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Johnson's Russia List
10 August 2000
[Note from David Johnson:
1. Reuters: Russia hunts for Moscow blast suspects.
2. Moscow Times: Ana Uzelac, Outpouring of Grief Grips Capital.
3. BBC MONITORING: PRESS DRAWS LESSONS FROM MOSCOW BLAST.
4. gazeta.ru: Explosives Investigator Provides Preliminary
5. The Times (UK) editorial: BLOODY ANNIVERSARY. A bomb aimed at
the Putin presidency.
6. The Daily Telegraph (UK) editorial: Krysha.
7. Reuters: Russia's Putin receives Gorbachev in Kremlin.
8. Reuters: Kremlin to set future course of Russian military.
9. The Times (UK): Giles Whittell, Kasyanov accused of $500,000
10. Segodnya/www.kompromat.ru: Georgii Osipov and Igor Saskov,
The Skeletons in the Prime Minister's Coffer. Why Did Kasyanov Offer
$500k to ex-Duma Deputy Gitin.
11. Rossiiskaya Gazeta: Roy Medvedev, VLADIMIR PUTIN, NEW ACCENTS
IN RUSSIA'S FOREIGN POLICY.
12. Moscow Times: Gregory Feifer, Berezovsky Starts Opposition
13. BBC MONITORING: CHECHEN WEB SITE SPECULATES MOSCOW BOMB MAY BE
PRETEXT TO DEPOSE CITY'S MAYOR.]
Russia hunts for Moscow blast suspects
By Peter Graff
MOSCOW, Aug 10 (Reuters) - A nationwide Russian manhunt for the authors of a
deadly Moscow bomb blast was in full swing on Thursday, but prosecutors made
clear that two men arrested in the wake of the bombing had never been
A victim died of severe burns in hospital, bringing the death toll to eight.
Officials said others were still in critical condition. More than 90 people
Newspapers ran four computer sketches of men police say were to blame for the
blast, which tore through an underpass at the height of Tuesday's evening
A chorus of Russian officials blamed the attacks on Chechen separatists, but
investigators and President Vladimir Putin have said they are not yet sure
whether the strike was linked to the 10-month-old Chechen war, or an
unrelated gangland-style crime.
Russian criminals often use explosives to settle scores, although such
attacks rarely harm passers-by.
Chechnya's pro-independence president, Aslan Maskhadov, has denied any blame.
The FSB security police contributed to early suspicions of a link to Chechnya
on Wednesday by announcing that two men, one a Chechen and one a native of a
neighbouring region, had been detained.
``We do not exclude they were both behind the terrorist act,'' Vladimir
Pronichev, first deputy head of the FSB, had said in disclosing the arrests.
But prosecutors made clear on Thursday that they had not linked the men, or
any others, to the attack.
``People are arrested every day for all kinds of reasons. Nobody has been
arrested in the case at hand,'' a Moscow city prosecutor spokesman told
An FSB spokesman said he could not comment on the fate of the two men who had
been detained, but NTV television said they had been released.
Russian media said witnesses saw two men leave a package near a shop stall
before the blast in a tunnel leading from a crowded underground railway
Officials have said that at least two of the suspects in police sketches have
the dark features typical of the Caucasus, the mountainous southern region
that includes Chechnya.
FEARS OF RACIAL HARASSMENT
Police have heightened security throughout the Russian capital, performing
spot checks of documents of those with darker complexions.
Chechens and other people from the region say they fear a campaign of racial
harassment, and liberals warned against an ethnic witchhunt.
``It is wrong to take one part of the population, yes and an ethnic minority
to boot, hold them as permanent suspects and subject them to psychological
pressure,'' wrote the liberal weekly Obshchaya Gazyeta.
``Responsible authorities in any emergency situation would emphasise national
Putin also cautioned against making an ethnic group a scapegoat, but vowed to
press on with the war in Chechnya.
Russians have seen constant images of violence since a series of bomb blasts
last September and 10 months of war in Chechnya that followed. But Tuesday's
blast in the crowded centre of the capital has touched a raw nerve.
Shockingly graphic footage of the wounded and dead has been played throughout
the day on Russian television.
The site of the blast has become a makeshift shrine, with passers-by laying
bouquets and gazing on, stunned. Putin himself made a brief appearance late
on Wednesday to lay flowers inside the smoke-blackened tunnel.
Russian television showed Putin, in a black jacket and turtleneck, hugging a
man whose face was streaked with tears.
August 10, 2000
Outpouring of Grief Grips Capital
By Ana Uzelac
Ilma was fast asleep on Wednesday afternoon, breathing deeply, her
honey-blond hair poking out from under the white sheets she was bundled up
in. She's 3 years old and was recovering from minor surgery a day after she
was hit in the chest by flying debris in the explosion on Pushkin Square.
It took her mother, Tanya Yufereva, more then five hellish hours Tuesday to
find out that her husband and daughter f unusually late for a toy-shopping
trip to Detsky Mir f were hurt, but alive.
"The first thing she told me when I found them here was: 'Mama, they tried to
kill me and Papa, but we survived,'" Yufereva recalled, leaning on the doors
of the post-op room in Moscow's Children's Hospital No. 9. "And then she kept
on asking: Is it over now?"
It was a question many Muscovites were asking themselves Wednesday as the
city was slowly picking up the pieces after the blast that ripped through one
of its busiest underground passages.
