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Johnson's Russia List


July 24th, 2000    
This Date's Issues: 4420 •   • 


Johnson's Russia List
24 July 2000

[Note from David Johnson:
1. The Guardian (UK): Amelia Gentleman, Town where a Soviet dream 
turned sour. Its scientists were the envy of the world. Now some of 
the top brains are manual workers. Our three-part series on the decline 
and rebirth of Russian science begins in Siberia

2. Reuters: Russia's Putin pleased with G8 summit.
3. Vremya Novostei: Tatyana Malkina, PUTIN ACCEPTED BY THE SEVEN.
4. Washington Post: Clay Chandler, Putin Makes Strong Bid For Equal 
Role in G-8.

5. Los Angeles Times: Valerie Reitman, Russian President Spices Up G-8, 
Earns Praise for Frank Discussion Japan: Academics at summit give him 
an A, while grading the overall conference a B-minus. 

6. Newsweek: Bill Powell, A Troubled Investment. Berezovsky warns of 
creeping ‘authoritarianism’ 

7. Financial Times (UK): Arkady Ostrovsky, Oligarchs to seek peace 
deal with Putin.

8. Los Angeles Times editorial: Too Soon to Cheer Putin.
9. Reuters: Swiss court turns down request by Russian tycoon.

10. Irish Times: Putin's apparent gains mask problems at home. 
Vladimir Putin, in spite of pre-summit progress, still faces 
disturbing undercurrents, writes Seamus Martin.

11. The Times (UK): Philip Webster, THE G8 SUMMIT. Putin steals 
the show with call for equality.

12. Chicago Tribune: Colin McMahon, `PYRAMID POWER' IS RUSSIANS' 

13. Reuters: Newborn dies in Russian hospital after power cut.] 


The Guardian (UK)
24 July 2000
[for personal use only]
Town where a Soviet dream turned sour 
Its scientists were the envy of the world. Now some of the top brains are 
manual workers. Our three-part series on the decline and rebirth of Russian 
science begins in Siberia
Amelia Gentleman in Akademgorodok 

Beneath the streets of Akademgorodok a maze of tunnels links key buildings so 
that academics in Russia's science town never need emerge into the harsh 
Siberian temperatures outside. 

In winter, workers at the institute of nuclear physics make their way along 
curving dimly lit walkways. The rationale of the underground system, one 
scientist explained, was to prevent research time being wasted in the 
rigmarole of wrapping up against the cold. 

When Akademgorodok was created from nothing in 1957, its founders spent 
considerable time assessing how to make life easier for the thousands of 
scientists who were to abandon their comfortable lives in Moscow to labour 
for the good of Russian science in bleak Siberia. 

On a site 30 miles south of the polluted industrial city of Novosibirsk, 
trees were planted, flats were built and spacious, well-equipped laboratories 
were set up. Academics were given a concert hall and a club - the House of 
Scientists - where they were to spend sober evenings together discussing 
research developments. 

Hundreds of tonnes of sand were imported at great expense and scattered on 
the stony shores of the nearby Ob sea to create the illusion of a beach on 
which the scientists could relax at weekends. 

For the first 30 years the town - with its 37 institutes and thousands of 
researchers working together to push back the boundaries of knowledge - was a 
symbol of the grandiose intellectual ambition of the Soviet regime. 

Scientists were treated with deference in the USSR. Lenin began to promote 
their interests immediately after the revolution, aware of their importance 
in the creation of a powerful new society. In the lean years they received 
extra rations. 

Later, under Stalin, a sense of national insecurity boosted the state's 
devotion to science. Most scientists escaped the repressions because they 
were needed to develop the country's ability to make weapons. Even those who 
were imprisoned continued to work in specially developed research camps. 

"We were slaves to the totalitarian state, but we didn't mind because we were 
doing interesting work and we felt that the state needed and respected us," 
said Vitaly Ginzburg, a physics professor, who worked during the 1940s to 
develop the Soviet atom bomb. 

Science was not a mere adjunct of Soviet life - it was at its core, the key 
to transforming Russia from a backward agricultural country into an 
industrialised mighty world power, equipped to defend itself against the 
capitalist enemy. 

The government poured large measures of the budget into cultivating this 
scientific base, squeezing ideological pride from internationally acclaimed - 
and feared - advances: pioneering aeroplanes, and later rocket technology; 
the first man in space; the first atomic power station; the hydrogen 

For most of the 20th century the Soviet Union raced on, matching the 
achievements of America. 

Akademgorodok - meaning small town of academics - was part of that tradition. 
Sophisticated space technology was developed in one institute, while down the 
road mathematicians pioneered computer technology and biologists wrestled to 
make Russia's crops sturdier, using new genetic engineering techniques. 

But in the past 10 years it has come to symbolise the disastrous decline of 
Russia's academic tradition. 

It is generally accepted that there are two reasons why Russians move to 
Siberia - either they are romantics or they come as prisoners. The scientists 
who founded Akademgorodok in 1957 were romantics. Many who remain see 
themselves as the prisoners of their own shattered project. 

No one has forgotten the early optimism. Towards the end of the 50s it had 
become obvious that Siberia had massive natural resources: petroleum, gas, 
coal, timber, diamonds and minerals. But with the country's brainpower 
concentrated in Moscow and Leningrad - now St Petersburg - there was nobody 
to exploit its potential, so President Nikita Khrushchev backed a scheme to 
move leading scientists and research students from western Russia to the 
Siberian wilderness. 

Just 12 years after the ravages of the second world war, the state somehow 
found enough money to establish the science oasis. The scale of the project 
was phenomenal. The main street, Lavrentiev Prospect, named after the town's 
founder Mikhail Lavrentiev, was once listed in the Guinness Book of World 
Records as "the most scientific street in the world", because of its high 
concentration of institutes. 

