October, 16 1999    
This Date's Issues: 4580 • 4581 • 

Johnson's Russia List
#4581
16 October 2000
davidjohnson@erols.com


[Note from David Johnson:
1. Washington Post: Boris Berezovsky, Our Reverse Revolution.
Under Yeltsin, we 'oligarchs' helped stop Russia from reverting 
to its old, repressive ways.
2. Reuters: CIS states face serious food shortages, FAO says.
3. Vremya Novostei: Timofei Bordachev, FAREWELL TO THE BALKANS.
They Do Not Need Russia There Anymore. 
4. Robert Bruce Ware: Lucas/Lieven JRL 4578.
5. The Guardian (UK): Rory McCarthy, Tajikistan on frontline of 
chaos. Afghan fighting spells serious trouble for frail Central 
Asia.
6. Ben Aris: Dear Mr and Mrs Putin.
7. EXECUTIVE INTELLIGENCE REVIEW: Edward Spannaus, DOJ SUES 
HARVARD OVER RUSSIA USAID SCAM and THE HOAX OF THE COX REPORT.
8. PODROBNOSTI RTR PROGRAM: INTERVIEW WITH NOBEL PRIZE LAUREATE 
IN PHYSICS ZHORES ALFYOROV.
9. Reuters: OSCE says Belarus election does not measure up.]


******


#1
Washington Post
October 16, 2000
Our Reverse Revolution
Under Yeltsin, we 'oligarchs' helped stop Russia from reverting to its old, 
repressive ways.
By Boris Berezovsky
The writer, a Russian industrialist, served as a deputy secretary of the 
National Security Council in Yeltsin administration.


A group of House Republicans in the United States has assailed the Clinton 
administration for supporting Russia's former president, Boris Yeltsin, whom 
they accuse of fostering corruption and allowing undue influence to big 
business during his time in office. Similar views are expressed by some 
reviewers of Yeltsin's memoirs, just published. 


Unfortunately, these people neglect the context of Russian history. As a 
participant in a major business privatization deal of that period--for which 
I have been labeled an "oligarch"--I would like to put what happened in 
Russia in historical perspective.


When the Bolsheviks abolished private property in 1917, they put all 
expropriated wealth under the management of two organizations that were to 
become pillars of Soviet totalitarianism: the Communist Party and the secret 
police (eventually known as the KGB). To accomplish this end, the new 
managers physically eliminated the previous owners--tens of millions of them.


Three quarters of a century later, in just a few years, Boris Yeltsin carried 
out the reverse of the Bolshevik revolution--and he did so bloodlessly and 
efficiently. By 1998, 75 percent of the property had been transferred to 
private hands.


Critics say that privatization was unfair--that the "oligarchs" got major 
assets for a fraction of their real value. To put this claim in context, I 
recall the events of the pivotal year 1996, which began with Communists 
having a majority in the Duma and Yeltsin's popularity slipping below 3 
percent while that of his Communist rival, Gennady Zyuganov, rose to nearly 
30 percent.


It was at that time that Yeltsin and Anatoly Chubais decided to sell out a 
great many state assets quickly so that it would be difficult for the 
Communists to renationalize private property after Zyuganov's expected 
victory in the race for president. This was the background of my decision to 
bid for the oil company Sibneft. For the auction, my partners and I needed at 
least $100 million but had only $60 million on hand. So we invited foreign 
investors--in the United States, Western Europe and Japan--to participate in 
our bid. No one gave us a penny, and George Soros, who always understood 
Russia better than others, told me: "The risk is too high. The Communists 
will take everything back. Russia is slipping into a black hole, Boris. Don't 
be a fool, take your family and get out, before it's too late."


But we did not run away. I found the money in Russia, and we won the auction. 
And we helped Yeltsin defeat Communists at the polls, using privately owned 
TV stations.


A week after the election I got a Western offer for my stake in Sibneft--$1 
billion. Thus, the statement that we paid an unfair price is false--anyone 
who was seriously interested could have participated, but few were prepared 
to take the risk.


As for undue influence, our critics should not forget that a strong civil 
society and the middle class that serve to protect democratic liberties in 
the West do not exist in Russia. What we have are communists--still too 
powerful--and ex-KGB people who hate democracy and dream of regaining lost 
positions. The only counterbalance to them is the new class of capitalists, 
who, under extraordinary circumstances, find it acceptable--indeed, 
necessary--to interfere directly in the political process.


In 1996 this happened twice: during the elections and later when we helped 
purge from the Kremlin a would-be KGB junta. To those who find our methods 
unacceptable, I say: In order to punish a small-time nationalist dictator, 
the United States has justified the destruction--from a safe distance--of the 
infrastructure of a whole country, including its TV stations. Is it not a 
double standard to accuse people of undue political influence for putting 
their and their families' lives on the line to prevent a much harsher 
dictatorship in their own country?


After their defeat in 1996 the Communists and the KGB started a concerted 
smear campaign against the new Russian capitalist class. False accusations of 
corruption, money laundering and links with organized crime became common 
tools in the arsenal of disinformation waged by reemployed practitioners of 
the Cold War KGB. In 1999 they nearly succeeded in impeaching Yeltsin in the 
Duma on false corruption charges.


Today the KGB again has gained prominence in the Kremlin while the influence 
of big business has been reduced to zero. The results are clear: The system 
of democratic checks and balances has been dismantled by President Putin's 
laws. Private owners of independent media are blackmailed by a government 
that is unhappy with news coverage. And fear of authorities is creeping back 
into the hearts and minds of millions of Russians.


There is a real danger of restoration of an authoritarian regime. This time 
it would be nationalist rather than communist, but the underlying goal would 
be the same: for the state bureaucracy to control all power and wealth. And 
again, as in 1996, the only group that dares to stand up for democracy is 
Russian capitalists--the creatures of President Yeltsin.


