Center for Defense Information
Research Topics
CDI Library
What's New
CDI Library > Johnson's Russia List

Johnson's Russia List


December 6, 2000   

This Date's Issues:   4671  4672


Johnson's Russia List
6 December 2000

[Note from David Johnson:
1. Reuters: Russians dying out faster, report shows.
2. Bloomberg: Rice Takes the Stage as Bush Foreign Policy Adviser.
3. Moscow Times editorial: Let's Heed Illarionov This Time.
4. Toronto Sun: Matthew Fisher, Russian trains a travelling circus. Overcrowded and cockroach infested, they are a universe unto themselves.
5. Michael Allen: re Infrastructure/4669-Oberg.
6. Paul Kindlon: re Russian intelligentsia/4670.
7. Val Samonis: Trailblazing Foreign Investment: An Interpretation of Debt for Equity Swaps between Russia and its Foreign Creditors.
8. Christian Science Monitor: Scott Peterson and Fred Weir, Pope case a resurgence for Russian spy agency. A verdict is expected this week in the first post-Soviet spy trial of an American
9. The Times (UK): Richard Beeston, Putin's nuclear dump. Putin’s contempt for Russia’s environment could lead to nuclear catastrophe
10. Bill to Give Putin Czarist Powers.
11. Reuters: Russian TV stations air their woes.
12. Reuters: Russia economists defend govt, say policies working.
13. BBC Monitoring: Ekho Moskvy radio, Russian official warns against problems with USA over trade with Iran. (Vladimir Lukin)
14. Reuters: US questions Russian cohesion on missile defence.]


Russians dying out faster, report shows

MOSCOW, Dec 5 (Reuters) - Russians are dying out faster than at any time
since World War Two, official statistics released on Tuesday showed. 

Nearly 930,000 more Russians died last year than were born, the largest gap
since the Russian population began a precipitous decline in 1992 after
decades of growth. 

For most of the 1990s, a net influx of immigrants, mainly from other
ex-Soviet states, had compensated for much of the decline in Russia's own
population, but that immigration has slowed, worsening the impact. 

The report by the State Statistics Committee predicted that there would be
11 million fewer Russians in 2016 than there were last year -- a fall of
nearly 7.6 percent. 

Poor public health, widespread social disorder and drunkenness have caused
a sharp drop in the life expectancy of men. Although slightly higher than
in the mid 1990's, male life expectancy hovers around 60 years, far lower
than in the developed world. 

Men of working age were more than four times likely to die last year than
women of the same age. In two thirds of the cases, the cause of death was
murder, suicide, accidents, alcohol poisoning or similar preventable traumas. 

For every 100,000 Russian men of working age, 86 committed suicide, 44
poisoned themselves with drink and 55 were murdered. Life expectancy for
women was between 70 and 75 years, much nearer to Western levels. 


Rice Takes the Stage as Bush Foreign Policy Adviser

Washington, Dec. 5 (Bloomberg) -- Condoleezza Rice, George W. Bush's
foreign policy adviser, emerged in October as one of the stars of
``Deutschlandspiel,'' a German dramatized documentary. 

Centered on the political struggle behind the fall of the Berlin Wall, the
movie depicts Rice as a hard-liner in the U.S. government arguing for full
German reunification and against compromise with the Soviet Union. Her
views won out, and the U.S. persuaded the Soviet Union to remove its troops
from Germany. 

``In a way, German television audiences know more about her role at the end
of the Cold War than American audiences do,'' said Philip Zelikow, who
teamed with her at the White House under Bush's father, President George

The 46-year-old Stanford University professor's profile will rise if the
younger Bush wins his legal fight for the presidency. In his campaign, Bush
said she was his candidate for the post of national security adviser, a job
that brought great influence for men like Henry Kissinger and Sandy Berger.
A Bush-Rice meeting set for today in Austin was postponed to tomorrow. 

``Bush doesn't know much in this area so he's going to have to rely on
(security) thinkers,'' said Ivan Eland, director of defense policy studies
at the Cato Institute, a libertarian think tank in Washington. ``Condi Rice
will probably be the person he relies on the most.'' 

Rice would be the first woman to hold the position of national security
adviser. She and retired General Colin Powell, a candidate for secretary of
state, would be the highest-ranking blacks in a Bush administration. 

Clarity and Confidence 

Zelikow says Rice won support in the National Security Council with the
clarity of her argument and her quiet confidence in a ``maximum approach''
of confrontation with the Soviets. 

Rice's positions today -- reflected in Bush's campaign -- suggest she's
skeptical of overseas partnerships. She backs a nuclear missile defense
system, views China as ``a problem for and challenge to American
interests'' and says U.S. troops are overextended across the globe. Rice
declined requests for an interview. 

Colleagues say Rice is a contemporary strategist who will restore morale to
the military and set the country's security priorities straight. 

Critics who've followed her writings say her views could undermine U.S.
ties with Europe. 

