November 10, 2000   

This Date's Issues:   4630 • 4631

Johnson's Russia List
#4631
10 November 2000
davidjohnson@erols.com

[Note from David Johnson:
1. Reuters: Russia hopes to turn tables in Chechnya in winter.
2. The Guardian (UK): Russia's glee at US election chaos. Russia is in no position to lecture the US on democracy, argues Ian Traynor.
3. From Edward Lucas.
4. The Economist (UK): The bridling of Russia's regions. President Vladimir Putin is showing that he can biff Russia's regional chieftains. But running the country is another story .
5. Business Week: Paul Starobin and Catherine Belton, Gazprom on the Grill. Questions are mounting about officials' self-serving deals.
6. the eXile: Korzhakov's review of Yeltsin's new autobiography.]

******

#1
Russia hopes to turn tables in Chechnya in winter
 
MOSCOW, Nov 10 (Reuters) - Russia hopes to finish off the remaining few
hundred Chechen rebels this winter, Defence Minister Igor Sergeyev said in an
interview published on Friday.

Russia has been fighting the separatists since August 1999. It controls most
of the region but Moscow's troops are killed or injured daily in lightning
raids by groups of rebels using mountainous terrain to their advantage.

Sergeyev said in the Red Star military newspaper that Russia would be able to
take advantage of the onset of winter, when the green cover is gone from the
hills and mountains where the rebels hide.

"I think that when the leaves fall it will be easier not only to find but to
destroy the bandits...we will do everything possible to turn the tables this
winter," he said after reviewing a new division to be stationed in Chechnya.

Sergeyev said troops would have more training to help stop the steady flow of
casualties in clashes with rebels, who have become expert at ambush and
mine-laying.

More than 2,500 Russian soldiers have died in the fighting and more than
7,000 have been injured.

"If it is possible to call 200-300 people a large group, then in Chechnya
today there is a maximum of two or three (such rebel groups)...but they
prefer to attack in small subdivisions."

Sergeyev said that the 42nd division's arrival in Chechnya -- it is the first
division to be stationed permanently in the region -- could be a key moment
in the conflict, but troops would also receive extra training to deal with
the region's dangers.

"We have decided to give anti-mine training to every unit...(and to) employ
other ways of fighting bandits which I will not reveal," Sergeyev said.

"All this will allow us to reduce our losses and, I repeat, turn the tables."

Russia's campaign in Chechnya is its second within six years. Moscow lost
control of the region after a 1994-96 conflict which the rebels won.

******

#2
The Guardian (UK)
9 November 2000
Russia's glee at US election chaos
Russia is in no position to lecture the US on democracy, argues Ian Traynor
in Moscow

It's not often that the heirs of Lenin and Stalin get the opportunity to
lecture the inheritors of Jefferson and Thomas Payne on liberty, the rights
of man, and the pursuit of happiness. But Russian pundits, politicians, and
MPs can barely suppress their sniggers at the constitutional conundrums
thrown up by the Florida fiasco.

Despite widespread evidence that ballot-rigging was rife in President
Vladimir Putin's election victory last March, even the Kremlin chief could
not pass up the chance to make a dig at the Americans' expense, offering
Russian assistance in ensuring a fair vote.

Putin noted that Alexander Veshnyakov, the head of Russia's election
commission, was in the US to watch the American election. ''If need be, he
will advise his American colleagues on how to act in the difficult position
in which they find themselves,'' quipped the Russian president.

It's an offer the Americans will have no problem refusing. But the air in
Moscow is thick with the scent of Schadenfreude at the American drama. A mere
eight months after Russia accomplished the first handover of power from one
head of state to another through the ballot box in its history, the former
foreign minister, Alexander Kozyrev, commented that the Bush-Gore chaos
highlighted the ''imperfections'' of the US democratic model.

In particular, he recommended that the US scrap the electoral college system
as an anachronism established for a different era.

Russian glee at the American dead heat is unaffected by admonitions about
people in glass houses. Broad Russian disaffection with the west means that
taking comfort in the US debacle triggers no corresponding self-reflection on
the infinitely worse state of affairs at home.

A dead heat or an uncertain outcome such as that produced by Bush and Gore,
for example, is inconceivable in Russia.

Boris Yeltsin reveals in his latest volume of memoirs that he almost
cancelled the election for his second term in 1996 because he faced defeat by
the communists.

It was only when the big TV channels came to his rescue by destroying the
communist challenger, Gennadiy Zyuganov, that Yeltsin went ahead with the
poll.

The trick was repeated a year ago. The same channels smeared and eliminated
Putin's rivals last year in a ruthless campaign of character assassination
that left the Kremlin clear to its current tenant. Putin refused to campaign,
comparing election contests to sordid advertising for chocolate bars or
sanitary towels.

He did not need to campaign. The March election rubber-stamped a decision
already taken by the shady elite running Russia.

US elections are scrutinised and analysed everywhere, of course. After half a
century of cold-war rivalry and a decade of so-called strategic partnership
between Washington and Moscow, the Russians have every reason to pay
particularly close attention to the race for the White House.

So beyond the Schadenfreude, the Kremlin is closely watching the White House
outcome for clues as to what it means for American foreign policy.
Temperamentally, Putin, a rightwing liberal on economic policy with
authoritarian leanings on social policy and civil rights, should hit it off
with a Republican president.

But Al Gore has been a key player in US-Russia relations for the past eight
years, and the Kremlin preference seems to be for the devil it knows. The
Russians were cross that Bush, Condoleeza Rice, and the Republicans in
Congress sought to hammer Gore over policy towards Russia during the
campaign, with Viktor Chernomyrdin, the former prime minister, at one stage
threatening to sue US politicians over allegations of corruption.

Officially, of course, Putin says he can work with any administration chosen
by the Americans. The Kremlin expects the new administration to ensure
"continuity in interaction with Russia and the consolidation of the positive
potential created by the leaders of the USA and our country in the last
years,'' said Sergei Prikhodko, Putin's foreign policy aide.

