two classes of society most 
ordinary people see as Russia's largest evils). He also says he has quit to 
protest that Karachayevo-Cherkessia, the tiny patch of the Caucasus 
Berezovsky adopted overnight last year to win election to the Duma from, 
doesn't get enough attention in Moscow. 

Some might argue that it would be more logical for Berezovsky to stay in 
parliament and use his Duma seat as a platform to work against President 
Vladimir Putin's policies and for Karachayevo-Cherkessia. Apparently he sees 
things differently. Again, it's all the same to us. 

But there are two cautionary notes we would sound. 

One is that despite all of Berezovsky's talk of opposing President Putin, 
Berezovsky almost single-handedly had the man elected f with a GÚbbelsesque 
manipulation of the news on ORT. Ever since, despite much loose talk of Putin 
vs. Berezovsky and the oligarchs, we have seen Berezovsky's real influence 
only grow. This is so whether we are talking about the presence of his 
daughter on the board at ORT or his role in swallowing almost overnight most 
of the aluminum industry. We have yet to see any evidence of a true break 
between Berezovsky and the Kremlin f only of a circus-like distraction in the 
form of disagreements about how to reform the Federation Council. 

The other is we have yet to see evidence of a real program for developing 
Russia's economic potential. Ad hoc petty prosecutorial harassment of 
individual oligarchs like Gusinsky or Berezovsky or LUKoil's Vagit Alekperov 
or Uneximbank's Vladimir Potanin may be viscerally satisfying for some. But 
this sort of game has gone on for years, and it holds out no hope for the 
future. 

******

#3
Berezovsky quits Russian parl't, vows opposition

MOSCOW, July 19 (Reuters) - Russian business magnate Boris Berezovsky quit 
parliament on Wednesday and pledged to proceed with efforts to organise 
opposition to President Vladimir Putin's reform plans. 

Berezovsky was restrained in his farewell address to the State Duma, the 
lower house, and expressed regret for failing to meet the expectations of 
voters who elected him last December in a southern Russian region. 

``I am leaving with a clear conscience and a heavy heart,'' he told the 
chamber. 

Berezovsky, one of Russia's ``oligarchs'' who amassed a large fortune in the 
post-Soviet era, urged members to approach decisions with ``a clear head.'' 

Duma members later voted by 346 votes to five to approve Berezovsky's 
resignation -- the first time in post-Soviet Russia that a member of 
parliament has quit in protest. 

Outside the chamber, Berezovsky launched a fresh broadside against Putin's 
campaign to bring to heel Russia's business bosses and trim the influence of 
regional leaders. 

``It is vital today to create a constructive opposition to the authorities,'' 
he told reporters. 

``Thousands of people already understand that the actions of the authorities 
are dangerous for our society, brazen and dangerous. We must try to stop 
them, hold them in check.'' 

A mathematician by training who had close links with former President Boris 
Yeltsin, Berezovsky caused a stir this week by announcing his decision to 
quit parliament and accusing Putin of trying to turn Russia into a Latin 
American-style regime. 

Berezovsky also marked his exit from parliament with a self-deprecating 
reference to his position as a prominent member of Russia's 800,000-strong 
Jewish community. 

``What is the difference between a Jew and an Englishman?'' he asked the 
chamber. ``An Englishman leaves without saying goodbye, while a Jew says 
goodbye without ever leaving.'' 

By leaving as he had promised, Berezovsky said he had shown that ``Jews in 
Russia are polite and obliging.'' 

*******

#4
BBC MONITORING
RUSSIAN POLITICIANS, BUSINESSMEN REACT TO TYCOON BEREZOVSKIY'S PROPOSED PARTY
Source: `Kommersant-Vlast', Moscow, in Russian 18 Jul 00 

Russian politicians and prominent figures have given widely differing
reactions to tycoon Boris Berezovskiy's announcement that he intends to set
up a party of "constructive opposition" to President Vladimir Putin and his
supporters in the State Duma, according to an article in a Russian
newspaper. Thus, Boris Gryzlov, leader of the Unity faction in the Duma,
cast doubt on Berezovskiy's motives, saying that "any project of
Berezovskiy's pursues only his own personal interests" and that only
"governors who are afraid of losing their power and certain deputies who
are unsure of their status might join it". On the other hand, Abubakar
Arsamakov, president of the Moscow Industrial Bank, said that, although he
had met Berezovskiy only once, his conclusion was that this man "has many
truly intelligent ideas". The following are excerpts from the article,
published in `Kommersant-Vlast' on 18th July: 

Boris Berezovskiy announced his intention to create an opposition party and
his own deputy group in the State Duma. 

Kirsan Ilyumzhinov, president of the Republic of Kalmykia: all of society
is interested in a constructive opposition. Only time will tell how
constructive an opposition headed by Berezovskiy will be. 

