April 12, 2000    
This Date's Issues: 4453• 4454 • 

Johnson's Russia List
#4454
12 August 2000
davidjohnson@erols.com


[Note from David Johnson:
1. AP: Moscow Blast Death Toll Reaches 11.
2. BBC MONITORING: MOSCOW BOMB LINKED TO SHOPPING CENTRE 
EXPLOSION - TV QUOTES PAPER.
3. BBC MONITORING: RUSSIAN MISSILE TROOPS TO STAY UNTIL 2006 
AT LEAST - AGENCY. 
4. The Times (UK) editorial: KREMLIN WARS. Disputes over nuclear 
forces have split Russia's military.
5. Moscow Times: Andrei Zolotov Jr., Church To Tackle Thorniest 
Questions.
6. Stanislav Menshikov: ECONOMIC UPTURN BOUND TO CONTINUE.
But Natural Monopoly Policies Present Dangers.
7. Alvin Rabushka: How Big are Russia's Foreign Exchange 
Reserves?
8. BBC MONITORING: NO OWNERSHIP CHANGE AT MEDIA MOST, SAYS NTV 
DIRECTOR.
9. Moskovskie novosti/www.kompromat.ru: Sanobar Shermatova,
The Secret War Between Russian Intelligence Agencies. In Chechnya, 
Russian Operatives Are Vying for Control Over Warlords.
10. Moscow Times: Robert Coalson, MEDIA WATCH: Developing 
'Transparency' 
11. BBC MONITORING: PUTIN-GORBACHEV MEETING MAY SIGNAL LATTER'S 
RE-EMERGENCE - RUSSIAN NEWSPAPER.
12. DAILY YOMIURI (Japan): Alexander Tsypko, OLIGARCH ON RUSSIAN 
ENDANGERED LIST.
13. The Electric Telegraph (UK): Marcus Warren, Last Tsar to be 
made a saint.]

*******


#1
Moscow Blast Death Toll Reaches 11
August 12, 2000


MOSCOW (AP) - Three more people have died from wounds suffered in a bomb 
blast that tore through a crowded underground passageway in Moscow, raising 
the death toll to 11, hospital officials said Saturday.


The bomb detonated during the evening rush hour Tuesday in a passage packed 
with kiosks selling everything from videos to clothes. Seven people died at 
the scene and more than 90 were wounded.


The three latest deaths were a man and a woman who died Saturday and a woman 
who suffered burns over 55 percent of her body and died Friday night.


Police reported no progress Saturday in finding the bombers, though official 
suspicion still centered on militants from Russia's breakaway republic of 
Chechnya, where federal forces are fighting rebels. In a Saturday meeting 
with top officials, President Vladimir Putin urged security forces to do more 
to find the culprits.


Authorities were searching for three suspects who witnesses saw fleeing the 
scene moments before the bomb exploded. In the days since, police have been 
frisking men and checking documents on city streets.


Chechen rebels also were blamed for apartment building explosions last 
September that killed about 300 people. Those blasts still haunt many 
Russians, and many feared the explosion Tuesday might have been the start of 
a new wave of violence.


Rebel leaders deny they were responsible for any of the attacks, and police 
said they also were considering whether gangsters could have been behind the 
blast.


Relatives and friends gathered for burials of seven of the dead on Friday. 
Another funeral was scheduled for Saturday.


*******


#2
BBC MONITORING
MOSCOW BOMB LINKED TO SHOPPING CENTRE EXPLOSION - TV QUOTES PAPER
Source: Russia TV, Moscow, in Russian 1000 gmt 12 Aug 00 


The team of investigators looking into the terrorist act in Pushkin Square
is considering a number of theories, and parallels are also being drawn
with last year's blast on Manezhnaya Ploshchad [Manezh Square] in Moscow.
Certain details coincide. Here is a report from Natalya Krapivina. 


[Correspondent] There are still three main theories about the blast in
Pushkin Square - a terrorist act by Chechen fighters, a criminal redivision
of property and a crime with a domestic motive. Citing experts, today's
`Kommersant' newspaper draws attention to the fact that, in terms of the
type of device used and its manner of construction, the 8th August
explosion was identical to last year's blast at the Okhotnyy Ryad shopping
centre [on Manezh Square]: an uncased explosive device filled with hexogen,
a home-made detonator and electronic clock serving as timer. In neither
case did the criminals fill the bomb with shrapnel fragments. That role was
performed by glass shop windows. 


But in the investigation into the Okhotnyy Ryad explosion, the Chechen
connection was only a secondary theory. The main theory was that it had
been part of a battle for control of the shopping complex among criminal
gangs. This time, the operational investigation group has also been headed
by an economic crimes expert, Moscow Prosecutor's Office investigator
Vladimir Idkin. That means that the investigation is seriously considering
the possibility that the terrorist act on Pushkin Square was the latest
stage in the battle for control over the network of trading points in the
capital. 


The Moscow authorities themselves do not share this point of view, and
insist on the Chechen connection. 


[Moscow mayor Yuriy Luzhkov] An identikit picture has already been put
together, and, to judge by the appearance of this person, everyone can
doubtless reach their own conclusions, and these conclusions are, it seems,
absolutely unequivocal as to where the trail originates, and who the most
dangerous people from the point of view of subversive terrorist acts are... 


*******


#3
BBC MONITORING
RUSSIAN MISSILE TROOPS TO STAY UNTIL 2006 AT LEAST - AGENCY
12-Aug-2000 


Russia's Strategic Missile Troops (SMT) will remain an independent part of
the armed forces until 2006, the Russian news agency Interfax reported on
Saturday, quoting unidentified Moscow sources. 


The decision was taken at Friday's meeting of the Security Council. 