But the Russians fear that continuity could be disrupted by a more robust and
assertive policy on Russia from a Bush administration, while a narrower
definition of the American national interest under Bush could also be
problematic.

Bush is pledged to pushing through the "son of Star Wars" national missiles
defence programme that so enrages the Russians. The Republicans look likely
to be less accommodating on aid to Russia and supporting the International
Monetary Fund and other lenders to Russia.

''Bush will actually force Russia to decide whether to accept the US plans to
create a national missile defence system or start thinking of withdrawing
from the 1972 ABM treaty,'' said Aleksei Arbatov, deputy head of the
parliamentary defence committee.

And the Republicans could be tougher on Russian arms policy and arms sales
to, say, Iran and China, while ignoring Russian foreign policy considerations
in hotspots like the Balkans and the Middle East.

A Bush White House will be ''extremely tough'' on Russia, Arbatov added.

On the plus side for the Russians, however, are the Bush team's warnings that
the days of the US troops in Kosovo and Bosnia are numbered. They also expect
Bush perhaps to be more lukewarm on Nato's further expansion into the former
Soviet satellites of eastern Europe.

And they expect a Bush administration to dispense with considerations of
humanitarian intervention, deploying US military muscle to punish trampling
of human rights. On Kosovo, Nato, and human rights, Gore would be tougher
than Bush, the Russians feel.

Russian analysts worry that Bush is extremely inexperienced, above all in
foreign policy. They choose to forget that 18 months ago no one had ever
heard of Vladimir Putin - or that last March's ballot was the first time
Putin had ever contested an election in his life.

******

#3
From: "edward lucas" <esl@economist.com>
Date: Fri, 10 Nov 2000
Subject: From Edward Lucas

The usual reminder: all comments, feedback, criticism etc are very welcome
at esl@economist.com.
To subscribe to this weekly mailing, send an e-mail to
edwardlucas-subscribe@egroups.com

Just back from Saratov--rather depressing in comparison to
Kaliningrad. An ambassador said sagely to me last night "ah yes, but
compare it to twenty years ago". I think this is one of the most
misleading ways to approach Russia. My favourite analogy is that this
is like saying a homeless person is better off than when he was in
prison. It is true in a very narrow sense, assuming that you think
freedom is more important than food, shelter, and heating. But so
what? Much of Russia exists on subsistence farming and cheap energy;
the physical infrastructure is decaying; the human capital (education
system) is declining; the country is less free than it was ten years
ago; and that the post-communist political class shows very little
sign of understanding these problems or having any idea how to cope
with them. There are lots of reasons why things are going to get
worse; very few that they may get better. Facile optimism is actually
rather damaging because it encourages complacency, both among
westerners and Russians.

The splendid piece from Chukotka is not by me but a very able
freelance colleague, Anna Reid, who is writing a book about the
disastrous legacy of Russian colonialism east of the Urals. Her
previous book was about Ukraine. And the (also excellent) piece from
Baku is by Tom de Waal, another Economist regular, who is writing a
book about the Caucasus. [DJ: Not reproduced here.]

Three little notices. One is that I am speaking at a conference
organised by Diena in Latvia on Friday November 24th, if anyone is
interested in my views on xenophobia in the Russian media

Secondly, if anyone is travelling from Moscow to Washington in the
next few weeks and would like to carry an extremely heavy book for a
friend of a friend, I would be very grateful.

Thirdly, there will be an Economist christmas party on December 8th.
Anyone who will be in Moscow then and would like to come should let
me know, so that I can plan numbers.

On that unusually cheerful note, have a nice weekend.
Edward

*****

#4
The Economist (UK)
November 11-17, 2000
The bridling of Russia's regions
President Vladimir Putin is showing that he can biff Russia's regional
chieftains. But running the country is another story
 
STEP out of line, and we will end your political career. That, bluntly, is
the message the Kremlin is sending to the 89 governors and presidents who
run Russia's regions. The methods vary. This autumn 33 of them are up for
re-election. President Vladimir Putin is much more popular than they are. A
simple public endorsement can swing an election. Dirtier tricks to do down
uppity governors include using the courts, the tax police and blackmail.

This marks a big shift in Russia's balance of power. Only six months ago,
Mr Putin's intervention in the St Petersburg gubernatorial poll failed
embarrassingly, when his favourite candidate was doing so poorly that she
pulled out. That reflected both the entrenched local position of the
incumbent, Vladimir Yakovlev, and his close ties with the tycoons within
President Boris Yeltsin's family circle.

Now the master-manipulator in that group, Boris Berezovsky, is abroad;
Russia's chief prosecutor says he will face criminal charges if he returns.
And previously puffed-up local leaders in Russia's regions and ethnic
republics are making strenuous public efforts to placate the Kremlin. Mr
Yeltsin once told them to "take all the sovereignty you can swallow". Now
they are busily revising their constitutions, and bringing their local laws
on privatisation, government structure, citizenship and so on, into line
with federal Russian ones.

Tatarstan, for example, the richest and biggest of the ethnic republics,
recently dropped long-standing plans to issue its own passports. Its
neighbour, Bashkiria, now says that it is "part and parcel of Russia", a
big step down from the days when its leaders liked to see themselves on a
near-equal footing with the federal authorities.

The squeeze against regional bosses is proving effective, at least in the
short run. The Kremlin's men have won four of the five elections held so
far; most of the remaining ones look set to go Mr Putin's way. But it is
one thing to misuse a court to have a troublesome local baron removed from
the ballot paper-which is what happened two weeks ago to Alexander Rutskoi,
an ex-fighter pilot (and bloody-minded old foe of Mr Yeltsin) who used to
govern the heavily industrialised Kursk region. It is another to find an
efficient, or even democratic, way to run sprawling, chaotic Russia as a
whole. Here Mr Putin's plans look fuzzier, and success farther away.
 