Boris Gryzlov, leader of the Unity faction: no, because any project of
Berezovskiy's pursues only his own personal interests. It would be
difficult to unite independent people on this platform. Only those
governors who are afraid of losing their power and certain deputies who are
unsure of their status might join it. Authority and society do not need
enigmatic figures like Berezovskiy. 

Sergey Stankevich, former adviser to the Russian president: Berezovskiy
would be good as a person unifying the business elite, but I don't see him
as a political leader. But if he is successful in realizing a chance to
build a "European project" in Russia, it would be good, and I would
probably join such an opposition. 

Dmitriy Ayatskov, Saratov Region governor: if Boris Abramovich
[Berezovskiy] had the surname Ivanov, he would have many more supporters.
But if the party delegated me to Berezovskiy, I would submit. I would not
make a decision only for myself, although I told Berezovskiy that I share
his opinion about a constructive opposition... 

Igor Shabdurasulov, acting first deputy head of the presidential
administration: I don't have the right to discuss this - after all I am in
the state service. But I think that authority needs a constructive
opposition. What there has been up to now resembles a crowd, bordering on
all-encompassing boorishness. But I don't see now a sensible, constructive
and authoritative figure who would be able to create and head an
opposition... 

Yuriy Skuratov, former prosecutor-general of Russia: can a person from the
"family" [reference to relatives and close aides of Boris Yeltsin] head an
opposition? I never heard anything funnier. Berezovskiy first has to come
to grips with Aeroflot and Andava [reference to corruption investigation]... 

Abubakar Arsamakov, president of the Moscow Industrial Bank: I would join.
I met Boris Abramovich only once, but he has many truly intelligent ideas... 

Adam Deniyev, leader of the Adamalla public organization for the rebirth of
Chechnya: What kind of opposition figure is Berezovskiy? He is a merchant!
Merchants have other tasks, and if these converge with the interests of the
president, there is no talk of any kind of opposition... 

Vladimir Ryzhkov, State Duma deputy: I have many questions for Berezovskiy.
Our positions regarding the federal structure coincide, but Berezovskiy is
hardly capable of creating a constructive opposition. I would join a
constructive opposition. The question is one of programme and people... 

Boris Khmelnitskiy, chairman of the board of the Kredit-Moskva bank: ...I
read Logovaz director Yuliy Dubov's book "Big Ration" [Russian: "Bolshaya
Payka"]. He gives a veiled description of the history of Logovaz.
Berezovskiy is presented there as Plato. The basic trait of this model is a
consumerist attitude towards people. For him, people are only tools... 

*******

#5
From: "Mickey Berdy" <maberdy@glasnet.ru>
Subject: mushrooms, sex and risk
Date: Wed, 19 Jul 2000 

I was interested to read Wallace Kaufman's contribution on mushroom picking
and risk-taking among Russians, since I had just spent half a day working
with a Russian colleague on a focus group discussion guide on condom use
that will include a section on risk taking. It is also our hypothesis that
Russian culture might in general look more favorably on risk-taking, and
that this factor should be taken into account when promoting safer sex.
This hypothesis is based on a number of factors, from linguistic evidence
(such as the word "avos'" which can be translated variously as "blind trust
in sheer luck," "faith in divine providence," "belief in serendipity," or
"counting on a miracle") to the admittedly less sophisticated data-gathering
technique of driving for five minutes on any Russian road, where "risk
taking" seems far too mild a word to describe drivers' typical behavior.

Sorry for the aside; I don't mean to be flip. Anecdotal evidence would,
indeed, seem to indicate that risk-taking might be more culturally
acceptable in Russia than in other countries. However, in the health
communication field there has been an enormous amount of research on risk in
recent years. It may not be that Russians are willing by nature to take
more risks, but that they don't appreciate their susceptibility, or they
underestimate the consequences of a risk that fails, or they appreciate both
their susceptibility and the consequences, but feel they are unable to do
anything about it. With regard to condom use, it may not be "cultural" but
rather a poor understanding of the risks of unprotected sex (a recent survey
by CDC and VStIOM showed that 60 percent of women thought they were at no
risk of contracting a sexually transmitted infection).

As far as mushrooms go - since the poisonings are concentrated in one or two
oblasts, it was my understanding that the problem may be a mutation that
makes the blednaya poganka more similar to the harmless siroezhki. In the
area north of St. Petersburg, close to the Finnish border, where my friends
(and I) do our picking, there haven't been any "mistakes." (Yet?)

******

#6
BBC MONITORING 
MOST RUSSIANS BELIEVE PUTIN WILL PACIFY CHECHNYA - POLL
Text of report by Russian news agency Ekho Moskvy on 19th July 

[No dateline as received] The All-Russia Centre for Public Opinion Surveys
[VTsIOM] has told Ekho Moskvy that 68 per cent of the Russians believe that
President Vladimir Putin can win the Chechen campaign and solve the Chechen
problem. Twenty-eight per cent of those questioned by VTsIOM had an
opposite view and four per cent were uncertain. 