The next U.S. administration will have to choose sides. I hope it will have 
the wisdom of President Clinton and make the right choice. Otherwise, in the 
21st century the world will have to deal with embittered, fiercely 
nationalist, authoritarian Russia.


******


#2
CIS states face serious food shortages, FAO says
By David Brough


ROME, Oct 16 (Reuters) - Many CIS countries are facing severe food shortages, 
aggravated by political and economic transition, the U.N. world food body 
said on Monday. 


``Less than 10 years after the break-up of the Soviet Union in 1991, 
undernourishment remains a persistent challenge in many of the successor 
countries now part of the Commonwealth of Independent States,'' the Food and 
Agriculture Organisation said in a report released to coincide with the 
U.N.'s World Food Day. 


In nine of the 12 CIS countries, at least five percent of the population was 
undernourished, according to the report entitled ``The state of food 
insecurity in the world 2000.'' 


``In four countries -- Armenia, Azerbaijan, Georgia and Tajikistan -- at 
least 20 percent of the population suffers from undernourishment,'' the 
report said. 


Only one country, Belarus, had a level of undernourishment comparable to 
levels found in the industrialised world (less than 2.5 percent of the 
population). 


FAO CHIEF HIGHLIGHTS FOUR STATES 


FAO director-general Jacques Diouf told Reuters in an interview that he was 
most concerned about four countries. 


``Presently we have a very serious situation mainly in four countries -- 
Armenia, Georgia, Tajikistan and Uzbekistan, which has been seriously hit by 
drought,'' he said. 


``The problem of the CIS countries is a problem first of political 
transition, which in many countries has led to conflicts -- wars with 
neighbouring countries or civil strife in many of those countries,'' he 
added. 


``But you have also the problem of economic transition of these countries 
moving from state-organised systems to a market economy.'' 


Diouf added, ``The move is welcome, but the conditions under which you make 
the move have a serious impact on how you respond to the economic needs of 
the countries.'' 


The FAO report said, ``There has been a breakdown of agricultural production 
and marketing systems, spiralling inflation, temporary bread shortages and, 
in several instances, outright conflict.'' 


Gross domestic product had plummeted along with the purchasing power of large 
numbers of ordinary citizens, it said. 


``In most CIS countries, levels of production are now only a fraction of what 
they were in 1991, and levels of unemployment and underemployment are quite 
high, although often disguised because of work in the informal sector.'' 


FAO is aiding CIS countries to develop farm policies and statistics and data 
collection, Diouf said. 


The Rome-based organisation is also launching its Special Programme for Food 
Security (SPFS) in some CIS states, which shows farmers how to irrigate 
fields and raise production in order to boost incomes. 


``In some countries we are launching the Special Programme for Food Security 
to help them control water, improve crop productivity and diversify into 
small animal production including fisheries and aquaculture,'' Diouf said. 


******


#3
Vremya Novostei
October 16, 2000
[translation from RIA Novosti for personal use only]
FAREWELL TO THE BALKANS
They Do Not Need Russia There Anymore 
By Timofei BORDACHEV, senior researcher, Institute of Europe 
of the Russian Academy of Sciences

This autumn Russia is withdrawing from the Balkans 
completely. Despite Moscow's touching attempts at least to mark 
its presence, it will never again be one of the determining 
factors of local politics for a number of objective and 
subjective reasons.
The fall of Slobodan Milosevic's Yugoslavia really winds 
up a whole period of European history, making the entire 
political space from the Bug to the Atlantic Ocean really 
homogeneous. Its nations are either already drawn into the 
process of European integration or consistently working to 
become drawn into it. In this context, the fate of Yugoslavia 
is in fact predetermined, despite inevitable difficulties of 
the transition period. The prospects of Serbia's and 
Montenegro's integration into the Euro-Atlantic space do not 
depend on the desire of either their people or their political 
elites. The importance of Yugoslavia for the entire Balkan 
region, which is preconditioned by its geographical situation 
and scale, merely forces NATO and the European Union into 
currying favors with the new Belgrade leader.
With such a line-up there is practically no room left for 
Russia.
Furthermore. After the change of regime Yugoslavia stopped 
being a player of European politics and became part of internal 
European politics. That is why Russia, as an outside player 
with regard to so-called Greater Europe, automatically loses 
the possibility to take part in its internal affairs. Under the 
new conditions, the rules of the game for Belgrade will be 
determined in Brussels - the way it is with Poland, the Czech 
republic and other candidates to EU membership. Using the fact 
that Moscow does not understand this, the Belgrade smart alecks 
will undoubtedly try to continue using Russia as a card in 
bargaining with the EU. Under such circumstances, however, it 
will be a hundred times more difficult for Russian diplomats to 
have a serious expression on their faces, which will deprive 
Moscow's presence in the region of the smallest meaning.
Reasons of a subjective character, which are connected 
with certain peculiarities of our national policy, have also 
had a no less important role to play in the loss by Russia of 
what was left of its erstwhile influence in that region. 
Practically throughout the whole of its almost 10-year-long 
history Russian diplomacy has been senselessly knocking about 
in Yugoslavia.
Under three of its foreign ministers it repeatedly dared to 
open confrontation with the West, flirting with Milosevic and 
desperately ignoring the UN. Its declared aims were to take 
care of its "historical ally" and preserve its political 
positions in the region, but unofficially it tried to help 
Russian business to get hold on the Balkans. And this was 
against the obvious historical facts, which show that relations 
between Moscow (St.
Petersburg before it) and Belgrade were ostentatiously friendly 
only when temper and selfish interests pushed Serbs on the 
brink of military troubles. No sooner had an outside threat 
retreated, than the Balkan "Slavic brothers" forgot all about 
their Russian brothers in faith and preferred more advantageous 
cooperation with the West. Now that the regime of Milosevic the 
Terrible has collapsed, Serbia is swiftly turning to Europe, 
while Russia is kicked out from the programs of Yugoslavia's 
restoration. By and large, Moscow's many-year-long activities 
towards stopping bloodshed in the Balkans have not reaped any 
concrete political and economic fruit.
The non-sanguine residue of the Yugoslav crisis, which has 
been one of the most important international events of the late 
20th century, has become a not very comforting sentence for 
Russian diplomacy in the region and the entire foreign policy 
activities of the new Russia. Moscow's failure in the Balkans 
is explained not only by the non- professionalism of concrete 
Foreign Ministry officials. Its fiasco in the Balkans and some 
other regions is the result of the lack of new foreign policy 
ideas and strategy, which would adequately reflect the present 
state of affairs and international situation. For ten years 
since the disintegration of the USSR Moscow has clung to its 
geopolitical legacy, looking at the world through the 
spectacles of Soviet foreign policy. And this has naturally 
been leading it to new setbacks.

