This Date's Issues: 4595 •
Johnson's Russia List
23 October 2000
[Note from David Johnson:
1. BBC Monitoring: Russian TV assesses US presidential candidates'
attitudes to Russia.
2. Chicago Tribune: Colin McMahon, NEW MATH IN RUSSIA: YOU JUST PAY UP.
3. IWPR'S CAUCASUS REPORTING SERVICE: Mikhail Ivanov, PUTIN KEEPS HIS
DISTANCE. The war in Chechnya has inspired new political sympathies between
Russia and Israel - but President Putin is still wary of taking sides in
the Middle East crisis.
4. Radio Ekho Moskvy: Interview with Yevgeny PRIMAKOV on Middle East.
5. Request from John Round in Magadan.
6. Rossiiskaya Gazeta: Anna Kozyreva, DUKES AND COUNTS WILL GET THEIR
7. The Russia Journal editorial: A culture of crime.
8. Felix Corley: Re 4592/Catholic parishes in Russia.
9. The Independent (UK): Patrick Cockburn, Russian governor barred
from election over 'undeclared Volga.'
10. BBC Monitoring: Governor barred from election predicts vote
11. BBC Monitoring: International energy projects seen as NATO bid to
Russian TV assesses US presidential candidates' attitudes to Russia
Text of report by Russian Public TV on 22nd October
[Presenter] The US election campaign is occupying more and more space in
foreign news reporting as polling day approaches. The people of America are
to make their choice in two weeks' time. According to the most recent polls
the candidates - Democrat Albert Gore and Republican George Bush Jnr - have
an equal chance of success. On many issues the contenders' views are close,
though they appear to see relations with Russia in quite different ways.
Here is our correspondent Vladimir Sukhoy reporting from Washington:
[Correspondent] There hasn't been such a close-run presidential race for
forty years, since the time of the contest between John Kennedy and Richard
Nixon. After months of campaigning and three televised debates Democrat
Albert Gore and Republican George Bush Jnr are neck and neck, as the saying
goes, as they approach the finishing line. Opinion polls show that 44 per
cent of electors are ready to vote for Bush and 43 per cent for Gore. The
points of dispute between the candidates are mainly over domestic political
issues - taxation, medical insurance, education and social assistance
programmes. There are practically no marked differences over foreign
policy, though there is just one country - Russia - which provokes
different attitudes and many differences of opinion between the candidates.
Vice-President Gore is the architect of Russian policy in the Clinton
administation, and although Gore hardly ever has much to say these days on
Russia his attitudes are quite clear: in principle he does not plan to
George Bush is quite another kettle of fish. At the very outset of his
presidential campaign he struck a definite anti-Russian tone. [Clip of Bush
campaign address, to translation by correspondent] The empire has passed,
but evil remains. I shall do all I can to get Congress to insist that
lethal Russian weapons are destroyed, and the sooner the better.
[Correspondent] During the second presidential debate in North Carolina
George Bush found himself bound to say that IMF cash had gone to enrich
corrupt bureaucrats in Moscow. And in the last few days Bush's people have
come out with yet another accusation against Gore - that he supposedly
struck a secret agreement with Viktor Chernomyrdin in 1995 allowing Russia
to continue military supplies to Iran.
Analysts regard Bush's anti-Russian attitude - or rather, his effort to
appear different - as being intended for domestic consumption.
[Thomas Graham, captioned as special emissary, in English to translation] I
would not attach too much importance to what people say in the heat of the
election campaign. I'm sure that if Bush is elected president he will bring
with him a very strong team which will of course have an interest in good
[Correspondent] In sport there is something called a dead heat - when you
breast the finishing line exactly together. That is how the US presidential
race is shaping up at the moment. Analysts believe the next president will
win by a very tiny margin.
October 22, 2000
NEW MATH IN RUSSIA: YOU JUST PAY UP
By Colin McMahon
Tribune Foreign Correspondent
MOSCOW -- The deal came down to 29 rubles and 4 kopecks.
Now, 29 rubles and 4 kopecks is about $1.05. It is a pittance, bus fare,
chump change, myeloch, as the Russians say.
But this myeloch stood between our selling the Tribune's Moscow bureau
vehicle and our having to, well, who knows what. Pay some outrageous fine or
go through some numbing bureaucratic process or something like that. Better
not to ask.
The 29 rubles, "and 4 kopecks," the Tribune's driver would always add with
helpful sarcasm, was a payment due the Moscow traffic police for some final
document. Once settled, the Tribune's trusty Toyota Land Cruiser would be
trucked off to Finland.
Only the fee could not be paid to any traffic police office or to any traffic
police official. The fee could not even be paid into the traffic police
account at Russia's federal bank.
The fee, all 2,904 kopecks of it, all 105 cents, had to be paid by bank
This is a problem if you do not have a Russian bank account.
Before asking why the Tribune does not have a Russian bank account you might
want to ask why the Tribune was getting rid of its trusty Toyota Land Cruiser.
The answers to both say much about doing business in Russia.
The Tribune bought the Toyota in summer 1997. Partly to attract investment,
partly because there was still a lot of stuff you could not get here, Russia
allowed foreigners to bring in vehicles and other equipment duty free. The
catch was that, eventually, the stuff had to be taken back out of Russia.
Purchased under this exemption from a Finland dealership, the Tribune's Land
Cruiser proved reasonable.
