August 7, 2000    
This Date's Issues: 4443•  4444   • 

Johnson's Russia List
#4444
7 August 2000
davidjohnson@erols.com


[Note from David Johnson:
1. BBC MONITORING: "COMPLETELY PRESIDENTIAL" HIERARCHY SEEN AS 
THE AIM OF STATE REFORM IN RUSSIA.
2. AFP: Solzhenitsyn a Major Influence on Putin Says Chubais.
3. Baltimore Sun: Will Englund, Filling up days with dogs, scuba 
diving and errands. Russia: Spending a few days with a modern 
middle-class Muscovite shatters some stereotypes.
4. AFP: ONE YEAR ON, DAGESTAN INVASION LEAVES BITTER LEGACY.
5. AFP: Gusinsky Preparing Gibraltar Bolt-Hole Says Report.
6. Jamestown Foundation Monitor: RUSSIAN LAW ENFORCEMENT TAKES 
AIM AT MONEY LAUNDERING. 
7. Ekonomika i Zhizn: ALL ABOUT OLIGARCHS. (poll)
8. John Dabbar: RE:JRL 4440 - WP/Was Russia Lost?
9. Robert Teets: Civilism.
10. Izvestia: Svetlana BABAYEVA, A JUBILEE WEEK FOR THE RUSSIAN 
PRESIDENT.
11. John Ryan: Re: Albert Weeks and NMD.]


*******


#1
BBC MONITORING
"COMPLETELY PRESIDENTIAL" HIERARCHY SEEN AS THE AIM OF STATE REFORM IN RUSSIA
Source: `Segodnya', Moscow, in Russian 4 Aug 00 p 1


The Russian newspaper 'Segodnya' has predicted that the structure of power
in Russia will change beyond recognition, with its reform - now under way -
likely to result in a "completely presidential" hierarchy. Many of the
prerogatives formerly exercised by the upper house, such as matters of war
and peace, states of emergency, key appointments and elections, will now be
taken over by the State Council, a new body liable to be controlled by the
president. The president will also continue to be in charge of the Security
Council, whose remit will extend to various strategic issues, in particular
national security. Finally, the reform of the upper house will be followed
by transformations in the lower house of parliament, aimed at the creation
of a two-party system on the basis of the pro-presidential Unity party and
the Communists. Follows the text of an article by Aleksandr Porfiryev on
4th August: 


Yeltsin's constitution is in its final days. The excuse for amending it
will be the creation of the State Council, which, as Vladimir Putin "did
not rule out" yesterday, will be given constitutional status. According to
the president, the State Council must not supplant the Federation Council,
but it could take on some of its "nonlegislative" functions. 


According to `Segodnya''s information, the formation of a "constitutional"
State Council will entail a fundamental revision of the entire structure of
the executive, and indirectly of the other branches of power too. According
to the account of our sources, the new hierarchy of power will be
completely presidential and will look as follows: 


- The president, as head of the executive, will most probably personally
head the State Council. Thus the deputy chairman of the State Council has
the status of vice-president. He (not the prime minister, as is customary
today) will be the president's "understudy" and therefore the number two
man in the state. 


- It is proposed to transfer to the State Council "nonlegislative"
functions of the Federation Council like questions of war and peace, the
introduction of states of emergency, approval of the budget and
prosecutor-general, and, finally, elections. 


- All strategic questions - from economic and foreign economic issues to
national security and relations between the centre and the regions - are to
be handed over to the Security Council, which the president also heads. 


- The security segment [of the government], which the president directly
oversees, will begin to operate more freely. The tradition which has
existed hitherto and prohibits law-enforcement agencies from investigating
top officials (federal ministers and others) without special permission
from the highest level will probably be abandoned. In addition, security
structures will be called upon to exercise more rigorous supervision and
control in the economic sphere. 


- The government loses considerable clout in the new power structure,
becoming essentially a technical subunit of the Kremlin administration and
distributor of quotas and licenses (which is of considerable importance for
retaining the current control over business). 


- The legislative branch will also be transformed. The fate of the
Federation Council is now decided. And this autumn - informed politicians
are saying this openly - it will be the turn of reform in the lower house.
The quotas of deputies elected on party tickets will be sharply reduced -
to 100-150 seats. The aim of the reform is to remove "small" parties from
the arena in order to produce a two-party system (Unity and the Communists). 


In addition, a law on parties and political movements is under preparation.
One version of it will place almost insurmountable obstacles in the way of
their re-registration: for instance, a strict quota for the number of
officially registered party members (say a minimum of 5,000 or 7,000
members) in each of the 89 Russian Federation regions. 


- The general line concerning the business world and the mass media, which
still influence domestic policy, is now clear. As for the business world
proper, one idea is that all companies of any significance (to say nothing
of strategic corporations and natural monopolies) should have the "correct"
top managers. Correctness must consist in the fact that these managers are
themselves aware of their responsibility primarily to the state (in other
words, to the current authorities), and only then to shareholders. 


So far all this is just studies by various sections of the administration
and "military analysis" structures. These studies are being coordinated
(coordinated, not led) by chief of presidential staff Aleksandr Voloshin.
As past experience of the progress of Kremlin ideas in the form of draft
laws in parliament has shown, serious obstacles will scarcely arise. At any
rate, it is planned to finish building the new power structure before the
end of the year. 


*******


#2
Solzhenitsyn a Major Influence on Putin Says Chubais


MOSCOW, Aug 7, 2000 -- (Agence France Presse) Former Soviet dissident
Alexander Solzhenitsyn is a major influence on the ideas of Russian
President Vladimir Putin, an ex-KGB colonel, the former chief of Russia's
economy said on Monday.