Seven people f five women and two men f were killed. Of the 93 people hurt,
61 were hospitalized, several of them in serious condition, the city health
The passageway on Pushkin Square f once a vibrant, colorful place lined with
kiosks and humming with the sounds of people trading f was open Wednesday but
was still covered with soot and dust.
The bomb crater in a blackened corner of the passageway was transformed into
a makeshift shrine, where those who lost friends gathered to mourn. Bouquets
of flowers placed along the wall were adorned with icons, and a row of
candles was burning in front of them.
A group of young men stood silently in front of the shrine holding plastic
cups filled with vodka in trembling hands, tears streaming down their tired,
unshaven faces. After a minute of silence they drank to the bottom and parted
without a word.
Soon their place was taken by a young, skinny girl who sat down and rocked,
crying, her face buried in her hands.
People who worked in the underground kiosks were among those who suffered the
most in the explosion.
A crowd of onlookers kept forming a circle around the mourners, oblivious to
a nervous policeman asking them to move on. Others joined a constant stream
of people passing by under the blackened ceiling lined with burned electrical
wiring, struggling with the bitter smell that still lingered.
"It's scary," said Vasily, 40. He came to have a look, to pay his respects.
"I used to pass through here literally every day. I could have been one of
Four of the seven victims of the blast were identified by Wednesday
afternoon, the city health committee said. Later in the evening, RTR
television reported the number had risen to five.
The doctors at Children's Hospital No. 9 refused to say whether they thought
the mother of Svetlana Leonova could be among them. The 14-year-old girl was
brought to them Tuesday evening with a broken leg and badly burned palms.
"She was trying to put out the fire that caught on her mother's clothes with
her bare hands," said Leonid Pinkov, head of the burns department, who was on
duty when the girl arrived Tuesday. "But then the smoke enveloped her and she
ran out. Her father is still trying to find out what happened to his wife."
Back at the passageway, the kiosk vendors who survived Tuesday's explosion
came to have a look at what was left of their workplaces. The kiosks farthest
from the site of the blast were almost untouched, but those deeper in the
passage were turned into piles of crooked metal and shattered glass.
The badly damaged kiosks were cordoned off by the police, but the vendors
were let through to look through the debris and try to save whatever was left
of their possessions.
But next to the very site of the explosion there was nothing to rummage
through anymore. "I used to sell clothes here," said Lena, 40, pointing to
the completely barren corner. "There's not even a tile left," she said
through tears. "Where am I supposed to find a new job now, at my age?"
Moved by reports of the blast, Muscovites formed long lines Wednesday outside
the city's blood centers to offer their help.
Nadezhda Krutikova said the news of the explosion hit her hard. "My first
thought was, there are people hurt. Second was, oh, no, not all over again,"
she recalled while sitting in the crowded waiting room of the blood
transfusion center in northwest Moscow.
Just like dozens of people around her, she had been waiting all morning to
give blood for the wounded, a thing she's never done before in her 49 years.
"It was a split-second decision," she said. "They asked over the TV for blood
donors, so I responded. As simple as that."
For Vladimir, a 39-year-old Afghan veteran, blood donation is a routine
thing. "Back there we did direct transfusions, vein to vein," he said. "I
didn't give it a thought, I just went out to do it."
Most of the people at the center were driven there from the Sklifosovsky
emergency clinic, where the lines of blood donors on Wednesday were so long
that the staff couldn't cope with all of them.
"I'm deeply moved by the spiritual generosity of our people," Vladimir
Shevchuk, deputy head doctor at Sklifosovsky, said in remarks reported by
Interfax. "I take my hat off to them."
Those who want to give blood can do so at the city blood transfusion center
at 15 Ulitsa Polikarpova in northwest Moscow.
PRESS DRAWS LESSONS FROM MOSCOW BLAST
August 10, 2000
With the police no nearer to solving the subway bombing, Russian newspapers
are looking at what the blast says about Vladimir Putin's presidency.
The popular Komsomolskaya Pravda chooses to let people speak for
themselves, with one university student voicing doubts about having an
ex-KGB man in power.
"It was either a showdown between some criminals or it could be something
to do with the special services, although I am very reluctant to believe
that," he said.
An engineer from the southern town of Volgodonsk, itself the target of a
massive bomb last year, sought to put the blast into perspective.
"Moscow only cares about Moscow. A small explosion, only seven dead, and
they broadcast special news bulletins every 15 minutes," he said.
"What about the dozens of people being killed in Chechnya all the time?
Perhaps now Moscow will finally realize what the war really means?"
The government daily Rossiyskaya Gazeta suggests the problem is purely one
of lax security.
"People make monthly contributions to the upkeep of law-enforcement
agencies. We are paying for our safety," it writes.
"But as soon as there is a blast, we are told to be vigilant. In other
words, it is up to the drowning man to save himself."
The liberal Segodnya, never an enthusiast where Putin is concerned, agrees
that the public is losing faith in the ability of the state to protect it.
"The victims of the explosion include the top political authorities," it
"According to an opinion poll, at least 56 per cent of people in Russia now
think that the special services are unable to protect them against
The result is "shock waves of fear throughout Russia".
Putin in the clear
But for another of Russia's heavyweight papers, Nezavisimaya Gazeta, Putin
can, perversely, take some comfort from the explosion.
The paper argues that it lifts any suspicion that the new president had
anything to do with the apartment-block bombs last year that resulted in
strong public support for a new war against Chechnya.
"The media and some politicians in the West openly expressed the view that
the special services were behind the terrorist acts in Russia," it writes.