Since the ruble crash of 1998, though, Russian customs officials have
First they ended duty-free exemptions for purchases. Then they began looking
into equipment brought in years earlier.
Foreign business executives started getting phone calls.
"In 1992, you brought in a file cabinet and a Xerox machine," the call might
start. "If you cannot show what became of them, you will have to pay . . . ."
Then some fantastic sum would be uttered. Collars would tighten.
Most of these cases were settled somehow. A manager at a U.S.-based
multinational said he got a bill for $1 million in back fees. But after
negotiations between the company's in-house "specialist" (a former KGB agent,
naturally) and the customs officials, a drastically lower amount was paid.
"It ended up being not too bad," the manager recalled. "But at first I
thought, holy . . . ."
Last year, customs retroactively rescinded the duty-free exemptions on
The Tribune was told to pay about $21,000 in back fees, based on a
mathematical formula that had to do with the Land Cruiser's sale price, the
size of the engine, the year of purchase and, no doubt, some other wholly
reasonable factors that I never bothered to nail down.
Generously, customs allowed us to pay over time. They wanted more than $700 a
month, again based on some complicated formula that had me nodding my head
and reaching for my wallet.
It's possible that nothing would have happened if we had not paid.
Enforcement is always a question mark, and the rules could change again.
But the customs guys were talking about the impound lot, threatening daily
storage fees that would shame even the Lincoln Park pirates.
At $700 a month, for the next 30 months, the Land Cruiser was proving a
liability. So we moved to sell.
First, of course, we had to find a buyer. Then we had to take the Toyota out
of the country and clear it through Russians customs--only to be brought back
This could be done for about $5,000, not including transport, or a quarter of
what customs wanted if the car remained in Russia under Tribune ownership.
(Why we could not just pay customs that $5,000 initially and be done with it,
no one ever could explain.)
Eventually a buyer was found. A deal was done. A headache was about to go
Except the 29 rubles and 4 kopecks.
We could not pay this fee because our bank, Dialog Bank, went bankrupt after
the August 1998 economic crisis.
Dialog may have been run by an American, but like other Russian banks it had
a huge chunk of its assets (40 percent in Dialog's case) in Russian treasury
bills. When the Russian government defaulted on its ruble bonds, banks that
had been scoring remarkable profits started folding across the country.
Unlike some Dialog depositors, the Tribune was able to salvage most of its
money. But its accounts were frozen.
And given that the bureaucracy of opening a bank account rivaled in torment
the closing of the accounts, we decided not to bother finding another bank.
The traffic police did not find this persuasive. They demanded a bank
transfer of the 29 rubles and 4 kopecks.
We tried friends, many of whom laughed when asked if they had a Russian bank
account. We tried pleading. We tried logic.
We did not try the one thing we figured would work eventually. We let the
broker handling the customs clearance try that.
"It's settled," the agent called one day. "They have been paid."
Magically, the 29 rubles and 4 kopecks went away. So did the Toyota.
And it cost us only an extra $50.
From: Institute for War & Peace Reporting <email@example.com>
Subject: IWPR'S CAUCASUS REPORTING SERVICE, NO. 54
Date: Fri, 20 Oct 2000
WELCOME TO IWPR'S CAUCASUS REPORTING SERVICE, NO. 54, October 20, 2000
PUTIN KEEPS HIS DISTANCE
The war in Chechnya has inspired new political sympathies between Russia and
Israel - but President Putin is still wary of taking sides in the Middle
By Mikhail Ivanov in Moscow
Russia's marked absence at the summit in Egypt last week has raised eyebrows
both at home and abroad.
The war in Chechnya has apparently sparked a growing rapprochement between
Israel and Russia, with both states suffering from Islamic terrorist tactics
ranging from suicide bombings to hostage-taking. There are also mutual
sympathies between PLO activists and the Chechen rebels - recently the
Chechen warlord Shamil Basaev promised to send volunteers to the Middle East
to help the Palestinians in their struggle.
But nevertheless, Russia preferred to stay away from the Egyptian summit
even though, according to some sources, an invitation was sent to the
Russian foreign minister, Igor Ivanov. However, President Vladimir Putin had
reportedly decided that Moscow would only agree to be represented at
Sharm-El-Sheikh on the highest level - and then only if an invitation was
forthcoming from both sides.
During last week's round of meetings with his Ukrainian counterpart, Leonid
Kuchma, in Sochi, Putin told reporters, "Of course, we'll take part if
that's what the two parties want" - and the words were accompanied by his
trademark smirk, as if to say, "Why should we get involved when we have
enough problems of our own?"
This passive approach provoked stinging criticism from media sources close
to the oligarch Vladimir Gusinsky, who boasts both Russian and Israeli
Sevodnya, for example, boldly drew parallels between Israel's struggle in
the Middle East and Russia's war in Chechnya then blamed the Kremlin's
hesitation to espouse Israel's cause on century-old traditions of "state
anti-semitism". The newspaper dubbed such policies "stupid" since, it said,
foreign powers seeking an alliance with the Russian Federation were few and
But, in fact, Putin can only be accused of pragmatism in his approach to the
Middle East crisis - and in the world of international politics, this is a
virtue rather than a vice. Now at least pragmatism prevails over ideology.
