July 27th, 2000    
This Date's Issues: 4425 • 4426   • 4427 

Johnson's Russia List
#4426
27 July 2000
davidjohnson@erols.com

[Note from David Johnson:
PROBLEMS IN RECEIVING JRL? I have had several reports from
recipients who have upgraded from Microsoft Internet Explorer 
5.0 to 5.5 and now cannot receive JRL. I think Microsoft has
a fix. Any other problems out there? AOL problems too?
1. AFP: UES electricity head says ready to put job on the line.
(Chubais)
2. Segodnya: Offshore Kremlin. (re Sibneft head Roman Abramovich)
3. Interfax: RUSSIAN BUSINESSMEN WANT AUTHORITIES TO PLAY FAIR.
4. Interfax: STROYEV URGES PUTIN TO CONVENE REPRESENTATIVE 
CONSTITUTIONAL CONFERENCE.
5. Malika Browne: Professor Norman Stone.
6. Moscow Times: Gregory Feifer, Luzhkov Casts About for a Role.
7. BBC MONITORING: MOSCOW MAYOR EMOTIONAL ABOUT GOVERNMENT-PROPOSED 
TAX-REFORM.
8. Wall Street Journal: Andrew Higgens, Factory Handles Excess 
Rubles By Putting Them on the Roof.
9. Chicago Tribune: Colin McMahon, IN RUSSIA, A FEST WITH PAGAN 
ROOTS COMES BACK.
10. Interfax: OVER 50% OF RUSSIANS APPROVE OF PUTIN'S WORK - POLL.
11. Nezavisimaya Gazeta - Stsenarii: RUSSIANS' SENTIMENTS AND 
OPINIONS IN JUNE 2000 by Yuri LEVADA, director of the All-Russian 
Public Opinion Research Centre.
12. Moscow Times EDITORIAL: 'Exoneration' Should Not Be for Sale.] 

*******

#1
UES electricity head says ready to put job on the line

MOSCOW, July 26 (AFP) - 
The head of Russia's UES electricity monopoly, Anatoly Chubais, said on 
Wednesday he was ready to call a special shareholders meeting at which his 
leadership of the company would be challenged.

Chubais, whose plans to overhaul the electricity group have been contested by 
a group of minority shareholders, confirmed that two shareholders have called 
for an extraordinary shareholders meeting, in which "the nomination of the 
chief executive" appeared on the agenda.

He said he would support the idea of the meeting before the company's board.

"I consider that there is no sense in continuing doubtful relations with 
certain shareholders," he said. "The shareholders who support Chubais will 
support the restructuring, those who do not want Chubais can say so at the 
meeting," he added.

The restructuring plan has run into criticism since it was launched in April.

Analysts and shareholders believe a reform of the electricity utility is 
vital but many think the plan is too vague and fear that it will lead to 
asset stripping of the group by local groups and regional governors.

Chubais has revised his original plan and assured that the rights of minority 
shareholders, who demand a right to look at the plan, would be respected.

The group is 52-percent owned by the state and more than 30 percent held by 
foreign shareholders. UES operates an old network across the country and 
controls almost 80 regional subsidiaries.

Its difficulties stem from artifically low tariffs, which are set at around 
eight percent of average European tariffs, and late-paying clients, with only 
48 percent of bills paid in cash. The network needs money and many regional 
companies are insolvent.

******

#2
Russia Today press summaries
Segodnya
July 26, 2000
Offshore Kremlin
Summary

News came that head of Sibneft Roman Abramovich is not included in the list 
of Russian big business representatives, who are invited to meet with the 
President of Russia. This means that Abramovich does not even need to come to 
the Kremlin – his business has personal privileges and laws already.

The Finance Ministry finished its analysis of comparative payment of taxes to 
the federal budget by oil companies for the first quarter of this year. The 
findings of this document are embarrassing: the difference between different 
oil companies payments per ton of excavated and processed oil varies, in some 
cases, by ten times. The "poorest" companies appeared to be Sibneft followed 
closely by Slavneft. Sibneft paid eight times less than, for example, 
Surgutneftegaz or Sidanko. (Sibneft paid only 23 rubles per ton, while 
Surgutneftegas pays 184 rubles per ton).

This lack of balance in payments cannot be explained with any objective 
reasons. This is rather official permission for one oligarch to pay less than 
others. This permission by officials cannot be apolitical.

*******

#3
RUSSIAN BUSINESSMEN WANT AUTHORITIES TO PLAY FAIR

MOSCOW. July 26 (Interfax) - Russian big businessmen want
assurances from President Vladimir Putin, with whom they will meet on
Friday, that the authorities will give them a fair shake, Impexbank CEO
Oleg Kiselyov, who will attend the meeting, told Interfax on Wednesday.
"The biased view of business as an essentially illegal occupation
often turns law enforcement agencies into a tool of social revenge and a
convenient tool for some financial and industrial companies in obtaining
an edge over the others," Kiselyov said.
Businessmen expect the authorities "to provide assurances that the
results of privatization will not be changed and that steps will be take
to amend the law, the inconsistency of which enables law enforcement
agencies to persecute nearly any successful corporation," he said.
The meeting will also cover the involvement of businessmen "in the
consolidation of the Russian state and countering the centrifugal trends
in the development of the country," Kiselyov said.
No charter is to be signed at the end of the meeting, Kiselyov
said. "There is no point in signing a charter because the business
community will itself work out one. The president can only give impetus
to the self-organization of the community, but must not interfere in the
affairs of businessmen. He is not the chief businessman or organizer of
business."
The possibility of setting up of a consultative body for
communication between business and the authorities is likely to be a
point of discussion during the meeting, Kiselyov said.
Commenting on remarks made by Union of Right Forces parliamentary
faction leader Boris Nemtsov about the upcoming meeting, he said, "There
is no leader of the business community now, which is why he had to speak
up. There is a vacuum. We do not object to Nemtsov speaking our mind,
but he cannot obviously be forever a mediator between business and the
authorities. I think that a leader may will be put forward in a natural
way."
It would be preferable that Roman Abramovich, Boris Berezovsky and
Vladimir Gusinsky attended the meeting, but "some of them were
unwilling, some were not included on the list for some reason. It was
the president who invited people to the meeting. I know that Abramovich
has refused to attend the meeting," Kiselyov said.
Nearly 20 businessmen will attend the meeting, notably Gazprom CEO
Rem Vyakhirev, the managers of Lukoil Vagit Alekperov, of the Yukos oil
company Mikhail Khodorkovsky, of Alpha-group Mikhail Fridman, of
Impexbank Oleg Kiselyov, Severstal director general Alexei Mordashev and
Russian Aluminum manager Oleg Deripaska.