Bush created a media frenzy by calling for U.S. withdrawal from the Balkans
during a presidential debate this fall. Rice was quoted in the New York
Times saying ``the governor is talking about a new division of labor'' in
which the U.S. would refrain from ``extended peacekeeping'' missions. 

Ivo Daalder, a senior fellow at the Brookings Institution, called the
position a sign of Rice's lack of understanding of the delicate post-Cold
War security balance. 

``She doesn't understand that we need to be (in the Balkans) to the extent
that others need to be there,'' he said. ``If we're not there, where else
should we be engaged in Europe?'' 

Birmingham to Stanford 

Rice was raised in Birmingham, Alabama during the 1960s civil rights era
and talks about her brushes with discrimination, said George Shultz,
secretary of state in President Ronald Reagan's administration and a
10-year friend. ``She doesn't carry that on her sleeve though,'' he said. 

Rice was taught to value education by a teacher father who got through
college by winning a scholarship for future Presbyterian ministers, said
Douglas Paal, who worked with Rice on the National Security Council. 

After earning her undergraduate degree and doctorate at the University of
Denver, Rice went to Stanford University as an assistant professor of
political science. She was invited to work in Washington by National
Security Adviser Brent Scowcroft. 

``She stood out among the younger crop of Russian watchers in that
period,'' said Paal, now president of an Asian Pacific policy center in

She was invited to be a Senate candidate by senior Republicans in
California when she left the White House in 1991; she declined, Paal said. 

After her return to academia, Stanford made her a full professor in 1993. 

Skeptical of Gorbachev 

Rice is one of a few advisers regularly invited to the Bush family's
vacation retreat in Kennebunkport, Maine. 

Advising Bush, Rice repeatedly appeared on television with him, as well as
giving speeches -- one to the Republican National Convention -- and

On Soviet policy, Rice split with other Russia experts by remaining
skeptical of Mikhail Gorbachev and his ``glasnost'' and ``perestroika''
reforms as president of the Soviet Union. 

``She thought he was difficult to figure out and wasn't sure he was the man
of the future,'' said Paal. She never changed that opinion, he said. ``I
think her analysis still holds.'' 

Her academic writings have drawn notice for her skepticism about the
Clinton administration's willingness to commit U.S. troops overseas in
murky international conflicts. 

``Foreign policy in a Republican administration will most certainly be
internationalist,'' she wrote in an article in Foreign Affairs last
January. ``But it will also proceed from the firm ground of the national
interest, not from the interests of some illusory international community.'' 

`Fundamentally a Moderate' 

Analysts say Rice isn't likely to encourage any rash new policies. ``She's
fundamentally a moderate,'' said Frank Cevasco, a defense consultant at
Hicks & Associates Inc. in Washington. He defended her cautious approach to
committing U.S. troops. ``We're wearing out our (military) people and
discouraging them from staying in service,'' he said. 

Rice supports U.S. engagement to help overseas nations solve conflicts but
she doesn't favor relying solely on the military to do it. Yet in office,
Rice probably won't significantly scale back U.S. troops overseas, said the
Cato Institute's Eland. 

``She's in the mainstream of the Bush wing of the Republican party,'' he
said. ``I don't see any radical departure from that.'' 

When a flap developed over Bush's comments about withdrawing from the
Balkans, Rice moved quickly to tone down the rhetoric by dispatching her
staff to call European security officials soon after the debate to say that
the remark was being misinterpreted. 

``The Republicans tend to want to ensure U.S. primacy and to do that, they
intervene,'' Eland said. 

Modulations in her hard-line positions don't mean Rice lacks backbone, said
a former colleague. ``You can make no worse mistake than to assume she is a
pushover,'' said Arnold Kanter, who worked with Rice on Soviet arms control


Moscow Times
December 6, 2000
Let's Heed Illarionov This Time

Editorial Good news about the economy just keeps rolling in. Presidential
economic adviser Andrei Illarionov predicted last week a 10 percent jump in
industrial output and a 7 percent increase in GDP this year. Prime Minister
Mikhail Kasyanov repeated these statistics to an economic forum on Tuesday.
Investment will increase by 20 percent, Illarionov says, and exports are up
40 percent. And so on.

With all this optimism in the air, complacency has become a serious
obstacle to good economic policy-making, and the stage is being set for
another crisis. Illarionov points out rightly that much of the economy's
glow is the reflected light of high global energy prices, which have by his
math brought Russia a $16 billion windfall. He argues that growth would
have been still greater if not for poor state management.

Illarionov’s sober warnings deserve particular attention because he has
been right in the past. In the summer of 1998, he made a series of
now-famous predictions that a ruble devaluation was "inevitable," and
warned that the devaluation would be more violent the longer it was
postponed. At the time, the Central Bank and government economists claimed
he was "deliberately distorting facts" and "just wrong." Then-Central Bank
chief Sergei Dubinin even asserted that Illarionov held unspecified
securities on some Chicago futures exchange and was trying to manipulate
world markets for his own personal gain.