Moscow's political elite has ceased to refer to Israel as "the stronghold of
international Zionism". And gone are the days when Russia thoughtlessly
pumped millions of dollars-worth of military hardware into the Arab states -
then watched helplessly in 1967 and 1973 as "the hay missed the horse" (to
quote the Russian adage).
But on the other hand, Putin would be ill-advised to dub the PLO "a
trumpet-bearer of Islamic extremism" and declare Israel an official "ally" -
as the hotheads at Sevodnya suggest. There are too many Muslim states with
which Russia is keen to maintain economic and political ties.
Consequently, Putin preferred to keep his distance from Sharm-El-Sheikh and
pay tribute to "Clinton's personal courage". Instead of focusing on
international problems, he devoted his energies to issues closer to home -
Ukraine's debts over Russian gas supplies and the former republic's
"non-sanctioned use" of Russian gas from the pipeline (gas which is
subsequently sold at world prices).
The pragmatic approach to the Middle East mirrors Putin's non committal
attitude to the Nagorny Karabakh dispute (see Mikhail Ivanov's article in
CRS No. 52) and his refusal to court controversy in Yugoslavia. The Kremlin
seems to be adhering to the old principle of "keeping out of harm's way".
Of course, Yegor Stroev, the chairman of the moribund Federation Council,
asserts that there can be no lasting peace in the Middle East without Russia
if only because "there are so many of our former citizens on one of the
warring sides" (or, to quote the singer Vladimir Vysotsky, "one quarter of
their people were once ours"). And, the lack of tangible results at
Sharm-El-Sheikh would seem to indicate that he may be right.
Sooner or later, the Russian foreign ministry and the presidential
administration will be forced to define their policies in the Middle East
and take practical steps. It's one thing to shun a rushed and badly prepared
summit and let Bill Clinton take the flak. But this is no reason to totally
withdraw from a politically vital region where Russia still boasts wide
spheres of influence built up over several decades.
Mikhail Ivanov is executive editor of Russian Life, a bimonthly magazine
published by Russian Information Services, Inc.
Radio Ekho Moskvy
20 October 2000
Interview with Yevgeny PRIMAKOV
By Aleksei Venediktov
[translation for personal use only]
A.V. Our topic for today is the sudden, or, perhaps, not so sudden
conflagration in the Middle East. And today, Yevgeny Maksimovich Primakov,
who has been doing Middle East most of his life, has agreed to talk to us.
Could you say that, by the amount of time that you spent there, Middle East
is your second motherland?
Ye.P. You could say so. At any rate, developments in the Middle East is my
favorite occupation. But I would not agree with you that the latest
conflagration was unexpected. It was not. It would have been naive to expect
that agreements reached in Sharm-el-Sheih [Egypt] on certain measures to put
end to clashes on both sides would bring immediate peace and calm and create
preconditions for the resumption of the peace process. Some time is needed,
and this time should be filled with efforts for the resumption of the
political peace process, because without it such a pause would lead to the
continuation of such flare-ups, even without deliberate incitements from
A.V. It is our habit to try to figure out who benefits from this and that.
Ye.P. The beneficiaries of all this are extremists from both sides, both
those on the Arab side who say that an agreement with Israel should not be
signed under any condition, and those in Israel, and there are plenty of
them, who say that this land is not negotiable and that it is out of
question to have Jerusalem as the capital of two states. But without this
decision there will be no peace in the Middle East.
A.V. You mean without a solution for Jerusalem?
Ye.P. At least not before they try to tackle the Jerusalem issue on the
basis of compromise, and, in my opinion, the possible basis for a compromise
is as follows: Jerusalem is the capital of two states, but also a holy site.
The Holy Grave, the Mosque of Al-Aksa and the Wall of Tears are the three
sanctuaries that ought to be under an international control, otherwise it
A.V. Speaking of mediators, outside observers have been astonished by
Russia's stance in this crisis, with Russia not being represented in the
peace process. Neither Foreign Minister Igor Ivanov, nor Vladimir Putin went
to Sharm-el-Sheih, and the decisions seem to be taken without us.
Ye.P. No, let us sort this out. First, we are not to blame for not being
represented in Sharm-el-Sheih. I think that the Foreign Affairs Ministry
made a statement that was well thought through and was very effective,
saying that we were ready to take part in the Sharm-el-Sheih consultations
at the same level as other parties, which were represented at the highest
level. I think it was a very strong move, and there was no articulate
response, as a result, the parties to these negotiations took all the
responsibility for them upon themselves, Russia being absent.
A.V. They say, we were not invited. But was Clinton invited? Didn't he just
go there without strings attached?
Ye.P. Well, Clinton has been conducting these negotiations already for a
long time, and I believe that the latest developments indicate precisely
that it is no good for one country to monopolize the mediatory role, as it
was done by the United States. It has been clear, of course, that Clinton
needed to maximize success in order to increase Gore's chances in the
election. But he had been conducting these talks for a long time. I believe
that we were right not to intrude in these negotiations, and when I say we,
I mean Russia, of course, because right now I am nobody, I am just sitting
in the legislature. We were right not to intervene, because the parties did
not ask for it. And if the parties don't ask, what can you do? Come banging
your fists at the table and sit down?
A.V. Wasn't it said that Arafat called us to participate?
Ye.P. No, Arafat said a number of times that he would like to see Russia as
a co-chair of the Madrid conference and so on and so forth, but he did not
make this specific invitation. Vladimir Vladimirovich Putin stated it
clearly in Sochi that we would come if some of the parties ask us to do so.