******

#4
STROYEV URGES PUTIN TO CONVENE REPRESENTATIVE CONSTITUTIONAL CONFERENCE

MOSCOW. July 26 (Interfax) - Chairman of the Federation Council
Yegor Stroyev, on behalf of the upper house of the Russian parliament,
has urged President Vladimir Putin to convene a constitutional
conference.
Closing the Federation Council session on Wednesday, Stroyev said
that "it should be a constantly working consultative body in which all
branches of authority and representatives of the public and science
might determine the goals, order and content of concrete steps to carry
out governmental reform, he said.
"The same consultations must be initiated on the main principles of
socioeconomic policy and state development," he said.
He went on to say that the regional leaders "support the meaning of
the presidential initiatives." "But the method of trial and error is
unacceptable. A systemic and comprehensive approach and a wide
discussion of every step with the public are needed," he said.
"So far, the picture is different: irregular breakthroughs out of
context, and unjustified haste in carrying them out even when flaws and
errors are obvious," he said.
"The current socioeconomic situation is good at first glance. But
stability has not been achieved yet. Meanwhile, the population's
expectations and hopes have never been so strong," Stroyev said.

******

#5
From: Malika Browne <Malika.Browne@loccitane.co.uk>
Subject: Professor Norman Stone
Date: Wed, 26 Jul 2000

Dear David 
I wonder if any of your subscribers would know how to get in touch with
Professor Norman Stone, who teaches at Ankara's Bilkent University. I
urgently need an email address as the telephone numbers I have for him in
Oxford don't give much joy.

******

#6
Moscow Times
July 27, 2000 
NEWS ANALYSIS: Luzhkov Casts About for a Role 
By Gregory Feifer
Staff Writer

A little over a year ago, he was seen as a likely future president. Today, 
Moscow Mayor Yury Luzhkov has been banished to second-tier status as a purely 
regional leader. 

"Luzhkov didn't lose everything, however," said Sergei Markov, director of 
the Center for Political Studies. "He's still the mayor, and that's 
something." 

But being just the mayor is a far cry from where Luzhkov seemed headed a year 
ago. After the August 1998 ruble devaluation, the Kremlin was reviled for 
having allowed a handful of technocrats to crash the economy. Luzhkov, who 
had long and loudly criticized those technocrats, stood out as a rising star, 
particularly after a high-profile alliance with then-popular Prime Minister 
Yevgeny Primakov. 

Then came Shamil Basayev's invasion of Dagestan, the September 1999 terrorist 
attacks and the war f and parallel to all that a vicious trading of insults 
and corruption allegations between the Primakov-Luzhkov camp and the Kremlin. 

Boris Berezovsky-controlled ORT television targeted Luzhkov in particular for 
a weekly basting over corruption in his administration, prompting Luzhkov to 
snap in October, "Berezovsky is Satan!" 

By the December 1999 elections, Luzhkov's political vehicle Fatherland had 
been abandoned by fairweather friends as regional leaders flocked to join the 
pro-Kremlin Unity. Fatherland's regional structure crumbled, and it 
eventually joined Unity in endorsing Vladimir Putin for president. 

Luzhkov did win re-election as mayor in December, with 70 percent of the 
vote. But given his 96 percent in the 1996 elections, even that was seen as a 
comedown. 

Since then, City Hall and the Kremlin have been making up, albeit grudgingly. 
In June, for example, Luzhkov joined Putin for a trip to Italy, prompting 
Kommersant to quip the mayor had been "rehabilitated." 

This month, Putin extended another olive branch: A decree reinstating Moscow 
police chief Nikolai Kulikov, a Luzhkov loyalist ousted by then-President 
Boris Yeltsin. Luzhkov has also been granted a five-year broadcast license 
extension for his pet television station, TV Center. 

But Luzhkov has been a lukewarm ally. He has cautiously criticized President 
Putin's drive to curb the powers of the governors, and has attacked the draft 
budget for 2001 for its plans to take more tax revenues out of the regions 
for federal government needs. 

"This is unlawful and deeply wrong," Luzhkov said this month on TV Center. 
"The government wants to concentrate all financial resources in its hands and 
give the regions no opportunity to manage themselves." 

Luzhkov has also been harsh in condemning the investigation of his old ally 
Vladimir Gusinsky, who built his MOST banking and media empire last decade on 
close cooperation with the Luzhkov administration. The mayor likened the 
campaign to the Stalinist terror of the 1930s. 

Perhaps because of such criticism, sailing has not been entirely smooth for 
Luzhkov. Early this month, Kommersant published an unsourced front-page 
article predicting the mayor and his deputies would soon be pushed out of 
office. Luzhkov dismissed the publication as "ordered by Berezovsky," who 
owns Kommersant. 