As well as undertaking research aimed at developing Russia's conventional and 
nuclear military potential, scientists were encouraged to focus on pure 
science, to find answers to the big questions, simply for the sake of 
academic advancement. 

Today the institutes - physics, chemistry, genetics, biochemistry, 
mathematics, electronics and more - all remain. A few, run by energetic 
directors, have transformed themselves into profitable enterprises by winning 
lucrative research contracts from western companies. 

But they are a minority. As their funding dwindles, the rest have had to 
abandon research projects and survive on a fraction of their former income. 
Many are dusty shells, virtually abandoned by their scientists, some of whom 
have been forced to turn to manual labour to supplement their miserly or 
non-existent income. Meanwhile the most talented of the younger generation 
have slipped abroad and students, disheartened by poor job and salary 
prospects, stay away. 

With a shortage of money for laboratory equipment, there is no question of 
even attempting to keep up with developments in Europe and America. And with 
the influx of rich communiting businessmen, many young scientists can no 
longer afford the rents. 

The privations suffered by scientists in this town echo the hardships of 
colleagues throughout the country since the collapse of the Soviet Union. In 
real terms Russian science now receives a seventh of the government funding 
it did in 1990, leaving hundreds of institutions struggling to survive. 

Genady Kulipanov, vice-chairman of Akademgorodok's governing body and a 
professor of nuclear physics, said: "In the late 1980s I found it hard to 
explain to friends in the west what the process of perestroika [rebuilding] 
really meant. Now I tell them perestroika - it was destroyka. We didn't 
really rebuild anything, we just destroyed a great deal. 

"The government stopped funding pro jects. There were no new institutes. A 
lot of the more energetic and best-qualified people left and went abroad or 
went into business. The spirit of the town changed." 

Scientists here remember the lean years from 1991 to 1996 with horror, 
proferring graphs with drooping curves -testimony to the funding collapse and 
- charts with soaring curves to demonstrate the flow of scientists abroad. 

Desperate to approach the future with optimism, many of Akademgorodok's 
workers are hopeful that Vladimir Putin is the man to restore the prestige of 
Russian science. They interpret the new president's commitment to restoring a 
powerful Russian state as an indirect pledge to boost their funding. 

Mr Putin's advisers are making all the right noises - stressing the urgency 
of developing Russia's scientific, technological base to revitalise the 
economy. But the president does not have long to contemplate the disarray he 
has inherited. Academics agree that an increase in funding must begin 
immediately, before the crumbling structures of Russia's scientific base 

"It is impossible to go on like this. If the process of the last 10 years 
continues for another 10 years then there will be total collapse," said 
Professor Vladimir Likholobov, deputy director of one of Akademgorodok's more 
succesful institutes, the Institute of Catalysis. 

But for men such as the founder of the town's medical institute, Professor 
Vlail Kaznacheev, 75, who devoted their lives to developing the Soviet 
scientific dream, the changes have come too late. Sitting in the bare lobby 
of the House of Scientists Mr Kaznacheev is despairing about the events of 
the last 15 years. 

"Our salaries have dropped radically, but we've lost everything else too. We 
used to get money for animals, laboratories, materials, equipment, 
expeditions and flats," he said. 

"Without expeditions and new equipment, we can't continue the research. The 
process has been devastating." 


Russia's Putin pleased with G8 summit

MOSCOW, July 24 (Reuters) - Russian President Vladimir Putin basked in the 
success of his weekend summit with leaders of rich nations on the Japanese 
island of Okinawa, saying on Monday it had boosted Moscow's international 

Touring Russia's Far Eastern Kamchatka peninsula before returning to Moscow, 
Putin told reporters that Russia achieved what it had expected to achieve at 
the summit. 

``Without doubt, the results will contribute to increasing the role and place 
of Russia in international affairs,'' RIA news agency quoted him as telling 

``These were the results we expected,'' he said. 

Russia's media have reported on the trip, Putin's debut in top-level 
multilateral diplomacy, as a glowing success. 

On Sunday one state television station showed pictures of Putin allowing 
himself to be thrown during a Judo exhibition on the summit's sidelines -- he 
holds a black belt in the sport -- and said it was ``Putin's only fall on 

Putin has also enjoyed the praise of his colleagues, especially for a 
briefing he gave them on his trip last week to North Korea, the first by any 
Russian or Soviet leader. 

German Chancellor Gerhard Schroeder said Putin's ``confident but not 
exaggerated performance'' had helped bring about Russia's full integration 
with the rich countries' club. 

``That is for me the most prominent result of this summit,'' said Schroeder. 


Vremya Novostei
July 24, 2000
[translation from RIA Novosti for personal use only]
Tatyana MALKINA from Petropavlovsk-Kamchatsky 