Hopes for more effective government rest mainly on the seven presidential
envoys (see our table to the right) appointed in May to manage much bigger
chunks of Russia that largely correspond to the country's military
districts. Their main power is patronage: they control appointments in the
local outposts of federal agencies such as the prosecutor's office and the
tax police. These agencies used to be largely in the hands of the elected
regional leaders, most of whom used them to their own political and private
advantage.

In theory, the new scheme could create a powerful new layer of government.
So far, however, progress has been unimpressive-except in the important
business of finding grand buildings for headquarters. One envoy, in the
Central region, has done practically nothing. Most of the others have made
authoritarian noises, and have picked on easy targets, such as wresting the
media out of the hands and pockets of local political chiefs. In the
North-West region, for example, Viktor Cherkesov, a former KGB man and
dissident-hunter, is creating a regional television station to get his
ideas across.

The only faintly promising one of the seven is Sergei Kirienko, a
business-like former prime minister who now runs the Volga district and
wants to make life easier for small firms. His advisers include people like
Vladimir Davidov, who put himself through a training course in Arizona with
McDonalds, and owns a fast-food outfit in Saratov, on the Volga river.
Opening a new restaurant there needs approval from 23 different
bureaucrats. Mr Kirienko is listening, he says.
 
The Kremlin's plans are meeting little resistance. A move to create a new
political party of independent-minded governors has flopped. Next year's
budget, passed after much squawking from the losers, divides tax revenues
greatly in favour of the federal authorities, depriving the rich governors
of their main weapon. Regional leaders have lost their automatic right to
sit in the Federation Council, the upper house of Russia's parliament.

As so often in Russian history, initiatives from the centre may bring
enthusiastic lip-service from the provinces, while life goes on much as
before. The new layer of bureaucracy could even make things worse, creating
yet another bunch of greedy officials to prey on investors and cash-rich
businesses. A third possibility is that the initiative ends up weakening
the centre's hold on the rest of Russia even further. One senior official
in Tatarstan's capital, Kazan, hopes that the new Volga region, with its
large and fecund Tatar-speaking population, could one day become a reborn
version of Idel-Ural, a Tartar-speaking state that emerged briefly after
Russia's Bolshevik revolution.

Although most of Russia's regions have been badly ruled, the danger in
bringing them to heel is that even useful experiments-on land reform, say,
or foreign investment-will be stymied. Mr Putin may succeed in making the
rest of Russia run along Kremlin lines, but he has yet to show that this
would be an improvement.

******

#5
Business Week
November 20, 2000
Gazprom on the Grill (int'l edition)
Questions are mounting about officials' self-serving deals
By Paul Starobin and Catherine Belton in Moscow 