******


#4
From: "Robert Bruce Ware" <rware@stlnet.com>
Subject: Lucas/Lieven JRL 4578
Date: Sun, 15 Oct 2000 


In his reply to Lieven, Edward Lucas admits that he knows little about the
Caucasus, and then proceeds vastly to exceed his grasp. He claims,
without offering evidence, that there was ample Western reporting of the
deteriorating situation in the North Caucasus from 1997 to 1999. One
would have hoped that such coverage might have focused upon Chechnya-based
criminal enterprises, including the savagery of the hostage industry, and
destabilizing effects upon the politics of neighboring republics.
Evidently, I missed most of the coverage to which Lucas refers because I
certainly saw very little of it. The fact is that because they feared the
hostage industry, few journalists had the courage to visit the Northeast
Caucasus during those years, let alone conduct any serious investigative
journalism in the region. Our reporters finally regained their fortitude
in October 1999, when the Russian army started offering them guided tours
of Chechnya. This permitted them courageously to criticize the Russian
campaign from the safety of Russian military cover. That's why we saw the
same stories (e.g the devastation of Grozny) being rewritten over and over
again for weeks at a time by the entire pool of Western journalists.
What our reporters overlooked, and what they permitted their readers to
overlook, is that the Northeast Caucasus is full of families, who, unlike
our reporters were unable to spend those years at a safe distance from,
and in blissful ignorance of, the horrors that occurred in the region. 


******


#5
The Guardian (UK)
16 October 2000
Tajikistan on frontline of chaos 
Afghan fighting spells serious trouble for frail Central Asia
Rory McCarthy in Kurgan-Tyube, Tajikistan


A sweeping Taliban military offensive across the mountains of northern 
Afghanistan threatens to unleash a refugee crises and a wave of Islamic 
insurgency and drug smuggling through Central Asia. 


Four years after seizing power in Kabul, the Taliban Islamic militia has made 
crucial gains in the past two months in the only area of Afghanistan still 
outside its control. Now that Taliban troops are sitting along western parts 
of the 1,000-mile border with Tajikistan, the Tajik government and its 
backers in Russia are increasingly apprehensive. 


Tajikistan has barely recovered from a five-year civil war that began only 
months after the collapse of the Soviet Union a decade ago. Unemployment runs 
at more than 50% and most factories have fallen into ruin. This year a severe 
drought threatens the lives of 3m people, half the population. 


So far Tajikistan has kept its Afghan border formally shut, fearing the 
impact of a flood of refugees. Aid agencies in the capital, Dushanbe, say up 
to 100,000 Afghans would descend on the country's southern provinces, the 
area worst affected by drought, if the Taliban made further advances. 


"The large humanitarian catastrophe could be greater than that in Kosovo, one 
of the biggest in the world," Sergei Ivanov, the head of Russia's security 
council, was reported as saying last week. Moscow opposes the Taliban and is 
keen to increase its own influence in Central Asia. 


Radical Islamic groups in Tajikistan, it is feared, would be inspired if the 
Taliban seized the remaining 10% of Afghanistan. Islamic militants are 
believed already to be moving from Afghanistan through the narrow strip in 
the centre of Tajikistan and onward north into Kyrgyzstan and the Ferghana 
valley, where hardliners have long wanted a separate Muslim homeland. 


"There is a very real threat of a spread of Islamism in Tajikistan," said an 
aid worker in Dushanbe. "There are a lot of different divisions of radical 
Islamists." 


One of the region's leading rebel groups, the Islamic Movement of Uzbekistan 
(IMU), which has bases in the mountains of Tajikistan and wants to overthrow 
the secular Uzbek government, was added to the US state department's list of 
terror organisations last month. 


Uzbekistan accuses one of the parties in the governing coalition of 
Tajikistan - the United Tajik Opposition - of supporting the rebels. In 
August IMU rebels fought their way to within 60 miles of the Uzbek capital, 
Tashkent. 


In the northern Tajik province of Leninabad, the Hizut Tahir movement, an 
Islamic group based on small, independent cells, has been pushing for a 
separate state. Leninabad is cut off from in winter when snow blocks the only 
pass. 


Although 25,000 Russian soldiers guard the Tajik border, drug smuggling from 
Afghanistan, estimated to produce 70% of the world's heroin, has increased 
five-fold this year. Rival factories in Afghanistan compete to refine the 
purest heroin, whose price rises exponentially on the smugglers' trail 
through Tajikistan to Russia. 


Some of the most vulnerable parts of the border are guarded not by the 
Russian army but by soldiers from the United Tajik Opposition, the Islamic 
group which, though now in Tajikistan's coalition, fought against the 
government in the civil war. For the Taliban, opium production is a big 
source of income; this year alone it brought in at least $9m (£6m). 