According to this theory, a "small, victorious war" was the perfect way to
launch the then Prime Minister Putin on the path to the presidency.
But "the explosion in Pushkin Square has dispelled all speculation in this
respect", the paper writes.
Paradoxically, the paper adds that "in similar situations the public's
support for military action increases sharply" and "one can imagine what
the public's reaction will be after Tuesday's events".
August 10, 2000
Explosives Investigator Provides Preliminary Analysis
Adolf Mishuyev, an explosives expert involved in the investigation into
Tuesday’s blast in central Moscow, has told Gazeta.Ru about the facts so
far established about the device used by the terrorists.
Adolf Mishuyev, the head of the Moscow Government’s Science-Experimental
Council for Security and Protection of the Population, has told Gazeta.Ru
that the device used in Tuesday’s blast in the pedestrian subway under
Pushkin Square and Tverskaya Street was, in fact, almost identical to those
used in apartment bombings that shook Russia last year. In all the bombings
ammonium nitrate was used. The explosive hexogen, to which the Russian
media has dedicated so much coverage over the past year since the apartment
bombings which killed almost three hundred and which the KGB allegedly
attempted to plant in an apartment block in an ‘exercise’ in the town of
Ryazan, was used only as a detonator and constituted no more than 1,2% of
the total weight of explosives in the device.
Ammonium nitrate, Mishuyev said is presently the most popular explosive
among Russian terrorists. It is used 12 times more often than any other
explosive, including TNT. Ammonium Nitrate comes in powder form and has
approximately the same power as TNT, mostly used by the military. Ammonium
nitrate is a fertilizer, it is easy to acquire and anybody with knowledge
of explosives can make a bomb from it, thus tracing the perpetrator is very
hard. Finding the culprit of such bombings is further complicated by the
fact that trained explosives experts do not specialize in certain
explosives. Everything depends on what additional materials the terrorists
According to Mishuyev, it is quite natural that a fire broke out
immediately after the blast. When substances like TNT are detonated, the
pressure in the epicenter of the blast rises up to 240 atmospheric measures
and a single spark from damaged electrical devices is enough to start a
large-scale fire. The kiosks in the passage were made of plastic and wood,
both flammable materials. In addition, perfume sold in several kiosks
caught fire spreading flammable liquid all around.
Mishuyev said that the investigators have still not been able to calculate
the exact power of the blast. “We need time for the investigation and we
need to talk to the survivors. When we have accumulated the facts about the
wounds suffered by the victims and how far they were from the epicentre of
the blast, only then can we judge how much ammonium nitrate the criminals
planted in the subway,” Mishuyev said. “At present one can only say that
the device contained the equivalent of 400 grams to 1.5 kilos of TNT.”
However, he added that the specialists had already managed to establish
that the explosive substance in the device amounted to no less than 800
Victoria Malutina, staff writer
The Times (UK)
10 August 2000
A bomb aimed at the Putin presidency
For Russians who queued yesterday to give blood for the dozens gravely
injured by the Pushkin Square bomb, or who paused briefly in the underpass to
leave flowers for the dead, time rolled back a year. That was when their
untried new Prime Minister, Vladimir Putin, reacted to a still mysterious
spate of bombings that killed 300 Muscovites by sending the army back to
Chechnya. With the rebellion subdued by last April, the "military phase" of
that brutal but broadly popular operation was declared over. Mr Putin's
"success" was no small factor in his presidential victory.
Yet Chechnya is anything but at peace; the Chechen separatist "bandits", far
from being annihilated as President Putin had sworn they would be, still
stage hit-and-run attacks. But continuing violence in the devastated rebel
republic, far away, has far less impact on opinion than a terrorist attack in
the heart of the Russian capital. British people, who know the horrors of
urban terrorist bombings, can understand something of the trauma added to the
already harsh lives of ordinary Russians.
Mr Putin faces his first serious challenge. Most Russians supported this war
and tolerated its heavy casualties because they shared his belief that the
integrity of the Russian State was at stake. Mr Putin urged people yesterday
not to jump to conclusions, saying that it was "wrong to brand a whole
people". He was right to say so - and it contrasts with his own rush to
judgment last year - but it may also be his hope that Chechens were not
responsible. For if they were, that would underline the failure of the
Russian military, even at the cost of well over 10,000 dead and wounded, to
end the "halt the process of disintegration of the State". It can be no
coincidence that this happened exactly a year after Boris Yeltsin plucked Mr
Putin to stardom.
This all too tragically literal blast from the past blights an anniversary
that could otherwise have been an occasion for both Russians and their
President to take stock with some degree of renewed hope and restored pride.
Whatever anxieties Mr Putin's attacks on the media arouse, and whatever
doubts justifiably exist about his respect for democratic liberties or
understanding of the real meaning of the rule of law, he has put a decisive
end to the years of Kremlin drift. He appears to know where he is going, and
- helped by a pliant but also skilfully manipulated Duma - how to get what he
Politically, he has reasserted central control over the regions by curbing
the huge and often corruptly abused powers of governors and local
administrators; in Moscow, he has taken on the oligarchs who, having built
monopolistic fortunes with the spoils of the command economy, had come to
treat the levers of political power as their toys. And the six economic
guidelines he set out last month point towards a liberalised economy, both
better ordered and less subject to intervention.