The possibility of changing the status of the troops will be reconsidered
after that year, the sources said. 


The Missile Space Defence Troops, which are currently a branch of the SMT,
will be put under the command of the air force within the next two years,
they added. 


The sources said that the meeting attached "great significance" to the
development of conventional forces, such as the non-nuclear components of
the navy and air force, and the Ground and Airborne Troops. 


They said the meeting decided to redistribute funding within the Defence
Ministry, with a "balance" being struck between the strategic nuclear
forces and conventional forces, a shift away from the "priority financing"
that the SMT received in 1998-99. 


The ministry was also granted an extra 2 billion roubles (more than 72m
dollars) for the current year, they added. 


********


#4
The Times (UK)
12 August 2000
Editorial
KREMLIN WARS
Disputes over nuclear forces have split Russia's military
President Putin is said to relish difficult choices. But yesterday he was 
faced with one of the most intractable of Russia's many debates: the 
longstanding dispute between his Defence Minister, Igor Sergeyev, and Anatoli 
Kvashnin, Chief of the General Staff, over Russia's strategic nuclear 
deterrent. At issue is whether Moscow can still afford an independent 
strategic missile force and new SS25 and SS27 intercontinental ballistic 
missiles, or whether the force should be drastically reduced and the money 
saved used to reform and re-equip the demoralised and underfunded 
conventional forces. At stake is Russia's world status as a nuclear power and 
its ability to fight a local war. 


Russia has no money to maintain its present military structure. Merely to 
shore up the overstretched army would need 3 per cent of the national budget; 
at most Russia now spends only 2 per cent on defence. In the past three years 
up to 80 per cent of military spending has gone on commissioning 20 to 30 new 
ICBMs a year, leaving little for conventional weapons, aircraft, 
communications or even helmets, boots and flak jackets. The result has been a 
lamentable failure to equip the troops sent to Chechnya: last March a 
100-strong paratrooper company was ambushed and killed by rebels because the 
troops lacked proper fighting clothes and because neither helicopters nor 
fixed-wing aircraft could operate at night or in fog. 


The debate has been embittered by personal antagonism. Marshal Sergeyev is a 
former commander of what was then called the strategic rocket force; he sides 
with the Foreign Ministry in insisting that the nuclear arsenal remain 
Russia's first line of defence. He sees the ICBMs as the only guarantee that 
Moscow's views will be taken seriously in the West. But General Kvashnin 
knows that his army is crumbling beneath his command. He has already lost 
2,500 troops in Chechnya, a total Western analysts say would have been halved 
had the men had proper body armour. Troops are demoralised, badly housed, 
badly fed and underpaid: in some areas the army virtually has to fend for 
itself, even selling equipment to buy food. 


Last year Marshal Sergeyev tried to outflank the strong lobby backing General 
Kvashnin by arguing that former President Yeltsin should consolidate all 
Russian nuclear forces, including missiles, submarines and bombers, in one 
service, and appointing his own protégé as their head. General Kvashnin has 
responded by urging Mr Putin - thought to be closer to his viewpoint - to cut 
the strategic nuclear force by 75 per cent from 6,000 warheads to 1,500. An 
incensed Marshal Sergeyev publicly denounced this "crime against Russia" and 
an embarrassed Mr Putin told both men to stop quarrelling in public. 


Mr Putin has already put off a decision and may yet attempt a compromise 
through his influential National Security Council. That would be wrong. The 
Russian Army desperately needs reform. Numbers need to fall from the already 
diminished 1.2 million to 900,000 at most, with eventual provision for an 
all-professional army. Pay, discipline, morale and equipment must be 
improved. The army must have enough weapons to operate in Chechnya and still 
keep a strategic reserve. And if Russia is to play any useful international 
peacekeeping role, it must be able to muster properly trained and equipped 
forces. Marshal Sergeyev imagines that Russia can win American nuclear 
respect and a war in Chechnya; at present it is losing both. Mr Putin should 
remove him and his outdated military doctrine. 


*******


#5
Moscow Times
August 12, 2000 
Church To Tackle Thorniest Questions 
By Andrei Zolotov Jr.
Staff Writer


Bishops of the Russian Orthodox Church will meet in Moscow this Sunday for an 
ambitious and far-reaching weeklong discussion on a host of morally thorny 
issues, many of which have never been officially considered by the church f 
from sainthood to genetic engineering to homosexuality to even sports and the 
mass media. 


The Council of Bishops, the church's second-highest ranking body, will meet 
in the newly reconstructed Cathedral of Christ the Savior as part of 
celebrations of 2000 years since the birth of Christ. Those celebrations will 
continue through next Saturday, when the cathedral will be consecrated. 


The council has been asked by the Holy Synod f the church's permanent 
12-member ruling body f to rule on the canonization of an unprecedented 
several hundred modern-day saints who died at the hands of Soviet power, 
including Tsar Nicholas II and his family. 


The bishops have also been asked to discuss and to vote upon two major 
documents: The church's first-ever "social doctrine" and a concept for 
relations with non-Orthodox churches. 


Both documents have been prepared by narrow groups of experts and remain 
secret f no doubt from the controversial nature of the subject matter and the 
hierarchy's desire not to expose them to critics before the vote. 


But the decisions expected to be taken by the Council of Bishops will address 
some of the most controversial debates within the church over the past decade 
and are likely to contribute substantially to church policies for years to 
come. 


"Of course, one can avoid speaking on all difficult issues," said 
Metropolitan Kirill of Smolensk and Kaliningrad, in an interview published 
this week in the NG-Religii newspaper. "But only our enemies would have liked 
that f as a confirmation of their accusations that the Orthodox Church is 
unable to have a dialogue with the modern man on issues which concern him." 