But they didn't. And I believe that, during today's phone call which is
expected or has already taken place, President Clinton will, in fact,
apologize, because he was the one who had the power to initiate an
invitation for Russia. And if he did not want to do that and wanted to stage
a personal victory in the electoral period, then he is back to square one,
and this is plain to see.
A.V. Generally speaking, do we have a clear vision, did you speak with the
president about what Russia needs in the Middle East? Do we have, if not a
plan then at least a goal?
Ye.P. I did not speak about this with Vladimir Vladimirovich [Putin], but I
can tell you my opinion: most of all, we need stability in this region. If
there will be stability, if the Iraq sanctions will be abolished, if there
will be no pariah states and they will not be artificially created, then we
will have good relations with the countries of this region, including
economic relations. Many people there are gravitating toward us. I recently
was in Tunisia, I saw North Africans', Algerians' attraction to us. This is
because we take an unbiased position in the region.
A.V. You speak of stability, but I just recently met some representatives of
the Kremlin administration who told me quite cynically: perhaps, we
shouldn't intervene, because the crisis leads to oil price increase, and
these are Russia's earnings, so everything is OK.
Ye.P. These were not very smart people, let us put it that mildly. If the
crisis in the Middle East leads to large-scale military operations, we would
be thrown back, all the world will be thrown back a long way, if not to the
Cold War. Look what is going on. On Friday, the General Assembly will vote a
resolution which is totally pro-Palestinian. There's general outrage over
what is going on, over the use of force. It is a telling comparison that
there are 120 or 130 Palestinian casualties, while only 7 people perished on
the other side. I don't imply that a certain party is guilty, though all
this was initiated by Sharon who provoked religious sentiment, an extremist
expression of these religious sentiments.
A.V. Can these developments lead to an explosion on a larger scale? You
mentioned the Cold War. Can they lead to geopolitical changes among the
Ye.P. I think they can create a hotbed of tension, which will force all the
great powers to redefine their position. This by itself can create discord
among the great powers. Take France, whose position on the Middle East is
totally different from that of the United States.
A.V. In this connection, can there be a new round of tensions between Russia
and the United States?
Ye.P. Relations with the United States are one of our foreign policy
priorities, no question about that, and we are interested in good relations
and in their development. At the same time, I believe that the United States
should stop thinking in terms of a superpower.
Ye.P. Superpower is a notion of the Cold War. Yes, the United States is the
strongest in military terms, in economic terms, in terms of their political
impact on global developments, there is no question about that. But a
superpower was a patron of a group of states which was creating their
collective defense, and also dictating its conditions. This was in the
context of confrontation with another group of such states. But now there is
no such confrontation, and in these conditions such a dictate is a sort of a
holdover from the Cold War. It will have to be abandoned, but there is
inertia, and it will probably go on for a long time.
A.V. A short question to you as the leader of the Fatherland-All Russia.
Today, the Duma is debating the budget which was not endorsed by FAR in the
first reading. What will be your position on today's second reading?
Ye.P. We were absolutely right not to endorse the budget in the first
reading and to vote as a faction against it. The consolidated vote of our
faction, CPRF, the agrarians, and a large group from the Regions of Russia
have compelled the government to abandon its categorical position, have
compelled it to agree to a dialogue. In the course of this dialogue, they
changed or rectified some of their previous positions. Therefore, I believe
that the budget will pass the second reading. Our faction favors a
constructive dialogue with the government. We don't want anything
impossible. We simply want to use the resources that are available in the
budget for the real economy, and also for the teachers who have miserable
pay. Generally speaking, our system in this regard is different from what is
everywhere in the world, because our teachers, our physicians, other groups
in this sector are paid less than everybody else. We will insist upon
changing these proportions, we will not succeed instantaneously, but we are
ready for a constructive dialogue.
From: "John Round" <firstname.lastname@example.org>
Subject: request for help
Date: Sun, 22 Oct 2000
Karla Marxa Prospect
D. 49, KV 21
Dear JRL readers,
My name is John Round and I am a PhD student from the University of
Birmingham, England. I am currently in Magadan researching the social
problems that the region is experiencing with a particular emphasis on the
difficulties its senior citizens face. My main research focus is an
examination of the various survival strategies employed by the local
population and how the harsh climate, remoteness and low levels of economic
activity in this region
influence these methods. I am also interested in the social assistance
provided in the northern regions by
non government organisations of all scales, from grass root groups to
agencies such as the Red Cross and also the role played by
national/regional government bodies with particular interest paid to the
levels of interaction between these various groups.
I would be very interested to hear from anyone who researches/works on these
topics, both on a national/regional level or indeed from anyone with a
interest in Russia's northern regions.
I can be contacted via email@example.com or firstname.lastname@example.org
Many thanks for your time.
October 20, 2000
[translation from RIA Novosti for personal use only]
DUKES AND COUNTS WILL GET THEIR PROPERTY BACK
By Anna KOZYREVA
The State Duma has drafted a law under which
pre-revolutionary owners can claim their property back. The
draft is titled "On the Restoration of the Right of Individuals
to the Immovable Property Alienated by the Bodies of Authority
of the RSFSR, the USSR and Other Bodies of Authority without
Court Ruling after November 7, 1917 (New Style), Which Is in
Improper Economic Condition and Which the State Has not Started
Regrettably, the draft does not include a list of such
historical objects in improper condition, which can hence be
returned to their former owners. We would be very much
interested to know exactly which dukes' and counts' estates can
be returned to their former owners.