The most immediate threat remains the current drought and the danger of a 
flood of refugees. At least 70,000 people fled the Afghan city of Taloqan 
when it fell to the Taliban last month. Up to 100,000 more would flee if the 
Taliban takes the last opposition town, Faizabad. 


In villages across southern Tajikistan people are on the brink of starvation. 
The UN's World Food Programme is launching a $62m emergency operation to feed 
1m of the most at risk in the next nine months. 


The drought reduced most of this year's crops to dust. What little water 
remains is diverted to the state and collective farms which for decades have 
been forcing a lucrative cotton crop out of an otherwise arid land. 


Most villagers have used up their meagre savings and sold their livestock. 
Many were well off under Soviet rule, but now cars sit rusting in garages and 
even if the old fridges and black and white televisions are still working, 
there is rarely electricity. 


Malakhova Bibigul, who works at the Maxim Gorky collective farm near 
Kurgan-Tyube, lost her husband in the civil war. She has eight children but 
an annual income equalling just a few founds from her work in the farm's 
cotton fields. 


"I don't know what my future will be," she said, clasping the white shawl 
covering her head. "I hoped my eldest son would go to school and be able to 
support the family. But he doesn't go. We can't afford it, he has no money 
for books. I have lost hope." 


Mrs Bibigul is one of a group of villagers who have been given half a hectare 
of land by the World Food Programme, together with flour, seeds and 
fertiliser to survive the winter and grow a crop for next year. 


These Muslim villagers were once refugees themselves. More than 500,000 fled 
into Afghanistan during the Tajik civil war. Now they are likely to find 
families of refugees begging for help at their doors. 


"It was difficult living in Afghanistan," said Qurbangula, 35, whose husband 
was also killed in the war. She is one of 60 widows on another collective 
farm close to the Afghan border who have been given land and seeds. 


"But it is better to be hungry and thirsty in your own country than to have 
enough food but be forced to live abroad." 
******


#6
Date: Mon, 16 Oct 2000 
Subject: Dear Mr and Mrs Putin
From: "Ben Aris" <benaris@online.ru>


Dear David,
a bit of fun following a slow weekend. 
Best 
Ben Aris 
Daily Telegraph


Dear Mr & Mrs Putin,


I have just returned from Moscow where I visited your son at the academy
there. I am writing to you to express some concerns I have with your sonıs
behaviour, following his mid-term report.


First as I know you are already aware that, despite Putin junior being
elected class monitor by his peers, he continues to terrorise the children
of the neighbouring Kavkaz School despite repeated protests from the
academyıs staff. But more worryingly there have been some new developments
in recent months that give rise to increased concern on our part.


Vladimir has become very aggressive in the politics of our own playground.
Firstly he has cooped the prefects, seven boys in all, and together with his
"gang" they have been hounding the 89 scholarship boys from the
disadvantaged Governor Estate (who admittedly are fairly rambunctious
themselves).


We could ignore this as there has been no actual violence and to be frank
behaviour in the playground ­ which has been unruly in the past -- has
generally improved. To give you an example, in a recent fight between one of
a boy associated with the "gang," young Leonid Reiman tried to snatch the
mobile phone of an older boy, Dmitri Zimin. We understand that Vladimir
stepped in and made Reiman return the phone, which is to the good.


However, we can not condone the existence of "gangs" in the playground nor
do we approve of young Vladimir appointing himself as a playground policeman
as, after all, that is what school rules are for.


Furthermore, what is unforgivable is that other members of the "gang" have
actually turned to violence on occasion. We are lead to believe (although we
have no proof) that Vladimir has cooped house captain Gazprom Major into his
circle of "toughs" who then persuaded Gazprom Minor to beat up young
Gusinsky who is now in hospital and may not recover.


Nevertheless, given the long tradition of rough and tumble in the Moscow
academy, staff is willing to ignore Vladimirıs brutal behaviour in the
playground as he seems to be making dramatic progress in his classes.


Let me start by underlining that since Vladimir began school this March he
has still a long way to go. There is still no progress in the subjects of
Banking, Agricultural and Utilities ­ all essential if he wants to graduate.


I take some slight encouragement from a recent term paper he wrote on
"Restructuring the Central Bank Russia," which showed that he understands
that this is an important topic, however, his solution of effectively
re-nationalising the CBR is clear proof that Vladimir is still has a poor
understanding of this subject.


I blame this in part to Vladimirıs insistence on continuing to associate
with Viktor Gerashchenko, a particularly unsavoury member of his "gang."


Likewise, Vladimir has made no progress in utilities. Although he has
written several papers on this topic since April, in conjunction with his
classmate Anatoly Chubais; they have continued to get "Dıs". Vladimirıs
tutors say that he is in the process of writing a new paper that will be
submitted in November, which I hope will show that he has finally buckled
down to the task at hand.


In both these subjects he is struggling with the basic approach. While he is
a supremely confident young man (clearly seen in his love of sports, where
he is particularly adept) these papers suggest that he believes he can solve
most problems on his own. I would strong recommend that he is enrolled in a
movement such as the Boy Scouts as he badly needs to learn of joys of team
work. Being king of the playground may be nice for him, but it is not
necessarily true for the other children.


This said I am happy to report that Vladimir is showing great promise in
several other key subject areas. Firstly I know that you are well aware that
he passed the first part of the GCSE Tax exam with flying colours and I am
glad to say he continues to get straight "Aıs" in the subject of Tax
Collection. I feel confident that Vladimir will do well in the second part
of the Tax Reform exams coming up after the Christmas break.


But what you might not be aware of is his good results in his class on
Customs Reforms, where he has also scored an "B+". He has learned to use the
computer recently installed in the Customs department and handed in, this
month, a poignant essay on "reducing the complexity of the customs tariff
system will reduce corruption." I understand that this essay went as far as
to discuss the benefits of a single tariff for all imports, which show a
radical boldness of thought that we had not previously expected from him.