Metropolitan Kirill, who heads the church's department of external relations, 
was in charge of the commission that drafted the social doctrine. He said his 
group had been working on it since 1994, and that it represented six years of 
internal debate and disagreement. 


The doctrine addresses many issues that have never been officially considered 
by the Orthodox Church, either in Russia or abroad: genetic engineering, 
contraception, organ transplantation, transsexualism, homosexuality, 
reproductive technologies and attitudes toward public education, mass media 
and sports. 


The doctrine also deals with attitudes toward private property and the social 
role of the church. 


Exactly what it advocates remains a closely guarded secret. 


But in his interview, Metropolitan Kirill suggested that the church, in the 
face of its strong monarchist tradition, will declare once again that it 
"does not tie itself to any state or public regime, nor to any political 
force." 


At the same time, it will refuse to endorse the principle of "freedom of 
conscience" f Metropolitan Kirill said that to do so formally would be to 
accept "the spiritual degradation of society, mass apostasy and de facto 
indifference to the cause of the church" f even while tolerating and 
recognizing its usefulness in practice. 


The other major document the Council of Bishops is to vote upon is a 
statement of the church's approach to other religions. The 20-page document, 
which has been approved already by the Holy Synod, seeks to regulate some of 
the angrier debates of the 1990s. 


"The subject of inter-Christian relations is used by various groups within 
the church as a bugaboo in partisan wars," said Hieromonk Hilarion Alfeyev, 
the Moscow Patriarchate's senior official in charge of relations with 
non-Orthodox churches, in an interview last week. 


"In particular, it is used to criticize the top leadership of the Russian 
Orthodox Church, which is well-known to have taken part in ecumenical 
activities for many years." 


The subject of church-to-church relations is also exploited by breakaway 
groups, such as the Russian Orthodox Church Abroad or Greek Old-Calendarists, 
to undermine people's trust in the church, said Alfeyev. 


In response, Alfeyev said, the church has created "a clear document which 
will outline the theological basis of the Russian Orthodox Church's attitude 
towards heterodoxy fwhich will raise the questions of why we need and if we 
need a dialogue with non-Orthodox confessions, what form this dialogue should 
take, and so on." 


The document is expected to specify that the Orthodox Church will not deal 
with "sects" but will have various forms of dialogue with the Roman Catholic 
Church, the Oriental Orthodox churches and Protestant churches. 


At first, the Moscow Patriarchate had planned to mark the important year of 
2000 by convening the church's top body, the Local Council f that includes 
not only bishops but elected members of clergy and laity. Contrary to the 
church's own bylaws, the Local Council has not been called since Patriarch 
Alexy II was elected in 1990. 


Instead, citing a lack of funds, the Synod decided to convene only the 
bishops. Critics have suggested the hierarchy fears it would not be able to 
control the Local Council f but even so, the bishops could also present a 
challenge to the top leadership during the discussions. The last gathering of 
the Council of Bishops took place in 1997. 


After next week's votes are over and the Cathedral of Christ the Savior has 
been consecrated, hundreds of Soviet-era saints f known as the New Martyrs of 
Russia f will be formally proclaimed at a church service next Sunday. 


The canonization of such saints has been an ongoing process. But this year's 
act will be unprecedented for the sheer number of people who will be sainted. 


Canonization of the imperial family was a particularly controversial issue 
because of its political connotation and because of the variety of opinions 
about the role of Nicholas in history. 


But while many Russians already recognize the family as saints, the Synod 
carefully selected a formula for their canonization to finesse much of the 
politics f ruling that they were saintly only for the way in which they did 
not rebel against their Bolshevik captivity and accepted their deaths with 
Christian humility. 


Given multiple divisions within the Russian Orthodox Church following the 
death of Patriarch Tikhon in 1925, canonization of bishops and priests from 
the era of persecution in the 1920s and 1930s was also an uneasy question: 
There was always the danger of canonizing a breakaway clergyman (there is an 
Orthodox formula that "the sin of schism is not washed away even with the 
blood of martyrdom"). 


The commission on canonizations that has carried out widespread research f 
including in the archives of the former KGB f eventually found its criterion: 
New saints must have been faithful in their day to Patriarch Tikhon's 
immediate successor, Metropolitan Pyotr Polyansky; but it is permissible for 
them to have turned away from Polyanksy's successor, Metropolitan Sergy 
Stragorodsky, who declared loyalty to the Bolshevik regime in 1927 and in 
1943 became the first Soviet-era patriarch. 


******


#6
From: "stanislav menshikov" <menschivok@globalxs.nl>
Subject: ECONOMIC UPTURN BOUND TO CONTINUE
But Natural Monopoly Policies Present Danger
Date: Fri, 11 Aug 2000 


"MOSCOW TRIBUNE", 11 August 2000
ECONOMIC UPTURN BOUND TO CONTINUE
But Natural Monopoly Policies Present Dangers
By Stanislav Menshikov


Once in a while, one hears panicky statements about a new economic crisis
pending in the next few months. Most of these "bad news stories" emanate
from writers who like to see skeletons in every cupboard. Even if the news
is good or moderate they somehow manage to make it look terrible. 
Consider, for instance, the panic caused by the surge of inflation in June
to 2.6 per cent. Mr. Putin himself commented on the resulting dangers
blaming the threatening figure on excessive money supply. As it turned out,
there was no extra money in consumers' pockets chasing scarce goods. The
surge in prices was due mainly to more costly electricity, gas, and public
transportation -- all government-controlled natural monopolies ­ and also
to steep hikes in excise taxes decreed by the authorities. With these
culprits temporarily out of the way, inflation dipped to 1.8 per cent in
July and was heading even lower in early August. If this trend continues,
overall consumer price inflation for the year 2000 will come up to 20 per
cent, a substantial improvement over last year's 36.5 per cent and within
the projected target range of 18 to 20 per cent.