Solzhenitsyn's criticism of the mass sell-off of state assets in
post-Communist Russia inspired Putin's attack against the country's clutch
of powerful businessmen or "oligarchs", Anatoly Chubais said.


"Solzhenitsyn's sincere and deep conviction is that the privatization
results must be annulled," Chubais, who masterminded Russia's privatization
scheme, told the Russian weekly magazine Vlast.


"Unfortunately, I have reason to think that this is not only his personal,
private views, but it is also something which has seriously affected the
situation. He is directly linked to what's happening now," Chubais said.


Chubais, president of the state electricity monopoly (UES), is considered
to be one of the Russian "oligarchs", business tycoons whose influence
increased dramatically during Boris Yeltsin's presidency.


Putin launched a crackdown on the oligarchs just weeks after his May
inauguration, accusing them of having illegally built their fortunes in the
capitalist free-for-all since the collapse of the Soviet Union in 1991.


Many oligarchs have been targeted for alleged tax evasion and rigged
acquisitions of state enterprises during the privatization process.


"It's a paradox, but it's a fact: Solzhenitsyn's ideas today fully coincide
with the most reactionary part of the Russian secret services and the
Communist Party," charged Chubais, one of the leaders of the liberal Union
of Rightist Forces.


Solzhenitsyn, a Nobel literature prize winner who spent two decades in
exile, has bitterly criticized the post-Soviet Russian authorities,
accusing them of being corrupted by outside influences.


"There are invisible magnates who spin their webs all over the executive
branch and divide its power among themselves," he said in mid-May, adding
that "no one said that this web was torn" with Putin's election. 


*******


#3
Baltimore Sun
6 August 2000
[for personal use only]
Filling up days with dogs, scuba diving and errands
Russia: Spending a few days with a modern middle-class Muscovite shatters
some stereotypes.
By Will Englund
Sun Foreign Staff


MOSCOW -- The dog bus from Milan is overdue. Mikhail Poznyakov has spent
the better part of Wednesday waiting on a noisy street corner for his
champion dachshund to return home from her triumph in Italy. 


Now his wife, Olga, is on the cell phone again, pressing him to tell her
whether she should skip out of work to join him. 


But no one here has an answer for her. Not Poznyakov, not the older man who
hates dogs but puts up with them on account of his wife, not the fat guy in
the purple T-shirt -- the one who just smuggled a shipment of chameleons
and spiders from Madagascar into Russia, in the lining of his coat, to sell
as exotic pets. 


"We arrive and we wait," says Poznyakov, whom everyone knows as Misha. 


But it has been a long wait, and Olga is getting antsy. Misha has been
whiling away the hours, smoking and eating a cherry or two, ducking out of
rain showers, waiting for a bus carrying a group of trainers and 30 dogs
that has just spent three days coming overland from Italy, because he
doesn't have a job to skip out on. 


Olga has been calling him from work every 20 minutes or so, just to keep on
top of things. 


A working wife, a career on hold and the company of dogs -- these are the
three realities of Misha Poznyakov's life. 


A 34-year-old computer specialist, Poznyakov has emerged from the first
post-communist decade in much the same way as millions of others -- one of
a new generation of middle-class wage earners who little resemble the usual
stereotypes. 


They are neither flamboyantly rich nor depressingly ground down by the
post-Soviet economy. A small car, a tiny apartment, decent clothes, an
all-consuming hobby -- these are the hallmarks of their reasonably
comfortable lives in Europe's largest city. 


For a few days this summer, Misha Poznyakov agreed to let a foreigner tag
along after him to get a sense of Moscow's version of the unremarkable life. 


Without much to do, Misha fills his time. Getting even the smallest things
accomplished here can be maddeningly time-consuming, and Misha has taken on
the burden of keeping the household moving. 


Often there's an interminable wait for something over which he has no
control -- a job, a doctor, a bus full of dogs. Busy and under stress, like
Russia itself, he seems never to get ahead. 


But there's a difference between frustration and despair. Misha might take
orders from his wife, and he might have always had trouble getting along
with his bosses -- he says he's had only one in his life that he liked --
but there's nothing very unusual about that among Russian men. 


The externals of life often can't be mastered. They're endured. It's
nothing to get dramatic about. 


Many Russian men take refuge in the bottle, others in a lifetime of
infidelity. But millions more carve out a corner by way of hobbies,
pastimes, obsessions: building a country dacha, growing tomatoes, ice
fishing. Or dog training. 


Olga's on the phone again. She's on her way over. 


As soon as she arrives, she tells Misha to buy her something to drink. He
returns with a bottle of sparkling water. "Misha!" she moans -- shouldn't
he know by now that she likes only still water? 


Here's the bus at last. A man with curly hair smiles expectantly on the
curb, clutching a bouquet of roses for his returning dog. 


The doors sigh open and there's a hubbub of dogs and baggage and tangled
leashes. Olga reaches for Ponochka, a wiggly miniature dachshund who topped
her class at Italy's prestigious dog show. 


It's Misha's turn. Ponochka licks his cheeks and mouth and nose. Misha
shuts his eyes in joy. 


THURSDAY 


It's been raining torrents. All day, while he's been driving around on
errands, Misha has been trying to return a call from the metals-trading
company where he used to work. 


Finally, about 4 p.m. he gets through and learns that they want him to
tweak the computerized phone system he set up this year. The calls aren't
being routed properly, and the canned music doesn't always play. 


If there's one thing that sets Misha apart, it's being unemployed. Millions
of Russians hold jobs for which they do little work and receive little pay,
often months or years late. 