Moreover, not only Russian, but also foreign citizens and
stateless persons, as well as their inheritors can claim back
such property. Courts shall be responsible for the restoration
of the right of ownership, while all archive documents, which
can prove the existence of such right, shall be issued "freely
and without payment." The deadline for filing corresponding
claims is 20 years after the enforcement of the law.
The law was initiated by deputy Alexander Chuyev, who
thinks there is a black hole in the current legislation, as
none of our normative acts stipulate the possibility of
reclaiming immovable property lost as a result of the
revolution and after it. The deputy stressed that "the return
to their former owners of objects that are registered as
monuments of history and culture entails their duty to comply
with legislation on monuments, including the coordination of
restoration and modernisation plans with corresponding
The author of the draft law believes that the former
owners, as well as their grand- and great-grandchildren, who
get their property back will immediately start restoring it and
establishing museums in their reclaimed estates. But what if
they reclaim a residential home? Besides, their former estates
are usually located in large parks. Even if the said estate
lies in ruins, the many acres of parkland surrounding them are
a juicy piece by all counts.
Russia is not the only country that is pondering the
restoration of historical justice. Other ex-socialist countries
faced this problem, too. But Russia is the only country that
decided to do this 80-odd years after the injustice had been
The Russia Journal
October 21-27, 2000
A culture of crime
The excitement over reform in Russia the passage of a budget, tax
changes, a growing economy and political stability is increasing among
the international business community. In fact, it seems that Russia will
soon become the darling of foreign investors, with political risk now
practically nil and state coffers overflowing with petrodollars.
But within this favorable situation, some critical factors remain largely
The real environment in which Russian business operates, at least those
firms that are profitable, lies within the shadow of criminal organizations
with strong links to both the government and bureaucracy.
Admittedly, the days of criminal gangs roaming the streets of Moscow of
Chechen bandits walking onto corporate premises with automatic weapons and
demanding "partnerships" might be over. The prisons might now be
overflowing with the small-time bandits that were once the foot soldiers of
the early ’90s Russian gangs the "Solntsovo," "Tambov,"
"Orekho-Brosisovo" and so on but that hardly changes the reality of the
Although some criminal gangs have been liquidated in turf wars, and others
sidelined or eliminated by the police, most have simply adapted themselves
to the new economy of the 21st century undertaking the necessary
The dark shadow of organized crime still looms large over the Russia
economy, and time and again we are reminded of this when we read of
professional hits carried out on senior executives.
It would be safe to say that in many cases local governments and officials
act more as an arm of this criminal system than of the government. And even
though violence is now only used in selected cases, with none of the
Chicago-style gangland shootouts or bombings, the hand of organized crime
is omnipresent in many industries.
The marriage between power and crime has traditionally been strong in
Russia. Criminals once assisted the Bolsheviks for the spoils of power,
while their late 20th-century successors, the profiteers and robber barons,
were in it for the money. Today, it is difficult to work out who runs who.
Most likely, both have taken on each other's attributes. The transition
from street criminal to corporate boss that took the Italian Cosa Nostra
almost five decades to achieve in the United States, has been achieved by
Russian gangsters in only five years.
Since Russian crime syndicates do not have the documented origins and
family structure of the Cosa Nostra and are often loosely tied through
backroom dealings statistics on how many Russian businesses are actually
under the control of the "Mafia" are virtually impossible to come up with.
But the fact that almost all of the thousand-odd contract killings of
businesspeople here over the past seven years remain unsolved speaks for
Organized crime, until recently known as the "krysha" or business roof, has
now evolved into a pillar of the Russian economy. The gangsters who
operated before the privatization years have converted themselves and their
outfits into respectable businesses. They control, directly or indirectly,
large enterprises and their trading and export operations thus keeping
money laundering and capital flight operations largely in their own hands.
Gone are the days of businesses throwing pennies to hoodlums to keep them
off their premises these commissions did not satisfy the criminals.
Russian crime syndicates have penetrated so deeply into many corporations
that it is almost impossible to differentiate them from entrepreneurs.
In recent months, we have seen the murders of executives of some well-run
corporations, businesses at the forefront of the Russian economy in
relation to direct foreign investment Baltika Breweries and
Urlamashzavodi to name just two. The calm after these killings raises the
possibility that the criminals have achieved their aims, and we might not
see further murders.
But the state and its organs have shown neither the ability nor the will to
tackle this critical problem. And it seems logical that even if the
political will existed at the top, the ridiculously low salaries and
appalling living conditions of security ministry officials makes it highly
unlikely that they could effectively tackle the issue.
In fact, many government organs are the muscle that settle the turf wars
bringing handsome rewards to bureaucrats and functionaries.
But what is alarming is how naive the foreign business community is in its
willingness to deal with such criminal elements. It has become fashionable
these days to add "former KGB" to business introductions and for people use
the term "Mafia" as if it related to star status.
True, there is often little information on the background of many Russian
businesses and entrepreneurs the furthest most go back is four or five
years, the time when privatization took place. Moreover, presented with
such a fait accompli, most foreign businesses are left with little choice
but to deal with these shady outfits.