Likewise Vladimir has turned in a solid performance in the Pension Reform,
Intellectual Property and the Budget classes. Unfortunately a bout of tummy
bug amongst his classmates in Duma 101 meant that the term paper on Land
Reform has been put off for at least month, despite an encouraging start.


As for the rest of this term, Vladimirıs tutors say that he is showing signs
of making progress in other areas. According to the autumnıs Cabinet
curriculum he is due to take a series of important tests in the run up to
the holidays.


Probably the most important, and certainly the most difficult for him, will
be the Bureaucratic Reform Bee that is due in November, whereas I think he
will do better in the Production Sharing Agreements exam that the school
sits in December.


In conclusion let me say that while I applaud Vladimirıs academic progress,
I feel that I must point out that when he finally graduates from the academy
and joins society at large his aggressive behaviour and "strongman tactics"
will be frowned upon, as will his nasty habit of fibbing to his betters.


If he is serious about reading Economic Prosperity at the WTO University
then he will need to change his friends and learn to behave in a more
civilised manner.


Best Regards
Jean Lemierre
Headmaster


******


#7
Date: Sat, 14 Oct 2000 
From: Ed Spannaus <Spannaus_E@mediasoft.net>
Subject: Cox Report and HIID


EXECUTIVE INTELLIGENCE REVIEW, Vol. 27, No. 40, October 13, 2000
DOJ SUES HARVARD OVER RUSSIA USAID SCAM
by Edward Spannaus


Harvard University is being sued by the U.S. Department of
Justice (DOJ) for fraud and conspiracy in its management of the
major U.S. aid program for Russia. The lawsuit, filed on Sept.
26, charges that Harvard and its Russia program ``defrauded the
United States out of at least $40 million paid to Harvard to
provide impartial and unbiased advice in connection with a United
States assistance program in Russia.''
Among other things, the lawsuit is further proof of the
absolute dishonesty of the recently issued ``Cox Report'' on the
Clinton Administration's Russia policy--an exclusively
Republican-authored document which whitewashes the Bush
Administration's role in setting into motion all of the programs
and policies for which it now attacks the Clinton Administration.


- Harvard and the Chubais Clique -
The civil suit names as defendants Harvard University, and
officials and associates of the Harvard Institute for
International Development (HIID), which drew up much of the
financial market ``reforms'' and privatization schemes for
Russia, starting in 1992.
HIID was an outgrowth of a series of 1991 meetings held by
Harvard Prof. Jeffrey Sachs and other Western economists such as
Anders @aNslund, with a group of young Russian ``reformers,''
including Anatoli Chubais and Yegor Gaidar. Chubais and Gaidar
were part of a group of young Russian economists recruited
already in the 1980s by the London-based Institute for Economic
Affairs, a center for radical Mont Pelerin Society free-market
ideology.
According to the DOJ complaint, the Harvard HIID program was
created to help implement the ``Freedom for Russia and the
Emerging Eurasian Democracies and Open Market Support Act of
1992.'' The Cox Report describes this bill as ``the most
important Bush Administration initiative of 1992,'' and as
``path-breaking legislation'' which was pushed through a
Democrat-controlled Congress by the Bush Administration. Among
other things, again according to the Cox Report, the act
authorized what is called ``technical assistance'' (i.e.,
consulting and advice) to Russia to accomplish the objectives of
``the establishment of the rule of law, the adoption of
commercial codes, and replacing the Soviet regulatory system with
transparent regulations hospitable to domestic and foreign
investment.''
These were the ``objectives'' which the Harvard team set out
to accomplish in 1992, when it got its first award for work in
Russia from the U.S. Agency for International Development
(USAID). The first program undertaken by HIID, starting in 1992,
was to provide advisory teams to assist the privatization of
Russian state-owned assets, and then later the scope was expanded
to include advice and support for ``legal reform and capital
market initiatives,'' according to the DOJ complaint.
Pursuant to these agreements with USAID, HIID created the
Russia Privatization Center--headed by Gaidar, and then by
Chubais after Gaidar was sacked at the end of 1992--and it also
later created the Russian Federal Commission on Securities and
the Capital Market, and the Institute for a Law-Based Economy
(ILBE), all of which became instruments for looting and
destroying the Russian economy for the benefit of Western
investors, including the principals of the Harvard project.
In 1997, USAID was forced to cancel most of its funding for
HIID, after investigations showed that top HIID officials Andre
Shleifer and Jonathan Hay had used their positions and insider
information to profit from investments in the Russian securities
markets. Among other things, the ILBE was used to assist
Shleifer's wife, who operated a hedge fund which speculated in
Russian bonds.
The DOJ complaint cites a number of specific instances in
which Hay, Shleifer, and their wives, engaged in business deals
involving the very Russia state agencies that they had helped
create, and regulations they had drafted:
-- Shleifer and his wife Nancy Zimmerman invested in Russian
companies which they had helped to privatize, and for which they
had provided USAID-funded legal services, and then also invested
in short-term Russian government securities (``GKOs'').
-- Hay, Shleifer, and Shleifer's wife invested in privatized
Russian oil companies, and had the stocks registered in the name
of Shleifer's father-in-law.
-- Hay, Shleifer, and their wives participated in the
launching of Russia's first mutual fund, the first such fund to
be licensed by the Russian Securities Commission, an agency
created and advised by Hay, Shleifer, and HIID.
-- Hay and his girlfriend (now wife) Elizabeth Hebert
created a private real estate firm to manage properties in
Russia; he also assigned World Bank-funded staff to work on
creating a real-estate mutual fund.
-- Hay and Shleifer's wife Nancy Zimmerman concocted a
scheme by which they traded in short-term government GKOs, and
then repatriated the profits to the United States in violation of
Russian rules designed to limit capital flight. The general
director of the Russian company which was utilized in this
scheme, was an employee of Harvard's Russian affiliate, the ILBE,
according to the DOJ complaint. Moreover, as a government
adviser, Shleifer was privy to insider information concerning the
Russian bond market, which he used for his own profit.
The DOJ complaint not only seeks recovery of at least $40
million paid to Harvard, but also other relief, including triple
damages, and all profits earned by the defendants.