But they don't show up on the unemployment rolls, officially measured at 11
percent. Misha, though, had a job in the new economy -- the one that pays
attention to balance sheets -- and in March, when his company didn't need
him anymore, he was out on the street. 


He has kept on good-enough terms to do a little free-lance "consulting" for
his former employers. But relations between bosses and workers generally
are poor here. Russian bosses are often rude and peremptory; workers rarely
feel loyalty or devotion. 


When Misha finished his studies in the 1980s, he was assigned by the Soviet
government to a job in a cartography institute. In 1990, he made the leap
to the new private sector, which gave him the chance to develop computer
skills that will -- undoubtedly -- land him another job at some point. 


Changing into a loud sport jacket, he heads off. The metals-trading company
is in a new building. The computer people gather to smoke in an
air-conditioned equipment room because of the good ventilation. 


A half-dozen old friends stop by. Anton Teslik kids him about the coffee --
it isn't anywhere near as good as it was when Misha made it. (In fact,
Misha brews delicious coffee; he's one of the few Russians who doesn't use
instant.) 


The work takes maybe 45 minutes. It means a few dollars. Olga comes back
and they leave. 


On the street, Misha tells her he wants to practice scuba diving this
evening at a pool. Diving is his other passion; in May, he was with a group
that raised a World War II artillery piece from the Black Sea. 


Olga reminds him that tonight is the birthday party of a friend named Gana. 


Misha points out that the pool will be closing tomorrow for the season;
this is his last chance. 


"Misha, let's just go the party for an hour," Olga says. 


"One hour? Be serious." 


"Misha, we already bought a present." 


"We can give it to her tomorrow." 


"Misha." 


"No." 


An hour later, Misha and Olga are heading to Gana's party. 


Misha has changed into a dark blue suit; Olga is in a black dress. He is
driving his secondhand Czech car, a Skoda hatchback; Moscow's streets are
clogged with inexpensive cars that have helped meet the pent-up demand that
arose during the Soviet era. 


Like a lot of men here, Misha drives with a heavy foot, relentlessly
pushing to close the gap with the car ahead. If there's 50 yards between
him and a red light he figures it's better to get to the light sooner than
later. It keeps other lead-footed drivers from cutting in. 


On the way to the party in the Reyutovo suburb, he is pulled over for a
document check. This happens to drivers all the time. Misha leaps out of
the car and humbly approaches the police officer, who gives him a quick and
nearly insolent salute. 


Misha knows there will be trouble. The Russian motor vehicle registration
system is hopelessly Byzantine, and so Misha's car is still registered to
the original owner. 


He has a document allowing him to drive the car legally, but he doesn't
have a valid inspection certificate because it was too much bother to get
it from the city where the car came from. 


A fine is levied on the spot. Fortunately, it's only 40 rubles, or about
$1.50. 


Misha is one of two men invited to the party, where much of the talk is
about the new Ikea store. Olga loves Ikea, although their two-room
apartment isn't big enough nor their wallets fat enough to indulge in major
purchases. 


The room where she and Misha sleep doubles as their living and dining room;
their 10-year-old daughter, Yulia, has a room to herself, which is also the
storeroom and home to four tortoises in terrariums. 


Olga treats herself to kitchenware and maybe a lamp from the Swedish store.
Misha hates the whole idea of shopping. 


He is called on to make a toast, and gallantly wishes happiness to fall
upon Gana in more abundance than the rain falling outside. He raises a
glass of water, while the rest of the company drink sweet local wine. It's
a long way home, and Misha knows the drinking-and-driving laws are
zealously enforced. 


Anyway, Misha doesn't live up to the image of the hard-drinking,
vodka-soaked Russian male. When asked about it, he misinterprets the
question and takes it as a challenge to his masculinity, proclaiming that
he and his friends can drink with the best of them. 


But what he most likes to do is relax with a gin-and-tonic at home and then
go for a walk in the park. 


The birthday party caps a tiring day for Misha. It began with a long drive
across the city to the gloomy Moscow Veterinary Academy, accompanied by his
talkative cousin, Katya Prokhorova. 


Misha never had anything to do with dogs until four years ago, when his
family traded their damp one-room apartment in a prefabricated apartment
house for a damp two-room apartment downstairs. 


Olga told him she had always wanted a dog, and now they had enough space
for one. So they got Vidzha, and it wasn't long before Misha was smitten. 


"It's a swamp that sucks you in," he says. 


Vidzha was a champion Rottweiler; the dog-crazy Russians especially like
big breeds. She died in May of lung cancer. 


Today, the patient was Hunter (English names are popular for dogs here), an
8-month-old Rottweiler who is Vidzha's son. 


The treatment consisted of injections to treat Hunter's chronic hip
condition and a tongue-lashing from Dr. Yuri Filippov, because Misha had
allowed Hunter to hurt himself several days earlier while running around in
the countryside. 


Misha stroked Hunter's head during the injections, which cost $7 every
week. When the dog gazed up at him, a look of tenderness and love flashed
across Misha's face. It wasn't the sort of expression he bestows often on
humans in his life. 


On the return trip, Katya lobbied for lunch at McDonald's. She spent most
of the meal expounding on the dangers of salmonella. 


FRIDAY 


"The interview was interesting," Misha is saying Friday morning, "but the
job wasn't." 


Misha is determined to find a computer-related position where he has some
hope of advancing and the pay is decent. He won't accept less than $1,000 a
month, and he'd rather get $1,500 to $2,000. 


The company that interviewed him today was offering what amounted to a
dead-end job. Misha won't take it. 