Meanwhile, the Luzhkov coterie still controls the city's business interests. 
The administration owns shares in more than 500 companies and controls media, 
oil, real estate and telecommunications enterprises. 

And that may be enough, for now, said Vyacheslav Nikonov, president of the 
Politika research institute and a former top strategist with Fatherland. 

"Luzhkov no longer has ambitions to move to the federal level," Nikonov said. 
"[His] influence will ultimately depend on how much the power of the 
governors will be cut." 

Markov added that the eclipse of Luzhkov's political star has taught him 
lessons. "He knows he has to do something," he said, "although I don't know 
if he understands what." 

Yevgeny Bunimovic, a deputy in the Moscow City Duma, agreed, saying the wave 
of criticism directed at Luzhkov during the election season had sunk in. 
"Luzhkov saw that he can be hurt by criticism," he said, "and that has made 
him more careful." 

Bunimovic said dealing with the city administration has become noticeably 
smoother since last December's elections. "It's much easier to talk to 
Luzhkov," Bunimovic said. "He acknowledges he doesn't understand everything 
and relies more on the independent judgment of others." 

*******

#7
BBC MONITORING
MOSCOW MAYOR EMOTIONAL ABOUT GOVERNMENT-PROPOSED TAX-REFORM
Source: NTV, Moscow, in Russian 1200 gmt 26 Jul 00 

[Presenter] Today's session of the Federation Council, the last one before 
summer vacations, has become a crucial one for itself. 

[Omitted: the bill on new order of formation of the Council has been passed] 

Now a stormy discussion on the amendments to the Tax Code is in progress. Our 
parliament correspondent Alim Yusupov is on a hookup with Ostankino studio. 

[Omitted: greetings] 

[Correspondent] Just fifteen minutes ago the senators approved the amendments 
to the second part of the Tax Code. 

[Omitted: known facts] 

During the discussion and especially before the beginning of the session many 
governors spoke about the government-proposed amendmets rather sceptically. 
Let us listen to some of them. 

[Vasiliy Starodubtsev, Tula Region governor] This is a controversial issue. 
Many regions will lose some money, and this, naturally, will make them 
difficulties. 

[Aleksandr Lebed, Krasnoyarsk Territory governor] I have calculated 
everything more than once. If this Tax Code is approved in its present 
version, I will lose 30 per cent of the [territorial] budget, which amounts 
to no less than R4bn. This Tax Code is a vivid manifestation of liberal 
Bolshevism: to seize everything from the strong, to dekulakize them and to 
put everything to one pot. Then somebody will stand near this pot with a 
sentry and divide everything, presumably in a just way. This is an unnatural 
process. 

[Omitted: correspondent repeats that many governors are unhappy with budget 
reform] 

According to the Federal Council regulations, every senator could speak for 
three minutes. After this his microphone was automatically disconnected. An 
exception was made for [Moscow mayor] Yuriy Luzhkov. He asked for five 
minutes and spoke even longer. He mentioned every amendment to the Tax Code 
and criticized all of them. 

[Luzhkov] We have analysed and calculated everything, in qualitative as well 
as in quantitative aspects. Let me tell you that a citizen of the Russian 
Federation will feel worse. [Russian writer of the 19th century Nikolay] 
Gogol said that Russia's main problems always were [bad] roads and fools. We 
apparently began to cope with roads in the last two years, but fools are 
still here. 

[Correspondent says that the amendments to the Tax Code were passed] 

******

#8
Wall Street Journal
July 26, 2000 
[for personal use only] 
Factory Handles Excess Rubles By Putting Them on the Roof
By ANDREW HIGGINS 
Staff Reporter of THE WALL STREET JOURNAL

ULYANOVSK, Russia -- Dmitri Nikiforov, a capitalist convert, closely watches 
Russia's money supply: The survival of his factory depends on it.

Sitting beneath a portrait of Vladimir Lenin, leader of the Communist 
revolution and this Volga River city's most famous son, Mr. Nikiforov 
scribbles figures to explain why pumping too many rubles into the system 
causes havoc, while closing the spigot too tightly means trouble, too. "It's 
a delicate balance," he says.

So what does he consider the optimum level?

"As a rule I like to see it at about 100 to 150 tons a month," says the 
53-year-old manager. "But last year, it went up to as much as 400 tons a 
month because of a shortage of rags."

Tons? Rags? Such terms don't figure prominently in the texts of Milton 
Friedman and other monetarists of the Chicago School, but they dominate the 
pioneering work of Mr. Nikiforov and his colleagues at the Ulyanovsk School 
-- better known as the Ulyanovsk Roofing Material Factory.

When Russia's financial markets buckled in August 1998 and the ruble 
collapsed, Mr. Nikiforov had a brainchild. Already wrestling with severe 
shortages of old cloth and wastepaper, his basic raw materials, he proposed 
an unorthodox way to mop up Russia's excess money supply.

"We'd already tried using wood chips and even straw, but to no avail," says 
Mr. Nikiforov. "We found that bank notes worked much better."

Today, his company is awash in money -- an unusual development in an 
impoverished region still named after the Bolshevik leader (Lenin's original 
surname was Ulyanov) and blighted by a lingering faith in his bankrupt 
economic creed.

Soaked in water and mashed into a porridge, millions of rubles in shredded 
bank notes cascade through a network of pipes and concrete ducts. Mixed with 
scraps of paper and shredded cloth to form a thick paste, the rubles are 
rolled into sheets and coated with tar to form a roofing material called 
ruberoid.

Russia has more money than it can cope with. It has mountains of the stuff, 
the legacy of a decade of political tumult and financial promiscuity that has 
seen the Central Bank issue three different sets of bank notes and has left 
warehouses bulging with unwanted and damaged notes. Frequent "monetary 
reform" has caused agony for millions of Russians holding abruptly suspended, 
worthless paper money. For the roofing industry, though, it has been a 
godsend.