Vladimir Putin's visit to Pyongyang evoked exactly the 
warm repercussions in the hearts of the leading world 
politicians that Moscow wanted. The Russian delegation was the 
super-star at the Okinawa summit. Everyone asked Putin for new 
details about the forbidden country, its main "comrade" and 
Putin's vision of the steps that the rest should now take. It 
is apparent that the vision was so convincing that the summit 
participants approved a statement on the situation in the 
Korean Peninsula, which was exalted in some places, and some 
members of the G8 (above all Japan) expressed readiness to join 
Putin's initiative. 
What with the absence of clear-cut success of Clinton the 
peacemaker in Camp David, Putin's peacemaking breakthrough in 
Pyongyang elevated the Russian president to the rank of the 
winner, as compared to the American "lame duck." The 
long-planned anti-American diplomatic blitzkrieg was crowned 
with success. In return for Putin's official statement on the 
North Korean readiness not to launch missiles from its 
territory, the G8 "surrendered" Clinton by including into the 
final communique a phrase about the need to undeviatingly 
comply with the ABM Treaty (in Russian wording). 
And this put Clinton in a position of lone ABM maniac. 
When asked if loyal allies would abandon Clinton now, Putin 
"When I attend such talks, I never try to outsmart anyone, to 
suggest something that would drive everyone into a deadlock, 
into a complicated situation. We have a stand, and we uphold it 
by advancing additional arguments. It seemed to me that the 
arguments voiced this time had a positive impression on 
Putin also had a few warm words for President Jacques 
Chirac of France, with whom he refused to meet tete-a-tete (it 
was joked in the corridors that Chirac could hope to have a 
personal meeting with Putin only if he loaded the Sedov with 
gold up to the waterline). Nevertheless, the two politicians 
talked during general meetings and made a favourable impression 
on each other.
This is what Putin said about Chirac: "Mr. Chirac is one of the 
recognised leaders of world politics. He impressed me with his 
encyclopaedic knowledge in the sphere of martial arts. He likes 
sumo best of all. He gave me a book, and I gave him a book 
about the Kremlin. France should not forget where the Kremlin 
is situated. There is such a place in the world." This is how a 
former secret service man dealt with a former socialist, 
without rudeness. 
The Russian president found especially warm words for 
Japanese Premier Mori. He thanked him wholeheartedly for the 
warm welcome and congratulated him on the perfect organisation 
of the summit, which would allow the country of the Rising Sun 
to strengthen its positions and raise its role in the world. In 
other words, Putin felt as "the big boy" in Okinawa. Judging by 
the comments of the G8 leaders, they were simply stunned by his 
Yeltsin frequently tried to huff and to puff before the 
G8, but this usually took the form of frightening demarches or 
sheer stubbornness. Putin, although he is pursuing a rather 
hawkish foreign policy, somehow managed to perfectly fit into 
the high style of relations between the world's giants. It was 
for the first time that Russia joined, with commendable 
seriousness, discussions that concern industrialised countries 
now, although these problems will concern it only in the 
future. I mean global spread of information, the safety of 
gene-modified products and better health (which we don't have), 
and the active old age programme, which sounds as a mockery in 
Nevertheless, Putin discussed these problems, which are 
far removed from Russia, quite easily and showed deep knowledge 
of details. The only difference between him and his G8 partners 
is that they put the problem of liquidating the gap in digital 
technologies to the second place and the struggle against 
terrorism to the last place in their final communique. But 
Putin's list of vital problems begins with international 
terrorism, organised crime and ethnic separatism, and ends with 
the genome - and not forcefully at that. 
On the whole, the individual minor drawbacks did not mar 
the triumph. But then there were not many such drawbacks - the 
mating and hence highly dangerous habu snakes, the heat that 
made some officials with bad eyes lose sight completely because 
their glasses fogged over when they stepped out of their 
air-conditioned cars, and the presence among the final 
documents of such atavistic papers as the "G7 statement" (mind 
you, not G8) or the G7 document on actions taken to combat 
abuses of the world financial system (subjects that are 
unpleasant to Russia). On the other hand, German Chancellor 
Schroeder suggested right at the summit that G7 be renamed G8 
there and then. By the way, Germany agreed to postpone the 
repayment of a part of Russian debt amounting to 8 billion DEM 
until 2016.
Anyway, Putin's debut appearance was a success. He scored 
heavily but said angrily at a press conference: "I have come 
here not to improve my image, but to do my duty as top 
official." But then, he succeeded in doing both. Next on the 
agenda of the Russian president is the global Summit 2000 in 
New York. 


Washington Post
July 24, 2000
[for personal use only]
Putin Makes Strong Bid For Equal Role in G-8
By Clay Chandler

NAGO, Japan, July 24 (Monday) In the two years since they invited Russia 
to become a full-fledged member, other leaders of the Group of Eight have 
treated the president of the former superpower as something of a poor 

They've barred him from purely economic discussions at their annual summits 
and excluded Russian finance officials from ministerial meetings. The 
clownish antics of Putin's predecessor, Boris Yeltsin, at the last two 
summits in Birmingham, England, and Cologne, Germany, only cemented their 
perception that Russia--notwithstanding its nuclear arsenal--lacked a 
government that could be taken seriously.

But with his confident and polished performance at this weekend's summit here 
in Okinawa, Russia's new president, Vladimir Putin, has begun to reverse that 
image. Comments by several G-8 leaders and top officials suggest that Putin, 
a 47-year-old former intelligence agent, has moved Russia closer to 
acceptance as a credible global power.

"Very impressive," declared Canadian Prime Minister Jean Chretien of Putin's 
mastery of the issues. Putin's comments were spontaneous and informed, said 
Chretien, and it was clear that he had read his briefing papers. German 
Chancellor Gerhard Schroeder declared Putin's conduct this weekend to be 
nothing short of "brilliant." Officials from Germany and from Italy--host of 
next year's summit, in Genoa--even suggested ending the two-tier system that 
excludes Russia from some discussions.

Such warm words for Putin--who has been sharply criticized elsewhere over the 
Russian military campaign in Chechnya, Kremlin attacks on the media and 
efforts to centralize power in Moscow--were among the few surprises at an 
otherwise carefully scripted gathering.

Putin and the other seven leaders wrapped up their discussions today with a 
promise to move more quickly in forgiving foreign debts owed by 41 
impoverished countries and a flurry of ambitious promises to bridge the 
"digital divide" between rich and poor countries, halve the number of people 
living in extreme poverty by 2015, and cut the number of AIDS cases by 25 
percent over the next decade. But the leaders did little to set these 
objectives in motion before departing this subtropical Pacific island, 
prompting anti-poverty advocates to decry the proceedings as an elitist sham 
and fueling criticism in many member countries that the annual summits have 
become pointless.

Putin's quiet, analytical manner at the Okinawa summit accounted for part of 
his appeal to the other G-8 leaders, but senior officials of member countries 
said Putin demonstrated his political savvy in several specific ways.