At the same time 43 per cent of those questioned were "seriously concerned"
by the fact that Putin had not solved the Chechen problem and had not
finished the military campaign as yet, 34 per cent were concerned by this
"to some extent", 11 per cent were "slightly concerned", eight per cent
were "not concerned at all" and four per cent were uncertain. 

Besides, 30 per cent of those questioned were "concerned to some extent" by
possibility of establishing a dictatorial rule leaning for support on the
armed forces. Twenty-six per cent were "slightly concerned", 21 per cent
were "not concerned at all", 15 per cent were "seriously concerned" and
eight per cent were uncertain. 

VTsIOM questioned 1,600 people in 83 towns and villages located in 33
constituent parts of the Russian Federation in the period between 30 th
June and 4th July 2000. 

******

#7
Russia bombs rebels, pro-Moscow Chechens argue
By Michael Steen

MOSCOW, July 19 (Reuters) - Russia's war in Chechnya raged on two fronts on 
Wednesday as the military attacked mountain rebel hideouts and the province's 
two Moscow-appointed Chechen leaders stepped up their private war of words. 

Attack jets and helicopter gunships flew 25 combat missions, bombing and 
strafing targets in the strategic southern Argun gorge, Itar-Tass news agency 
reported. Rebels fired on checkpoints across the province, killing at least 
two Russians. 

But a feud between the region's two Chechen civilian administrators showed no 
sign of abating, with the top man, Akhmad Kadyrov, accusing his new deputy of 
attempting to stage an ``armed mutiny.'' 

The deputy, Bislan Gantamirov, marched into the eastern town of Gudermes, 
where Kadyrov is based, on Tuesday with a group of gun-toting militia men in 
what Russian media described as a show of force after the two argued over 
local police appointments. 

Gantamirov was appointed only last week as part of what Moscow says is the 
start of a political process to end the 10-month-old war against separatist 
guerrillas. The Kremlin said appointing loyal ethnic Chechens would help 
bring about peace. 

Kadyrov, who fought on the side of the rebels in a 1994-96 war which Russia 
lost, told Interfax news agency in Gudermes that a meeting with Gantamirov 
had not resolved their argument. 

``ARMED MUTINY'' 

He was quoted as saying Gantamirov's actions were an ``armed mutiny aimed 
against the president of Russia and those people whom he appointed to bring 
about order in Chechnya.'' 

Kadyrov, who was Chechnya's top Moslem cleric until his appointment last 
month, added that Gantamirov's ``hundreds of armed men'' had marched up to 
the building he was in and ``tried to psychologically influence'' him. 

Gantamirov was the Kremlin-installed mayor of the capital Grozny during the 
last war and was later convicted of stealing reconstruction funds. He was let 
out of jail at the start of the current war to lead a Chechen militia 
fighting alongside advancing Russian troops. 

``The statements I made yesterday remain in force: under no circumstances 
will I abandon my comrades-in-war and hand them over to Kadyrov,'' he said. 
Gantamirov had protested against a number of police force dismissals which 
Kadyrov made. 

But he was later quoted by Tass as saying his 2,000-strong militia would lay 
down their arms next week to avoid his row with Kadyrov turning into an 
``armed conflict.'' 

In the southern mountains of Chechnya, a group of 100 rebels attacked Russian 
troops at the village of Nozhai-Yurt, RIA news agency reported. It said the 
fight lasted more than four hours, injuring five rebels. There were no 
reported Russian losses. 

Interfax news agency said two servicemen were killed in a series of 
firefights at Russian checkpoints. The rebel website kavkaz.org reported 
several clashes. 

A series of recent landmine and suicide bomb attacks have taken their toll on 
Russian forces. Moscow's losses officially stand at more than 2,400 since it 
sent troops to Chechnya last September to subdue rebels it accused of blowing 
up apartment blocks in Russian cities. 

******

#8
ANALYSIS-New China-Russia axis seen limited in scope
By Paul Eckert

BEIJING, July 19 (Reuters) - Like any partnership founded more on a common 
adversary than on shared values, China's vaunted ``new type of cooperative 
relationship'' with Russia is vulnerable to their diverging interests, 
analysts said on Wednesday. 

Russian President Vladimir Putin and China's President Jiang Zemin capped off 
a summit in Beijing with a joint statement brimming with resentment and 
suspicion of a ``certain country'' -- Chinese shorthand for the United 
States. 

``China and Russia call on the international community to heed continuously 
the activities of a certain country to develop a missile defence system, 
which is detrimental to the global strategic balance and stability,'' said 
the joint statement. 

In addition to registering their pique at U.S. plans for a anti-missile 
defence systems for North America and Asia, China and Russia stressed their 
opposition to international intervention in domestic conflicts on 
humanitarian grounds. 

Both giant countries are modern-day empires rife with restive, 
independence-minded ethnic groups, and both have come under human rights 
criticism for their treatment of such groups. 