A ton of rubles costs less than $15, not even a third as much as scrap paper. 
The rock-bottom prices have Mr. Nikiforov reaching for the stars.

Not only do rubles help plug leaky roofs, he says; they also eventually could 
revolutionize personal hygiene. He shows off certificates from the health 
ministry and epidemiological control department certifying that bank notes 
pose no health hazard as toilet paper. He has even passed his Geiger counter 
over them, and knows that they aren't radioactive.

Toilet tissue made of rubles -- known in the trade as MBS, a Russian acronym 
for "Special Waste Paper" -- would be "a bit rough" and not particularly 
absorbent, he says, but it would be cheap.

In the factory's main rolling room, Natalya Strada, a supervisor, fingers a 
heavy chunk of freshly minted ruberoid specked with tiny strips of purple 
500-ruble notes. "It's good that useless money has been given a new life" on 
roofs, she says. But to use it as toilet paper, she says, is "going too far." 
She would rather just have "a few extra rubles in my pocket."

Mr. Nikiforov's exact recipe for ruberoid is a secret. He wants to patent it 
before providing details, adding that a rival factory near Moscow tried to 
copy his idea but had trouble making it work. The proportions are important, 
he says: A ruble content of more than 30% leaves his roofing products brittle 
and prone to leaks.

Mr. Nikiforov's ruble revolution began with a train trip to Moscow in late 
1998, where he met Yuri Babichev, the chain-smoking head of Mosoblvtorresurs, 
a state-owned scrap dealer. A veteran wholesaler of old socks, dogeared 
schoolbooks and other recyclable waste, Mr. Babichev had cut a deal with 
Russia's Central Bank to dispose of damaged and defunct rubles. (The bank was 
burning old money but stopped because environmentalists complained.)

"They cried with joy when I said I'd take some of the money off their hands," 
recalls Mr. Nikiforov. Offered a free sample, he returned to Ulyanovsk with 
two bricks of compressed shredded rubles in his briefcase. A few weeks later, 
he got a truckload of money and started a trial production run.

The tests started out badly. Rubles didn't dissolve easily and kept floating 
to the surface of a big vat of bubbling water. Then came problems with 
clotting: Ribbons of rubles tended to congeal into lumpy pellets. Workers, 
many of whom hadn't been paid in months, were also trouble: "They wanted to 
glue the notes back together," as if they might then be worth something, 
recalls the factory's general director, Yuri Titienko.

But Mr. Nikiforov persevered and finally prevailed. His technicians worked 
out the kinks in a maze of pipes and in the production process. And, thanks 
to a barter deal with the local government, the factory also found a way to 
pay its back taxes. To dispatch some of its obligations, it now supplies 
schools and a clinic in the nearby town of Novoulyanovsk with free ruberoid. 
Recycling has come full circle: "Money is the root of all evil. It should be 
turned into roofs," says the mayor, Anatoly Arkhangelsky, who covered his own 
garage with ruberoid. Each week, Mr. Nikiforov sends two big Kamaz trucks on 
a 450-mile journey to Moscow to collect about 30 tons of rubles. And he is 
scouting for bank notes in Siberia. He also has heard of a ruble stockpile in 
Boris Yeltsin's hometown, Yekaterinburg. The Central Bank won't discuss the 
size or location of its ruble rubbish dumps.

"Marx and Lenin predicted we wouldn't need gold and would one day make 
toilets out of it," says Valery Perfilov, director of a complex of dusty 
museums in the center of town dedicated to Lenin. "We don't have golden 
toilets yet, but we have roofs covered with money. Who knows what might 
happen next?"

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

******

#9
Chicago Tribune
July 26, 2000
[for personal use only]
IN RUSSIA, A FEST WITH PAGAN ROOTS COMES BACK 
By Colin McMahon 
Tribune Foreign Correspondent 

VLADIMIRSKOYE, Russia -- People come to tiny Svetloyar Lake near the Volga 
River in search, ostensibly, of a lost city.

In truth, many come looking for something else more intangible.

Based on a legend centuries old, the Ivan Kupala holiday as celebrated July 6 
in the central Russian town of Vladimirskoye is making a comeback. Organizers 
are trying not only to revive a holiday that suffered during Soviet times, 
they are trying to build a new Russian tradition.

Unlike many holidays in today's Russia, Ivan Kupala is not a Soviet leftover. 
Its religious aspect is optional and adherents say it is a day that unites 
rather than divides Russians.

At Svetloyar Lake, everyone is welcome. This year's holiday drew leftists and 
rightists, rich and poor, old and young, pagans, Orthodox Christians, yogis, 
Old Believers, Hare Krishnas and atheists. And while organizers pay homage to 
the legend of a lost city at Svetloyar Lake, they do not make faith in the 
myth the price of admission.

"Of course I do not believe that the city is there on the bottom of the 
lake," said Svetlana Arakelova, 50, who since 1992 has been working to 
recharge and reinvent the holiday. "But I believe in it as a symbol. I 
believe in the spirit of it."

A local expert counts eight versions of the legend, including one that the 
Russian composer Nikolai Rimsky-Korsakov used for an opera. All have this 
basic story line:

An ancient Russian town called Kitezh came under attack by Mongol invaders 
around 1240. Despite a heroic Russian defense, the Mongols (or Tatars, as the 
Russians call them) carried the day. But just as Kitezh was to fall, it 
disappeared into Svetloyar Lake.

According to legend, the people of Kitezh remain there today, living and 
worshiping as before. And each year on the night of July 6, Kitezh becomes 
visible. The town's church bells sound, too, ever so faintly.