Another panic was caused by excellent statistics showing currency reserves
approaching $23 billion, a level not seen since 1997. Instead of rejoicing,
the "bad news" experts (from IMF included) expressed concern about the
resulting "avalanche" of new roubles allegedly printed to replace incoming
dollars. But these people seemed to forget that a currency is more stable
when foreign currency reserves increase and that a revalued rouble is a
strong anti-inflation factor. It took a couple of weeks for the IMF people
to realise their mistake and to officially express their "pleasant
surprise" at the performance of the Russian economy. 


Indeed, judging by half-year results, Russia is one of the fastest growing
economies in the world. In that period its GDP grew by 7.3 per cent,
industrial production by 10 per cent and capital investment by 14.2 per
cent. The latter development is particularly encouraging. Investment had
been stagnant for too long and was threatening to strangle growth soon. One
view is that Russia's growth will lose steam without substantial foreign
investment. Current figures show that the outlook for domestic investment
is improving and that foreign capital may not be that crucial after all.
Close to zero real interest rates are also bound to revive bank credits to
the working-capital-hungry industry. If that happens, foreign capital will
follow.


But can this upsurge survive? The government now thinks it can. Its GDP
forecast for the year is 5.5 per cent, higher than the previous estimate of
4 per cent and much better than the 1999 growth figure of 3.2 per cent. A
slightly slower pace is anticipated for 2001. Apart from the improved
investment outlook this optimism is supported by two other factors ­ rising
incomes and remaining competitive power. Average real wages were 32 per
cent higher in mid-summer than a year ago, and pensions have been raised
for the first time in more than three years. This explains continuing
strong consumer demand. And in spite of its revaluation in recent weeks the
rouble is still much lower against the dollar than the rise in domestic
prices would indicate. Meaning that domestically produced goods retain
their margin of competitive price advantage versus imports. The consumer
who has turned to Russian-made goods in recent times is not yet prepared to
make another U-turn towards imports just yet.


However, this optimism could be destroyed by ill-timed reforms and tax
policies. Recent rises in prices for electricity, gas and public
transportation are indications of what could become a disaster for the
economy. For reasons unknown the government is putting priority on
reforming the natural monopolies in a way that threatens to spiral up their
prices beyond what the economy can sustain. Gazprom is set on bringing
domestic prices of gas closer to the international level under the pretext
that it is losing money inside the country. Yet the company is awash with
excess money stashed away abroad through less than legal schemes. RAO UES
is switching off electricity across the country creating artificial
shortages of energy, undermining industrial production and laying the
foundation for a new surge in prices. But for the Kremlin Messrs. Viakhirev
and Chubais remain sacred cows ­ untouchable for political reasons. Even
the railway ministry is on the verge of "commercialising", i.e. becoming
another price-maximising monopoly. In this Mr. Aksyonenko is, strangely
enough, being supported by Mr. Putin. In addition, the government insists
on further raising excise taxes as if, in a growing economy, there is real
danger of not collecting enough revenues. 


With such policies economic growth will eventually come to a standstill. It
stands to reason that reforming natural monopolies and raising excise taxes
should come AFTER, not before self sustained growth in consumption and
investment becomes a certainty. This, however, has not yet happened.
Therefore maintaining growth should be the government's FIRST priority
rather than ill-timed reforms and tax hikes.


******


#7
Date: Fri, 11 Aug 2000 
From: Alvin Rabushka <rabushka@hoover.stanford.edu>
Subject: How Big are Russia's Foreign Exchange Reserves?


Dear Mr. Johnson,


Would you kindly inform your subscribers that we posted a new research 
note, entitled "How Big are Russia's Foreign Exchange Reserves?", on our 
web site:http://www.russiaeconomy.org/
The note can be found at:


http://www.russiaeconomy.org/comments/081000.html


Many thanks.
Alvin Rabushka, Hoover Institution, Stanford University


*******
#8
BBC MONITORING 
NO OWNERSHIP CHANGE AT MEDIA MOST, SAYS NTV DIRECTOR


Moscow: 11th August (Interfax) - General Director of the NTV television
channel Yevgeny Kiselyov has said that the Media Most holding and NTV
broadcasting company still have the same owner; "there has been no change
of owner." 


"Believe me, [Media Most owner] Vladimir Gusinsky will agree to sell his
property only at gun point," he added in an interview with Interfax. 


"The editors-in-chief of NTV and other media united in Media Most and all
leading journalists in them are not at all indifferent about who owns the
media for which they work," Kiselyov said. 


"I worked for the government-owned media for years like many of my
colleagues did, and I don't believe any wishful talk that government-owned
media in Russia can be independent," he said. 


"There have been no changes in the editorial policy of the television
company, we are working the way we did," Kiselyov said. "Our editorial
policy amounts to one thing - to inform our viewers about everything that
happens in this country and the world to the utmost," he said. 


******


#9
August 8, 2000
Moskovskie novosti / www.kompromat.ru
Sanobar Shermatova
The Secret War Between Russian Intelligence Agencies
In Chechnya, Russian Operatives Are Vying for Control Over Warlords
[translation for personal use only]


Among Chechens, there is a popular joke: For every square meter in Chechnya,
there are 3.5 tanks, ten intelligence operatives and one Chechen. In spare
time, everybody in Chechnya is fond of pontificating about who is employed
by which intelligence service. Recently, these conversations have been
focused on widely known Chechens, such as brothers Akhmadov from Urus-Martan
and Arbi Barayev from Alkhan-Kala. There is a long trail of allegations
behind these people who are suspect of being involved in high-profile
kidnappings of Russian and foreign journalists and in the brutal murder of
four engineers from Britain and New Zealand. In our investigation published
in No. 12-13 of this year, these Chechens were named godfathers of the slave
market. According to locals, until recently both Akhmadov brothers and
Barayev were living in their own houses and traveled without problems across
the republic in their personal vehicles. Nor have they been included in the
lists of people wanted by the authorities "for participation in illegal
armed groups" (lists which include, among others, Aslan Maskhadov and
Movladi Udugov).