Putin's report on his stop in North Korea en route to Okinawa and his 
assessment of that country's reclusive leader, Kim Jong Il, was easily the 
most interesting item on the leaders' foreign policy agenda and helped him 
grab the limelight. A genuine peace overture from North Korea would transform 
the security dynamics of the Pacific, and all the leaders were interested to 
hear Putin's assessment of Kim's proposal to abandon his missile program in 
exchange for help from other countries in launching North Korean satellites. 
North Korea's strategic missile capability is one reason given by the Clinton 
administration for the need to build a limited U.S. missile defense system.

Putin also seems to have impressed the other leaders by not using the summit 
to demand that Russia be relieved of $42 billion in debt inherited from the 
Soviet Union. Many concluded that Putin avoided the issue because he thought 
raising it would undermine Russia's stature in the discussions if it had its 
hand out.

And it was Putin's suggestion that the leaders begin to correspond by 
e-mail--even though several of them are confessed computer novices.

In his final news conference here this afternoon, Putin made clear that he 
hopes Russia can become a major player at G-8 meetings. "We cannot hide our 
heads in the sand like ostriches," he told reporters. "It is important for 
Russia to act as an equal partner in global affairs. . . . Russia cannot be 
an idle observer of international developments."

Some officials credited Putin's relations with the other seven leaders for 
ensuring that Russia received favorable treatment in the final summit 
communique. That document omitted passages from an earlier version that urged 
Russia to repay its debts and expressed support for Russia's bid to become a 
full member of the World Trade Organization. Italian Prime Minister Giuliano 
Amato told reporters the references were deleted at the last minute at the 
Russian leader's request. "Putin asked us not to mention a single country in 
the G-8 final document, and we did that," Amato said.

After his final round of discussions with the other leaders, Putin, who holds 
a black belt in judo, visited a local sports center, where he faced off 
against a Japanese youth. He threw his opponent to the mat, then allowed 
himself to be thrown.


Los Angeles Times
July 24, 2000
[for personal use only] 
Russian President Spices Up G-8, Earns Praise for Frank Discussion 
Japan: Academics at summit give him an A, while grading the overall 
conference a B-minus. 
By VALERIE REITMAN, Times Staff Writer

NAGO, Japan--While President Clinton made his curtain call this weekend 
at his eighth and last summit of global leaders, a new star was stealing the 
show: Russian President Vladimir V. Putin. 
The former KGB spy, elected to the top Russian office in March, 
enlivened an otherwise dull meeting teeming with vague resolutions aimed at 
attacking the growing gaps in poverty, health, education and computer 
literacy between rich and poor nations. 
Putin added some spice, arriving on the heels of a two-day tete-a-tete 
with North Korean leader Kim Jong Il, bearing fresh information about the 
inscrutable nation that has only recently begun opening to the West. He told 
of Kim's offer to abandon his country's missile program in exchange for help 
in space exploration. German Chancellor Gerhard Schroeder reportedly called 
Putin's accounts of his North Korean visit "brilliant." 
The G-8 Research Group, an association of academics who attended the 
conference, was so impressed with Putin that it gave Russia the top grade 
among the summit participants: a solid A, compared with the B-minus they 
rated the overall conference here on Japan's southern island of Okinawa. 
Putin interjected some tension by trying to build support for his 
challenge to U.S. missile defense system proposals. But he earned praise by 
not sugarcoating the problems of his own beleaguered economy. 
"He explained in frank and clear words about Russia, and he didn't try 
to hide or disguise anything," French President Jacques Chirac told 
Putin defied expectations by not asking for charity to relieve Russia's 
burdensome $42-billion Communist-era debt, as had been expected. "Putin 
decided to not accept the lowly role of beggar but was instead playing for 
big-power status in lieu of a handout," said George von Furstenberg, an 
economics professor at Fordham University and a member of the G-8 Research 
For Putin, the conference was an opportunity to define himself after the 
often erratic performances of his predecessor, Boris N. Yeltsin--and he did 
so with swagger and ideas of his own. 
Putin was seemingly the most adept and enthusiastic computer user among 
the bunch, calling for the leaders to communicate by e-mail: Much of the 
conference focused on the so-called digital divide between the rich and poor 
countries. But the leaders themselves were digitally divided: Several are 
said to use computers or e-mail only rarely. 
Only Japanese Prime Minister Yoshiro Mori--who just began using e-mail a 
few months ago--seconded Putin's e-mail motion, and it was dropped, according 
to spokesmen for Japan and Germany. 
The odds of Putin winning over his counterparts were stacked against him 
because the Russian economy is so troubled and the country isn't even a 
full-fledged member of the group known as the G-8. In fact, the members of 
the "rich man's club"--the U.S., Japan, France, Britain, Germany, Italy and 
Canada--met without Russia on the first day of the conference. Russian 
foreign and finance ministers do not join separate meetings of the G-7 
Putin said he was determined that Russia participate. "Russia doesn't 
want to be and cannot be an idle observer of world development," he said. "We 
intend to be integral in all structures," including the World Trade 
Organization and other financial groups. 
Clinton said Russia, for all practical purposes, is a full member. "But 
the G-7 have to meet separately when there are creditor nation issues that 
only the creditor nations can deal with. . . . It's purely a question of 
financial necessity. Otherwise, Russia is fully involved." 
Asked his impressions of Kim, the North Korean leader, Putin told 
reporters: "He listens and hears what he is told. . . . You can talk to him, 
but you have to listen to the national interests of North Korea; otherwise, 
you'll never achieve positive results." 
As for his reasons for meeting in North Korea, Putin said that it and 
his country are neighbors with a common border. "The Russian interest is not 
to have a social explosion," he said. "One must be precisely aware of the 
scale and nature of the threat." 
At the G-8 conference, there were kudos too for Clinton. 
Said British Prime Minister Tony Blair: "Last night, all the leaders of 
the G-8 spoke not just of our immense affection for President Clinton 
personally, but of our real admiration for his strength and his leadership 
over these past few years . . . and we're all going to miss him greatly 