For the time being, the Poznyakovs will live on Olga's $650 a month as a
bookkeeper at the metals company and what little Misha can make from
free-lance work. 


Olga wants him to be ambitious, to pursue the job queries he has gotten
from companies in Germany, Canada, California. Because of his computer
skills, Misha is among the fortunate Russians who can hope to win visas to
work in Europe or the United States. 


But Misha doesn't want to abandon his father. His mother died a year ago at
age 51; his father, 58, lives alone and is in poor health. 


Men here are well aware of the dismaying life expectancy statistics, which
hang over them like death sentences. A man in Russia -- worn down by poor
nutrition, inadequate medical care and lots of vodka -- has an expected
life span of 59.6 years, the lowest in Europe. 


No one's health is that great: Misha had to give up biathlon competition
(shooting and skiing) after surgery for circulatory problems at the age of
25. 


Fortunately, Misha and Olga own their apartment, thanks to Moscow's
privatization program, so their expenses are not high. There will be some
belt-tightening come September, when Yulia returns to her private school.
The fee is $150 to $180 a month. 


The school allows students to challenge their teachers, as long as they can
make a logical argument to back up the challenge, and that makes it a
rarity in Russian education. 


Misha's face lights up when he talks about Yulia, about how independent she
is, how she's already learning English. She's spending a month at an old
sanitarium on the Black Sea, a Soviet-era summer hotel, with Olga's mother. 


Misha, who has been married to Olga 12 years, gets to talking about the
strains that the new Russian economy can put on a marriage. About 60
percent of marriages end in divorce, with the rate likely even higher in
Moscow. 


There are men, Misha says, who don't like to be supported by their wives --
and there are women who don't like to support their husbands. In Soviet
times, people were dependent on the state; now, a man or a woman might be
dependent on a spouse, and not every marriage can withstand that. 


Misha offers an example: There was a couple at the birthday party last
night, Yuri and Olya. Yuri's a pediatrician (which is a very low-paying
job) and Olya works high up in the finance department of the company. 


"He can't do anything but be a doctor," Misha says. "He tried his hand at
business, but failed. Finally his wife told him not to worry." 


In the afternoon, Misha dreams up a way to pretend he's doing something
useful and spend time with a friend as well. Muscovites are not inclined to
sit around their tiny apartments. 


He picks up Alexei Vologuyev, a photographer, and they drive out to a sort
of stuntman's theme park that's being built slowly near the Mosfilm movie
studio. 


The park is loaded with old cars, a castle, a fort and medieval armor. It's
open to the public only a couple of days a year, but if it is ever
finished, it will be a boys' fantasy world. 


Misha installed the office computer here. He looks it over and sees it's
still in good working order. 


SATURDAY 


Breakfast is like every other: a cup of black coffee and a cigarette. Misha
and Olga don't do much cooking in their galley kitchen, into which they
have crammed three chairs, a drop-leaf table, food bowls for the two dogs
and the elderly cat. 


Olga eats at work, and Misha did, too, when he had a job. Lunch is
traditionally the big meal of the day, and the employer subsidizes it
heavily. Yulia gets breakfast and a big lunch at school. 


Supper at home might be some slices of hard sausage on bread. Sometimes one
of them will throw a chicken in the oven. 


Now, fueled on caffeine and nicotine, Misha is dashing off to put in an
hour as a dog trainer. He drives across the city to a field in southwestern
Moscow, making good time in the light traffic. Best of all, no traffic
police pull him over. 


Waiting for him is Misha's partner, Sasha Zhdanov. The men climb into
padded overalls and don large arm shields, then run around the field
getting lunged at by four ferocious dogs. The animals need this weekly
training to stay sharp. When things get sticky, the men whack the dogs with
rubber truncheons. 


"I need to smoke less," says a winded Misha when he sits down. 


They split $3 to $4 per dog. 


In the afternoon, Misha and Olga might have driven to their dacha, in the
village of Iksha, about an hour north of Moscow. It is something they
considered. But it isn't a good day for it. 


All the rain in the past week will have turned the back roads into pure
glop. Also, they share the dacha with Olga's relatives, and Misha doesn't
find that much fun. 


Their dacha is typical -- a small, rough cottage with a couple of pieces of
old furniture, a few partitions and a minimum of privacy. All spring he
avoided going there, and now there are lots of weeds to pull and cleaning
to do. 


One relative owns a mean bull terrier, so if they take Hunter, they'll have
to spend all their time keeping the dogs apart. 


On top of that, Misha went out for a walk Friday night and didn't come home
until 4 a.m. He says he just walked. He's bothered by not having a job and
still sad about Vidzha's death. He smokes and walks and thinks. 


Olga was furious. They spend the day steering clear of each other. Misha
putters around on errands. Olga pleads a headache and takes to bed. 


There's one task that Misha, the dog lover, could take on: In the village
where his father has a dacha, a group of strays taken in by a kindly woman
has turned into a predatory pack, killing people's pets. Some residents are
afraid that a child might be next. 


The police were called in; two officers shot a few of the dogs with their
revolvers but gave up when the rest ran away. Now his father wants Misha to
come out with a rifle and finish the job. It has to be done -- but not
today, not when the world seems so out of sorts. 


SUNDAY 


A measure of serenity returns, as do Yulia and her grandmother. A 40-hour
train ride has brought them back from the Black Sea; Misha and Olga are
waiting to meet them at the Kursky station. 


Olga cries; flowers are thrust through the train window; Misha's
mother-in-law, Emma Bokanenkova, strokes his hand affectionately. 