Alexei Groza came to Vladimirskoye three years ago to run a local cultural 
center dedicated almost exclusively to the Kitezh legend.

"The differences in the versions of the legend are not important," said 
Groza, who takes the legend quite seriously. "What is important is that in 
all versions the city can be seen by those who believe and are pure of heart."

Asked if he had seen the city himself, Groza's face reddened and his brow 
furrowed.

"That," he said with a slight smile, "is a military secret."

Ivan Kupala, a mixture of the feast day of St. John the Baptist and the pagan 
holiday Kupala, is celebrated throughout the former Soviet Union. But 
elsewhere it usually coincides with the summer solstice, about two weeks 
earlier.

Girls toss flowers into rivers, hoping that the boy downstream who picks it 
up is right for her. People jump over campfires or into lakes and rivers to 
purify themselves. Some revelers search the woods for a flowering fern or 
just for an excuse to get lost with a companion on a holiday that traces back 
to pagan fertility rites. There is a little bit of all of that at Svetloyar 
Lake. But Kitezh is the star.

Some believers come early, crawling on their knees three times around the 
mile-wide lake as they pray. At the top of a hill sits a still-unfinished 
wooden Russian Orthodox church, built during the past couple of years. For 
some Old Believers and Russian Orthodox, Svetloyar is sacred. Even many who 
dismiss Kitezh as a myth see important symbolism in its perseverance.

Alexander Ogorodnikov, a Soviet-era dissident who was persecuted for his 
religious beliefs, said he and others would use Kitezh as a kind of code when 
they traveled around the Soviet Union.

"To `search for Kitezh' is a way of speaking in metaphors about the search 
for holiness," Ogorodnikov said.

Last year Russian Orthodox Church officials visited on Ivan Kupala. Some 
people welcomed this recognition. Others are concerned that the church might 
try to assert control over the holiday.

"This holiday should not be one or the other, Orthodox or pagan," said 
Arakelova, her skin glowing with the tan of the Russian countryside, her head 
adorned with a wreath of daisies that is an Ivan Kupala tradition. "We don't 
have enough holidays that are for everyone and not just certain groups."

As night neared on this year's Ivan Kupala, the pagans, yogis, Krishnas and 
others who were camping near the lake prepared for their festivities. They 
practiced chants and dances. They collected wood for fires.

On the banks of Svetloyar Lake, families lay down blankets and set out 
picnics of pickled vegetables, cold meats, beer and, of course, vodka. Their 
children splashed around in cool water clear enough to see down to one's 
feet. Women picked daisies.

And on the path leading to the site, entrepreneurs sold sweets, cakes, 
cigarettes, shish kebab and spirits. Business was brisk.

This ecumenical stew is just what Arakelova wants Ivan Kupala to be.

"We are here in search of an ideal, maybe we are creating a new ideal based 
on our own history," Arakelova said. "The ideal is to be in harmony, harmony 
with nature, harmony with one another."

By dusk about 2,000 people had gathered. Choirs sang Russian folk songs. 
People fashioned little rafts of wood to hold candles, then floated them on 
the lake. They swam, some naked, among the candles. Others walked around the 
lake, their candles burning, then disappeared into the woods.

They met up near the pagan camps, to stay up all night, sing songs and dance, 
jump across the cleansing fire and pair off for a walk, and maybe more, in 
the woods.

******

#10
OVER 50% OF RUSSIANS APPROVE OF PUTIN'S WORK - POLL 

MOSCOW. July 26 (Interfax) - 53.8% of Russians approve of Vladimir 
Putin's work as president. This information was distributed on Wednesday 
by sociologists working with the independent research center Russian 
Public Opinion and Market Research (RPOMR-Gallup International). 
This information was obtained as a result of a representative poll 
conducted in mid-July, in which 2,000 respondents from 155 populated 
areas in 40 regions of the Russian Federation took part. 
11.6% of Russians do not approve of the president's work; 32.5% of 
the respondents answered "neither yes nor no;" and 2.1% of them were 
undecided. 
20.5% of Russians said their attitude to Putin's activities since 
he was elected president have changed for the better. 10.1% of the 
respondents reported that their opinion has worsened. The majority of 
respondents (64.3%) said their attitude to the Russian leader has not 
changed; 5.1% were undecided.

******

#11
Nezavisimaya Gazeta - Stsenarii No. 7
[translation from RIA Novosti for personal use only]
RUSSIANS' SENTIMENTS AND OPINIONS IN JUNE 2000
Analytical Note
By Yuri LEVADA, PhD, professor, director of the All-Russian 
Public Opinion Research Centre

Almost a year has passed since the process of the 
transition of power to a new (or a newly-structured?) 
presidential team, and therefore, to a new epoch of rule and a 
new epoch of the entire social and political life started in 
Russia. This transition has become a difficult trial for the 
entire fragile institutional system, which began to be formed 
in Russia after 1991, including the endurance test for 
democratic trends of public opinion. It has turned out to be 
quite long and can hardly be regarded as completed one even 
after the solemn inauguration of the newly elected President.
The point is that up until recently the political elites, 
observers and the public were largely acquainted with the style 
of the new leader's personal behaviour but were lost in 
conjectures as to his programme, team and social support, the 
methods of solving the pressing problems, etc. Both 
enthusiastic and alarming expectations were based on 
conjectures. The credit of confidence received by Vladimir 
Putin meant actually confidence in his image (to be more 
precise, the mirror reflection of distrust for the previous 
President); hence the consent to postpone giving answers to 
questions till the post-election period. Now the time has come 
for such answers: if it is not yet time to pay the bills, it is 
time to show them to society. In this sense, the development of 
events in May and especially in June is of extreme importance. 

What Is the Power Vertical Aimed At? 