- Summers's Role -
The DOJ's investigation of HIID was an outgrowth of a probe
begun by the General Accounting Office (GAO), which was asked by
Congress in 1997 to look into Shleifer's role in the
Gore-Chernomyrdin Commission. That Commission was linked to the
HIID scam, particularly through its Capital Markets Forum, since
Shleifer was the special coordinator for all four of the Forum's
working groups.
And although Treasury Secretary Lawrence Summers is not
named in the DOJ complaint, he would undoubtedly qualify as an
unindicted co-conspirator. Summers, as the Bush-nominated chief
economist at the World Bank in 1991-93, and then as
Undersecretary of the Treasury for International Affairs in the
Clinton Administration, was a central figure in the Harvard
Russian program.
In her 1999 book {Collision and Collusion} (reviewed in
{EIR,} Aug. 6, 1999), author Janine Wedel wrote that Summers
``had deep-rooted ties to the principals of Harvard's Russia
project.'' Shleifer credited Summers with having inspired him to
study economics, Wedel says, and Summers and Shleifer had at
least one joint foundation grant.
Summers wrote a publicity blurb for Shleifer's 1995 book
{Privatizing Russia}, in which Summers gushed: ``The authors did
remarkable things in Russia and now they have written a
remarkable book.''
At Treasury, Summers and David Lipton, who took over
Summers's position in 1995, and who had been vice-president of
Sachs's consulting firm, oversaw the USAID grants that were
administered through HIID.
When the DOJ took over the GAO probe, it originally treated
the HIID investigation as a {criminal} case. One can only
speculate as to what pressures were put on the DOJ from quarters
around Gore and Summers, to attempt to kill the probe altogether,
and then, when that could not be done, to ensure that it was
handled instead as a civil, and not a criminal, proceeding.


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


THE HOAX OF THE COX REPORT


On Sept. 20, twelve Republican Congressmen issued a report on the
Clinton Administration's conduct of Russia policy, entitled
``Russia's Road to Corruption,'' laying at the footstep of the
Clinton Administration, the corruption and devastation which
prevades the Russian economy.
But in fact, they are only indicting themselves. As {EIR}
has shown on numerous occasions (see, for example, ``IRI's
Friends in Russia,'' Sept. 6, 1996, and ``Criminality Was the
Policy in Russian `Reform,'|'' Sept. 3, 1999), institutionalized
criminality was the essence of the ``reform'' policy introduced
into Russia already by 1991 or earlier, by the free-market
fanatics circled around the International Republican Institute
(IRI), the GOP branch of the 1980s-era ``secret, parallel
government'' called ``Project Democracy.''
The Cox Report, on the other hand, after glossing over the
catastrophe of the first year of Russian economic
``reforms''--with its introduction of ``shock therapy'' at the
beginning of the 1992, resulting in the collapse of industry,
2,500% hyperinflation, and the wiping out of the savings of
Russian citizens--only picks up at the point when the Clinton
Administration took office, in 1993.
The Cox panel charges President Clinton with ``unwillingness
to involve himself in foreign policy generally''--a false
accusation, as witnessed, for example, by Clinton's vigorous
efforts to form a strategic alliance with Germany, oriented
toward the economic development of the former Soviet bloc, during
his first years in office. This policy, combined with his
Administration's call for ``less shock, more therapy'' in
December 1993 (issued by Deputy Secretary of State Strobe
Talbott), was one of the key factors in the decision of
London-sponsored circles in the United States to launch a series
of escalating scandals against Clinton at the beginning of 1994.


- The Role of Al Gore -
The Cox Report is more accurate, when it zeroes in on the
role of Vice President Al Gore, Gore's national security adviser
Leon Fuerth, and Treasury Secretary Larry Summers, in taking over
the Administration's Russia policy. However, the report asserts
that a ``troika'' of Gore, Summers, and Talbott ran Russia policy
for the Administration--ignoring the policy differences between
Clinton and Talbott on the one hand, and the Gore-Fuerth-Summers
group on the other.
The more truthful version of events, is that as President
Clinton became more and more distracted by the scandals being
thrown against him (which were stoked by many members of the Cox
panel), he permitted Gore and Fuerth to take control of Russia
policy. Seen in this way, much of the detail that the Cox Report
describes is accurate, but the fallacy is the report's primary
thesis: that everything was going fine under Bush, and that the
opportunities created by the Bush Administration were squandered
by President Clinton. In truth, the Clinton Administration
inherited a disaster from George Bush, which President Clinton,
under political assault at home, failed to reverse.


******


#8
TITLE: INTERVIEW WITH NOBEL PRIZE LAUREATE IN PHYSICS ZHORES 
ALFYOROV
(PODROBNOSTI RTR PROGRAM, 20:30, OCTOBER 11, 2000)
SOURCE: FEDERAL NEWS SERVICE