It was one of Viktor S. Chernomyrdin's last deeds as Prime Minister of
Russia. In February, 1998, he signed a decree handing a federal contract
worth millions of dollars to Moscow-based Stroytransgaz to lay gas pipelines
in Russia's regions. It was an interesting selection. The Prime Minister's
son, Vitaly, was a first vice-president of the enterprise as well as holder
of a 6% stake. And Stroytransgaz itself was a satellite of Gazprom, Russia's
huge gas conglomerate. Chernomyrdin the elder presided over Gazprom before
entering the government in 1992. And he went back to Gazprom as chairman
shortly after approving that contract.
   Sounds questionable. A lot of things, though, were questionable in
Russia's tumultuous progress to capitalism--and allegations of management
abuses at Gazprom surfaced often through the years. To no avail, however:
Gazprom, protected by the politically powerful Chernomyrdin, was long
considered sacrosanct. Yet the history of Gazprom's insider deals is now
gaining special prominence. A more aggressive board, the rising anger of
shareholders, and wider availability of documents are all putting the
transactions at Russia's biggest company under intense scrutiny.
   Most important, President Vladimir V. Putin is moving aggressively to
tighten government control over the mammoth enterprise, which wielded so much
political clout in the past that it became known as Russia's ``state within a
state.'' Putin may even clean up the company, which is 38% owned by the
government, to prepare for an overhaul. A first step in this direction,
already on the agenda, is a breakup of Gazprom's monopoly on gas pipelines.
   Such a bold reform would go a long way toward fulfilling Putin's vow to
improve Russia's economy. Gazprom's vast assets dwarf the holdings of
oligarchs so far targeted by Putin's regime such as tycoon Boris Berezovsky,
whom federal prosecutors are now threatening to charge with embezzlement in a
case connected to national airline Aeroflot. ``The government is clearly
concerned about possible asset transfers from Gazprom. Before now, it was
totally passive,'' says Oleg Vyugin, an architect of Putin's reform plan.
   As a result, official Moscow is abuzz as more information leaks steadily
out about the questionable goings-on at Gazprom when Chernomyrdin served as
Boris N. Yeltsin's Prime Minister and after he rejoined the company. The
thrust of the allegations: that Gazprom executives transferred assets and
shares at below-market prices to relatives and other insiders and awarded
sweetheart contracts to Gazprom-connected companies. Gazprom officials deny
any wrongdoing. But the authorities are looking into several of the
allegations. Documents obtained by BUSINESS WEEK reveal insider dealings
between Gazprom and Stroytransgaz and also indicate that a Gazprom senior
manager has a stake in an upstart producer, Itera Group.
FAMILY AFFAIR. The tale of Stroytransgaz, the winner of that federal
contract, encapsulates all the criticisms leveled at Gazprom. The pipeline
maker's list of shareholders, filed with Russia's Federal Securities
Commission (FSC), includes not only Vitaly Chernomyrdin but his brother,
Andrei, and Tatyana Dedikova, the daughter of Gazprom Chief Executive Rem
Vyakhirev. The president of Stroytransgaz, Arngolt Bekker, is a Gazprom board
member. In fact, Gazprom managers and relatives own at least 60% of
Stroytransgaz. It currently has $1.2 billion in orders on its books, over 80%
placed by Gazprom. Perhaps the most lucrative gift of all: In 1995, Gazprom
transferred to Stroytransgaz a 4.83% block of Gazprom shares, according to
FSC documents. Gazprom charged just $2.5 million for securities that had a
market value at the time of up to $80 million, according to Moscow brokerage
United Financial Group. The FSC is now probing asset transfers from Gazprom
to Stroytransgaz, which may have violated laws barring insider dealing.
Stroytransgaz says it is a transparent company with nothing to hide.
   Share purchases are at the heart of another allegation focusing on links
between Gazprom and Itera Group, a privately held company headquartered in
Moscow. Over the last three years, Itera has shot up to become the world's
fourth-largest holder of gas reserves, while Gazprom has remained No. 1. This
has raised eyebrows because most of Itera's reserves have come from Gazprom.
   The government has ordered the State Duma's Audit Chamber to probe 
possible illegal dealings between the two companies, an effort due to be
completed by the end of the year. Officials have already referred one of the
probes of Gazprom practices to the Prosecutor's Office, where it is being
investigated further for possible legal action.
   Yet in an interview with BUSINESS WEEK, Itera Vice-President Vladimir I.
Martynenko defended his company's dealings with Gazprom. ``Gazprom is not
giving anything for free'' to Itera, Martynenko declares, saying Itera has
paid market prices for access to Gazprom pipelines and that the state
approved the company's purchases of Gazprom assets. He says no Gazprom
managers own personal stakes in Itera.
   But BUSINESS WEEK has obtained filings that appear to provide the first
concrete evidence of a link between a senior Gazprom manager, Viktor
Bryanskikh, and Itera. Bryanskikh is a major shareholder of a corporation
called Lanka Promkomplekt, which is registered at the same Moscow address as
Itera, and is owned in part by companies with links to Itera. In February,
1999, Lanka also bought a chunk of Sibneftegaz, a Gazprom affiliate. Those
shares eventually ended up under Itera's control.
   The Sibneftegaz shares were also sold on the cheap. Sibneftegaz registered
its shares in the 1999 sale at a value of $1.8 million--while independent
analysts put a much higher valuation of $80 million on the shares. Fellow
purchasers of the discounted stock were Gazprom senior manager Vyacheslav
Kuznetsov, his spouse, and a company owned by the son and brother of Gazprom
CEO  Vyakhirev.
   Bryanskikh declined to comment; Itera's Martynenko says Lanka Promkomplekt
is not an Itera company. ``But if they [Gazprom managers] have some shares in
Itera holdings, what's wrong with that?'' he added.
   The big question is how this wheeling and dealing has affected Gazprom as
a company. Because of underinvestment, production at Gazprom is projected to
drop to a 10-year low this year. It has reported total losses of $10 billion
in the last two years. A company with $15.4 billion in sales and $40 billion
of gas reserves, Gazprom has a market capitalization of only $6.8 billion.
   Another charge leveled is that Gazprom managers appear to be using tax
schemes to transfer assets to Itera. According to a recent report of the
Audit Chamber, Gazprom, paid 1998 and 1999 taxes to the Siberian regional
administration of Yamal-Nenetsk in the form of gas. The gas was valued
cheaply at $2 per thousand cubic meters. The region, headed by an elected
governor who also sat on Gazprom's board, sold the gas to Itera at the same
low price. Itera, in turn, sold the gas on world markets for as high as $60
per thousand cubic meters. According to the Audit Chamber, Itera garnered
$1.8 billion in 1999 through such means. The Audit Chamber has passed its
findings on to prosecutors for possible legal action. ``Itera is such an
egregious rip-off [of Gazprom shareholders], one blinks with disbelief,''
analyst Eric Kraus at the Moscow brokerage Nikoil Investment Co. declared in
a Nov. 2 report on Gazprom.
   Gazprom declined to respond to phone calls and written questions from
BUSINESS WEEK. The company's management has previously denied any misdeeds
and said it is acting to make Gazprom more transparent. Chernomyrdin also
declined to respond.
TIGHTER REINS. Gazprom has new directors who are a lot more aggressive about
policing it. The board voted just last month to require management to obtain
directors' approval for any asset sales, a stipulation that did not exist in
the past. At the insistence of Gazprom director Boris Fyodorov, a finance
minister in Yeltsin's administration, a discussion on the company's Itera
ties was placed on the agenda for the next board meeting in late November.
The government's representatives on the board backed that move against CEO
Vyakhirev's protests--but it's still not clear whether they will join
Fyodorov, who represents minority shareholders, in forcing Gazprom to divulge
all its questionable transactions. Seeking to increase the pressure for
reform, Fyodorov on Nov. 3 sent Vyakhirev a letter--a copy of which has been
obtained by BUSINESS WEEK--demanding further information about Gazprom's
relationship with Itera and asking about the involvement of Stroytransgaz in
Gazprom's Blue Stream project--a $3 billion venture, in which Gazprom and the
Italian company ENI are equal partners to build a gas pipeline linking
Russia's Black Sea coast with Turkey's. In 1998, Stroytransgaz received a
contract to build the pipeline's first phase. Fyodorov wants to know if it
was competitively awarded. Stroytransgaz says this contract and others were
all awarded on a tender basis.
   To be sure, not all of Gazprom's problems are of its own making. Its
performance has long been hamstrung by the state because the government has
forced it to subsidize the rest of the economy by keeping domestic gas prices
low. Gazprom has also been blocked from cutting off supplies to major
companies that can't afford to pay. But the extent of insider dealing at
Gazprom, cynics say, simply proves Russia is incapable of reform.
   Not so. Gazprom represents an old style of business that progressive
executives and policymakers are eager to change. Putin says he wants to build
an open economy that consumers and investors can trust. This is his chance.