Despite the cosiness between states that were bitter rivals for decades 
following the 1960 Sino-Soviet split, analysts saw nothing alarming in this 
new axis. 

``A lot of it is just hype and it's worth keeping in perpective their 
bottom-line interests,'' said a Beijing-based Western diplomat. 

Yan Xuetong, an international security expert at Tsinghua University in 
Beijing, said the ``new Sino-Russian relationship falls between neutrality 
and mutual alliance.'' 

China and Russia could be virtual allies on U.S. missile shield plans but 
differ on NATO's expansion, trade and regional disputes, he said. 

FAULT LINES APLENTY 

On the surface, the two leaders made good on the warning by Beijing's top 
disarmament diplomat last week that U.S. pursuit of of a National Missile 
Defence (NMD) system could push China and Russia into a closer alliance. 

``But if you look at it closer, there's not necessarily a community of 
interests,'' said the diplomat. 

Potentially divisive issues ranged from South Asia, where China backs 
Pakistan and India is a traditional Russian friend, to Japan, where Russia's 
territorial dispute with Tokyo pales in intensity beside China's deep 
historical enmity. 

And while the potential for cooperation on NMD remains significant, even 
there interests diverge between heavily nuclear-armed Russia and China with 
its modest arsenal. 

Diplomats noted that Tuesday's joint statement did not rule out Russia's 
eventually accepting amendments to the 1972 Anti-Ballistic Missile treaty 
(ABM). 

And in a move that would be anathema to China, Russia -- which wants to 
reduce its costly stock of nuclear warheads -- is thought to be open to minor 
revisions to ABM to allow an arms-cuts-for-missile-shield trade-off with the 
United States. 

While China is dead against missile shields, Putin appeared to bend towards a 
Western stance last month when he proposed a joint anti-missile defence 
system with NATO and Europe. 

One envoy called it a ``difference between Russia's more pragmatic diplomacy 
and a Chinese one that is full of lofty principles but short on practical 
solutions.'' 

U.S. URGED TO ACCEPT ASPIRING POWERS 

Like the summit itself, the joint statement focused sharply on the United 
States, putting questions on Jiang's assertion that the evolving 
Beijing-Moscow axis was ``not confrontational and not aimed at any third 
country.'' 

Beijing and Moscow -- the aspiring and has-been superpowers -- drove home 
their desire for a ``multipolar world,'' meaning both want to dilute U.S. 
global influence. 

``America's hegemonic policy is a major factor bringing the two sides closer 
together,'' said Yan. 

``If the U.S. tries to exclude China and Russia from the international 
community and not give them equal status and membership in international 
society, these two other countries have no other choice but to become closer 
and closer,'' he said. 

******

#9
The Globe and Mail (Canada)
July 18, 2000
Alliance aims to aid Russian corporate revolution
A joint university program will give directors and
academics training in governance to take back
to their companies and institutions.
GORDON PITTS

Toronto -- A strange thing happened this month at the annual meeting of one 
of Russia's biggest companies.

Management of the gas production giant Gazprom lost control of its board for 
the first time. Minority shareholders and the government, which owns 38 per 
cent, won the majority of seats.

Not only that, a board candidate representing minority shareholders captured 
more votes than the company's chief executive officer.

In North America, such battles between shareholder rights and management 
control rage continually. But for Russian university official Andrei 
Kouznetsov, the Gazprom incident reflects the first sparks in a revolution of 
corporate thinking in his country.

"Corporate governance is now a hot topic," says Mr. Kouznetsov, an official 
in one of Russia's major business schools, who then adds with a smile, "but 
not too hot a topic."

In Russia, more than a decade after perestroika, the concept of governance is 
still in its infancy, and shareholder rights are often trampled on or ignored.

Now, Mr. Kouznetsov, vice-rector of Moscow's Higher School of Economics 
(HSE), an eight-year-old university organized along Western curriculum lines, 
wants to help push governance to the forefront of the Russian agenda.

His university has entered a three-year alliance with York University's 
Schulich School of Business in Toronto aimed at creating systemic change in 
Russian companies.

The partners plan to do this by giving a large and carefully selected group 
of Russian directors and academics training in governance that they will take 
back to their companies and institutions -- and, it's hoped, create a ripple 
effect. The first class of more than 20 directors comes to Toronto next 
February for four weeks.

The other major tool is to develop a centre for corporate governance at HSE 
that will serve as a focus for research, information, expertise and lobbying.

Why the push for corporate governance? The Russian economy is improving and 
desperately needs foreign investment, but Westerners are reluctant to inject 
money unless there is reliable governance in investee companies.

"Western investors want clarity in the relationship between management and 
shareholders," says Sergei Filonovich, a professor in HSE's management 
department.

But the academics are adamant that any program, to be successful, cannot have 
Western experts simply preaching to Russians. Governance has to be taught 
within the Russian cultural context, Prof. Filonovich says.