The explanation is simple: the slave traders have procured themselves with
documents identifying them as Russian intelligence operatives, which is
tantamount to immunity. This fact may have remained secret, were it not for
the scandal that flared up two months ago. Then, some officers of the
General Staff of the Russian Army exposed the FSB by supplying Moscow with
evidence of the Akhmadov brothers' posession of IDs issued to FSB
associates. But even after this, the Akhmadovs were left intact, and the
blame was laid upon local FSB employees: the only result of the scandal was
the firing of Yunus Magomadov, the FSB Directorate commissioner in charge of
the Urus-Martan district.


It appears that the military intelligence was not satisfied. A few days ago,
a Moscow newspaper ran an article revealing some curious details from the
life of Akhmadovs as well as Arbi Barayev. This information taken together
leads the reader to the conclusion that the patrons of the Chechen slave
traders occupy powerful offices in Moscow.


The article containing this information referred to the military
intelligence of the General Staff as a source, which by itself is highly
unusual. The Chief Intelligence Directorate, or GRU, is a reclusive agency
which is not prone to issuing comments or leaking information. Therefore,
revelations by the military intelligence about slave traders protected by
high-powered networks may be seen as an extreme manifestation of an outburst
of an inter-agency conflict.


In this specific case, the causes of their rivalry are seemingly on the
surface. The special assignment units of GRU (spetsnaz) are busy chasing
most prominent guerilla warlords. In the process of planning their
operations, the GRU people find themselves confronted with certain "taboos".
As explained by knowledgeable people, military intelligence runs into
trouble every time it tries to capture a Chechen who happens to be in the
service of another Russian agency.


Meanwhile, some recent mysterious developments involving Arbi Barayev can be
explained only by his cooperation with federal authorities. Thus, in
Chechnya many people know the background of hostilities between Barayev and
Hamzat Gelayev, a guerilla captain. In late January, Gelayev's detachments
were withdrawing with grave losses to the forests in southern Chechnya. The
guerillas were dying from wounds and hunger. At that moment, Barayev
contacted Gelayev telling him that he had sent buses to evacuate the wounded
to the villages where they would be provided with aid. Gelayev believed this
to be true; he led his regiment out of the woods and was caught in a trap.
Instead of Barayev's buses, he found federal forces who immediately opened
fire. Nevertheless, Gelayev's troops eventually managed to retreat to the
woods, via his native village of Komsomolskoye (the village defense from the
federals by Gelayev's troops continued until the end of March).


In the wake of these events, Gelayev launched his own chase of Arbi Barayev.
Two months ago, a real estate in Alkhan-Kala owned by Barayev was blown up.
In June, there have been skirmishes between Gelayev and Barayev troops in a
Grozny suburb, and in late July, they clashed yet again, near
Shalazhi village. As a result, according to federal authorities, 44
guerillas were slain.


It is hard to predict how the GRU-FSB rivalry over the godfather of the
slave market will play out. In some of the similar occurrences, the object
of rivalry ended up being eliminated. Thus, the mysterious murder of Abu
Movsayev, one of the most prominent Chechen field commanders, has often been
explained by the GRU-FSB conflict. This warlord, aged 38, had been at the
helm of the Chechen intelligence agencies and had a grim reputation. The
following details have been collected in conversations with locals. This
May, Movsayev secretly came and stayed overnight several times with his
relatives in Shali. One of the local officials informed the local FSB
commissioner of these visits. The latter made no moves, but later, when the
GRU spetsnaz tried to capture Movsayev, FSB came out against it. The scandal
reverberated in Moscow, where the decision was eventually taken to proceed
with the capturing of Movsayev. Yet on the eve of the operation, Movsayev
was killed. As some of the Chechens suspect, he was eliminated so as not to
become prey to a rival agency.


Incidentally, Movsayev could have been of interest to each of the agencies
not for the sake of his standing among Chechen guerillas. He also was
involved in a convoluted incident which occurred in Grozny in December last
year. Then, a Turkish journalist named Sedat Aral videotaped an
interrogation of Sr.Lieut.Aleksey Galkin (or Galtin) who had been captured
by Chechens. Galkin stated that he was a GRU associate and, according to his
information, the Moscow and Volgodonsk explosions were carried out by FSB
and GRU. The article about this was published on January 6 by The
Independent. The newspaper also provided a comment by a Defense Ministry
official saying that the captured officer may have been under influence of
very special interrogation procedures. One of the participants of this
interrogation was Abu Movsayev. It is clear that both FSB and GRU had an
interest in getting him under control.


All these intricacies of intelligence ventures in Chechnya increasingly
overshadow the goal of the year-old "counter-terrorist operation", which was
supposedly to eliminate banditry. Whatever the motivations of intelligence
services might be, the individuals who are the living symbols of most
horrendous crimes are out in the streets.


******


#10
Moscow Times
August 11, 2000 
MEDIA WATCH: Developing 'Transparency' 
By Robert Coalson 


The other day, a Western reporter was talking to me about Kremlin efforts to 
take over the nonstate television network NTV, and he asked me, "What do you 
think the West will do in the face of [President Vladimir] Putin's latest 
crackdown?" 


"Not much," I answered. "The West is generally more interested in short-term 
issues like nuclear security, combating terrorism and a secure investment 
climate than in really building democracy and an open society." 