July 31, 2000
[for personal use only]
A Troubled Investment 
Berezovsky warns of creeping ‘authoritarianism’ 
By Bill Powell

July 31 — Dr. Frankenstein, meet president Putin. Boris Berezovsky was one
of the men who helped put Vladimir Putin where he is today—sitting in the
Kremlin as Boris Yeltsin’s successor. Now, Berezovsky is recoiling in fear
at what he helped create. 
IN THE AUTUMN of last year, the then President Yeltsin, his immediate
family and the so-called oligarchs—business cronies who, like Berezovsky,
got rich after the collapse of the Soviet Union—feared for the future.
Yeltsin’s term was running out, and a left-leaning, anti-oligarch
opposition was coalescing under former prime minister Yevgeny Primakov.
Last summer Yeltsin’s inner circle, known as “The Family,” seized on Putin,
then the largely unknown head of the Federal Security Service (a successor
to the KGB), and made him prime minister. Two months ago they helped him
win the presidency on the back of a popular war in Chechnya. For
Berezovsky, a businessman who once said that his best investment in Russia
in the 1990s was “in politics,” everything seemed to be under control. 
It has not turned out that way. Last week, as Putin moved to enhance
his own power at the expense of 89 regional governors, Berezovsky moved
into open opposition. With the president evidently intent on moving ahead
with his oligarch hunt—a campaign that started with the brief arrest of
media magnate Vladimir Gusinsky and now includes investigations of the
country’s largest oil and metals companies—Berezovsky has apparently seen
enough. “Putin before the presidential elections and Putin after are two
different things,” Berezovsky said in an interview with NEWSWEEK on
Saturday. Three days earlier the businessman (he controls oil, airline and
media companies) quit his seat in the Russian Parliament. He called for a
blanket amnesty on Russia’s corrupt privatization deals in the 1990s—”We
need to close the books on this,” he told NEWSWEEK—and vowed to form an
opposition movement to fight Putin’s creeping “authoritarianism.”
It’s not clear who will join him. Few average Russians are upset by
Putin’s anti-oligarch campaign. Far from it. The palpable political
appetite for a few show trials of wealthy businessmen—whether based on real
evidence or not—may spur Putin on. There is no question, political analysts
of the Kremlin say, that a “KGB” faction is ascending that almost surely
favors a wider crackdown. If Putin’s “anti-corruption campaign” has only
just begun, Berezovsky may not like the ending of this Frankenstein tale.
With Owen Matthews and Yevgenia Albats in Moscow


Financial Times (UK)
24 July 2000
[for personal use only]
Oligarchs to seek peace deal with Putin
By Arkady Ostrovsky in Moscow

Russian business tycoons will this week seek to negotiate a peace deal with 
President Vladimir Putin, urging him to rid the Kremlin of corrupt officials 
and favouritism. 

A group of oligarch business leaders will present Mr Putin with proposals 
drawn up by Boris Nemtsov, an MP and leader of the liberal Union of Right 
Forces party, who persuaded Mr Putin to meet Russia's business elite. 

Mr Nemtsov said in an interview: "The business and power should not attack or 
blackmail each other, they should be partners working towards economic 
recovery of Russia." 

Several large Russian companies and their bosses, including Lukoil, the 
country's biggest oil company and Norilsk Nickel have been targeted over the 
past few weeks by tax police or the state prosecutor's office. 

Mr Nemtsov said the business leaders would present a three-point declaration 
to the government. 

First, they would call on the Kremlin to declare a moratorium on any 
investigations into the legitimacy of privatisation over the past decade and 
not initiate any redistribution of former state property. 

Second, the business community must undertake an obligation to play by the 
rules, pay taxes and and religiously obey the law. "Five years ago this would 
have been impossible. The oligarchs were fighting like mad dogs for a piece 
of property. Now they have stuffed themselves and they themselves need 
rules," Mr Nemtsov said. 

Thirdly, the government must rid itself of corrupt bureacrats "starting with 
the prosecutors' office", Mr Nemtsov said. However, the business tycoons on 
their part must undertake not to use government institutions or bribe state 
officials to fight their competitors. 

The attacks on business tycoons by the Kremlin have so far conspiciously 
bypassed two oligarchs, Roman Abramovich and Alexander Mamut, who are 
considered to be part of the so-called family, a group of Kremlin insiders. 

"In his election programme Mr Putin said that all oligarchs should be equally 
distanced from the Kremlin. He should now act on his promise," Mr Nemtsov 

Mr Putin, who is trying to withdraw power from the oligarchs and from 
regional governors, is unlikely to make any firm commitments in his first 
meeting with the business elite. 

About 20 businessmen will meet Mr Putin on Friday. But some of the most 
outspoken critics of President Putin's policies, including Vladimir Gusinsky, 
a media magnate, and Boris Berezovsky, who has quit the parliament in protest 
against Kremlin's attack on businessmen, will not be present. Alfa Group, a 
banking and industrial conglomerate, has joined the list of large Russian 
business groups that have run into trouble with the authorities. 

Mikhail Fridman, head of the group, said police last month seized control of 
Alfa Group's 13 per cent stake in the Slavneft oil company in connection with 
a three-year old criminal investigation. 