He is committed to protect property rights, lower taxes, tariffs and
subsidies, reform banking and government bureaucracy and overhaul welfare to
target those most in need. In Russia, each pledge is a tall order; but the
task is under way. The first tax reform, creating a flat income tax rate of
13 per cent with 1 per cent earmarked for social welfare, is a signal triumph
against powerful bureaucrats and local politicians who grew fat under the
contorted old structure by striking covert tax deals in exchange for
"commission". When corporate tax is reformed this autumn, companies will at
last have some degree of fiscal security. The idea is that, if taxes are both
fair and low, people will pay, revenues will go up and capital flight, put at
$150 billion over the past decade, will slow. That outflow is already down a
third, stemmed not least by healthy 5 per cent growth, low inflation and a
If Mr Putin's decidedly authoritarian streak is used to bring more order and
prosperity, most Russians would think that a good bargain. One bomb does not
destroy the hopes aroused this past year. But in Russia's brittle state, it
lays the icy finger of mortality on Mr Putin's shoulder.
The Daily Telegraph (UK)
10 August 2000
LIKE all good "Chekists" - the name by which alumni of the KGB refer to
themselves - President Putin of Russia certainly knows how to turn adversity
to maximum advantage. His response to the terrible bombings in Moscow might
well have come out of the style manual of his hero, Yuri Andropov, although
not in the way that the cynics might suppose.
Many of them will suspect that either Mr Putin or his allies in the Russian
security services planted the bomb, much as they were suspected of doing this
time last year. They are thought to have done this with the intention of
setting up the despised Chechens, thus whipping up public support for a
renewed offensive in the Caucasus.
There was a compelling motive for such action then, but not this time round.
Whether staged or otherwise, a Chechen outrage after a supposedly decisive
military campaign can only be profoundly embarrassing to Mr Putin. He might
garner backing for renewed tough action - some expect it this autumn - but it
would potentially come at the price of his reputation for icy competence.
His intriguing remarks to the effect that whole ethnic or racial groups must
not be stigmatised or blamed for it suggests someone who wants to play the
issue down, not to hype it up. Nor do the Chechens have an interest in such
actions: their strategy is to demoralise the Russian army in Chechnya itself.
Certainly, this politically correct terminology stands in stark contrast to
the dismissive language that Mr Putin has employed in the past to describe
Chechens. So why the change? For in exculpating the Chechens, Mr Putin is
able to build up his overseas image as fair and liberal. This, in turn,
bolsters his claim that terrorism is an international problem and that he
needs more support to fight it.
So far so good, many will say. But the rub lies in Mr Putin's definition of
greater "support". He defines it as entailing subordination of the law
enforcement and security agencies of the "near abroad" - nations of the
former Soviet bloc - to the control of the FSB, the most powerful of the
successor organisations to the KGB. This will serve to bring them back into
the Russian orbit of influence.
Increasingly, this atrocity looks like a criminal action, albeit with
strategically embarrassing connotations. The location of the bomb, in an
upmarket part of the city bulging with shops, suggests a mafia turf war. Few
traders there can operate without krysha - literally "umbrella", or
And anyone in that line of business will be savvy enough to make sure to use
Chechens and others from the Caucasus. Chechens may be involved, though not
necessarily because of the conflict there. It is bad news for Mr Putin, but
if anyone can extricate something from it, he surely can.
Russia's Putin receives Gorbachev in Kremlin
MOSCOW, Aug 10 (Reuters) - Former Soviet leader Mikhail Gorbachev returned to
his former Kremlin office for the first time since 1991 on Thursday to meet
its new tenant, Russian President Vladimir Putin.
Television pictures showed the two men sitting across from each other at a
table, engaged in serious discussion.
Gorbachev is feted in the West for his role in bringing about the end of the
Cold War but is viewed with more ambivalence at home where a decade of
turbulent post-Soviet reforms have left many nostalgic for past certainties.
He was never invited to the Kremlin by Putin's predecessor, Boris Yeltsin, a
fierce rival since the 1980s.
Russian news agencies quoted Gorbachev as saying he and Putin had discussed a
new advisory State Council, which the Kremlin is setting up to give a voice
to regional bosses after Putin passed laws stripping them of parliament
He was also quoted as reiterating his belief that Putin posed no threat to
Itar-Tass news agency quoted Gorbachev as denying Putin ``suffers from
``I observed no such thing,'' he said.
Kremlin to set future course of Russian military
By Martin Nesirky
MOSCOW, Aug 10 (Reuters) - President Vladimir Putin and his Security Council
are expected to meet on Friday to decide the future of Russia's armed forces
and there is likely to be tough talk about how to reform the country's
Few would disagree the 1.2-million-strong armed forces are in poor shape --
low on cash, short of modern equipment and demoralised despite fighting
phrases from their military-minded president and continued domestic support
for the Chechnya war.
But there are sharp differences between Defence Minister Igor Sergeyev and
the chief of General Staff, General Anatoly Kvashnin, in particular about
what to do with Russia's strategic nuclear deterrent -- a formidable if
ageing triad of missiles based on land, in submarines and aboard aircraft.
``Nobody, even those who are particularly well informed, wants to predict
with any certainty the outcome of this fateful meeting,'' wrote the daily
newspaper Vremya Novostei.
``The range of views is impressive -- from threatening words about everyone
being sacked to more neutral talk about a compromise with everyone getting
Military analysts said last week Putin may be tempted to use differences
between Kvashnin and Sergeyev as a reason to ditch both and name a civilian
defence minister. But it is by no means certain Putin will make that move on
Friday, if at all.