The reporter reacted as if I had said something particularly stupid. "Surely 
a nonstate media is necessary for a secure investment climate?" 


You would think so, but one rarely sees evidence that Western businesses or 
economic-development agencies really feel this way. A good example on the 
local level is the automobile factory opened last fall by the Ford Motor Co. 
in the town of Vsevolozhsk, outside St. Petersburg. Some readers may recall 
that I wrote last summer about how the mayor of this town had waged a 
relentless campaign against the only independent newspaper there, Nevskaya 
Zarya. Using the usual tactics of intimidating printers, distributors, 
advertisers and the editor herself, the mayor managed to kill off this 
inconvenient paper only a few months before he himself was arrested on 
corruption charges. Meanwhile, Ford was proceeding with a $150 million 
investment in the town. 


The neat combination of local corruption, the death of the nonstate press and 
foreign investment in this one little town seemed a perfect illustration of 
what is wrong with the Russian media system and how the West is ignoring this 
serious problem. When Ford began advertising for employees using the slogan, 
"We care about our environment and community," I wrote to the company to 
explain the history of Nevskaya Zarya and urged them to pay attention to this 
problem in this community. Ford didn't even give me the courtesy of a polite 
response, much less a constructive one. 


Now we have a similarly clear example on the national level. 


For the last six months or so, we have all been holding our breath and 
waiting to find out whether the government, under the guise of the 
natural-gas monopoly Gazprom, would succeed in taking over NTV. Just in the 
last week, the Kremlin has issued statements saying that the takeover was 
virtually complete, and there have even been reports that Putin's staff had 
offered the position of director of the new company to various figures. Boris 
Timoshenko, an expert with the Glasnost Defense Foundation, told The Russia 
Journal last week, "If this comes through, it will reinforce state control 
over TV news coverage ţ ." 


That is why I was shocked by a European Bank for Reconstruction and 
Development announcement Tuesday saying the bank had approved a $250 million 
loan to Gazprom. Undoubtedly, this generous credit will free up considerable 
resources to enable the Kremlin and Gazprom to swallow up NTV. And just last 
week, the new EBRD president, Jean Lemierre, wrote in this paper that "a 
strong investment climate reflects a commitment to transparency." 


While the EBRD was handing the Kremlin the resources it needs to reestablish 
a Soviet-style monopoly over national television, Boris Berezovsky f who had 
previously said he would sell his shares in ORT to the Kremlin f announced he 
would not sell if Gazprom took over NTV. He piously declared that he could 
not allow a state television monopoly to undermine democracy here. Thus, we 
have a situation where the EBRD is financing the destruction of open society 
in Russia, while Berezovsky is able to pose as a principled liberal democrat 
and a hero of the free press. And I thought I'd seen it all. 


But imagine a different scenario. Imagine that the EBRD decided to postpone 
its $250 million loan for, say, six months to wait and see how strong 
Gazprom's "commitment to transparency" is. Imagine that the money is invested 
at a conservative 8 percent during this period, generating a tidy $10 million 
in interest. That money is roughly equal to three times USAID's annual 
media-assistance budget for all of Russia. Among other things, we could bring 
back a nonstate press to the people of Vsevolozhsk. 


And if it Gazprom does not share the EBRD's "commitment to transparency," 
maybe the bank would decide to bring the whole $250 million to bear on this 
problem. Imagine that. 


Robert Coalson is a program director for the National Press Institute. The 
views expressed here are not necessarily those of NPI. 


*******


#11
BBC MONITORING
PUTIN-GORBACHEV MEETING MAY SIGNAL LATTER'S RE-EMERGENCE - RUSSIAN NEWSPAPER
Source: 'Kommersant', Moscow, in Russian 11 Aug 00 


Vladimir Putin's meeting with Mikhail Gorbachev on 10th August is a
"symbolic gesture" which demonstrates that "times have changed" and that
"nothing is left of the old regime", according to a Russian newspaper. The
meeting is also Gorbachev's "last chance of regaining any political
importance", but this depends on whether he will continue "to say things
that square with the Kremlin's general line", the newspaper added. The
following is the text of a report published in `Kommersant' on 11th August: 


Yesterday the first and last president of the USSR was for the first time
received in the Kremlin by the president of Russia. The meeting was
fruitful: Vladimir Putin explained that "our country is in essence social
democratic", while Mikhail Gorbachev decided to support "the course aimed
at ensuring there is more order and responsibility in the country",
although he had previously thought otherwise. 


Until recently Gorbachev had been fatally unlucky in post-Soviet politics.
The former president simply could not find his place in them. All his
attempts to take a direct or indirect part in elections - both presidential
and parliamentary - brought him and his movement around 1 per cent of the
vote. Not even Boris Yeltsin's well-known hostility towards him was any
help: the electorate, nostalgic for union times, would follow anyone but
Gorbachev. 


All of a sudden fortune, in the person of the second Russian president,
smiled on him. First Mikhail Sergeyevich [Gorbachev] was invited to Putin's
inauguration (Boris Yeltsin personally deleted him from the guest list for
a similar ceremony in 1996). 


After this Vladimir Putin personally called Gorbachev on 25th May, when the
USSR president had received the registration certificate of the United
Social Democratic Party from the Justice Ministry. He congratulated him and
asked how things were going. And a call from the president is nice even for
a former president, of course. Admittedly, at that time Gorbachev was
severe in his view of Yeltsin's successor. For instance, he described
Putin's proposed reform of state power as "contradictory" (but also
"necessary"). 


Now the last barrier between Gorbachev and the Kremlin has been swept away.
Of course, there is nothing out of the ordinary in two presidents deciding
to talk - unless it is Yeltsin's successor and Gorbachev. The invitation of
the latter to the Kremlin is a symbolic gesture. Putin thereby demonstrated
that times have changed. Nothing is left of the old regime, not even deadly
grudges. 