Suitcases are piled up on the platform and Yulia unleashes all kinds of
hilarity when she hands out gag gifts. For Misha there's a pack of gum
that, when you try to pull out a stick, disgorges a big plastic cockroach
instead. 


Olga wipes away her tears, Misha shoulders the bags, and off they go, to
home and dogs. Summer's in full bloom, there's another job interview
tomorrow, the days are long and filled with possibility. 


*******


#4
AGENCE FRANCE PRESSE
ONE YEAR ON, DAGESTAN INVASION LEAVES BITTER LEGACY
06-Aug-2000


A year after Islamic militants invaded Dagestan, an impoverished Russian
republic bordering Chechnya, the conflict has left a legacy of broken
homes, shattered friendships, and bitterness. 


In the early hours of August 7, 1999, some 300 Chechen guerrillas seized
this Dagestani village and the neighbouring settlement of Rakhata, vowing
to recreate a 19th century Islamic republic embracing the two territories. 


The incursion heralded a month of savage battles with government troops
that left hundreds dead and escalated into a full-scale Russian
intervention in Chechnya which shows no sign of ending soon. 


In his small three-roomed home in this border village, Shamkhad Magomedov,
47, speaks bitterly of "the Chechens who betrayed me. 


"I had more friends in Chechnya than in Dagestan," he said. "I lodged 11
people here permanently and 17 during the bombing of Vedeno. 


"I treated two wounded, I slaughtered all my cattle, I had to ask my
brother for money, but I always managed to give food and clothing to the
refugees who left my house." 


"They betrayed our friendship," said his neighbour Magomed, 42. "If Imam
Shamil united us, then Shamil Basayev divided us," he said. 


Shamil was the charismatic leader of the Islamic state that his namesake
Basayev, a leading Chechen warlord, said his incursion aimed to refound. 


Despite months of mounting tensions along the border, which saw Russia
launch "pre-emptive strikes" against rebel bases in Chechnya, Moscow
appeared unprepared for the scale of the August invasion. 


This despite warnings from Dagestani villagers who learnt of the impending
incursion by letters - from the Islamists themselves. 


"They sent us several letters asking for right of passage through our
village, promising that they would touch nothing and wouldn't shoot,"
explained Magomed Zakiyev, a leading villager in Gagatli, a small farming
settlement of small stone houses on the Dagestan-Chechen border. 


"We sent our parliamentarians to them and we said nobody would be allowed
to pass through our village with weapons." 


On August 2 they gathered at the local mosque and vowed to defend the
village. The shooting dead of a local police captain the same day only
stiffened their resolve. 


Women were put to work digging three rows of defensive trenches, which
still exist. Weapons were stockpiled and people returned from the towns to
help defend their home village. 


Local policeman Magomed, 36, says the rebels could have been headed off had
the authorities reacted to his warnings. 


"We had a radio link with Botlikh," the region's main town, he said. "I
told them that the rebels could skirt around our positions and attack
Botlikh, but nobody took me seriously." 


Botlikh police chief Dzhalalutdin Nabiyev however says the rebels' initial
success was due to detailed forward planning and betrayal by fifth
columnists. 


"Some of the fighters were there at least a month before the attack. They
built fortifications, carried out reconnaissance of the area," he said.
"There were 40 Dagestani traitors among them, mainly Wahhabites." 


The fundamentalist Islamic movement was behind an uprising in central
Dagestan later the same month, having grown in importance in the North
Caucasus region since the end of the 1994-96 Chechen war. 


But few Dagestanis have envied Chechnya its short-lived freedom from
Moscow's writ. 


"The example of Chechnya shows what life is like without Russia - two wars,
banditry, kidnappings, famine, misery, that's what independence means,"
said Ansalta resident Askhap. 


"The shepherds willingly guide us through the mountains and keep us
informed," said one Russian soldier, underscoring the resentment Dagestanis
feel towards the rebels. 


In nearby Shadroda, a village severely damaged in the Dagestan fighting,
Dzhabrail is despondent. "My house was destroyed but it's very difficult to
build another one. I don't have enough money." 


"It's too early to think about our homes," sighed Barad, a refugee in
Botlikh. "First we'll have to see what happens in Chechnya. Everyone seems
to think the fighters will return. And we won't be able to stop them." 


*******


#5
Gusinsky Preparing Gibraltar Bolt-Hole Says Report


LONDON, Aug 7, 2000 -- (Agence France Presse) Independent Russian media
baron and ardent Kremlin critic Vladimir Gusinsky has been granted the
right to residency in Gibraltar, The Times newspaper reported Monday.


Gibraltar's Chief Minister Peter Caruana told the daily that Gusinsky
qualified under a new scheme that relaxed residency qualification rules to
attract multimillionaires.


Gusinsky's move comes after weeks of heavy-handed probes by the Russian
authorities into his business affairs that saw him thrown into jail briefly
in June.


"He has business in Gibraltar," Caruana was quoted as saying. "As far as
Gibraltar is concerned, he has done nothing that makes him disreputable or
undesirable."


Gusinsky's Media-MOST empire has established offices on Gibraltar and the
businessman himself is believed to be searching out an apartment in the
British colony, The Times said.


Gusinsky earned a reprieve from prosecutors from fraud charges and
immediately left Russia for Spain.


The crackdown on the media mogul has been criticized by some as an attack
on the freedom of the press by President Vladimir Putin. Others have seen
it as a long overdue first step to clip the wings of the powerful business
barons known as oligarchs who wield formidable influence in Russia. 