He will have his work cut out at the Security Council as it is. At stake is
the future of the armed forces over the next 15 years. The Security Council
is an advisory body but has become increasingly influential under Putin's
There have been rumours the meeting could be postponed -- it has already been
shifted once -- but the session seems to be firmly marked in Putin's schedule
this time, according to Kremlin sources. That may indicate a compromise has
CRUNCH TIME FOR RUSSIA'S NUCLEAR MISSILES
Interfax news agency said Sergeyev and Kvashnin would present proposals on
how they see the short- and long-term future. Strategic Rocket Forces
commander Vladimir Yakovlev, air force chief Anatoly Kornukov and navy chief
Vladimir Kuroyedov are also expected to make their pitches.
``The Russian army leaders unanimously assess the current state of the
Russian armed forces as far below the critical mark,'' Interfax said. But it
noted the ministry and General Staff still differ on what to do about it.
Kvashnin favours cutting the rocket forces, merging them with the air force
and funnelling the savings to conventional forces which have been seen to be
dangerously exposed in the Chechnya conflict.
Sergeyev, a former missile commander, sees the rocket forces as a vital
deterrent umbrella and a guarantee that Russia retains a seat at the top
table of international powers. He does not rule out some cuts but favours
putting the nuclear triad under one strategic command but not under air force
But with only so much money around, something has to give.
To get a feel for the problem, consider the defence budget.
On Wednesday, U.S. President Bill Clinton signed a $287.5 billion defence
spending bill for the fiscal year starting October 1 -- that is some $30
billion bigger than Russia's entire gross domestic product. The Russian
defence budget is $4.5 billion on paper but far less in practice.
Interfax said one of the main aims of the planned reorganisation, whatever
shape it takes, is to cut spending on maintenance and spend more on procuring
hardware and weapons.
Russia has been struggling to reform its armed forces since the mid-1990s but
economic and political crises as well as two wars in Chechnya have made the
process at best intermittent.
The Times (UK)
8 August 2000
[for personal use only]
Kasyanov accused of $500,000 bribe attempt
FROM GILES WHITTELL IN MOSCOW
A RESPECTED former member of the Duma has alleged that associates of Mikhail
Kasyanov, the Prime Minister, offered him $500,000 (£345,000) to halt a study
of Russian government borrowing in the run-up to the crash of the rouble two
Viktor Gitin, until recently a member of the Duma's finance committee, said
that representatives of Mr Kasyanov, then Deputy Finance Minister, tried to
buy his silence in early 1998 over a decision whether or not to default on
billions of dollars of German loans. Mr Kasyanov chose not to default, and
months later the rouble crashed, helping to trigger the financial crisis.
Mr Gitin was imprisoned in Siberia earlier this year on corruption charges
linked to an allegedly fraudulent savings account. His arrest has been
condemned in an open letter from 365 fellow Duma deputies. Since then, he
says, he has suffered two attempts on his life and two heart attacks.
He was released last week for treatment in a hospital in Moscow, from where
he said: "Kasyanov never threatened me, but people from his entourage came to
offer the bribes to make me stop my work.
"I was too inquisitive. If the documents I collected had been made public Mr
Kasyanov would never have become Prime Minister, but since his appointment no
one has been interested in studying them."
Mr Kasyanov has repeatedly denied any wrongdoing before or during the 1998
crisis. Nevertheless, the dozens of boxes of papers Mr Gitin amassed on a
range of government financial matters during his time on the Duma finance
committee were confiscated at the time of his arrest. Mr Gitin said that the
documents shed light on a number of controversial episodes, including the
privatisation of the Arctic mining giant, Norilsk Nickel, the lucrative
trading by Kremlin insiders of Soviet era rouble loans to Moscow's allies,
and the 1998 crash itself.
His comments will deepen Mr Kasyanov's embarrassment over a decision by
Switzerland last month to reopen an investigation into what happened to $4.8
billion in International Monetary Fund aid released to the Russian Central
Bank days before the rouble collapsed.
The IMF loan was part of a $11.4 billion international package assembled to
support the rouble in the summer of 1998. The Central Bank has admitted that
most of the IMF tranche never reached Russia, being sold off instead to
commercial Russian banks that deposited their dollars in foreign accounts.
August 9, 2000
Segodnya / www.kompromat.ru
Georgii Osipov, Igor Saskov
The Skeletons in the Prime Minister's Coffer
Why Did Kasyanov Offer $500k to ex-Duma Deputy Gitin
[translation for personal use only]
Yesterday, the Times of London ran a sensational article titled "Kasyanov
Allegedly Offered a Bribe of $500,000". In particular, the article claims
that Viktor Gitin, deputy chairman of the budget committee in the previous
Duma (and a member of Yabloko from Krasnoyarsk) had allegedly been offered
money in exchange for abandoning the investigation of the circumstances of
the 1998 financial crisis. Let us remind that Viktor Gitin was arrested in
Moscow on March 24 of this year in relation to charges of embezzlement of
budgetary funds. He was later released from prison but remains under a
The Times publication casts a new light upon the Gitin case: according to
the newspaper, the ex-deputy's archive that was seized during the search
contains a number of materials that would make the present prime minister
Mikhail Kasyanov feel rather uncomfortable. The Segodnya correspondents
contacted VIKTOR GITIN who is currently under treatment in one of the Moscow
Q: Do you posess any evidence of Mikhail Kasyanov's involvement in any of
A: This is the subject for the prosecution authorities to investigate. My
perspective is solely from the point of view of the budgetary process.