Still, there is a tendency in the investment community to brush over such
nasty details with comments like "lack of transparency." Foreign banks and
investors are often lured into less than legal business situations through
naivete, or investment managers who cover what would normally be considered
outright criminal behavior for enterprises in most countries.
While it is not our intention to overdo it, it is important to recognize
that while gangsters and criminals might have acquired new attitudes and
style, the deeper issue of a criminal-government nexus remains largely
unaddressed in Russia.
For their part, foreign businesses should remain true to their own domestic
business standards and ethics and refuse to operate on the fringe of
Russian law, no matter how tempting the profits might be out there.
From: "Felix Corley" <email@example.com>
Date: Sun, 22 Oct 2000
Subject: Re 4592/Catholic parishes in Russia
I would like to correct an error made by Maura Reynolds in her Los
Angeles Times article of October 21, 2000 "Religions Could Use Divine
Intervention to Overcome Legal Curbs". In writing of the Catholics in
Russia she declared:
<"At the time of the Soviet collapse, Russia was left with only two
small parishes--Moscow and St. Petersburg--which served mainly
diplomats and other foreign residents. Since then, more than 100
local parishes have been reorganized throughout Russia. That rapid
growth has caused the Russian Orthodox Church to complain more than
once that Catholics are "proselytizing.">
I have in front of me a 1987 typewritten list of Catholic parishes
throughout the USSR (except Latvia and Lithuania), produced by the
Archdiocese of Riga. It lists 12 parishes then functioning in Russia:
Moscow, Leningrad, Prokhladny, Novosibirsk, Prokopyevsk, Kemerovo,
Chelyabinsk, Orsha, Orenburg, Omsk, Tomsk and Saratov.
The Catholic church would have had more parishes of course, had not
the Soviets closed them down and taken away the many
pre-revolutionary churches. It would be nice if the Catholics could
get these back (in Barnaul, for example, the Catholics have been
trying to regain their pre-revolutionary church for the past ten
years - so far in vain).
The Independent (UK)
23 October 2000
Russian governor barred from election over 'undeclared Volga'
By Patrick Cockburn in Moscow
One of Russia's most famous provincial governors, Alexander Rutskoi, was
blocked from running for re-election yesterday because of his failure
todeclare ownership of an elderly Volga car.
Mr Rutskoi, governor of the Kursk region, is a former Russian vice-president
who was briefly jailed in 1993 after he joined the defence of the Russian
parliament when President Boris Yeltsin assaulted it with tanks.
Up until Saturday he seemed likely to stay in office. Then a local court
decided to ban him from the poll. Mr Rutskoi said: "Police supposedly found a
car registered to me, a 1994 Volga sedan, which they alleged I did not
include in my declaration as a candidate." He added that he no longer owned
Mr Rutskoi was careful to state that he did not believe the Kremlin was
behind this last-minute sabotage of his candidacy, the decision to ban him
evidently delayed until the moment when he would have no time to appeal to
the Supreme Court. "The whole of the Kursk region is up in arms," he said. "I
have many supporters."
As governor of the Kursk region, south of Moscow, Mr Rutskoi was one of the
40 regional chief executives â€“ often all-powerful figures in the Russian
provinces â€“ running for re-election in the next few months. The decision by
the court in Kursk to ban him because of his failure to declare a
six-year-old car is unlikely to be taken seriously by an electorate who often
suspect their leaders of purloining millions of roubles.
Mr Rutskoi claimed he was the victim of a carefully prepared conspiracy,
because before the court announced its decision "the police ringed off the
court building, the television centre and the radio building during the day".
The leaders of Russia's 89 regions are among the most powerful political
figures in the country. They have come under heavy pressure this year as the
President, Vladimir Putin, has tried to curtail their powers. Mr Putin has
appointed seven envoys to oversee the governors and is keen for more tax
money to go to central government. The Kremlin also wants to limit governors
to two terms in office.
Yegor Stroyev, the speaker of the upper house of the Russian parliament,
which is made up of provincial leaders, said yesterday that Russia had always
entered "a time of troubles" when there was a conflict between central
authority and regional governors.
Governor barred from election predicts vote rigging
Source: NTV International, Moscow, in Russian 1500 gmt 22 Oct 00
Kursk governor Aleksandr Rustkoy has said that the Kremlin administration
orchestrated his removal from the gubernatorial election. Interviewed live by
the "Itogi" analytical programme, he said that he intended to appeal to the
Russian Supreme Court and run once again, should the current election be
declared invalid. The following are excerpts from his interview broadcast by
the Russian NTV International television at 1500gmt on 22nd October:
[Presenter] As we have promised, now we are returning to the scandal over the
Kursk [Region] gubernatorial election. The incumbent Kursk Region governor,
Aleksandr Rutskoy, is live on air. You have already seen our detailed report
on how he was barred from the election through a court decision. Hello,
[Rutskoy] Hello, Yevgeniy.
[Q] Tell us please, what did the court verdict say? Why have you been removed
from the election?
[A] You know, the law is being manipulated in Russia. They [authorities] use
it as they want, and in so doing they still insist that this is what the
dictatorship of the law is about.