*******


#6
Jamestown Foundation Monitor
August 7, 2000
West's worst fears about Russian money laundering confirmed


RUSSIAN LAW ENFORCEMENT TAKES AIM AT MONEY LAUNDERING. Russian law 
enforcement agencies have announced that they are prosecuting thirty-seven 
criminal cases involving money laundering carried out by what a Russian 
newspaper described today as "a good half of Russia's largest companies and 
enterprises," including oil companies, alcohol producers and grain trading 
companies. The paper quoted officials from Moscow's police and special 
anti-organized crime unit as saying that the heads of one offshore bank, 
International Cassaf Bank Corporation, were involved laundering more than 
US$300 million abroad. The bank, which is registered on the Pacific island 
of Nauru, reportedly used a number of complex schemes to launder money on 
behalf of a number of leading Russian corporations, including 
Rosvooruzhenie, Russia's state arms exporting agency. According to 
investigators, at least US$30 million in "dirty" money passed through 
Cassaf Bank's accounts each month. One laundering scheme involved that 
bank's correspondent accounts in three Russian banks--Atlant-bank, 
Rossissky Kredit bank and MDM bank--in Switzerland's Inter-Maritime Bank 
and in the Bank of New York (BONY), among others. MDM bank has been 
associated in the Russian press with Aleksandr Mamut, reportedly a key 
Kremlin insider, while BONY has been at the center of a scandal involving 
alleged Russian money laundering. Today's report cites unnamed Russian 
special services officials as saying that during their investigations of 
these cases, they found "confirmation of practically all the accusations 
made earlier in the West" concerning Russian money laundering (Vremya 
novosti, August 7).


The fact that a Nauru-registered bank is at the center of this new money 
laundering scandal is not surprising: Late last year, Viktor Melnikov, 
deputy chairman of Russia's Central Bank, told the Washington Post that 
US$70 billion was transferred in 1998 from Russian banks to the accounts of 
banks chartered on Nauru (see the Monitor, October 29, 1999). Earlier this 
year, in response to charges that it had become a laundering center for 
"dirty" Russian money, Nauru announced it would review its banking system 
(Moscow Times, February 10). During the Group of Seven meeting in Japan in 
July, the leading industrialized nations announced they would take tough 
new measures against money laundering and might cut off banking relations 
with some offending countries. The previous month, the G-7's Financial 
Action Task Force put both Nauru and Russia on a list of financial centers 
deemed "uncooperative" in the fight against money laundering (Moscow Times, 
July 11).


This latest scandal comes on the heels of allegations that money from the 
IMF's US$4.8 billion "stabilization credit" to Russia in the summer of 1998 
was diverted to various banks, including BONY (see the Monitor, July 17, 
25, 31). Last week, Mlada fronta DNES, the largest-circulation daily 
newspaper in the Czech Republic, reported that the Czech law enforcement 
authorities had evidence that money from the IMF credit was laundered in 
American banks. The paper quoted unnamed Czech counterintelligence 
officials as saying that last summer they discovered a network of 
questionable financial transactions between BONY and the Prague affiliates 
of Komercni Banka and Invedticni a postovni banka, and that these 
transactions turned out to be part of an operation to launder IMF money 
bound for Russia. The Czech authorities reportedly informed the FBI of 
their findings. The Czech paper, quoting sources in the Czech police, 
reported that funds were still being moved between BONY and accounts in 
Czech banks belonging to Russian citizens. The article linked the money 
laundering activities involving the Czech banks with Semyon Mogilevich, an 
alleged Russian mobster who reportedly laundered money through BONY 
(Russian agencies, August 3; see also the Monitor, August 27, October 6, 
1999). Mogilevich was deported from the Czech Republic in 1995, after which 
he reportedly he began operating out of Budapest. Earlier this year, an 
interview with Moskovskie novosti, he denied all the allegations against 
him, saying he was simply a wheat trader (see the Monitor, February 22).


******


#7
Ekonomika i Zhizn
No. 31
[translation from RIA Novosti for personal use only]
ALL ABOUT OLIGARCHS
Between July 20 and 25, the All-Russia Public Opinion 
Research Centre conducted a representative poll among Russia's 
adult population. The poll covered 83 towns and settlements in 
31 regions of the country. Among the questions asked were those 
concerning the people's attitude to the government's actions 
aimed at verifying the oligarchs' financial activities.
---------------------------------------------------------
Question: What did you feel upon learning of the actions
taken by the General Prosecutor's Office against the
oligarchs?
Answer:
joy - 10
satisfaction - 34
surprise - 34
indignation - 3
concern - 5
fear - 1
no emotions - 26
I have not heard about it - 7
I don't know - 5
---------------------------------------------------------
Question: Do you think there are some financial
violations in the activities of major Russian companies, such
as....
Answer:
No violations, Significant I don't
insignificant violations, know
violations most 
significant 
violations
---------------------------------------------------------
GAZPROM
headed by
Vyakhirev? 18 66 16

LUKOIL
headed by
Alekperov? 17 60 23

MEDIA-MOST
headed by
Gusinsky? 16 65 19

Norilsk Nickel
headed by
Potanin? 17 61 22

ORT headed by
Berezovsky? 20 61 19

RAO UES of
Russia headed
by Chubais? 13 70 17

Siberian
Aluminium 
headed by
Deripaska? 13 61 26

SIBNEFT
(Siberian Oil)
headed by
Abramovich 13 61 26
---------------------------------------------------------
Question: Which of the following opinions concerning the
law-enforcement agencies' actions towards the oligarchs and
big business you would agree with?
Answer:
The actions are dictated above all by the intention...
to bring order to the economic
sphere and to clear it from
criminals - 46

to press the oligarchs for money
to replenish the treasury - 15

to demonstrate the strength of the
present authorities, to strengthen
the "power vertical" structure - 16

to settle accounts with those
who do not want to submit to
the authorities - 7

to start a redivision of
property in the country - 8

I don't know - 8
---------------------------------------------------------
Question:
Do you think that the campaign against the oligarchs was
unleashed in earnest and it will limit their economic and
political influence in this country, or it was aimed at
intimidating them, with the oligarchs retaining their
influence?
Answer:
The campaign was unleashed in
earnest and it will limit the
oligarchs' influence - 31