******

#6
Date: Thu, 09 Nov 2000
From: "Mark Ames" <editor@exile.ru>
Subject: new eXile material/PRESIDENTIAL MARATHON: FROM DAWN TILL DUSK

Korzhakov's review of Yeltsin's new autobiography

PRESIDENTIAL MARATHON: FROM DAWN TILL DUSK
THE NEW BOOK BY FORMER PRESIDENT OF RUSSIA BORIS YELTSIN, REVIEWED BY
FORMER HEAD OF THE PRESIDENTIAL SECURITY SERVICE ALEXANDER KORZHAKOV

The eXile
November 9, 2000

When my book Boris Yeltsin: From Dawn Till Dusk appeared, Yeltsin was among
the first to receive a copy as a gift. The inscription read as follows:
"To Boris Nikolayevich Yeltsin--President of All Russians--with regards,
A. Korzhakov."

Unfortunately, Boris Nikolayevich didn't see fit to give me a copy of his
Presidential Marathon. The Stringer editors were forced to spend 240 rubles
and then present the book to me. I don't begrudge the money--the book
turned out to be of high quality, lovely, ample, rich....

When I first started reading I laughed a lot, until realizing that I simply
had not read a more truthful account of Kremlin morals and manners.

"...Later it became clear to me exactly what was going on with Bordyuzha.
As an officer who had made a wonderful career for himself within a strict
military system, he had a poor understanding of modern political
structures; he could not catch the subtle nuances or the underlying
currents. From his point of view, all of the chief of staff's work was
illogical, unregulated, strange. And he was... out of his element.

"Bordyuzha developed a sort of split personality, he was suffocated by
internal pressure. It was probably just this constraint that I noticed in
him.

"Such things happen in life. I know from experience. A strong and willful
individual, even one with superb health, finding himself in an unpleasant
situation and undergoing constant stress, will simply start to ail.
Following a brief tenure as chief of staff, the young border guard general
developed heart problems...."

This is all true to the last word. No normal person could possibly work for
long in that snake pit known as the "Presidential Administration."

I don't know whether Yumashev and Dyachenko understand that they overdid
their attempts to paint over the Yeltsin period. The result was an
extremely wicked parody of reality. There is decay and corruption, and they
write about as if it were a revival.

What is surprising is the haste with which the collective author has
published these memoirs. Clearly they were afraid that someone would beat
them to it and give an entirely different interpretation of the events
depicted in the book. It is well known that a memoir-type publication must
satisfy at least two requirements: to be informative and truthful. But
instead of a serious assessment of the events occurring in the country
during Yeltsin's second term, the reader is presented with a work on the
theme of "How I Spent My Summer Vacation." It's just as well--essentially,
it's a review.

The fact that the book's authors were "Valya and Tanya" arouse not the
slightest doubt from anyone. Boris Nikolayevich had long forgotten how to
write. Even decrees for signature were provided to him with the resolutions
typed out in advance. He signed them with some difficulty. He was unable to
comprehend films with a plot more complex than Mumu. He would watch only
American action flicks at the dacha or at Zavidova. He would fall asleep
while watching them, quickly and deeply.
In my time, I tried to interest him in Soviet films. The only one he could
watch through to the end was White Sun of the Desert. So, Vladimir Motyl.
More than likely, Motyl and the film's creative team owe their prize to
Korzhakov.

"...Awards are basically a simple matter. What's so complex about it--just
take it and sign. But...

"I have always felt (and still do) that any matter, even the most peaceful,
provides an occasion for an unexpected decision. Take the awarding of a
State Prize to the creators of the film White Sun of the Desert. The 25th
anniversary of this remarkable picture was approaching. But my filmmaker
associates felt that if the country and its leadership had not recognized
the film's creators at the appropriate time, it was already too late to
make up for lost opportunities. An award after the fact would be absurd,
strange.

"But I forced my own way [Against whom? -- A.K.]. I was absolutely
convinced in the rightness of my actions.... This was probably one of the
few times when I thought of myself: It's good that I am the president....

"It was nice to shake hands with Vladimir Motyl in the Kremlin's
Georgievsky Hall. And I was not ashamed for the country. On the contrary, I
was proud."

In general, the book turned to be largely representative. It's hardly worth
reviewing, but it should be read. Thus, for the most part I'll simply quote
from Yeltsin (for convenience, we'll just assume that Boris Nikolayevich
wrote the book), and correct him a little bit.

TANYA

"...One time Valentin Yumashev came to see me at Barvikha. I held nothing
back and shared my thoughts with him: I felt that I did not control the
process, I could see from the downcast eyes of my advisors (particularly
Viktor Ilyushin) that the situation in the administration was growing worse
by the day and that slowly but surely we were becoming mired in a swamp. To
all appearances, the staff was a continuous squabble with no strategy, a
Soviet communication style. It did not resemble a gathering of like-minded
individuals in the slightest.

"'We need one of our people on the staff,' I said. Valentin listened,
nodded, and gave it some thought.
...But who? Who could it be?

'What about Tanya?' he asked suddenly."

Tanya was "thought up" by Berezovsky, Gusinsky, and Chubais in Davos.
Yumashev even came to me with this idea. They needed a set of ears on the
Election Committee, of which none of them was a member. At that time they
had their unofficial staff meetings at LogoVAZ headquarters, but they had
no idea what was going on at the real meetings.

Tanya was the only person on the Committee with no duties whatsoever.
Yeltsin even removed her once; he ordered me to revoke her admittance pass.

Then they used Naina Iosifovna to wear down Yeltsin. He even started
arriving at the Kremlin at 7 a.m. in order to down his first 100 grams of
the day. Yeltsin had always ignored his wife and daughters. It was only
when he grew ill that he truly became a father and husband. He really loved
to complain about his health.