One factor is the newness of the current system: Joint stock companies and a 
stock exchange have only emerged in the past 10 years.

Another barrier, Mr. Kouznetsov says, has been the well publicized difficulty 
in enforcing the law in Russia. Still, he holds great hope for new national 
legislation, that would protect the rights of minority shareholders.

Then there's history. Prof. Filonovich says Russia was a peasant society that 
came late to industrialization. Peasants had a strong sense of land ownership 
that persisted even as they became workers under 20th century industrial 
socialism.

The attitude was particularly prevalent among the managerial elite in the 
Soviet Union's industrial complexes. After privatization, managers remained 
in control of their operations and often became significant shareholders.

In the nineties, through economic necessity, they had to surrender large 
chunks of ownership, but managers still saw themselves as effective owners. 
That mentality has to change, the academics say. Boards of directors must 
reflect share ownership and exert real influence.

"The issue of the split between management and ownership is not well resolved 
in Russia," Prof. Filonovich says.

In fact, Schulich's James Gillies says that issue also dominates governance 
debates in North America: Who controls the public company, the professional 
managers or the often diverse and scattered shareholders?

Prof. Gillies, chairman of the Corporate Governance in Russia program's 
advisory committee, sees the Russian experience offering other parallels to 
Western issues. Education will be a two-way street, he believes.

Take the role of entrepreneurs. Prof. Filonovich says because of an 
underdeveloped stock market, many Russians who have built companies are 
forced to stay on as owner-managers, even as their companies have grown 
complex.

But the qualities needed for an entrepreneur are quite different than for a 
manager. Entrepreneurs don't like the routine, he says, and become stale. A 
commitment to corporate governance would help these people through the 
transition.

Prof. Gillies, a former dean of York's business school, admits he was 
skeptical when the idea of teaching governance to Russians came up. He had 
often seen delegations come to Canada for short courses that amounted to 
glorified vacations.

But he was encouraged by the prospect of creating lasting change through an 
alliance with a credible partner, and with the potential for spreading the 
program to the 15 major business schools in Russia. Schulich also hopes to 
become a source of expertise for Canadian investors in Russia

The program, funded with more than $3-million from the Canadian International 
Development Agency and the Soros Foundation, shifts into higher gear this 
October, when Schulich hosts a roundtable of academics and other experts on 
Russian business and corporate governance, who will provide input on the 
curriculum.

Then, the two partners expect about 120 Russian directors and academics will 
pass through the program.

*******

#10
From: "Nathan W.Arnold" <arno0102@tc.umn.edu>
Subject: Re: JRL#4402, #4408 Berezovsky and #4406 Khodorkovsky
Date: Tue, 18 Jul 2000 

Putin's recent assault on the oligarchs has caused them to strike back in 
the most unusual manner. In the Business Week article that appeared in 
JRL#4402 Boris Berezovsky is quoted as stating, "All of the decrees, all 
the laws proposed by Putin are directed at enslaving the people. People 
were given a whiff of freedom, and now they are to be forced to there knees 
again." 

Mikhail Khodorkovsky has also recently launched an offensive on Putin's 
crackdown. In JRL#4406 he is quoted by Reuters as saying, "Current 
legislation is incomplete and does not allow you to clearly determine the 
border between what is legal and what is illegal." He complained that law 
enforcement agencies no longer played by a set of informal rules of 
business. However Khodorkovsky's comments do not tell the whole truth. What 
Khodorkovsky really means is that he is upset because the inability to 
"determine the border between legal and illegal" that used to work in his 
favor is now working against him and the "informal rules of business" that 
allowed him to amass his YUKOS oil empire at the expense of others is now 
working at his expense. 

Berezovsky's comments also show the same contradiction. No one heard 
Berezovsky complaining of decrees or actions "directed at enslaving the 
people" when Yeltsin dissolved parliament by force in 1993, or earlier when 
he gathered his massive empire and personal wealth at the expense of the 
Russian people in Sachs' now infamous "privatization" of Russia. 

Berezovsky's recent announcement that he will resign his recently won Duma 
position (JRL#4408) stating that he did not want to participate in "the 
destruction of Russia." [read: Berezovsky's Russia] and his statement "I 
can't go everyday to act in a show someone else is directing. And I don't 
like the way it is being directed." show his true shallowness. He's mad 
that someone might take away his personal empire and he can't call the 
shots anymore so he'll take his ball and go home. Perhaps he just realized 
that he was so hated in the Duma that they would quickly strip him of 
immunity given the chance.

Berezovsky's and Khodorkovsky's comments show them to be nothing more than 
speculators that took advantage of an unfair situation and are now crying 
foul once the situation has been reversed. 