Los Angeles Times
24 July 2000
Too Soon to Cheer Putin 

Russian President Vladimir V. Putin's tax commissars have stepped up 
their assault against the financial "oligarchs," but it's too soon to cheer. 
Tax evasion remains widespread, disrupting even the payment of government 
salaries and pensions. But Putin must show fairness and respect for due 
process of law, as well as firmness in dealing with lawbreakers. Tax 
enforcement should be part of a broader plan to set the government and the 
economy on a firm legal footing and sever the government's corrupting links 
to business. 
Moscow's prosecutor general's office has been especially busy this 
month, raiding offices of some of the biggest business names in Russia, 
jailing a few and handing out indictments. Avtovaz, the country's biggest 
auto maker and linked to the richest Russian, Boris Berezovsky, has been 
accused of a huge tax evasion scheme; similar charges were leveled at Vagit 
Alekperov, chairman of the oil company Lukoil. Vladimir Gusinsky, the media 
magnate who angered Putin by his critical coverage of the war in Chechnya, 
was jailed briefly and stands accused of embezzlement. Another industrial 
mogul, Vladimir Potanin, was charged with underpaying $140 million for one of 
the companies in his sprawling industrial empire. 
Most of the oligarchs have something in common. They bought up Russia's 
most valuable assets--oil, mineral resources and more--for a pittance in the 
infamous privatization campaign of the mid-1990s, then built up powerful 
industrial and media conglomerates. They used their muscle to get Boris N. 
Yeltsin elected president in 1996 and acquired political influence reaching 
all the way to the top. Corrupt Kremlin officials were a key ingredient in 
the rise of the oligarchs and were part of the "family" ruling Russia. 
Although the crackdown is widely popular among the mostly impoverished, 
resentful Russians, many outsiders, and some Russians themselves, see the 
campaign merely as a way to replace Yeltsin's cronies with Putin's. The 
president, who rose to the top from an obscure apparatchik post at the secret 
service agency with the help of the "family," has offered little more than 
Soviet-style rhetoric in explanation. He needs to do more. 
Tax enforcement should be part of a broader plan to establish the rule 
of law, something neglected in the switch to Russia's rough-and-tumble market 
economy. Putin also needs to overhaul the convoluted tax code and complete 
market reforms. Even the oligarchs, who are restyling themselves as 
legitimate businessmen, are complaining about Russia's chaotic legal system. 
Putin is seeking world-class status for Russia, hobnobbing with 
American, European and Asian leaders at the G-8 summit over the weekend. To 
be credible, however, he must first establish law and order at home, and for 
that, he doesn't seem to have a plan. There is every reason to be skeptical. 


Swiss court turns down request by Russian tycoon
By Marcel Michelson

ZURICH, July 24 (Reuters) - The Swiss High Court said on Monday it had 
rejected a request by Russian business magnate and politician Boris 
Berezovsky to unfreeze accounts in Switzerland blocked as part of a 
wide-ranging fraud investigation. 

``We have rejected the request from Mr Boris Berezovsky, made through his 
lawyers, to unblock bank accounts frozen in Switzerland,'' court official 
Elisabeth Zimmermann told Reuters. 

Berezovksy is one of the founders of Forus, a Swiss-based company. At the 
heart of the investigation are allegations that Aeroflot airline was 
defrauded out of up to $600 million, partly through Forus and another 
Lausanne-based company, Andava SA. 

Berezovsky, one of the powerful handful of Russian business figures dubbed 
the ``oligarchs,'' is often described as having been close to former Russian 
President Boris Yeltsin. 

Russian special investigator Nikolai Volkov is due in Switzerland on 
Wednesday and will be able to peruse some 800 Swiss legal files connected 
with the case. He can take some 200 of them back to Moscow immediately. 

The offices of Forus Services SA and Andava SA were raided in July last year 
under the personal supervision of former Swiss Attorney General Carla del 
Ponte and many documents were seized. 

Forus Group was created as a financial services company in 1992 by Swiss 
trading firm Andre et Cie and Berezovsky. Andre no longer holds a stake. 

The parent company is Forus Holding SA in Luxembourg with a paid-in capital 
of $30 million. On its website (, Forus Group says it has assets 
in excess of $120 million and has several stakes in the Russian banking and 
financial sector. 

Forus says it has been involved in various financing operations for Aeroflot, 
but it says allegations by Volkov that it was involved in defrauding the 
airline are ``false and unjustified.'' Andava has also denied the 

Forus said Berezovsky resigned from its board in 1996 after his nomination as 
deputy of the secretary of the security council of Russia. Dealings with 
Aeroflot started later. 

(with additional reporting by Elif Kaban in Geneva) 


Irish Times
July 22, 2000 
Putin's apparent gains mask problems at home 
Vladimir Putin, in spite of pre-summit progress, still faces disturbing 
undercurrents, writes Seamus Martin 

RUSSIA: President Putin has arrived at Okinawa with an impressive record of 
recent achievement as the G8 summit's "new boy".

He came to Japan having achieved parliamentary approval for his plan to 
centralise power in the Kremlin. He has also struck an alliance with his 
Chinese counterpart, Mr Jiang Zemin, and appeared to convince the formerly 
intransigent North Korean leader, Mr Kim Jong-Il, to offer a compromise on 
his country's missile development programme.

But while all may look well on the surface, Mr Putin faces some disturbing 
undercurrents at home and abroad. The new "alliance" with China, for example, 
was accompanied by a joint statement in which the wording betrayed a feeling 
of overwhelming resentment against "a certain country", a phrase generally 
taken to be Chinese political shorthand for the United States.

In an economic crunch, however, China's response is likely to be pragmatic. 
Its successful economy is, after all, more dependent on trade with "a certain 
country" than any rediscovered emotional bond with its former ally in Moscow. 
As for the North Korea deal, Mr Kim's unpredictability raises a major 
question, for all Mr Putin's praise in calling him a "thoroughly modern" 

It is at home, however, that most difficulties are likely to arise. In the 
weeks leading up to the summit, Russia's authorities have carried out actions 
against the group of leading businessmen, known as the "oligarchs", in the 
style of an old-fashioned Soviet purge.