In the process of obtaining of the latest pre-crisis IMF loan tranche by
Russia, budgetary legislation was violated. By the summer of 1998, the
government had exhausted its allowance for external borrowing which had been
set by the Duma. It was not by accident that the government then resorted to
a scheme under which the immediate recipient of the funds was not the
government's budgetary account but rather the Central Bank. At the time,
Mikhail Kasyanov, as deputy minister of finance, was directly in charge of
all negotiations and proceedings. Then, the government forwarded a memo to
the administration of the president complaining that the Duma had passed a
bad resolution and asking for an approval of a violation of the program of
external borrowing. The president's legal department prepared the requested
resolution of its own, and on August 2, 1998, if my memory is right, Yeltsin
appended his note of approval. After all this was done, they were able to
conduct their notorious financial operation [that is, the buying of hard
currency at a low exchange rate by several banks who had an advance notice
about the subsequent devaluation of the ruble. - Segodnya].
When all this began to be discussed in public, I tried to explain in the
American Congress, at the hearings on BONY scandal, that the real problem
consisted of the lack of proper legislative regulation of these issues,
which enabled the executive to satisfy itself with the president's sanction
for what happened afterwards. Now, to what extent did this violation lead to
criminal consequences. The available information leads me to believe that
the government was busy solidifying hard currency reserves not of the
national budget but of select commercial banks. Why some of the banks were
favored in the process while the rest were not? This is a subject matter not
for a parliamentary investigation but for the prosecutorial agencies.
Q: If the documents that were confiscated from your archive had been made
public, would it mean that Kasyanov would not become prime minister?
A: He would have got problems. Now, everyone is so much focused upon this
IMF tranche of $4.8 billion, but one also should pay attention to another
operation that was conducted two weeks before the crash of August 17 and was
no less serious. I mean the issuing of Eurobonds for $6.5 billion which were
then swapped for GKOs that were just about to collapse. GKOs were exchanged
for hard currency bonds, and with a 25% discount! Only a narrow circle of
specially authorized financial institutions were allowed to participate in
this operation, and this was done when everyone already understood that
tomorrow GKO will be worth a candy envelope. I spent a year pressuring the
Ministry of Finance to release relevant documents. They replied saying that
MinFin had no money to xerox these documents and no money to translate them
from foreign languages.
At that point, I forwarded a letter to Kasyanov saying: my salary is not
big, but I am prepared to pay for these expenses. We were engaged in this
kind of correspondence for an entire year. At last, I obtained a package of
untranslated documents, with a "confidential" stamp, but not everything I
had been asking for was there. Where are these documents on the $6.5 billion
deal now? They have been confiscated and not given back, even though the
Krasnoyarsk prosecutor office demands their release from the operatives [of
the Interior Ministry], but they don't comply.
Q: Didn't a similar situation take place later, when Kasyanov was identified
as the source of a leak on Russia's obligations to the London Club?
A: True. The smaller operation of $6.5 billion was used as a model for a
scheme that was later employed when dealing with the larger chunk of debt.
Q: Were the IMF loans and the financial market loans the main area for the
potential violations of law?
A: The largest number of violations was with regard to the credits
guaranteed by the government. They require more specific information which
makes it easier to find out certain things. This was also Kasyanov's turf,
before the appointment of Mikhail Zadornov to MinFin (under Zadornov,
Kasyanov was simply denied the right to append MinFin approvals to
document). Hundreds millions dollars of credits went through Kasyanov's
hands. And nowadays there are serious questions about many of these.
Q: So who was it who offered you $500,000, as claimed by London Times?
A: I want to remind you that I am under investigation. Let me just tell you
that these were people from Kasyanov's entourage.
August 8. 2000
[translation from RIA Novosti for personal use only]
VLADIMIR PUTIN, NEW ACCENTS IN RUSSIA'S FOREIGN POLICY
By Roy MEDVEDEV, a historian
In autumn 1999 and then in the first months of this year
Vladimir Putin held many meetings in the White House and
Kremlin with politicians from different countries. However,
these were, as a rule, not summit meetings and not the
elaboration of any new agreements but the study of the
situation in Russia and acquaintance with its new leader was
their aim. This is only natural, as both a change of a
political regime and a change of political generations took
place in Russia.
After Putin officially took the Office of the President of
the Russian Federation he began to play a more active role in
the sphere of foreign policy. In May of this year he had
meetings and conversations with almost all the leaders of the
The Kremlin was preparing for US President Bill Clinton's visit
to Moscow and Putin's big tour of West European nations. At the
same time, work continued on the renewal of Russia's foreign
Russia no longer set forth any global and, especially,
ideological tasks of a superpower. The new concept was a
concept of a multipolar system of international relations,
which objectively reflected the many-faceted character of the
modern world with a diversity of its interests. At the same
time, the position of Russia in this world was determined not
as one of European nations but as a great Eurasian power
responsible for the maintenance of security in the world in all
the areas both at the global and at the regional level.
According to its new foreign policy concept, as a permanent
member of the UN Security Council, which possesses a
considerable potential and resources in all the spheres of life
and maintains intensive relations with the leading countries of
the world, Russia exercises substantial influence on the
formation of a new world order.
Putin, who headed the elaboration of this concept,
emphasized the need for its offensive, not defensive,
translation into life and vigorous activities to protect the
national interests of Russia.