I have not received yet - after almost 24 hours - a detailed court verdict
which bars me from the election. I am not surprised at all. It should be seen
as a conspiracy based on simple cowardice. Just that. But they have not
removed some Sidorov, Petrov or Ivanov [common Russian surnames]. They have
not removed [local security chief Viktor] Surzhikov or [State Duma deputy
Aleksandr] Mikhaylov. They removed the candidate who was clearly about to win
the election. You have just shown a report on the Kremlin authorities
pondering how they can influence governors. They should not think about
influencing us. They should think about real business, about a real economic
reform in the interests of the people.
I was accused of the following. Look, I mentioned a Grand Cherokee [jeep] [in
the description of property before elections], which had been stolen. Police
had cancelled its registration instead of trying to find it. But I did not
mention the Volga [car] produced in 1994. I sold it, but how could I know
that its registration has not been cancelled? Therefore, the claim that I
have been trying to conceal property is just laughable.
[Q] Was it all about the Volga?
[A] I had a conversation with a presidential administration official. I asked
him whether it had been a huge problem to say it straight to me: Aleksandr
Vladimirovich, we are not happy about you, so would you please abstain from
running in the election, please understand us correctly. I think this would
have been fair. But why do they want to embarrass, well, not myself, but the
country? Everyone is laughing at us already.
We are talking about democracy and the dictatorship of law and at the same
time we accept scandalous breaches of the constitution and the Russian
legislation. This is a unique situation, when the incumbent governor was
barred from elections 12 hours before they started. It looks as if we are in
a small Latin American country. It looked like a coup. There was police, riot
police and dogs. They cordoned off and seized the television and the radio
broadcast centre. There were riot police with dogs on the streets adjacent to
the Kursk Region administration headquarters. It was laughable to watch.
[Q] Sorry for interrupting you, Aleksandr Vladimirovich. I have a question.
Did your representatives in the court or your lawyers try to protest against
scheduling the trial for Saturday [21st October]. It was clear, that should
the court ruling be against you, you would not have time to appeal.
[A] Of course they protested. The court was opened at 0900 [0500 gmt], while
the trial started at 1100. They made several prolonged breaks so that it
lasted until 1830, at which time the decision was announced. The person who
represented the Prosecutor's Office, the body in charge of supervising the
implementation of laws in the country, at the trial was against the decision.
The person who represented the Region's electorate commission was against it,
too. So the court came up with its own decision adopted despite strong
objections from the Prosecutor's Office and the electoral commission, since
this decision was supported by nothing...
[Q] Aleksandr Vladimirovich, what will you do next? Will you appeal to a
court of a higher instance?
[A] I have been trying to contact the prosecutor-general, the Supreme Court
chairman and the Russian president for over 24 hours. It was all in vain. So,
although I still have no detailed court decision, I have already drafted an
appeal to the Supreme Court. So I will insist that this case is examined and
an appropriate decision is taken in accordance with the Russian legislation.
If Moscow has nothing to do with this conspiracy, then the law will
undoubtedly triumph. If my assumptions appear to be true, then we will have
nothing to do, and it will be clear once again in what kind of country we all
live. Who will wish to have any kind of relationship with us after that?
[Q] Does this mean that if the court of a higher instance cancels the
decision by the Kursk Region court, another election will be held?
[A] Undoubtedly so. On my way to your studio I received a report that 39.5
per cent of voters have cast their votes. I have no doubts that they
[Rutskoy's foes] could put additional ballot papers into the bins and make it
51 per cent. Thus the presidential administration will have an orthodox
Communist, State Duma Deputy Mikhaylov, as the leader of the race. Well, they
will get what they wanted.
[Q] Let us not speak about candidates, since the voting has not finished yet.
Polling stations are still open.
[A] Well, they are still open, but the turnover is still far below the 50 per
cent margin. But, as I have just been told, some people are taking ballot
boxes all around the city, trying to attract those who could not come to
[Q] Will you take part in a new election [if this one is declared invalid]?
[A] If a new election is held, I will certainly take part in it...
International energy projects seen as NATO bid to sideline Russia
Source: 'Nezavisimaya Gazeta', Moscow, in Russian 19 Oct 00 p4
The Baku-Ceyhan oil pipeline project, proposals for a Transcaspian pipeline
to transport Turkmen gas to Turkey and a project to supply Turkmen
electricity to Turkey from April 2001 are all parts of a drive to use Turkey
to expand the influence of NATO in the region, according to the 'Nezavisimaya
Gazeta' newspaper. The following is the text of the article by Sergey
Pravosudov, published on 19th October under the headline "The USA is fighting
for the energy resources of the CIS countries":
The Americans are trying to step up work to lay pipelines that bypass Russia.
More and more countries have been putting forward their claims to Turkmen gas
in recent times. Let us recall that Russia and Ukraine recently concluded
contracts for the delivery of the blue fuel from Turkmenistan. Each of the
countries hopes to receive 35bn cubic metres of Turkmen gas a year. In the
near future, however, Turkmenistan may send its gas in a different direction.
Turkmen President Saparmyrat Niyazov and his Turkish colleague Ahmet Necdet
Sezer discussed the question of accelerating the realization of the
Transcaspian gas pipeline project. The pipeline is supposed to go from
Turkmenistan along the floor of the Caspian Sea, through Azerbaijan and
Georgia, to Turkey. The cost of the trunk line of about 2,000 km may be
Let us recall that on 21st May of last year Saparmyrat Niyazov and the
Turkish minister of energy and natural resources Ziya Aktas signed a contract
in Ashkhabad for the delivery of Turkmen natural gas to the Turkish Republic.