Masked tax police raided premises associated with many of the men whose 
wealth gave them political influence in the Yeltsin era. Among those under 
pressure in the latest moves are Mr Mikhail Fridman, of the successful Alfa 
banking group; Mr Vladimir Potanin, a former deputy prime minister turned 
billionaire; and Mr Anatoly Chubais, who presided over Russia's initial 
chaotic privatisation.

Again, the main target has been Mr Vladimir Gusinsky, whose media empire 
failed to support Mr Putin in the presidential elections. Mr Gusinsky, 
accused of fraud, has had his Media-Most headquarters raided on several 
times, has been imprisoned for a week without charge, has had his Russian 
property seized, and has been threatened with the loss of his real estate 
abroad. His NTV channel and daily newspaper Segodnya have, however, been able 
to continue their independent lines.

The response of the oligarchs has been unusual and almost in inverse ratio to 
the difficulties in which they find themselves. Most vociferous in his 
criticism of Mr Putin has been Mr Boris Berezovsky, whose business empire has 
suffered least so far.

In the course of the week, Mr Berezovsky has announced that he will resign 
his seat in parliament to dissociate himself from what he considers as Mr 
Putin's "increasingly authoritarian" rule.

In fact, Mr Berezovsky, according to insiders, heads one of the four interest 
groups which wield influence in Mr Putin's Kremlin. As a member of a clique 
known as "the family", with Mr Yeltsin's daughter, Ms Tatyana Dyachenko, and 
others, Mr Berezovsky has lodged a number of his supporters in Mr Putin's 
cabinet. A team of liberal economists and businessmen associated with Mr 
Putin in St Petersburg form a second group while his former colleagues from 
the KGB make up a third. The fourth set of influence-peddlers includes Mr 
Chubais and others, who were strong players in the Yeltsin era but whose 
power has been reduced considerably.

Mr Berezovsky's dramatic gesture in abandoning his parliamentary seat of 
Karachayevo-Cherkessia, and consequently his immunity against prosecution, 
has been supported by another sinister and immune oligarchcum-deputy, the 
petroleum magnate, Mr Boris Abramovich, who represents the reindeer herders 
of Chukotka in the Duma.

Of Mr Berezovsky's enterprises, only the almost moribund Avtovaz motor 
corporation has so far been targeted by tax police. There has, however, been 
a long-running, on-off investigation into his use of hard currency earned by 
the national airline Aeroflot. Mr Putin might hold this gun to Mr 
Berezovsky's head if the going gets tougher.


The Times (UK)
July 24, 2000
[for personal use only]
Putin steals the show with call for equality 

FOR most of the delegates at the G8 summit Vladimir Putin was an unknown 
quantity, but all of them were fascinated by him and by the end it was clear 
that the Russian leader had stolen the show. 

>From the moment he arrived in Okinawa on Thursday evening for his first G8 
summit, Mr Putin was the star attraction. For years Boris Yeltsin had been a 
jovial if unpredictable guest at the G8 table. Beset by ill-health, he would 
often keep his appearances at the annual gathering to a minimum. 

Russia has been traditionally excluded from the original G7 discussion of the 
state of the world economy. Mr Putin, though not attending the formal 
debates, was in no mood for such distinctions, setting out from the start 
that he wished to be treated as an equal and far exceeding that objective in 
his contributions to the talks. 

By Saturday evening Mr Putin was so confident that he even started floating 
the idea that Russia should host the G8 in three years' time. He had planned 
to raise the issue at the controversially lavish banquet at the Shuri Castle 
on Saturday night. Yoshiro Mori, the Japanese Prime Minister, got in the way, 
however, by spending an inordinate amount of time talking with Jacques Chirac 
about Sumo wrestling, an apparent obsession of the French President. 

Mr Putin got a mixed reception to his idea. Gerhard Schröder, the German 
Chancellor, was apparently in favour. Others were definitely not. Even Tony 
Blair, who has supported Mr Putin, was not so sure. "More work needs to be 
done," his spokesman said. 

The Russian President had been on a roll, however. "Quite honestly he dazzled 
them," an official who observed Mr Putin addressing fellow leaders at their 
working dinner on Friday night said. "It was supposed to cover the full range 
of G8 issues but Putin dominated the evening." 

Several members of the summit had arrived in Japan with misgivings about the 
tough new boss at the Kremlin. M Chirac even declined the opportunity of a 
tête-à-tête. Mr Putin's reputation in Chechnya, and what are considered 
inadequate efforts to tackle organised crime, had gone before him. His 
assessment of the Russian economy and his efforts to reform it was given to 
the summit on Saturday, however, and he is said to have been impressive. 

Mr Putin did not get all he wanted from the summit though. Instead of writing 
off some $42 billion (£27 billion) of Russian debt the G8 will reschedule it. 
Mr Putin was a victim of his own success - the Russian economy has been 
improving, helped by the recent rise in the oil price.


Chicago Tribune
July 23, 2000
[for personal use only]
By Colin McMahon 
Tribune Foreign Correspondent 

KOZENKI, Russia -- Olga the carrot seller is not impressed.

Across the highway that runs from Moscow to Latvia, a giant, plastic, hollow 
pyramid rises up out of an open field.

At 135 feet tall, it is imposing and intriguing or at the very least 
incongruous. Cars line up in front. Dozens of people trudge up a dirt path 
toward it.

Olga the carrot seller sniffs. She has not visited the pyramid, even though 
she lives practically in its shadow, even though people tell of the pyramid's 
healing powers and of the good fortune it can bring.

"It has not helped my business, that's what I know," said Olga, who stands on 
the shoulder of the highway selling carrots, potatoes and other vegetables 
from her garden. "Cars slow down to look, but they do not stop to buy from 

Olga Ivanova is not missing some spiritual point by looking for some concrete 
benefit from the plastic pyramid. The pyramid is all about concrete 
benefits--for those who visit--for Russia, for the whole world.