Anchor: This is an unusual day and we have quite an unusual
guest, a fascinating guest, Doctor of Sciences, Professor, Dean of
the Leningrad Polytechnic, Academician of the Russian Academy of
Sciences, Vice President of this Academy, Rector of the Ioffe
Physico-Technical Institute, author of some fifty inventions, three
monographs, 500 scientific papers. But that is not all, he has been
awarded the orders of Lenin, the October Revolution, the Red Banner
of Labor, Badge of Honor, For Merits to the Homeland, most
important, since yesterday he is a Nobel Prize laureate in physics.
Zhores Ivanovich Alfyorov is a guest of the Podrobnosti program.
Good evening, Zhores Ivanovich, we congratulate you
wholeheartedly. My first question has nothing to do with physics.
It is from the field of biography. Why Zhores, why a French name?
Alfyorov: My father was an old Bolshevik. When my older
brother was born in 1924 he named him Marx in honor of Karl Marx.
My brother, by the way, we had the so-called Red Christening. We
have the documents in the family archive. We have his trade union
membership card, he was admitted into a trade union when he was 13
days old. And he was exempted from the payment of membership dues
till maturity.
On his christening day and first birthday he was made a
present of Marx's Capital. My brother Marx was killed on the front.
He fought in Stalingrad, in the battle of the Kursk Bulge. He was
in the infantry, he commanded a squad, then a company. And it was
in 1944, at Korsun-Shevchenko, at the end of that very difficult
operation, that he was killed.
He finished school in 1941. He went to study at the Urals
Industrial Institute. He studied there for only two or three weeks.
He decided that it was not the right time to study and went to the
war. 


Q: So it turned out to be your lot to study?
A: Yes. I must say that the generation of my older brother
defended our country.


Q: Zhores Ivanovich, is it true that your father, besides
being a Bolshevik, was also a Hussar? 
A: Yes, before the revolution he served in a Hussar Guards
Regiment. He volunteered when World War I began. And he served in
the 4th Hussar Guards Mariupol Regiment. He earned two St.George
Crosses in World War I and the Red Banner Order in the Civil War.


Q: You are a member of the CPRF faction in the Duma. Is this
in tribute to family traditions?
A: No, not only. It is just that this reflects my beliefs.


Q: Strange. You see, the physicists of the 1970s were mostly
dissidents, they were in opposition to the authorities. Or is it a
tradition for the technical intelligentsia to be in opposition?
A: I would not say that the physicists of the 1970s were
dissidents. Among physicists and lyricists there were dissidents.
Indeed, dissatisfaction was widespread among the intelligentsia,
dissatisfaction with the situation in the country. Many people very
sincerely, I believe, thought about the democratization of society,
I think that in their time many people were shocked by the invasion
of Czechoslovakia. I think that the Afghan war was a terrible
thing. Many of us could not understand why was it being waged.
But at the same time, I think, at least people of my
generation, and many people younger than I, understood at the same
time that in principle socialist society brings the people good.
Despite all the twists and turns, all the tragedies the
achievements of our country were gigantic.


Q: Can it be said now that the Nobel Prize laureate in physics
is a convinced communist?
A: Of course. I would add to this. So much dirt is being
poured... In reality the communist ideas are very simple. The main
difference -- what is most important in life, labor or capital? 


Q: I think that for you, beyond doubt, the answer is labor.
A: Of course. The second thing that is fundamentally important
is that, by the way, the first typical feature of fascism is fierce
anti-communism.


Q: Zhores Ivanovich, you learned only yesterday that you are
in the same category with the greatest personalities of our
century, Einstein, Rutherford, Bohr... 
A: Sergei Vadimovich, Nobel prizes are awarded since 1901. The
first Nobel prize winner in physics was Konrad Wilhelm for
discovering Roentgen rays. In the 1920s, 1930s such outstanding
physicists won these prizes as Albert Einstein, Paul Dirac,
Schrodinger, Pauli... It is these geniuses who laid the groundwork
on the contemporary theory of cognition, laid the groundwork of
quantum theory and quantum physics that lie at the base not only of
physics but also of the theory of cognition and many sciences in
the 20th century.
At the same time Nobel prizes were also awarded for inventions
stemming fundamental research but of tremendous importance in terms
of their application -- the transistor, one of the greatest
technical inventions which changed the world, changed the social
structure of the world, brought about computerization and so on.
But at the same time this discovery was based on research in
physics and was clearly designed for application.
Well, our studies and the prize that was awarded this year are
not in the same category as the works of Albert Einstein, Niels
Bohr, Pauli, Landau. This prize is in the same category as the one
awarded for the discovery of the transistor to Shockley, Bardin,
Brattain, it follows the discovery of the laser and maser principle
by Townsend, Basov and Prokhorov, the discovery of the tunnel
diodes and the tunnel effect in semi-conductors. So this prize is
of a somewhat different nature.
That is why you should not make any comparisons with the great
geniuses of the 20th century. I will only say that our work based
on fundamental research was very highly assessed. The result of our
work is first of all in the changes it brought about in modern
technologies. And a lot follows from this.


Q: Your work is in the area of semi-conductor
heterostructures. I mean, if we use scientific terms. How can a
layman, an ordinary person feel the results of your work, for
instance, at home?
A: I think that precisely thanks to research in the field of
semi-conductor heterostructures and then the creation of
semi-conductor lasers on that basis many people now have in their
homes compact discs where the needle is replaced by the
semi-conductor laser. We speak on the telephone, we access Internet
using optical fiber communication lines that now in their tens of
millions kilometers encircle our planet. The signal, the useful
information is transmitted through these lines by the
semi-conductor laser. You see flashing light diodes on video
cameras. On the car dashboard you see light emitted by small
semi-conductor lamps when you press on the brake. Semi-conductor
light diodes are used traffic lights.
Their effectiveness... Such instruments existed in the past as
well. For instance, there existed the semi-conductor laser using
the homo pn junction. For it to work normally it had to be cooled
to the temperature of liquid nitrogen. There were light diodes...