For Gorbachev, this is certainly his last chance of regaining any political
importance. And he appreciated Putin's gesture. Yesterday there were no
contradictions in assessments of the Russian leadership's activities:
Gorbachev agreed that "regionalism has reached a scale verging on
disintegration of the country". And he "is not withdrawing his position and
the position of Russian social democracy in support of Vladimir Putin's
course". And Putin, according to the former president, also agreed that
"Russia is in essence a social democratic country; it does not want to turn
the clock back". 


Putin naturally wants only to move forward. And Gorbachev may still come in
handy for him. For instance, yesterday he very opportunely remarked to
Putin that the State Council "must be made real but compact, we should not
allow a mishmash". Only the previous day the Federation Council had called
on the president to include all leaders of the regions in the new body,
which certainly does not square with the idea of compactness and with the
presidential administration's ideas about the State Council. So, if
Gorbachev continues to say things that square with the Kremlin's general
line, meetings between the two presidents will probably become regular, to
their mutual satisfaction. 


*******


#12
THE YOMIURI SHIMBUN/DAILY YOMIURI
August 12, 2000
OLIGARCH ON RUSSIAN ENDANGERED LIST
Alexander Tsypko, Special to The Daily Yomiuri 
(Tsypko is a Moscow-based political analyst.) 


Russian President Vladimir Putin's meeting with leading Russian businessmen
at the end of July showed that they were no longer oligarchs in the style
of former Russian President Boris Yeltsin. 


Russia no longer has magnates who can fire prime ministers and appoint
Federal Security Service directors or prosecutors general as media mogul
Boris Berezovsky did recently. Of course, some oligarchic businessmen still
exist, but they no longer have any control over the Kremlin or ability to
sway the president's decisions. 


In addition, Putin did not invite to the meeting men who controlled the
country during Yeltsin's rule. Business tycoons Vladimir Gussinsky, Roman
Abramovich and Berezovsky were absent from the Kremlin for different
reasons, but their absence was symbolic. 


The former oligarchs, except for Gussinsky, still control huge empires, but
the end of the oligarchy is evidenced by the decline of "shadow power" and
"shadow politics." Reliable sources say that even Abramovich and Alexander
Mamut, who just two months ago were dubbed almighty, are now behaving very
modestly. 


The influence over Putin by the deputy head of the president's
administration, Vladislav Surkov, is much greater than that of the Yeltsin
"family members." Yeltsin's daughter Tatiana Dyachenko, former
administration head Valentin Yumashev and their friends Abramovich and
Mamut are appearing in Kremlin corridors less frequently. 


Berezovsky, the creator of the Yeltsin Family, has cut all personal ties
with Putin and very publicly moved to opposition. He was the first oligarch
to realize their power was coming to an end, and decided to change his
image from puppet master to liberal oligarch and protector of human rights
and freedom. He even quit his parliament seat, possibly to leave the way
clear should he need to request political asylum in France. With the image
of a martyr for freedom, Berezovsky has more chance of avoiding arrest and
gaining the support of the West. Berezovsky followed the lead of Gussinsky,
former owner of the Media Most. 


The oligarchy has ceased to exist simply because Putin, unlike Yeltsin, has
started to exercise the authority provided to the president by the
Constitution. In a short time, Putin managed to weigh the balance of power
in his favor. Putin has solved the problem of oligarchs very easily by
changing his power base. Yeltsin relied on financial capital. Putin relies
on mainstays--security, armed forces and public prosecutors. Putin does not
need the oligarchs because he controls parliament and even managed to
maneuver the upper house into dismissing itself. 


It seems Putin agreed to meet Russian business leaders so that he could
show them who is boss. That is why his voice was firm as he explained their
position to them. The list of meeting participants also shows that he does
not consider fuel-energy complex and banking tycoons to be sacred cows, and
that he prefers to deal with industrial leaders. 


Most of the former oligarchs yielded. Their fate is similar to that of
regional governors who relinquished authority as upper house members under
pressure from Putin. During their last meeting with Putin the former
oligarchs were like naughty schoolchildren who relished the opportunity to
meet the president. 


At the same time, the former oligarchs want to keep their property. That is
the main point of the new political situation in Russia. Wealthy business
owners, mainly in the fuel-energy complex and extractive industry, are
afraid that Putin will review the results of the voucher privatization, the
free distribution of state property, and deprive them of their property
rights. 


Putin has suspended privatization of the military-industrial complex
enterprises and might also renationalize the main source of budget funds,
the fuel industry. That possibility is tormenting the former oligarchs. 


At the meeting with the business leaders, Putin actually denied planning a
"privatization amnesty." On one hand he said he had no political will to
review privatization in general, but he also said he would not stop
investigation of economic crimes committed during the acquirement of former
state property. 


The last statement represented a real threat to the economic might of the
former oligarchs. At the meeting, Putin advised one participant, Vladimir
Potanin, to pay the state 140 million dollars that he, according the
president, had underpaid in the purchase of the Norilsk metallurgical
plant. The Kremlin decided recently that control of the NTV television
company owned by Gussinsky will soon go to the state-run Gazprom corporation. 


The problem is that the property of former oligarchs is a very sensitive
issue. They know that the law was violated in every case of former state
property privatization. That is why they demand a "zero variant" or amnesty
for wrongdoings the investigations might turn up. This explains Putin's
very careful handling of the problem and why he has yet to make a final
decision. 