******

#11
Wall Street Journal
July 17, 2000 
[for personal use only] 
Kremlin Official Seeks Amnesty For Chaotic Privatization Era
By ANDREW HIGGINS 
Staff Reporter of THE WALL STREET JOURNAL

MOSCOW -- A senior Kremlin official has urged an amnesty for wrongdoing 
committed during Russia's chaotic post-Soviet sell-off of state assets. It 
could be a sign that President Vladimir Putin may want to rein in an 
escalating brawl over the alleged past misdeeds of prominent Russian tycoons 
known as oligarchs.

The call for a clean slate follows a wave of investigations into powerful 
companies -- and the moguls who control them -- by tax police and other 
government agencies. On Friday, electricity monopoly RAO Unified Energy 
Systems, headed by former privatization czar Anatoly Chubais, became the 
latest firm to be placed under scrutiny. The Audit Chamber, an official 
watchdog, said it was looking into allegations that RAO UES illegally sold a 
big chunk of shares to foreigners.

The action was launched mere days after tax police announced probes into 
Russia's biggest oil company, OAO Lukoil, and Avtovaz, the nation's No. 1 car 
maker as measured by production. Mr. Chubais said it was part of a "massive 
political wave" that is "ruining the foundations of the modern Russian 
state." Foreign investors reacted more calmly, saying the Audit Chamber, a 
largely toothless agency, was merely re-examining old allegations that have 
bubbled for years but yielded no solid evidence of wrongdoing.

Privatization Program

The matters under review date back to 1992 when Russia first launched a 
program of privatization and foreign investors acquired a 15% stake in UES, 
which controls 72 regional power companies and a vast system of power lines 
spanning 11 times zones. Critics of the sell-off have long said this stake 
was meant for domestic investors. In 1998, Russia's parliament, which was 
then communist dominated, passed a law restricting foreign ownership of UES 
to 25%. At the time, foreigners already held around 30%. They have since 
increased this to 33%. The government holds a 51% stake.

"It is worrying that this argument has not been resolved after so long ... 
but the current administration wants foreign investment and has absolutely no 
interest in confiscating assets," said Alexander Branis, associated director 
of Prosperity Capital Management, a fund manager active in Russia. A more 
serious danger, he said, is a controversial plan by Mr. Chubais to 
restructure the electricity company. Mr. Chubais pledged last week to revise 
and delay the program but distrust still runs deep. Shareholders Friday 
pulled out of a body set up with UES management to discuss the restructuring. 
UES shares fell 1.7% Friday, while the main local index rose slightly.

The Kremlin denies orchestrating what many observers see as a campaign to 
trim the influence of business barons who built their empires on former state 
property acquired under former President Boris Yeltsin. Also under 
investigation are RAO Norilsk Nickel and OAO Gazprom.

In an interview published Saturday, Mr. Putin's deputy chief of staff, Dmitri 
Kozak, said a large-scale review of past privatization "could plunge the 
country into chaos." He said "it is now entirely possible and necessary to 
adopt an amnesty for legal violations during privatization." Russia's 
oligarchs, he said, aren't being targeted by the Kremlin but "must be 
combated" if they seek "their ends through corrupt officials."

The idea of an amnesty has been championed most actively by Boris Berezovsky, 
a tycoon who played a prominent role in Kremlin decision-making under Mr. 
Yeltsin, but who appears to have lost some of his influence since Mr. Putin 
won a presidential election in March.

Swiss Decision

Mr. Berezovsky has so far escaped the recent flurry of investigations but 
could come under scrutiny following a decision by a Swiss court to allow 
investigators to send to Moscow thousands of documents relating to companies 
formerly linked to Mr. Berezovsky. The Swiss-based firms, Andava SA and Forus 
SA, are alleged to have helped siphon off revenue from Russia's national 
airline, Aeroflot. Lawyers tried to block evidence being sent to Russia but 
recently lost a court battle to keep it in Switzerland. A spokesman for the 
Swiss federal prosecutor's office in Berne said 600 files will be shipped to 
Moscow in coming weeks.

Mr. Putin has said he wants to create a level-playing field for all 
businessmen, but many observers say the Kremlin is picking on its enemies. 
The first tycoon to come under investigation was Vladimir Gusinsky, the head 
of Media-Most, a holding company that controls Russia's only independent 
television network. He was jailed for three days last month and charged with 
fraud in connection with the privatization of a television company in St. 
Petersburg. He denies any wrongdoing. His lawyer said prosecutors on Friday 
rejected a request by the media mogul -- who is chairman of the Russian 
Jewish Congress -- to be allowed to visit Israel.

"What is happening now is not an attempt to restore order but a hunt for 
those who, for one reason or another, displease the powers that be," said 
Boris Nemtsov, a liberal member of parliament. Warning that current 
investigations could spin out of control as business and political rivals 
seek to exploit the uncertainty, Mr. Nemtsov is trying to organize a meeting 
between Mr. Putin and Russia's tycoons. "So long as there is no strong and 
independent court system, so long as there is no strong and uncorrupted 
prosecutor, any attempt to review privatization will be very dangerous for 
the country," he said.