The pyramid near the village of Kozenki is the latest, and biggest, of 17 
pyramids built in and around Russia by Alexander Golod.

Golod, 51, who runs a military industry factory, is on a crusade.

Like other believers in "pyramid power," Golod says pyramids hold and 
transmit a special energy that affects not only humans but also plants, 
animals, machines and even the weather.

The space around us is out of whack, Golod says, and this distortion of our 
space causes natural disasters like earthquakes and tornadoes. It leads to 
wars, disease and crime.

Pyramids restore harmony to our space, Golod says. Life gets better.

"This is not something mystical," said Golod, a calm, confident and, by all 
outward appearances, level-headed man. "This is science."

Golod said charged rocks from his pyramids, scattered around a jail and along 
Moscow streets, have lowered crime rates. He said the pyramids have kept flu 
rates low and can wipe out cancer and other deadly diseases. Rocks from the 
pyramids, he said, have helped stabilize the Mir space station.

It would be easy and quite probably wrong to suggest that the Russians 
flocking to Golod's pyramids are searching for meaning in a post-communist 
world shorn of ideology and absolutes.

Most Russians visit the pyramids out of curiosity. They seem more interested 
in a diversion than dogma. They also figure that, well, it can't hurt.

At the same time, they are displaying a traditional Russian open-mindedness 
to theories, ideas and philosophies that fall outside the strict rules of 
science and modern medicine. Russians are superstitious. They often embrace 
medical concepts that most Western doctors dismiss. Junk science has a 
cherished spot in many a government institute.

So, mixed in with their doubts is a feeling, perhaps a hope, that maybe Golod 
is on to something.

"A friend told me she felt something positive after visiting, so I thought we 
would come and see," said Valerya Smolenenkova, 22, who just graduated from 

Smolenenkova came to the Kozenki pyramid with her boyfriend. She joined 10 
people who had gathered on benches or were standing on the sand floor in the 
center of the pyramid. They were holding their arms out, their palms turned 
up toward the point of the pyramid. A woman said they were hoping to receive 
the pyramid's energy.

Smolenenkova's boyfriend stood off to the side, smirking.

"I'm not saying I really believe in all this," she said. "This is like an 
excursion. It is something to do."

Other visitors showed similar ambivalence.

A construction worker said he doubted the power of the pyramid but 
appreciated its design. A newlywed couple came to have their picture taken, 
figuring it might become a new traditional spot for Moscow marriage photos, 
like Lenin Hills or the World War II tanks at Victory Park.

Yet Golod has his believers.

A few men volunteered that the pyramid had revived their dormant sex lives. A 
woman said drinking water stored in the pyramid had relieved her back pains.

"This is my second time here," said Irina, 42. "The first time I had a 
terrible headache, which stopped immediately after I'd been here."

"Also my sight suddenly became a lot better," said Irina, who wears glasses. 
"Of course I believe in the healing effects."

Among Golod's supporters is Georgy Grechko, a physicist and cosmonaut who 
flew on three Russian space missions in the 1970s and '80s. He has a special 
interest in pyramids. He doubts whether Egypt of the pharaohs was advanced 
enough to build the great pyramids there. He wonders if there is not some 
connection between them and space.

"Golod thinks that his pyramid will prevent wars, protect people from AIDS, 
from hunger, from poor harvests," Grechko said. "I doubt it. But the fact is 
that some things are going on here that can be shown and proved and that 
scientists did not perceive at the beginning."

Grechko clearly likes Golod, and it is hard not to. Golod says he has spent 
everything he has earned from his business on his pyramids, at least $1 
million, he figures. He dresses like a worker, in worn jeans and a baseball 
cap. He drives a Russian Lada in need of repair.

"Here is a person who is spending his money not on drinks, not for a 
Mercedes, but on this," Grechko said. "He is a bit otherworldly, a dreamer. 
It is difficult for him to live in our reality, difficult to understand what 
is going on here and why. This man should get help. So, I help him."

Some Russian media suggest the pyramids are a scam. It is hard to see how. 
Golod does not charge admission. He does sell snacks, drinks and souvenirs 
from a few tables outside the structure, but prices are low and so, it 
appears, are sales.

All items have been stored in the pyramid for at least three days. There are 
rings for 75 cents. Bottled water costs 50 cents a gallon. There are sodas, 
cakes and cookies, and cigarettes too. (The Apollo-Soyuz brand seems a 
logical choice.) M&Ms and Tic Tacs offer pyramid power in small doses.

Naturally, there are Mars bars.

Golod's dreams reach higher than the 14 stories his latest pyramid stretches. 
He wants to build a cosmic theme park on the 11-acre site he owns around the 

"It will," Golod said, "be like a kind of space Disneyland."

Lastly, Golod is ready to help out other countries. He offers to repair the 
ozone hole over Australia. He is ready to end "within a week" tornadoes that 
threaten the U.S. yearly.

His charge for this service: $10.


Newborn dies in Russian hospital after power cut

MOSCOW, July 24 (Reuters) - A newborn baby died in the hands of frantic
doctors in a birthing hospital in Vladivostok in Russia's Far East after a
power cut caused his artificial respirator to fail, news reports said on

Power cuts are frequent in the region, which has endured pressing energy
shortages for years. But hospitals are supposed to be assured stable

Interfax news agency said the local power company, Dalenergo, had blamed
the power cut on a malfunction, saying it would never deliberately cut off
power to a hospital. 

``Despite the severe situation in the energy system, we do not shut off
hospitals and birthing wards,'' it quoted company chief engineer Dmitry
Tarasov as saying. 

It said doctors had struggled in vain to save the child after his life
support system stopped early on Saturday. 

The hospital lacked a backup generator because of a shortage of funds, a
nurse at the birthing ward said. 


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