"...On the other hand, Tanya is the only person who can get me all the
information. People tell her things that they would never say to my face.
And she's an honest person, without bureaucratic complexes; she would never
hide anything. She's young and intelligent--and she's my daughter, with my
character and my approach to life."

As for character and approach to life, this is all entirely true. But as
for "bureaucratic complexes," you're better off asking the personnel who
had to serve her. I'll merely say that, when Tanya came to the Kremlin the
first business she attended to was Naina Iosifovna's quarters. These
included an office, banquet hall, snack bar, kitchen, beauty salon, and
full bathroom.
As for her honesty, this is a question for Abramovich, who following the
election brought to Tanya's office a suitcase full of cash top Tanya's
office--from 160,000 to 180,000 bucks.

Tanya was needed primarily by Berezovsky and Chubais. At the Election
Committee meetings, she would sit quietly in the corner and attempt to
record everything that went on. Then she would rush off to LogoVAZ;
Berezovsky would decide how much to tell Yeltsin, and what was better to
withhold.

It was precisely in their quarters that Tatyana and Berezovsky arranged
Yeltsin's meeting with the 10 bankers. Yumashev and Borodin were also
there. No one else was allowed in, not even security. I only know the
details of this meeting from OBSLUGI.
At the meeting, the bankers chipped in 50 million dollars each for the
election, asking in return for guaranties regarding the transfer of
ownership. There was the usual bargaining. "Honest" Tanya and "honest"
Boris Nikolayevich sold off Russia for 500 million.

"...Various decrees were prepared: specifically, for a ban on the Communist
Party, dissolution of the Duma, and to put off the Presidential Election
for a later date....

While I was in the office, Tanya called Chubais and told him to come to the
Kremlin. 'Papa, you should hear a different opinion. You simply must,' she
said. And suddenly I understood: Yes, I must....

"...When Chubais becomes upset, his face instantly flushes a crimson color.

"'Boris Nikolayevich,' he said. 'It is no longer 1993. Today is different
in that the first person who leaves the Constituional playing field will be
destroyed....'"

Yeltsin could never countenance "other" opinions. At that time, he would
not have sat down alongside Chubais on a single Constitutional playing
field. There was no meeting between Yeltsin and Chubais.

Soon after the Duma voted to annul the Belovezhsky agreement [which
dissolved the Soviet Union in 1991], Yeltsin called a closed meeting. The
calls were made in the evening, and at 6:00 a.m. on April 18, 1996, we were
all there in the Kremlin: the three Kulikovs, Soskovets, myself, Barsukov,
Grachev, and chief of staff Yegorov. I insisted that Chernomyrdin should be
called, but Yeltsin did not want to see him under any pretense. He thought
that Chernomyrdin was after his seat.

Boris Nikolayevich floated the idea of dissolving the Duma and banning the
Communist Party. All the generals supported Yeltsin. FSO Head Krapivin even
issued an order to "close" the Duma not allow anyone into the Parliament
building. Only Minister of Internal Affairs Kulikov voted against, for
which he was subsequently dismissed.

They thought up Chubais in order to battle the communists, to make him into
a Constitutional savior and defender of justice.

"On the eve of the second round of the Presidential election, Korzhakov
decided to strike back. On June 19, at seven o'clock, at the White House
entrance the Presidential Security Service arrested two members of the
election campaign staff. They were accused of stealing money.

"...And then Tanya went (it was already 1 a.m.) to the LogoVAZ offices,
where most of the analytical group and other sympathetic individuals had
gathered--Nemtsov, Gusinsky, journalists, television reporters. Security
informed them there were snipers on the roofs and special service officers
had surrounded the building. It seemed to everyone that Korzhakov and
Barsukov would never let them out."

Never in my life have I met anyone more cowardly than those who gathered
that night at LogoVAZ. There were never any snipers or special service.
Otherwise, they would have come out in a line with their hands up, after
which they would have pointed the finger at one another.

There was no "strike back." A week prior to the arrest of Lisovsky and
Yevstafyev, Yeltsin personally ordered me to deal immediately with the
theft of campaign funds. By his own hand, he penned a resolution addressed
to me. At that time my duties as a member of the Election Campaign
Committee included monioring financial expenditures.

The night before the arrest, we hid a safe in Kuznetsov's office. The safe
contained 2.5 million dollars and another 5 million in offshore payments
for the printing of brochures. The office was under surveillance throughout
the day. No one except Kuznetsov went in. But after the arrest it turned
out that nothing was left in the safe except the 500,000 bucks in the Xerox
box. I still don't know how Kuznetsov managed to get out the 2 million
dollars. I was not permitted to get to the bottom of it.

The ongoing fate of this money is rather more interesting. Streletsky and I
submitted a statement to the General Prosecutor's Office indicating that
there were no criminals and we found the loot. We requested payment of the
25-percent state reward payable in such cases. In response, we were told
that the money had been returned to the Finance Ministry.

"...If those people whom Tanya virtually protected that night--i.e.,
Berezovsky, Gusinsky, Malashenko--would remember that in the future...."

As far I know, Tanya only protected Makashenko, Lisovsky, Lesin, and
Chubais. I didn't heard anything about Berezovsky and Gusinsky.

Incidentally, Chubais did remember this--as chief of staff, he proposed
making Tanya vice-president: "This girl is in love with power; let's groom
her as a successor."

THE OPERATION: BEFORE AND AFTER

"Obviously, other than my family the only people who knew about the heart
attack were the doctors and several security and staff members. Not the
inner circle, but only the absolutely closest people.

"Literally on the day after the attack, June 27, Tanya and Chubais met at
the President Hotel, where the campaign staff was operating. The entire
schedule of appearances between the first and second rounds would have to
be canceled under some innocuous pretense--a change in tactics: after all,
the President was certain of success. Under no circumstances could a leak
about the illness be permitted.