The first step of the administrative reform announced by 
the President - the creation of seven federal districts and the 
appointment of the presidential representatives to them - has 
created (to a considerable extent, due to the same factor of 
unexpectedness) the illusion that this measure can be carried 
out easily. Taken by surprise, the public reacted to the 
presidential initiative by a rather obedient approval.
According to the June national poll of 1,600 people carried out 
by VTsIOM, 44% of the respondents believed that the creation of 
these districts "would be useful for putting things in order in 
the country," 9% of those polled said this measure "would only 
intensify general chaos," 11% of the respondents thought that 
this measure would open "the way for the personal dictatorship 
of Putin;" 17% of the respondents said that this would not have 
any serious consequences for the country and 19% of those 
polled did not give any answer. As many as 47% of the polled 
agreed that the President is right when he steps up the process 
of limiting the governors' rights. 
The reaction to the next step of transformations, which 
have been intended (apparently, long ago) - revising the 
structure of the Federation Council - has turned out to be more 
complex. The attempt to break up this state institution has 
generated the most acute political collision of the past month. 
The artificially created confrontation in the triangle of the 
supreme power (the President - the State Duma - the Federation 
Council) concentrates the public opinion on the balance of 
powers which are lost and acquired by its various peaks. The 
opinions about the veto by the Federation Council of the 
President's law on the procedure of forming the upper chamber 
divided equally: 29% of those polled approved of the this 
decision while another 29% of the respondents did not approve 
of it. As many as 46% thought that the members of the 
Federation Council were guided by their personal interests 
rather than the interests of the country. 
The vesting of the President with the right to remove from 
office the heads of regions was supported by almost two-thirds 
of those polled (63%). However, only 27% (against 60%) would 
approve of the removal of their governor. 
In political battles around the power vertical the 
interests of various state institutions clash with each other;
however, the main question is precisely how the structure of 
power complicated by an additional administrative storey will 
be able (and whether it will be able at all) to service the 
interests of society better, more effectively and with lesser 
efforts and means. In other words, it is necessary to know 
whether this structure will be able to look better at the 
grassroots' level, the needs of the population and the economy 
of the regions or whether its function will boil down to simply 
transmit the directions from above. 
Meanwhile, the answer of the public to this question is 
quite definite. In the opinion of the polled, the activity of 
the heads of regions must be aimed, in the first place, at 
"satisfying the needs of the population of their region" (49%), 
at economic and social development of the region (34%), and 
only after that "at fulfilling the instructions of the 
President and the government of the Russian Federation" (12%).
The basis for collisions with the participation of the regional 
public opinion is seen clearly enough. 

The Trial of Strength: Who Lost After All? 

The second hotbed of public tension last month was linked 
with the scandal surrounding the arrest of Vladimir Gusinsky.
Several lines have intertwined in this extremely scandalous and 
significant event: it can be rightly called "the story of one 
oligarch," or the story of "the non-state holding company," or 
even "the story of the Procurator's Office" or even "the story 
of the President" (who was tripped up, who did not know and who 
could not reach by phone the Procurator General, etc.); each of 
these lines could make a subject for a detective film. The 
reaction of various groups of society and the public to all 
this inevitably turns out to be ambiguous. 
The public trusts accusations easily, without asking for 
proof, only when it is prepared for this in advance. And the 
public opinion in our country has been reared in the atmosphere 
of distrust for any private individual who has become rich and, 
all the more so, for an oligarch. That is why a court judgement 
is not needed; a hint will suffice to bring in a mass verdict 
for "the thieves." According to the June poll of Russian 
citizens, 40% of the respondents saw in the arrest of the head 
of Media-MOST a sign of bringing order to the country and 21% 
of those polled thought that "lawlessness was in place and a 
dictatorship was coming." Of the polled Muscovites, 27% 
believed that the Procurator's Office arrested Gusinsky on its 
own initiative, 42% thought that President Putin, his 
administration and the Family was behind the arrest, 11% 
mentioned the role of Boris Berezovsky and 71% expressed the 
confidence that Putin had known in advance about the pending 
arrest. In connection with this incident, 25% of the polled saw 
"strength and decisiveness" in the President's actions and 41% 
qualified this as "his weakness and helplessness." Only 18% 
agree that the President displayed "honesty and decency" in the 
story with Gusinsky and 49% of the polled qualified his 
behaviour as "hypocrisy and intrigues." 