It was unleashed to intimidate
the oligarchs, with their influence
being left intact - 54

I don't know - 15
---------------------------------------------------------
Question:
Do you think that the present campaign against the
oligarchs is conducted in line with the continuation and
development of market reforms, or it shows that they are being
curtailed?
Answer:
It goes on in line with the continued
market reforms - 53

It shows that the reforms are being
curtailed - 16

I don't know - 31
--------------------------------------------------------
Question:
Do you think that President Vladimir Putin will finally
manage to enhance the prestige of federal authorities and
strengthen the "power vertical" structure?
Answer:
Surely "yes:, rather "yes" than "no" - 73

Certainly "not", rather "not" than "yes" - 14

I don't know - 13
--------------------------------------------------------

******


#8
From: "John Dabbar" <Dabbar@CPC.Ru>
Subject: RE:JRL 4440 - WP/Was Russia Lost?
Date: Mon, 7 Aug 2000 


Regarding the Washinton Post (Aug 5 2000) editorial in JRL 4440: Readers
wishing to make sense of Russian economics and econometrics should
understand a fundamental principle of business in Russia today: The vast
majority of businesses have completely protected themselves from ruble-based
inflation by pricing goods and services in US dollars. I find this practice
in businesses as diverse as hotels, restaurants, car parts, legal services,
technical consulting, computers, sporting goods, cable TV subscriptions,
construction contracts, landscaping, apartment leases, home appliances, and
employment contracts. 


Readers that have been to Russia recently are familiar with the abbreviation
U.E. or uslovnaya edinista - customary units. Used in restaurants and retail
establishments, this almost exclusively means US dollars, and the exchange
rate is conveniently posted at the cash register or adjacent exchange point.
Firms with higher-priced goods set U.E. prices, have an in-house exchange
point that hands over rubles for dollars, and a cashier where you pay in
those rubles. With suitable recycling of rubles back to the exchange point,
I'm convinced most of the paper rubles never actually leave the building.


Business to business transactions via wire transfer generally include the
terms "Payable in rubles at the Central Bank exchange rate applicable on the
date of payment." The Central Bank conveniently posts the daily rate and
history on its web site, making the number available to both parties in the
transaction. I can therefore negotiate contractual terms in dollars, with
both my side and the counterparty confident that our interests are equally
protected.


Granted, neither of these is as "efficient" as a stable "hard" currency.
However, it provides the stability and predictability needed to get through
the day's business. And when the advisors go home and the people are left to
make sense of the situation, challenging times give birth to creative
solutions.


******


#9
Date: Mon, 07 Aug 2000 
From: "Robert M. Teets, Jr." <rmtlaw@online.ru>
Subject: Civilism


Dear David,


Some very pleasant summertime weather encouraged myself and thousands of other
Muscovites to enjoy a Sunday stroll in this city's many parks. Then with
friends
I listened to a charming vocal concert in an art gallery followed with up a
meandering conversation as we headed back along the nabrezhnaya to my
apartment
for supper. Although there were e-mails to reply to, checking-in with your
ever
diligently-produced list was "de riguer."


One item which I've missed reading about in your excellent list, if you've
already covered it, is the very important intellectual source of one of the
probable overarching theoretical premises for some of "role of the state" plus
property ownership questions in the Putin Administration's ongoing program and
actions.


Vladik S. Nersesiants is a prominent faculty member at the Institute of State
and Law of the Russian Academy of Sciences where I am a visiting professor and
have just received my LL.M. He conducts research and writes principally on the
theory and history of what in Russian political and legal theory is
referred to
as "the state and law." Clearly this is a topic central to questions of
federalism as well as the contemporary rubric "rule-of-law" and current
short-hand expressions such as that of a "strong state."


Since the start of the perestroika era, Academician Nersesiants has long been
developing in his writings a concept which he labels as "civilism." He has
done
so in a variety of scholarly and mainstream media including journals,
newspapers, plus numerous books. Most recently he has drawn together his ideas
into a pamphlet, "The National Idea of Russia in Worldwide-Historical
Development of Equality, Freedom, and Justness—the civilism manifesto" (61pp.,
Norma, 2000).


While I am preparing a review essay upon it and Dworkin's new "Sovereign
Virtue-the theory and practice of equality" for The Jurist web site
<jurist.law.pitt.edu/world/russia>, a fine translation has just been published
by the distinguished scholar, William E. Butler, which you and your readers
would be well-advised to seek out. "Civilism Manifesto—the national idea of
Russia in the historical quest for equality, freedom, and justness"
(46pp., an
occasional paper of the Vinogradoff Institute of the University of London,
Simmonds & Hill, 2000, a translation from the Russian, ISBN 1-898029-53-9).


with my best regards,
Rob


******


#10
Izvestia
August 7, 2000
[translation from RIA Novosti for personal use only]
A JUBILEE WEEK FOR THE RUSSIAN PRESIDENT
By Svetlana BABAYEVA

This week, or, to be more precise, this week and half of 
the next, will be a time of several jubilees for President 
Vladimir Putin. This is not connected either with his birthday 
or other family holidays, which are two months away yet. The 
issue at hand is political dates. It will be one year on August 
9 since Putin was nominated the acting Prime Minister; one year 
on August 16 since his endorsement as the full-fledged Premier 
and 100 days on August 14 since he was elected Russia's new 
President.