"Of course, my aides and I were walking a fine line: would it be
permissible to hide such information from the public? But to this day I am
convinced that to surrender victory to Zyuganov or reschedule the election
would have been a far greater and damaging sin."

This was already the fifth heart attack. The four previous ones, "we had
endured together." But I was also present for the fifth one. It was not
Zyuganov that he feared, but rather Chernomyrdin.

When Boris Nikolayevich took ill, I was received a call from the young man
who was then head or acting head of the Security Service, Tolya Kuznetsov.
I came and the first thing I heard was Yeltsin's characteristic mantra:
"Just don't tell Chernomyrdin!"

"What should we do?" Kuznetsov asked. I asked for a copy of the
Constitution and showed him the article stating that, if the president is
unable to fulfill his duties, then the prime minister, as the second in
command, temporarily assumes them. Look, I said, if something happens to
him, you'll be the first to take the fall. You don't serve Yeltsin, you
serve in a state post.

Naina Iosifovna came in, and I read her the article from the Constitution.
She told me I was to blame for everything. In response, I said, "You're the
one who's to blame for all this, with your Chubaises and Berezovskys."
Before leaving I again told Kuznetsov that he should inform Chernomyrdin.

Several days later they needed to show a healthy Yeltsin on TV. Then, upon
orders from Borodin, they prepared a backdrop depicting the President's
office in the Kremlin. A desk was moved next to Boris Nikolayevich's
bedside. They dressed him a white shirt with tie and jacket. They didn't
bother putting any pants on him. They propped him up with pillows.
Yumashev, Tanya, Vasya Shankhovsky, and I think Shakhrai gathered around
the desk--there were six people in all.

And so, without pants, the President conducted his final meeting before the
second round of the election.

"Still prior to the election, in the spring, there was a joint letter from
the doctors addressed to Korzhakov, directly indicating the catastrophic
condition of my heart. This letter was not show to me, nor to my family. I
only read it much later.

"'Consultation Report.

"'During the past two weeks, the condition of President of the Russian
Federation Boris Nikolayevich Yeltsin has undergone changed for the worse.
All of these changes are directly connected with a sharply increasing level
of stresses, both emotional and physical. A major role is played by the
constant changes in climatic conditions and time zones during flights over
great distances. Sleeping time has been reduced to a minimum--about 3-4
hours per day. This work schedule represents a real threat to the health
and life of the President.'

"The report was signed by 10 doctors."

After experiencing four heart attacks, you don't necessarily need to read
doctors' letters in order to learn about the catastrophic condition of your
heart. It's true that I did not show the letter to anyone. It was addressed
to me, in order to lighten the President's campaign schedule.

But everyone was aware of the letter's existence. After all, I was not the
one who convinced Boris Nikolayevich to dance on stage in 40-degree
weather. It was his own daughter who did this. Tanya knew perfectly well
that her father's life practically hung in the balance.

Incidentally, Boris Nikolayevich provides the text of the letter in its
entirety. But he does not have the letter; it remains with me. I did not
event turn over the files after I was dismissed, as I was supposed to.
Question: how does Yeltsin know the text of the letter? Answer: only from
my book, where it was published in full.

Thius means that either Boris Nikolayevich read the book himself, or it was
read to him. Nevertheless, later, on page 78, he writes: "They say that
Alexander Vasilyevich's book is full of lies and dirt. But I did not bother
reading it; I could not overcome my disgust."

About these lies and dirt. Thus far, not a single fact in my book has been
refuted. Moreover, many of them are confirmed by Yeltsin himself in his new
book. And the dirt? There was always more than enough to go around in
Yeltsin's circle.

I only wrote about the top of the iceberg, and in an extremely restrained
manner. For some reason no one is dishing any dirt on me, although I have
long been outside of Yeltsin's circle and I have plenty of enemies.

...
BEING NEIGHBORLY

"I return to the present, the year 2000....

"Soon after my resignation, a meeting of CIS leaders was held in Moscow.
They all arrived one day prior to the official events, and I invited them
to my home at Gorki-9. Never before had so many official guests, an entire
summit, been received in my home. But Naina and I decided to break the
tradition. Naina was even concerned that there would not be enough dishes
or silverware. We served the presidents our family dish--Siberian pelmeny
with pike...."

Gorki-9 is an official state residence, with a capacity for a thousand
guests. What home or silverware is he talking about. It seems what they say
is true: Yeltsin does not wish to give up the presidential residence, and
Tanya is planning to privatize one of the residences at Barvikha-4.

Although what is so surprising? Yeltsin always viewed Russia as his own
personal property.

...BACK IN THE HOSPITAL

"The work that my political enemies later came to refer as the influence on
the President of the Family--like that, with a capital letter--was in fact
my meetings with the chief of staff. his deputies, advisers, discussions
about proposals developed by them, and ultimately the taking of a final
decision by the President. Then, once the decision has been made, its firm
and unwavering implementation.

"I worked under this scheme during all my final years. And although first
they identified Chubais as 'regent,' then later Yumashev and Voloshin as
members of the Family, the essence of the claims did not change. Someone is
operating in secrecy behind the President, they say.

"I confirm. In fact, there stood behind me a large, strong, well-organized
team. But if someone prefers this term 'Family,' you can put it this way:
the members of my family included Chubais, Voloshin, Johann Pollyeva,
Sergei Yastrzhembsky, Vyacheslav Surkov, Ruslan Orekhov, Igor
Shabdurasulov, Mikhail Komissar, Alexander Oslon, Mikhail Lesin, Yuri
Zapol, Kcenia Ponomareva, Konstantin Ernst, Oleg Dobrodeyev, Sergei Zverev
(while he worked in the administration), Igor Malashenko (during the first
years after the '96 election), Alexei Gromov, Oleg Sysuyev, Sergei
Prikhodko, Dmitri Yakushkin, Andrei Shtorkh...."
Actually, the list should have started with Berezovsky, Abramovich, and
Mamut. Nothing further to add.