Shortly after his meetings and talks with Clinton in
Moscow, the main subject of which was the new American project
for the deployment of a national ABM system (the project, in
which huge money was already invested but which was not
supported by probably anywhere in the world, besides the US),
President Putin made his first visits to Western Europe - first
to Italy and in a few days to Spain and Germany. Putin met with
the leaders, public personalities and businessmen of these
countries, participated in some cultural events and was
received by the Pope in Vatican.
During these meetings some important initiatives were discussed.
Suffice it to mention the idea of a common European ABM system
as the alternative to the dubious American project. There were
no sensations, but all experts appraised the results of these
visits as good.
The results of economic talks were also quite good. The
countries which Putin visited do not belong to the "nuclear
club," even though they are NATO members. These countries have
serious apprehensions concerning the US plans of a limited
national ABM system but they showed an obvious interest in
Putin's proposal. As professional diplomats said, Putin
launched an attack from the flanks on the American project by
drawing non-nuclear countries into the discussion of the main
problems of European security.
European leaders saw that Putin is a persistent, confident
and competent politician who largely differs from his
predecessor in the style of behavior and the character of
negotiations. There was neither familiarity nor "no tie"
meetings. Putin did not strive to pose either as the reigning
sovereign or as a superman.
He was not arrogant but he did not allow cheap tricks to win
the sympathy of the leaders of other countries. He was true to
the norms of etiquette.
It goes without saying that Western politicians and
experts attentively registered all the details of Putin's style
and character. It is indicative, however, that the Western
press and television, which paid much attention to Putin in
January, March and May, wrote and spoke very little about him
in June, though they could have a closer look at him. His press
conferences and meetings were practically not front-paged by
any newspapers and were not among the main items of electronic
media. Some commentators linked this ostentatious indifference
of the Western mass media to the events in Chechnya or the
"Gusinsky case." But the war in Chechnya began a long time ago.
As for Gusinsky, the West did not pay much attention to it.
Putin calmly took all the comments connected with his
European trip and, as we all became convinced in July, drew the
Participation in the meeting of the Shanghai Group of Five
in Dushanbe was the beginning of the "eastern stage" of his
In his remarks at the meeting, Putin said that Russia
would not only preserve but also increase its military presence
in Tajikistan. The Shanghai Group of Five supported the
position of Beijing on the Taiwan problem and Russia's "just
actions in the Chechen republic." They demonstrated the ability
to shape a new security model, which differs from the alliances
and blocs of the Cold War period. Few could deny the importance
of stability in that region in the general context of stable
international relations. It was decided to rename the Shanghai
Group of Five into the Shanghai Forum. Uzbekistan joined this
Putin began his Far Eastern tour on July 18 with
negotiations in Beijing. Western papers wrote that his Chinese
visit produced no surprises and was conducted in the "active
manner," which is typical of Putin.
As was to be expected the Russian and Chinese leaders not
only signed the joint Beijing Declaration but also made a
special Statement against the US attempts to deploy a "limited"
national ABM system. Russia and China re-affirmed their course
to strategic partnership. This was more than diplomacy. The
Statement made by Russia and China is the demand of these two
nuclear powers, which are permanent members of the UN Security
Council. Taking into consideration that the attitude to the
American plans is also more than lukewarm in Western Europe and
Japan, there is ample ground to say that it was impossible for
the Clinton Administration to ignore the Russian-Chinese
Statement. The Chinese and Russian leaders agreed on
cooperation in several large economic projects, the expansion
of the sales of Russian defense industry products to China and
the growth of trans-border trade.
Very important was the general atmosphere of Putin's
meeting with Jiang Zemin. They demonstrated friendliness, as
well as a good disposition, mutual understanding and respect,
which were absent from Russian-Chinese meetings for the past
Successful meetings in Beijing prepared the success of
Putin's visit to North Korea. The press of different countries
and of various trends called that visit - and with ample ground
at that - a sensation and a breakthrough. Neither the Russian
nor the Soviet leaders have ever visited Pyongyang. The same is
true of the leaders of Western countries. That is why Putin's
visit can be also called a success and a breakthrough for North
Korea, which begins to overcome its complete international
The most important result of the Pyongyang negotiations
was the consent of Korean leader Kim Jong-il, which he
confirmed in a written form, to give up independent nuclear
research if more industrialized nations help his country to
conduct the launching of communications and space research
satellites. The satellites can be launched from the territory
of other countries. Describing his meetings in Pyongyang a day
later, Putin said that Kim Jong-il, whom he invited to visit
Russia, comes across as a well informed modern politician and
that Russia and North Korea can substantially expand the
In the opinion of almost all political commentators and
participants in the three-day summit meeting of the world's
eight most industrialized nations, Putin's participation in the
work of the summit was very successful and important for him
and for the other leaders.
Putin arrived in Okinawa from Blagoveshchensk on July 21
and did not participate in the first working meeting of the
other leaders. However, after dinner he had an hour-long
meeting with President Clinton and told him in detail about his
visits to Beijing and Pyongyang. By and large, Clinton was
pleased. He had forced himself into a corner by his earlier
remarks that the US would make the decision about the national
ABM system in August.
But he was unable to persuade either his allies or his
opponents that the project, which would violate nuclear-missile
stability, was expedient. What is more, the very first tests of
the "star weapon" were unsuccessful and the entire first stage
of the system proved to be too costly and unreliable. Now
Clinton was able to postpone the final decision without "losing
his face." This is what was actually done in the joint
statement on the results of the Putin-Clinton bilateral meeting.