I believe the property conundrum's solution will depend on the liberal
reforms program supported by the president. If attempts to resume reforms
are effective and lead to reanimation of business activity, Putin probably
will agree to an amnesty. He would also enforce a strict tax policy and
demand that the former oligarchs hand over excessive profits to Russia.
Putin has demanded that Sibneft, an oil company run by Abramovich, make its
financial activities transparent. 


However, it is possible that if the reforms fail, all natural resources
monopolies will be returned to state control. If the state coffers are
empty and the threat of public unrest is real, Putin will have no choice
but to take control of natural resources from former oligarchs and return
it to the state. Putin will not attempt to nationalize small and
medium-size business, nor will he bother those that have made their fortune
in the industrial sector. But he may nationalize enterprises that profit
from national wealth--oil, natural gas and mineral resources. 


Public pressure may force such a move. Russians were always against
privatization of natural resources monopolies. They want the resources to
remain state property. Putin is relying on the traditionalist element of
the population, who are very hostile toward the former oligarchs and their
property. That element has supported prosecutors office moves to
investigate Berezovsky. 


People of the mainstay ministries who firmly back Putin are also foes of
the former oligarchs. An officer on a meager salary can see no
justification for the fortunes made through privatization of national
wealth. Putin himself, as an ascetic person, is irritated by the
flamboyance of the oligarchs, who ostentatiously demonstrate their wealth.
Putin wants businessmen to be more modest and not to enrage the public.
Putin's remark that the former oligarchs are like fishermen eager to catch
a fat fish in muddy water is significant. 


A possible energy crisis, for which the oligarchs could be held
responsible, might be another reason to renationalize enterprises
exploiting natural resources. 


But if further reforms are successful and the results of privatization are
totally confirmed, the former oligarchs will be unable to turn their wealth
into political power. 


Putin does need oligarchs to act as mediators between the powerful, the
social elite and the public. His regime that relies on mainstays leaves no
room for political machinations of Berezovsky. There is also no way for
oligarchs to become the core of a political opposition group. Regional
governors have already refused to enter political battles. Those
dissatisfied with their living conditions will never follow oligarchs,
because the poor never trust the rich. That, incidentally, is why Putin was
able to solve the oligarchs dilemma. 


*******


#13
The Electric Telegraph (UK)
12 August 2000
[for personal use only]
Last Tsar to be made a saint
By Marcus Warren
AN unworldly man who was blessed with unyielding religious faith, Tsar 
Nicholas II faced no ordeal more testing than that of the last days before 
his execution by a Bolshevik firing squad in this bleak Urals city.
Confined to their stuffy prison, their belongings pilfered by the guards and 
their daughters butts of the soldiers' coarse humour, Nicholas and his wife, 
Alexandra, put up with house arrest in Yekaterinburg without complaint. 


Trusting as ever, the Tsar appeared to believe his captors when the family 
was ordered down into the cellar, supposedly for their own safety one night 
in July 1918.


His last words after the death sentence was read out but before the 
executioners opened fire were those of disbelief: "What? What?" Now his 
courage in those last days is to be recognised by the Orthodox Church, which 
is expected to make the Romanovs saints at the opening of its Council of 
Bishops tomorrow.


Members of the commission examining whether to canonise the Romanovs stress 
that the Tsar qualifies for sainthood not because of his time on the throne. 
He was a weak ruler who could not rise to the challenge of ruling a country 
at a time of great and violent change. Rather he is to be acclaimed for his 
conduct after abdicating and his martyr's death in the Urals.


Some Orthodox believers oppose the imperial family's canonisation for fear 
that it will strengthen "fundamentalists" who want the church to lobby for 
restoring the monarchy. In the Soviet era, communist ideology demonised him 
as "Bloody Nicholas". Now most Russians see him as a disastrous sovereign but 
a decent man, but it is not a subject that is exercising many outside the 
church.


The virtues displayed by the Romanovs in captivity as described by a member 
of the canonisation commission sound like a checklist of traits dooming the 
turbulent Russia the Tsar ruled as autocrat to revolution and chaos. 
Archpriest Georgy Mitrofanov singled out the Romanov's qualities for special 
praise earlier this summer: "Hope in God's help, unwillingness to resist as 
mere mortals and readiness to forgive."


Canonisation will be the latest twist in the imperial family's posthumous 
fate. Their deaths were ordered by the Bolshevik leadership in Moscow, but 
the Soviet Union denied the murder of the Empress and the five children for 
years. The area outside the Ipatiev House, the Romanovs' prison and place of 
execution, was later renamed the Square of Popular Vengeance.


On the Kremlin's orders, the building was demolished by the local Communist 
Party boss, Boris Yeltsin, in 1977. The foundations of a huge church, to be 
known as the "Church on the Blood" and finished by 2002, now fill the pit 
where the cellar once stood, but a small group of amateur archaeologists are 
sifting the site of the garden for relics.


So far the volunteers have found two white china plates with the Tsar's 
monogram to add to a tin toy train believed to have belonged to his 
haemophiliac son and heir, Alexei, discovered earlier. Alexei Smolin, a 
history student supervising the dig, said: "I have been working here for 
three months but I feel worn out already. This place has a real aura about 
it."


Now a construction site surrounded by a high concrete fence, the spot where 
the Ipatiev house stood is a place of pilgrimage with a wooden chapel and 
several memorial crosses dedicated to the Romanovs. Valentina, who sells 
souvenirs inside the tiny chapel, said: "I am convinced they should be made 
saints. I often pray to them for help with my family or health and God 
answers my prayers."


But even the design of the church being built where the Ipatiev House once 
stood has provoked criticism for its gigantic scale, a huge contrast with 
original plans to build a modest chapel on the site. When finished, the 
church will boast a large crypt with a lifesize replica of the cellar where 
the Romanovs were killed, a cinema showing films about their life and a 
refectory. The complex may also include a hotel for pilgrims.


*******