Yet Another Stage of Chechen Campaign

Soon a year will be marked since the beginning of the 
second Chechen campaign. The military command has already 
announced more than once about the completion of the big war.
(It is true, though, that this war is generally called the 
"anti-terrorist operation;" however, after the General 
Procurator's Office accused Aslan Maskhadov six months ago of 
an armed mutiny, the meaning of the entire operation became 
clear: the suppression of the armed mutiny). There hasn't been 
and there isn't any plan or mechanism of the political 
settlement which has long been waited for. The heroic (assault) 
phase of the operation - with the hoisting of banners on top 
the mountain peaks and the destroyed blocks of buildings in 
Grozny - has passed away irrevocably. The re-arrangements of 
figures in the Chechen field (Kadyrov instead of Koshman and 
Gantamirov) so far do not give an answer to the question of 
what comes after the exhaustion of possibilities for 
large-scale military actions - an endless series of mop-up 
operations and guerilla and terrorist raids or some calm after 
all. The transition from a worse peace to a still worse war was 
far more simple than the transition from this war to some (most 
likely, to very lean and unreliable) peace. 
Only 7% of the population (June, the all-Russian poll) 
could see in Chechnya some signs of a peaceful settlement, 
whereas the majority of the respondents believe that a guerilla 
war has broken out there. Another 29% believe that "everything 
remains as it was in winter and spring." According to the 
polls, the war in Chechnya ever more frequently causes alarm 
among Russian citizens. In June the situation in Chechnya 
caused "great concern" of 77% of the respondents and "some 
concern" of another 19% of those polled (the poll involved 
1,800 people). Russian citizens were most of all alarmed by the 
heavy losses of federal troops (58%), the protracted nature of 
the military operation (46%), the fierceness of the war, the 
death of civilians (43%), the threat of new terrorist acts in 
various regions (37%), the need of big expenses for the 
maintenance of refugees and the restoration of the local 
economy (24%). 
For the first time in all the months of the war the 
actions by the Russian troops have begun to get mostly negative 
assessments in the public opinion. Thus, in April 58% against 
31% considered these actions rather successful than not, and in 
June the ratio of opinions changed: 39% of the respondents 
believed the operations of the Russian troops to be successful 
while 47% considered them to be unsuccessful rather than 
successful. (Each time 1,600 people from various groups of the 
population were polled). The number of supporters of the 
peaceful negotiations with the Chechen side grew respectively. 
Whereas back in March 73% of the polled insisted on the 
continuation of the military operations and only 19% on 
negotiations, in June 55% spoke for the continuation of the war 
and 33% for negotiations. However, in the event that the troops 
sustained heavy losses, the votes for and against the military 
campaign were divided equally for the first time (42:42). 
During the year the ratio of opinions about the results of 
the military action in Chechnya underwent definite changes but 
lately it has begun to reproduce almost accurately the picture 
of expectations which existed at the very beginning of the 
campaign: 

---------------------------------------------------------
How will the armed conflict 1999 2000 
in Chechnya end? October June 
---------------------------------------------------------
The militants will be destroyed
and the whole of Chechnya will be 
brought back into 
the Russian Federation 27 28 
A part of Chechnya to the north 
of the Terek River will be separated
from it and brought back into the 
Russian Federation 7 6
The conflict will lead to heavy
losses and end like in 1996 19 18 
The conflict will acquire a drawn-out 
character and spread to other regions
of North Caucasus 30 33
Hesitant 20 15
---------------------------------------------------------

Most of the population (63%) would consider as the best 
outcome of the conflict the full victory of the Russian troops 
in Chechnya; however, actually the same number of the 
respondents (62%), taking into account the real situation, is 
ready to agree with the possibility of the secession of the 
mutinous territory from Russia. Only 27% (before the beginning 
of the current operation - 14%) believe that it is necessary to 
impede this development of events by any means, including 
military ones. 
Last autumn when it seemed to many that the war would be 
brief and heroic, not only generals but also some democratic 
leaders, seeking to get closer to the position of the new 
leader, were ready to speak about the revival of the combat 
spirit of the army in the operations in the North Caucasus.
The current judgements by the population about the notorious 
case of colonel Budanov give a considerable material for 
assessing such expectations. As many as 17% of Muscovites 
thought that a colonel of the Russian army "could not commit 
such a crime" and that he was simply defamed. Actually the same 
number of people (18%) consider his behaviour "as an 
extraordinary case, from which one must not judge about the 
Russian army." About one-third of the polled give tougher 
assessments of what has happened: in the opinion of 19%, "the 
war is a dirty business which can't do without cruelty, 
violence and killings." Another 15% think that "this case 
testifies to the deep demoralisation of the Russian army" and 
the rest (32%) did not give any answer. 
Let us note one considerable specific feature of the 
perception of the current Chechen war by the public. Given the 
severe condemnation of terrorists and mutineers, the desire to 
participate personally in the operations against them is 
expressed quite weakly and even has a trend towards further 
reduction: whereas in November this readiness was expressed by 
19% of the polled (against 65%), in April this figure was 15% 
(against 70%); moreover, people of non-qualifying age or health 
are not included in these figures. 

Confidence and Claims

The level of confidence in the main personalities of the 
Russian political scene changed little in June. The activity of 
Putin as the President of Russia was approved by the maximum 
number of people at the moment of the elections - 69% (against 
20%); now this figure is 61% (against 26%). Over the same 
period, the number of people approving of the activity of 
Mikhail Kasyanov rose slightly (from 42% to 45%) while the 
number of people approving of the activity of the government 
dropped (from 39% to 34%). This means that the population still 
assesses its leaders not so much by their deeds as by their 
personal qualities (and, what's more, qualities ascribed to 
them). Immediately after the presidential elections 66% of the 
respondents and in June slightly less than 59% of the polled 
said that they knew little of Putin. Apparently, this is due to 
a big credit of trust given to Putin by people over six months 
ago. 

---------------------------------------------------------
"Are you concerned with March June
the fact that Putin... Yes No Yes No
---------------------------------------------------------
... is closely linked with 
the Yeltsin entourage 
(Family) 55 40 55 41 
... worked for a long time in
the Federal Security Service 23 71 26 70
... did not offer any economic 
and political programme 29 43 65 30
... failed to resolve the 
Chechen problem 59 35 78 19
... may establish military 
dictatorship 39 52 45 48
---------------------------------------------------------

Over the past months citizens have reassessed their fears 
in regard for Putin as a political leader. 
The June poll figures show that the fears linked with 
Putin's past remain actually at the previous level, while the 
fears linked with the current and future situation in the 
country (Chechnya, the programme) are noticeably intensifying.
It is interesting to compare people's conceptions about 
how the situation will develop in the country after the 
election of Putin as the Russian President on the eve of the 
elections and now (the polls involved 1,600 people across 
Russia from various groups of the population). 