The next day, all the leaders listened with keen attention
and interest to Putin's story about his trips to China and
North Korea. On July 22 the Russian President was in the center
of the summit attention. His proposals were reflected in the
concluding communique - in the sections on arms control and on
the threat of international terrorism.
There is no need to dwell at length on all the results of
this summit, which was full of contacts, statements and
preliminary agreements. Discussed at the Group of Eight summit
were problems of missile-nuclear stability and the threat of
AIDS, the role of information technologies and problems of the
aging of the population, the development of world trade and
ecological problems. There were no conflicts during the summit.
Putin was admitted to this club of the heads of state with
At the concluding press conference in Okinawa Putin did
not conceal that he was satisfied with the results of the
summit, which are of importance for Russia and for him
personally. This is only the beginning, however. A wealth of
work and a host of incredibly difficult tasks lie ahead.
August 10, 2000
Berezovsky Starts Opposition Movement
By Gregory Feifer
A diverse group of intellectuals has joined controversial tycoon Boris
Berezovsky to form a movement of "constructive opposition" to what it calls
the Kremlin's authoritarian tendencies.
In a statement titled "Russia at the Crossroads," published Wednesday on the
front page of newspaper Izvestia, nine signatories f including writer Vasily
Aksyenov, filmmaker Stanislav Govorukhin, former Deputy Kremlin Chief of
Staff Igor Shabdurasulov and economics journalist Otto Latsis f said freedom
of speech, enterprise and thought are under threat.
"The current situation is marked by the weakness of civic institutions, which
are the basis of civil society," the statement said.
Berezovsky said during a news conference Wednesday that his aim was to bring
about an "intellectualization" of power. "Our statement is not a populist
appeal, but one directed at thinking people," he said.
Berezovsky announced his movement as President Vladimir Putin's popularity is
soaring to record levels. One poll put his approval rating at 73 percent last
Those ratings come after a period of feverish activity in which Putin pushed
legislation through parliament dramatically curbing the authority of powerful
regional leaders, even as law enforcement bodies targeted some of the
country's most influential businessmen.
The Kremlin says its aim is to rein in rampant crime and corruption. Critics
say the president is aiming to create an authoritarian regime.
"People are completely without memory," Berezovsky said. "Around 700,000
people came to the funeral of [Soviet dissident] Andrei Sakharov. Ten years
later, only 12 came to a memorial service."
Berezovsky left the specific purpose and future of his movement unclear.
"The actual form of our movement will depend on society's reaction," he said,
adding that given enough support, the movement may form a political party.
A sometime Kremlin strategist, Berezovsky was widely credited with helping
bring President Putin to power. But he has increasingly spoken out against
the president's actions in recent months and said he resigned his post as
State Duma deputy in July to form a movement of opposition.
Analysts said Berezovsky's movement has little chance of attracting much
support. "It's a demonstrative step aimed at publicizing his stance," said
Yury Korgunyuk of the Indem research group. "Berezovsky is one of the few
people who can slap Putin publicly.
"But his name would discredit any movement of which he is part," Korgunyuk
Berezovsky met with several regional leaders last week. Asked why no
governors had signed his statement, Berezovsky said they were afraid.
"The governors want to see the authorities' reaction to make up their minds
how to participate," he said. "I can assure you many of them will
participate, but it's not clear if it will be in an open or secret fashion."
Berezovsky brushed aside his key role in organizing the pro-Kremlin Unity
Party last year, saying the organization was formed solely to help elect
Putin. "The country was under a real threat that [Moscow Mayor Yury]
Luzhkov's and [former Prime Minister Yevgeny] Primakov's Fatherland-All
Russia movement would come to power," he said.
"Unity had a one-time goal, that's why it has no ideology," Berezovsky said.
"But the situation now is cardinally different."
Both Berezovsky and filmmaker Govorukhin, a State Duma deputy and
Fatherland-All Russia member, said the new movement might cooperate with the
Luzhkov-Primakov organization. "The two groups will cross paths and move
forward side-by-side," Govorukhin said.
Berezovsky's media outlets, campaigning on behalf of the Kremlin last year,
smeared Fatherland-All Russia in a bitter war of rhetoric, provoking Luzhkov
to respond that Berezovsky was "Satan."
CHECHEN WEB SITE SPECULATES MOSCOW BOMB MAY BE PRETEXT TO DEPOSE CITY'S MAYOR
Source: Kavkaz-Tsentr web site, in Russian 9 Aug 00
9th August: Chechen sources in Moscow report that 12 people were killed and
59 were wounded as a result of the bomb explosion in an underpass on
Pushkinskaya Ploshchad [Pushin Square]. Our source received this data from
the Sklifosovskiy Institute. At the same time, the Russian mass media,
quoting Russia's Emergencies Ministry, report that seven died and 53 were
[Passage omitted: estimates of size of device.]
The Chechen side has said that it was not involved in the Moscow blast.
However, representatives of the Chechen special services recalled that they
had repeatedly warned that in August-September, the Putin grouping was
planning a series of terrorist acts which would be a little less bloody
than last year's apartment block explosions in Moscow. This time, the
Kremlin regime is trying to use the explosions as a pretext for a purge of
staff in order to consolidate its authority and stoke fear and uncertainty
in the country with the further establishment of a tough and
quasi-democratic authoritarian regime.
The result of this explosion may be a campaign to depose [Moscow Mayor
Yuriy] Luzhkov. A Kavkaz-Tsentr correspondent reports that the command of
the Chechen mojahedin is closely following how the situation develops in