It is a year since the appearance on the Russian political 
scene of a practically unknown new personality, Vladimir Putin.
No one knows, practically does not understand and is not 
persuaded by any explanations how it could have happened that 
eventually Putin, and not the then favorite Yevgeny Pimakov 
supported by Yuri Luzhkov, the runner-up at that stage of the 
race, has eventually become Russia's new President. The 
resignation of Sergei Stepashin (who for many months before it 
had been regarded as the presidential successor) and the 
appearance of Putin, accompanied by Boris Yeltsin's words that 
he had finally found his successor caused surprise, to say the 
least.
It is worth recalling that Yeltsin made a new reshuffling 
when thousands of bandits from Chechnya were nesting in 
Dagestan and the danger to lose that republic and then the 
Northern Caucasus as a whole was quite real. It was a time when 
regional leaders were at their best, thinking how to take over 
additional economic and political privileges from the ailing 
center. The economy, which revived after the ruble devaluation, 
was again not sure which way to move on: to start running for a 
new agreement with the International Monetary Fund or let 
inflation grow and the ruble fall. (As a matter of fact, none 
of these problems has been really solved yet.) Oligarchs 
hurried up to count their money, trying to figure out whether 
they should "surrender" to Primakov, flee to off-shore zones or 
search for a third way.
Suddenly there was the idea to leave the incumbent President 
for a third term, by artfully and artificially trying to 
inspire people with the feeling of the presence of the 
guarantor in the country. We often heard phrases like "arrived 
in the Kremlin," his handshake is strong" and "works with 
documents". Hearing that "he arrived in the Kremlin," those 
with an interest in things political froze with horror that 
something bad might happen.
Today, a year later, this phrase is only used as a joke. 
The President has become the same accoutrement of everyday life 
in the Kremlin as a morning cup of coffee or a radio weather 
forecast.
So, what do we have? A President who has been elected by 
the majority of people in a low-cost election campaign 
(compared to 1996) and who is in perfect health, judging by his 
hobbies. It is indicative that two-thirds of the electorate are 
still in love with him. It is strange that all political and 
even economic forces of the country feel respect for him. It is 
very pleasant, indeed, that he begins to play a noticeable role 
in the world.
What has the former acting premier and acting president 
has accomplished? In a matter of one year he has turned from an 
ordinary federal bureaucratic official, even if, of a high 
rank, into Personality No. One in the country. To put it in a 
nutshell, he has formed all up. The Duma, which in the past 
three years has been a fickle political gathering, has pulled 
itself together and started working.
Over the past 365 days Putin has perplexed the rest of the 
world. During his premiership he made a number of fact-finding 
voyages, drew certain conclusions from them and started acting:
Britain, Byelorussia, Italy, North Korea, China. Americans are 
irritated. The French say that they look forward to his 
official visit. But he is not in a hurry, as he is offended by 
Paris's non-constructive position on Chechnya. Cuba, the Middle 
East and probably India are next countries on his visiting 
list. It has not taken long for results to become visible. The 
US has signed a document, which almost guarantees that at least 
the present Administration will not begin to deploy the 
national ABM. North Koreans promised to give up their nuclear 
program and stop scaring the world with it. International 
creditors to whom Russians humbly came begging for favors for 
years diplomatically hint that they are ready to sign an 
agreement and give money. The answer is: Thank you but we do 
not need this now.
It is true that we have been over-subtle, so to speak, in 
economics thus far. The results will be clear next spring, the 
first anniversary of the presidential elections. In the 
meantime, it is worth mentioning the tax reform and actions to 
streamline customs. Serious social initiative lies ahead. 
Thanks to austerity measures and a couple of underrated indices 
the budget has received money. But there is a good pragmatic 
estimation: if the hard times begin, it will be possible to pay 
pensions on time.
One year and one hundred days are not large periods of 
time, even in the context of the President's term in office. 
However, there is no denying the fact that the entire political 
configuration has drastically changed over the past year. Putin 
probably has another 365 and 100 days to adjust and oil this 
new configuration so that 146 million ordinary Russians start 
feeling its results. In what way? Very simply: so that they 
could work, live, have babies, get civilized legal services, 
receive wages, trust banks and walk in the streets without 
fear. What an easy and what difficult task for a "man from 
special services" who has been elected by popular vote and who 
is Russia's new and so untypical President.

*******


#11
Date: Mon, 7 Aug 2000 
From: John Ryan <jaquesryan@yahoo.com>
Subject: Re: Albert Weeks and NMD


David, your forum is probably not the best place to
debate the merits of the proposed national missile
defense, and yet the comment by Albert Weeks that "the
combined threats of punishment and denial" amount to a
better defense than Cold War-tested mutual assured
destruction leaves me hankering for a fuller
explanation of the merits of abandoning a policy that
has prevented nuclear attack for 55 years.


The threat of punishment is clear. That of denial
isn't.


Albert Weeks says NMD may make nuclear missiles too
expensive to be worth the effort. That argument is
hard to defend when each NMD test -- the many failures
and the few successes -- costs $100 million, quite a
bit more than a cheap North Korean rocket.


But accept for the sake of argument that tens of
billions of dollars spent on NMD would deter potential
missile-throwers. That would just shift the focus. The
putative enemy would then build cheap suitcase, truck
or cargo ship bombs (imagine a dirty nuke exploding
off the coast of Manhattan). Don't forget Russia's
loss of bomb-miniaturization technology.


*******