---------------------------------------------------------
February June 
---------------------------------------------------------
Development of democracy 35 23 
Establishment of dictatorship 10 14 
Preservation of the previous 
(Yeltsin's) rules of the game 26 31
Return to pre-perestroika ways 4 5 
Loss of order, increase of anarchy 1 7 

---------------------------------------------------------

This is how the population assesses the new presidential 
regime in the country which is still being formed. Moreover, as 
was noted above, these assessments are largely based on 
conjectures about the President, his team and policy. 
As the respondents believe (June), the most successful 
measures taken by Putin for the six months of his stay in 
office as the Russian President have been the increase of 
pensions (about 31%), efforts to bring order to the country 
(15%), the anti-terrorist operation in Chechnya (15), foreign 
policy actions (10%), and the same number of people singled out 
measures for improving the situation in the economy. As many as 
25% of the respondents do not see any successes. The main 
claims set to the President over these months include the 
growth of prices and the falling living standards (37%), 
victims, destructions, the absence of a political settlement in 
Chechnya (19%), the absence of an anti-crisis programme (17%), 
instability in the economy (12%), scandals linked with the 
increase of prices for vodka, the seizure of enterprises, etc., 
(10%). As many as 20% of the polled do not advance any claims. 
In February 45% of the respondents agreed with the fact 
that "the population of Russia has grown tired of expecting 
from Vladimir Putin some positive shifts in our life" (42% of 
those polled did not agree with such judgement). In June the 
feeling of tiredness was shared by a greater number of people - 
49% against the same 42%. 
The credit of confidence given to Putin before the 
elections is large enough to maintain his current political 
authority, allay suspicions about his dictatorial inclinations, 
etc. At the same time, the specific actions by the state 
leadership cause a lot of well-founded claims. 

In the Search for the Point of Support

The presidential regime which is being formed has, as it 
seems today, two bearing structures. One of them, which was 
largely needed during the electoral period is the mass 
disappointment regarding the activity of the first President, 
the desire for order and the hope for a strong man. The second 
one, which is becoming ever more evident, involves power 
structures and intelligence services as the cadre resource and, 
apparently, a model of actions for the higher echelons of the 
power pyramid. The Federal Security Service again serves as an 
organisation supplying senior personnel for the President's 
entourage. Apart from that, direct and considerable influence 
on society is exerted by the actions and ambitions of the 
military command and military structures (the army, the 
Interior Ministry and others) participating in the Chechen 
conflict. 
In April, soon after the elections, in one of the polls 
carried out by VTsIOM 1,600 respondents were asked about the 
forces President Putin would rely on. The following answers 
were received: the military, the Interior Ministry, the Federal 
Security Service - 52%; governors, the political elite - 40%; 
oligarchs, major business - 25%; directors of large enterprises 
- 17%; state functionaries - 12%; common people - 12%; 
specialists - 11%; the middle class - 10%; the cultural and 
scientific elite - 9%; the entire people - 6%. 
As the latest developments have showed, the public was 
mistaken in this case in relation to the role of governors.
But what is important is the fact that this spread of opinions 
does not mean any condemnation or at least bewilderment: most 
of society is ready to accept together with the President the 
system of presidential plenipotentiaries in federal districts, 
which is being formed, in the hope that it would not be worse.
The above Moscow poll revealed that a considerable number of 
respondents (42%) positively assess the fact that five out of 
seven presidential plenipotentiaries are former generals and 
only 10% of the polled negatively perceived such a selection of 
cadres. 

*******

#12
Moscow Times
July 27, 2000 
EDITORIAL: 'Exoneration' Should Not Be for Sale 

"Boris Berezovsky received a measure of vindication Monday when the auditing 
firm PricewaterhouseCoopers exonerated one of his companies [Forus] in a 
long-running investigation into embezzlement"
-The New York Times on Tuesday 

When news broke that the Central Bank had for years been funneling billions 
through a Channel Islands shell company with no offices or employees, the IMF 
was not amused. It demanded an accounting of the Financial Management Co., or 
FIMACO. Central Bank Chairman Viktor Gerashchenko turned to 
PricewaterhouseCoopers, his bank's official auditor. PWC duly investigated. 

The resulting report was both highly valuable f largely because the IMF 
posted it on the Internet f and highly incomplete. 

That the report had any meat at all to it was to PWC's credit: The Central 
Bank is a big client, and it might have been tempting to help Gerashchenko 
whitewash shennanigans at his bank. Instead, PWC's report confirmed the bank 
secretly invested its reserves via FIMACO f earning profits that have never 
been publicly accounted for. 

"Were we lied to?" harrumphed Stanley Fischer, the No. 2 man at the IMF, 
after reading PWC's report. "The answer to that, coming out of [the report] 
is unfortunately 'yes.'" 

That the report was incomplete, moreover, was hardly the fault of PWC. "The 
report is based solely on financial and other information provided by, and 
discussions with, the persons set out in the report," PWC warned. 
"PricewaterhouseCoopers have not carried out any verification work which may 
be construed to represent audit procedures." 

PWC's admonitions aside, Gerashchenko seized the report and held it up like a 
shield. Exoneration! he cried f predictably. His allies referred to a 
PricewaterhouseCoopers "audit" that found nothing. And PWC, bound by 
professional ethics not to discuss its clients, watched and stewed. 

Fast-forward a year, however, and what do we have? Oligarchs like Berezovsky 
have realized they can hire an auditor like PWC and pay them to write: "We 
were offered various scraps of information, and amid those scraps we have 
found no criminal activity." 

And then the Berezovskys can cry "exonerated!" while PWC sits silent. 

It's one thing to put together a for-the-public report about one's client, 
the Central Bank, and then to weather the regrettable political fallout. It's 
another entirely to take on a new, highly politicized client under 
investigation for embezzlement, knowing your work will be intentionally 
misrepresented to spruce up that company's political image. After all, some 
clients can be turned away, and not everything should be for sale. 

******