It is planned that the total volume of deliveries along the pipeline will be
30bn cubic metres of gas a year. According to the accord, Turkish company
Botas received the right to buy 16bn cubic metres of natural gas a year at 78
dollars per 1,000 cubic metres at the border of its own country for 30 years.
The remaining 14bn cubic metres will be exported to Europe. It is obvious
that it is more advantageous for Turkmenistan to sell gas to Turkey than to
Ukraine. The price of the gas is the same for Turkey and for Ukraine, but the
Turks will pay the full cost of the blue fuel in freely convertible currency,
while the Ukrainians will cover half of the amount through barter. In
addition, Ukraine is known for its shaky ability to pay. It has already
accumulated significant debts for gas, so there is no 100-per-cent assurance
that it will be able to pay for the Turkmen energy resources in full
conformity with the agreements. But not everything in these contracts depends
on economics. Let us recall that Turkey is a NATO member and is trying to
expand the influence of this alliance to neighbouring countries. The USA and
the European Union are actively assisting Turkey in this. But Russia is
trying to pursue its own policy in this region; therefore its interests often
cross the interests of the North Atlantic alliance.
It is obvious that if energy resources from the Caspian region do not go
through Russia, but rather through other CIS countries, this will lead to
their growing closer to the NATO countries. After all, thanks to this project
they, not Russia, will receive the money for gas transit. And this is not a
small amount of money - approximately 40 dollars for every 1,000 cubic
metres. In this way Azerbaijan and Georgia will divide up approximately 1.2bn
dollars a year between themselves. Moreover, Europe has already announced its
own plans to increase gas imports and so our Transcaucasian neighbours are
extremely interested in deliveries from Turkmenistan. However, Stiven
Dashevskiy, an analyst at the ATON investment company, thinks that the more
time passes, the less chance there will be for the Transcaspian pipeline to
be realized. After all, Russian gas will already start arriving in Turkey by
the Blue Stream pipeline in 2002. And in this case the construction of a
second gas pipeline will be unprofitable. Moreover, the Transcaspian gas
pipeline is supposed to run along the floor of the Caspian, but the status of
the Caspian Sea has not been defined at this point. Therefore, before
beginning construction it will be necessary to get consent from all the
countries of the Caspian basin. It is obvious that Russia will not under any
conditions give its consent to realization of this project. But our country
is proposing to Turkmenistan that they deliver their gas to Europe by Gazprom
pipelines. So the only thing that can save the Transcaspian project is
political pressure by Europe and the USA. But at this time not a single
Western company has declared its desire to invest money in this construction
But the collaboration of Turkmenistan and Turkey is not limited exclusively
to gas projects. Beginning in April 2001 Turkmenistan will transport 300m kWh
of electricity a year to Turkey. In Ashkhabad they consider the Iran-Turkey
route for exporting Turkmen electricity and the development of projects to
transport it to Afghanistan and Pakistan to be important parts of the
country's development strategy for 2001-2010. It must be remembered that the
Unified Energy System Russian joint-stock company [UES] also has plans to
export electricity to Turkey. So a clash of interests will also occur on
Whereas the West is not showing any special activity in relation to Turkmen
gas, in relation to the project to export Caspian oil from Baku to the
Turkish city of Ceyhan vigorous work is under way. A few days ago the
government of Azerbaijan, the State Oil Company of the Azerbaijani Republic
(SOCAR) and a sponsor group of oil companies signed an agreement to build the
primary export pipeline from Baku through Tbilisi to Ceyhan. Heydar Aliyev,
the president of Azerbaijan, who was present at the agreement signing
ceremony, said: "If Azerbaijan's new oil strategy had its start in 1994, this
day can be called the point of departure for Caspian oil to reach world
markets. The signing of this agreement opens a new era in the development of
the transportation system that connects East and West." The agreement
determined the participating shares of the parties exactly: SOCAR 50 per
cent; BP 25.41 per cent; Unocal 7.48 per cent; Statoil 6.37 per cent; TPAO
5.02 per cent; Itochu 2.92 per cent; Ramco 1.55 per cent: and Delta Hess 1.25
It is expected that in eight months the sponsor group will prepare the base
project for constructing the pipeline. Moreover, in the next few days the
group will conclude agreements with Georgia and Turkey as countries
possessing transit territory and with the Turkish Botas Company on doing the
technical planning work and construction of the pipeline on Turkish
territory. The construction of the primary export pipeline, at a cost of
2.4bn dollars, is planned to begin in 2001.
Let us recall that the Western oil companies have refused to finance the
realization of this project in the past because there were not adequate
explored oil reserves in Azerbaijan. But now, according to our information,
the English company BP has appropriated 140m dollars to survey the pipeline
route. It can be assumed that the US Department of State reached agreement
with the leadership of Kazakhstan on transportation of oil extracted in that
republic through the Baku-Tbilisi-Ceyhan pipeline. Nursultan Nazarbayev spoke
earlier about how Kazakh oil would go to the West across Russia's territory.
In the opinion of Stiven Dashevskiy, construction of the primary export
pipeline only makes sense if Kazakh oil is transported along it. It this
happens, Russia can only hope that such reserves of oil are found in
Kazakhstan that there is enough for two pipelines, the American Baku-Ceyhan
and the Russian Caspian Pipeline Consortium.
to CDI's Home Page I Return
to CDI's Library