Write to Andrew Higgins at andrew.higgins@wsj.com

*******

#12
Moscow Times
July 19, 2000 
INSIDE RUSSIA: Today's Jackals Will One Day Be Devoured 
By Yulia Latynina 

Not so long ago, a banker let fall the following remark: "Today there is only 
one oligarch f [Interior Minister Viktor] Rushailo." He was exaggerating, of 
course; there is in fact a select tribe of them, forming the spine of our 
paralyzed economy. But now, the stomping boots of the tax police and the 
yapping of the Prosecutor General's Office herald the beginning of a new 
epoch. 

However, this changing of the oligarchical "guard" has already happened 
several times. Who now can remember the financial-industrial barons of the 
early 1990s? Where are they? They are as forgotten as our country's first 
wave of democratic politicians. 

Take the "first Soviet millionaire," Artyom Tarasev, who now is living 
quietly in England. Then there are those like Oleg Boiko. The flashy founder 
of the once-mighty National Credit bank now heads up a nice little business, 
one that is a long way from the nation-shaking prominence of his early 
ventures. And what a giant National Credit was! How close it was to political 
power and how rapidly its fortunes changed. 

But then businesses founded like these, solely on proximity to power, were 
inherently fragile. Along came newer, hungrier businesses even more closely 
intertwinedwith the authorities that gobbled up their predecessors in the 
twinkling of an eye. And now, those newer businesses are on the menu f 
starting with those who have betrayed their own vulnerability. In this 
context, the attack on LUKoil provides a typical case study. Indeed, LUKoil 
gave offense thrice. 

First, LUKoil was the main sponsor of Fatherland-All Russia f the 
"anti-Kremlin" bloc led by Moscow Mayor Yury Luzhkov and other fractious 
governors. 

Second, it got caught up in the battle for Severnaya Neft. This medium-sized 
oil firm extracts some 800,000 metric tons of crude a year f and it's headed 
by one Andrei Vavilov, a former first deputy finance minister. Vavilov didn't 
want to be pushed aside by anyone, not even LUKoil. 

Third, LUKoil f in an alliance with Yukos f is moving to try and snap up oil 
holding Onako, an 85 percent stake of the company is slated for privatization 
this year. But LUKoil and Yukos are not alone in fancying Onako. Sibneft and 
its master, Roman Abramovich, have also made it obvious that they are 
interested in Onako. 

As the generation of jackals rips to pieces its predecessors, two features of 
this process stand out. 

First, the law enforcement authorities f which are being used as war robots 
in these battles f may suddenly decide that it is better to be generals 
instead of cannon fodder. In 17th-century China, high-ranking officials 
called in the Manchurians to put down an uprising in the capital, after which 
the Manchurians decided they were best fitted to run the empire and settled 
down to found a dynasty. 

The second matter is connected to the principle difference between market 
economics and other systems of economics. Market economics operates in much 
the same way as the medieval "wheel of fortune" f he who is highest will 
certainly end up at the bottom sooner or later. 

The conclusion must be that Abramovich will also be gobbled up in turn. 

Yulia Latynina writes for Sovershenno Sekretno. 

******

#13
Vremya MN
July 18, 2000
[translation from RIA Novosti for personal use only]
DOES RUSSIA NEED UNILATERAL DISARMAMENT?
By Sergei ROGOV, director of the Institute of the USA and 
Canada (srogov@glas.apc.org) 