Q: I believe it is minus 197 degrees Celsius... 
A: 193. The light diodes were very ineffective, they
overheated and emitted very little light. The introduction of
heterostructures makes it possible to change the properties of
crystal inside it and to move on from the properties of one
material to another. Hetero means non-homogeneous.
My old comrade, my colleague, long a Nobel Prize winner, he
got it in 1973, the Japanese physicist Leo Isaki (sp.), who made a
big contribution to science, including to studies of
heterostructures when he proposed the so-called super-lattices, he
once remarked... This remark referred to the super-lattice but it
also is applicable directly to the entire field of
heterostructures. Whereas ordinary crystals, semi-conductor
materials are homogeneous and can be described as God-made
crystals, heterostructures, that is when we change properties at
distances measured by the permanent lattice, are man-made crystals.
Man makes such crystals with an absolutely new set of
properties that can be used for practical purposes and,
incidentally, two fundamental discoveries were made on the basis of
these heterostructures, and these discoveries have already been
awarded Nobel prizes. I mean the quantum cold discovered by Klaus
von Klitzingen (sp.) in 1980 and fractional quantum cold that
required the supposition of the existence of a fractional charge in
the system of electrons. The prize for this was awarded two years
ago.


Q: Zhores Ivanovich, all this is terribly interesting and I
think our viewers will spend a lot of time trying to understand
what you said. But you are also appearing in the role of a
politician as well. Speaking in the Duma today you named rather
horrible figures. You said that the budget intends to spend much
more on the work of corps of deputies than on the financing of
fundamental science. Is this so?
A: No. It is intended to spend four times more on the corps of
deputies than on capital investment in science, on the construction
of buildings or laboratories in science. The planned budget
allocations for science are slightly more than 20 billion rubles.
Investments in science are planned on the level of 260 million
rubles. And it is planned to spend 1.1 billion rubles on the corps
of deputies.


Q: In this connection. The prize comes with a lot of money. I
heard that the sum is 250,000 dollars. Do you have any idea already
how you are going to spend it?
A: Incidentally, it is about a hundred times that such a
question was put to me during the past two days. I already said how
I was planning to spend this money. I intend to spend a part on the
Scientific Education Center at the Physico-Technical Institute. But
the bigger part of this problem is going to be solved by my wife
Tamara Georgiyevna.
But I just recalled that when Nobel prizes were received by
Kapitsa, Prokhorov and Basov such questions were not asked. They,
too, held press conferences. When I mentioned this today a young
lady journalist asked me: "Wasn't that money taken away from them?"
This awful nonsense is very widespread.


Q: You know, in order to avoid this awful nonsense we are
putting this question. Zhores Ivanovich, it is not customary for
men to present flowers to men. Believe me, I am also a supporter of
heterostructures. Not from me, but from our entire company, from
Russian Television, from all of us please accept them. We are
rejoicing together with you and perhaps even more than you. I thank
you very much.
A: I disagree with this "even more than you". I believe I am
rejoicing more than anybody else.


Q: The guest of Podrobnosti program was Nobel Prize laureate
Zhores Alfyorov.


******


#9
OSCE says Belarus election does not measure up
By Dmitry Solovyov


MINSK, Oct 16 (Reuters) - A parliamentary election in Belarus at the weekend 
did not measure up to international standards for a democratic poll, the 
Organisation for Security and Cooperation in Europe said on Monday. 


Authorities in the ex-Soviet state released new figures overturning earlier 
reports of a low turnout that would have embarrassed President Alexander 
Lukashenko. The new figures were certain to disappoint an opposition that 
called for a boycott. 


The vote was also likely to deepen a split between Moscow and the West over 
the small state, located stategically between Russia and Poland. 


The West has mostly scorned Lukashenko, saying he has ignored democratic and 
economic reforms. 


But Moscow sees Belarus as the focus of efforts to boost its influence in its 
former Soviet colonies. Lukashenko's office said President Vladimir Putin had 
called to congratulate him on carrying out a free and democratic poll. 


The OSCE, a democracy and security watchdog, did not send a full-scale 
monitoring team to Belarus for the poll because of doubts about its fairness 
beforehand, but did send a team of technical observers along with other 
European organisations. 


``The election to the House of Representatives of the National Assembly of 
the Republic of Belarus on October 15 fell short of international standards 
for democratic elections,'' its mission in Belarus said in a statement. 


``The minimum requirements were not met for the holding of free, fair, equal, 
accountable and open elections.'' 


The statement said officials had abused the election registration process to 
eliminate ``undesirable contenders.'' 


``State-controlled media provided only a prejudiced approach which dominated 
print and electronic information,'' it said. 


It said authorities ``severely limited basic rights of citizens, including 
rights of free expression, assembly and association, and brought elements of 
intimidation and bans into the election campaign.'' 


TURNOUT FIGURES HIGHER 


The opposition had hailed low initial turnout figures on Sunday evening as a 
victory for their boycott campaign. But the figures released on Monday 
morning were higher. 


The election commission had said on Sunday that 28 of 110 constituencies had 
failed to secure the 50 percent turnout needed for polling to be valid. But 
on Monday, the election commission said the result was valid in all but 14 
districts. 


Lidia Yermoshina, head of the state election commission, said the overall 
turnout was 60.6 percent. The figure was still substantially below the 70 
percent Lukashenko had predicted, and in the capital Minsk turnout was 49 
percent. 


``The election was valid in 96 constituencies out of 110,'' Yermoshina told a 
news conference. 


State television had said the boycott was a failure. 


``The generously-funded boycott campaign has failed,'' presenter Alexander 
Zimovsky said. ``In general, voters took part in the election, which means 
democracy won.'' 


Yermoshina said run-off votes would be held on October 29 in 53 districts 
where no candidate had won an outright majority. In the 14 districts where 
turnout fell short, a new election must be held in three months. 


Washington said earlier this month it would not recognise the outcome of an 
``undemocratic'' election. Moscow said that amounted to meddling in Belarus's 
internal affairs. 


Lukashenko won election in 1994 on promises to raise living standards, crush 
corruption and forge a new union with Russia. 


His flamboyant manner and rejection of fast-track market reforms have kept 
him popular in undeveloped rural Belarus. City residents were thought more 
likely to back the boycott, though opposition pre-election rallies had been 
small. 


******