VERY PERSONAL

"Upon moving to Moscow, already disgraced, I bought my first car--a silver
Moskvich. I was still in the state structures. I decided that from now on I
would drive to work myself. And so, there was the first trip.

"The security guard sits to my right, my family behind me. . We're on a
busy ulitsa Gorkogo. I'm constantly looking back to keep track of what's
going on behind me. I have trouble using the rear-view mirror. Tanya says
to me, 'Papa, look ahead! I beg you!' I'm driving at a reasonable speed.
The pale security guard does not take his hand off the emergency brake so
as to activate it in case of emergency should there be no other way out. We
arrived without incident, thank God!

"From that time, Naina is deathly afraid and does not allow me behind the
wheel. "Borya, there are plenty of drivers in the family--sons-in-law,
daughters, grandchildren. They'll be happy to drive you wherever you want."
Nevertheless, I recently did some driving on the roads at the dacha in my
presidential limousine. Now that I'm a pensioner I can do whatever I want.

"But I still managed to compensate for my passion for motoring--by driving
in an electric car. Plus it's more healthy. I especially like to ride down
a hill and right into a tree. I turn at the last minute. This is relaxing.
Recently, the security guard accompanying me on this risky journey could
not hold on during the turn and was thrown from the car. I had to apologize
to him...."

About this Moskvich. This was in the courtyard of a building on ulitsa
Goirkogo. As soon as Yeltsin got behind the wheel, the car began to shake
as if afflicted. At a speed of about 10 km/h we made a circle around the
courtyard. A second test run followed.
I drove the future president of Russia to the Kremlin. Then there was the
"trip" from Vasilyevsky spusk under the flashes of cameras and television
cameras. It looked like a motor run by a team of invalids. My Niva and
Zhiguli was in the lead clearing the way for the Moskvich, with another
Zhiguli following behind. At a speed of 40 km/h the cavalvade traveled
along ulitsa Gorkogo.
I was pale as a ghost and really did keep my hand firmly on the emergency
brake.

The family would never get in the car while papa was behind the wheel.

"...Many are probably interested in our incomes? In other words, am I a
wealthy man? Frankly, I don't know.... It depends on how you measure such
things. Let us see what I have, and what I don't have.
 
"So, I live in a state-owned dacha. I own (jointly with my wife) real
estate consisting of a dacha in the Odintsovsky district of Moscow oblast.
The size of the dacha is 452 square meters. The land plot measures four
hectares.

"I also have a BMW that was purchased in 1995. There's the apartment in
Moscow on Osennaya ulitsa. There are the refrigerators at the dacha and
another at home. Several televisions. Furniture (couches, sofas, stools,
cabinets, etc.). Some clothes. My wife and daughters' jewelry. Tennis
rackets. A floor scale. Hunting weapons. Books. A stereo. Dictophone...."

And let's not forget the blood pressure measuring device, hot water bottle,
and thermometer....

"...On the islands among the Zavidova lakes, hay grows in the summertime.
Sometimes I would go there to forget about everything. I would fall asleep.

"In general, hunting and fishing are a special pursuit.

"...Duck hunting at dawn is the most dynamic. You shoot the bird in flight,
trying to get it with a precise shot from the boat. This is almost a sport.
It's so hazardous that sometimes you return home with a large black
palm-sized bruise on your shoulder."
The story about the bruise explains everything to any hunter: either
Yeltsin is lying or he doesn't know how to shoot. Now for the sport.

After a duck hunt we (Grachev, Barsukov, and myself) would return home with
our catch. Some would bring home 10, maybe 15. Twenty was the maximum. But
Yeltsin would never return with fewer than 80. He was always the champion.
Once, when Yeltsin had fallen asleep after a dose, the chief huntsman at
Zavidova, Anatoly Vasilyevich Lepilin, suggested that we go for a ride to
show me Yeltsin's hunting spots. We puttered for awhile along the canals,
until we sailed at full speed into a duck-filled lake. The ducks didn't
even bother to take flight, they just quacked.

It turns out that Yeltsin was taken to a duck farm to hunt. They sailed in,
stopped, and Yeltsin would shoot like crazy.

Sometimes he would take more than 100.

"Traditionally, the Russian way of life has strictly dictated that you
can't not drink on your birthday, and you can't not drink at a friend's
wedding, you can't not drink with colleagues from work. I have always
regarded this obligation with a certain melancholy, I cannot bear drunks,
but... at some point I realized that alcohol is actually a substance that
quickly alleviates stress."

No comment.

ANOTHER LIFE

"Perhaps I'm overly self-reliant, I take too much upon myself.

"I don't really think so. I am under an obligation to be absolutely honest
about everything I thought, how I felt, why I acted one way or another. But
questions remain: what next? Who am I today, right now?

"Probably, I feel like a long-distance runner who has run a super marathon,
one of 40,000 kilometers.

"That is the state I am in today. I gave all my strength, all my soul to
the Presidential marathon. I gave of myself honestly for the distance.

If there is any need for me to justify myself, then here it is: if you can
do better, then try. Run those 40,000 kilometers anew.

Faster. Better. More gracefully. More easily.

"And that is what I did."

There will be no other life for Boris Nikolayevich.

In the foreword to the book Yeltsin writes: "The book's primary purpose is
to tell the story of our reforms, my own personal story--the story of the
first democratically elected President of Russia." But he should have
started from the epilogue, when Boris Nikolayevich asks for forgiveness
from the Russian people.

As was rightly noted by first court chronicler Pavel Voshchanov,
Presidential Marathon is an embellished court chronicle. In my view, the
book's true purpose is to mythologize the period of Boris Nikolayevich's
rule. To embellish Yeltsin's place in Russian history.

It seems that Yeltsin feels uncomfortable in his own place.

******

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