The conflict between Sergeyev and Kvashnin has put the 
country's military department on the brink of an unprecedented 
split, which goes far beyond the framework of a routine 
bureaucratic intrigue. It is not only the issue of the 
incompetence and intrigues on the part of the chief of General 
Staff whose low professional level has been clearly 
demonstrated in the two Chechen wars. The arguments for 
re-distributing 2 per cent of the military budget in favour of 
conventional forces at the expense of nuclear ones look 
ludicrous. One can hardly expect seriously that the Air Force, 
which has just integrated the Air Defence forces, will be able 
to incorporate successfully the Strategic Missile Force, which 
has devoured also quite recently the missile and space troops 
and the space defence forces. 
The Kvashnin plan envisaging the liquidation of the 
Strategic Missile Force has its own hidden logic. In order to 
get rid of the defence minister much hated by him and take up 
his office, general Kvashnin is ready to liquidate the last 
remaining part of the destroyed super-power - the strategic 
missile forces of Russia. 
Over the years of Yeltsin's rule, we had successfully 
eaten up the gigantic economic resources accumulated during the 
Soviet period. By its economic performance, the Russian 
Federation is not a great power since by the size of its GDP it 
holds the 15th or 16th place in the world and by the size of 
the state budget it is somewhere in the 60-odd place. It is 
only the nuclear sphere, in which Moscow is still no inferior 
to any state, including the USA. 
Thanks precisely to its nuclear arsenal, Russia is still 
perceived by the surrounding world as a great power. However, 
it will not be easy for the Russian President to safeguard 
Russia's interests at the forum of industrialised nations' 
leaders. A compromise-based solution of such important problems 
for Russia's revival as restructuring of its foreign debts, 
which are an unbearable burden for the federal budget, depends 
precisely on our Western partners led by the USA. 
Today open calls are heard in Washington to take advantage 
of Russia's economic dependence and not to agree to a 
compromise, until Russia makes concessions on political and 
military issues. One of the most important of them must be 
Russia's consent to the demand by the US administration to 
change the ABM Treaty, which is a cornerstone of strategic 
stability. 
It is not a secret that economically Russia cannot afford 
to maintain its nuclear armaments either at the level of the 
START-I, or the level of the START-II Treaty which has not come 
into force after all due to the refusal by the US Senate to 
ratify the 1997 protocols on delimiting strategic and tactical 
ABM defence. If the USA withdraws from the ABM Treaty, in a few 
years Americans will get a decisive superiority both in 
defensive and offensive armaments. 
The Kvashnin plan is a strategic signal for the USA:
Russia gives up the model of mutual nuclear containment, on 
which strategic stability has been based for several decades. 
The point is that the reduction of ICBMs to 100 missiles 
enables the Pentagon to plan a pre-emptive strike, thus 
avoiding nuclear missile retaliation. Today the US plan of a 
nuclear war includes, according to reports in the press, 1,500 
targets on the territory of Russia. The proposals by the chief 
of the General Staff will reduce this number by several times.
In actual fact, two US submarines patrolling off the Russian 
coast would suffice to destroy 100 ICBMs and a dozen bases of 
our submarines and heavy bombers in one salvo. 
At the same time, the approach time may equal less than 10 
minutes. This means that Russia may turn out to be unable to 
deliver not only a retaliatory but also an encounter strike.
Moreover, the USA will have a possibility to deliver a 
counter-force blow with the help of the latest high-precision 
long-range conventional armaments. The Pentagon purchases 
thousands of cruise sea-launched missiles and ultra-modern 
aviation systems, which can keep within their sight an 
overwhelming majority of strategic targets on the territory of 
Russia. 
Finally, even a limited national ABM system with 250 
interceptor missiles which the Clinton administration plans to 
deploy is capable of protecting the territory of the USA from 
the surviving Russian warheads. But if the Republicans come to 
power and implement their Star Wars plan with a space echelon, 
the Russian nuclear potential may be neutralised finally. 
If adopted, the Kvashnin programme of minimal nuclear 
containment will also change radically Russia's relations with 
other nuclear powers. 
Therefore, it is not the issue of a conflict between 
personalities. Seeking to create a single operative control 
over all the components of nuclear containment forces, defence 
minister Sergeyev proposes to preserve with minimal losses the 
status of Russia, despite inevitable reductions of outdated 
armaments. This will make it possible to win time and 
concentrate efforts on internal reforms and provide for the 
country's security for another 10-15 years. 
President Putin proclaimed as his aim the creation of an 
effective state capable of successfully carrying through all 
reforms necessary for Russia. The new official documents on the 
issues of national security, the military doctrine, the foreign 
policy concept and also the recent presidential state of the 
nation address underline that despite the restricted nature of 
all our resources, Russia must become one of the centres of a 
multi-polar world. A reliable nuclear containment potential has 
been proclaimed as the basis for ensuring the national security 
of the Russian Federation. 
The implementation of the proposals by the chief of the 
General Staff will turn these promises into a verbal cover for 
Russia's unilateral disarmament and give a green light to the 
deployment of the US ABM system and push a whole number of 
countries to the missile-nuclear arms race. The Russian 
positions at the negotiations on the START-III and the ABM 
accords will also be undermined. 
As for the military reform, it is necessary to continue it 
to bring the armed forces into compliance with the national 
interests and economic possibilities of Russia. At this, the 
real increase of expenses for the army modernisation will 
become possible only when there appear requisite budget 
resources as a result of the stable economic growth of the 
country's gross domestic product. Today, however, Russia needs 
to concentrate its efforts on the creation of relatively small 
groupings of forces to be in the state of permanent combat 
readiness rather than to disperse means for preserving 
excessive number of understaffed units and formations, arms 
depots and mobilisation resources of industry for the 
production of military hardware which has long become obsolete. 
It is necessary to reduce the Strategic Missile Force as well, 
optimise its composition, liquidate cumbersome missile armies. 
However, Russia must not radically demolish the existing 
structure of the Russian nuclear forces. The point is that to 
build up the sea-based and aviation components of the strategic 
triad, huge resources will be needed and Russia does not have 
them. It is also necessary to create a single system of 
operative control over all nuclear forces of Russia by 
eliminating parallel structures. Only in this case will it be 
possible to prevent the destruction of the nuclear containment 
potential which has been created at such a high price, preserve 
the mechanism of strategic stability and achieve 
compromise-based START and ABM accords with the USA. 

******