Despite such calumny in the past, Illarionov remains unbowed, and he
deserves praise for his candid critique of state policy. By far the
greatest boon of high energy prices has been the time it has afforded
Russia to make fundamental economic decisions in an atmosphere of
deliberation, rather than crisis. 

Unfortunately, it would seem that deliberation is not the government’s
strong suit. Kasyanov acknowledged Monday that the banking sector is little
short of a disaster, saying that fewer than one-third of the nation’s 1,400
banks are "functioning normally" and admitting that all of them are
dangerously undercapitalized. We can’t imagine how he could say this with a
straight face after the Central Bank’s decision in October to allow banks
to count the value of their offices as part of their charter capital.

The government has also made little progress on pledges to streamline the
bureaucracy and reduce the regulatory burden on business. It continues to
wage an expensive and inhumane war in Chechnya. 

Instead of making decisions on these matters, the past year has been spent
discussing "information security," "national symbols," union with Belarus
and other non-issues. 

Illarionov is right to remind us all that the clock is ticking.


Toronto Sun
December 4, 2000 
Russian trains a travelling circus
Overcrowded and cockroach infested, they are a universe unto themselves
By MATTHEW FISHER -- Sun Columnist at Large

MOSCOW -- Want a job as a drug dealer? Want to buy porno cassettes or a few 
pieces of "hot" crystal from a factory which hasn't paid its workers in three 

As those TV ads in Canada say: "Take the train!" 

Every evening at 7:46 the green carriages of a Firmenny Poezd overnight train 
snake out of Moscow's Kiev Station bound for Bryansk Oblast, some 500 
kilometres away near Russia's borders with Ukraine and Belarus. 

For an outsider it is a remarkable, exhilarating odyssey through the heart of 
post-Soviet Russia. For Russians it is an unremarkable, draining journey from 
the relatively bright lights of the capital to the darkness and misery of the 

Trains in Russia are living organisms and not only because they are 
overcrowded, infested with cockroaches and equipped with toilets which 
utterly defy polite description. They are a universe unto themselves with 
their own code and customs. 

Cloaked in the anonymity that every train traveller enjoys and fueled by 
samogon, the sometimes lethal home-brewed vodka, and a pungent mix of cheap 
cigarettes, sour pickles, greasy sausages and fresh onions and garlic, 
passengers aboard this moveable psycho-therapy saloon shared their woes, 
their pessimism and their fatalism when not chatting up equally inebriated 
members of the opposite sex. 

Presiding over this raucous theatre of the absurd were provodniks. They are 
the tough female conductors allegedly responsible for the welfare of 
passengers, but usually preoccupied with stuffing their pockets with money 
from people desperate for them to act as couriers taking medicines, birthday 
presents and almost anything else to and from relatives and friends in the 

Moscow is a magnet because it is almost the only place in the country with a 
range of consumer goods for sale and a real job market. So the train south 
was full of young men and grandmothers heading home from the capital with the 
few rubles they had earned from low-paying unregistered jobs as construction 
workers and as babysitters or maids for so-called New Russians. There were 
also shadowy "biznizmen" who regularly make the Bryansk run to recruit local 
talent willing to take great risks for a chance at the big money that can be 
made smuggling drugs and weapons across the border. 

In what is called "hard class," which costs 130 rubles ($7 Cdn.) a ticket, 
cots were stacked to the roof and bodies filled every one of them. But it was 
almost impossible to sleep because of an endless procession of garrulous 
drunks and salesmen who persisted in shouting about the virtues of what they 
were selling at three o'clock in the morning. 

Another reason to keep eyes open was that everything, including coats and 
shoes, could be stolen at any second. A Russian man was knifed to death by 
two Azerbaijani men recently on this very train in a dispute over a pack of 
cigarettes or, as others tell the story, the affections of a boozy provodnik. 

It was not just the noise or the possibility of theft or murder that kept 
everyone awake. The train and its passengers reeked of life on the margins. 

A husband and wife in their 50s were on their way to their home town of 
Klintsy in Bryansk Oblast for only the second time in 25 years to attend the 
funeral of a relative. Their journey had begun one week before in Taimyr on 
the Laptevs Sea in the High Arctic. 

Five-day trip 

To get this far the couple had flown 4,000 kilometres south to Krasnoyarsk 
and taken a five-day train trip west from there to Moscow. 

"It's your fault we went to Siberia. It was your greed," the husband 
announced to his wife and everyone else. 

"Yeah, but look at all the money and benefits the government promised us," 
she replied, playing to the crowd every bit as much as her partner. 

"But all that we get are our salaries of 1,500 rubles ($75 Cdn.) a month." 

"Come on, tell the whole truth. We get the northern allowance of 1,500 
rubles, too." 

"But if I had not paid attention to you and we had stayed at home we would 
have had our own house and car by now." 

Their performance was amusing and revealing in its own way. But when the pair 
took their shoes off it was instantly evident that it had been days since 
they had last bathed. 

That, along with the fact that both the man and the woman were constantly 
relieving themselves of prodigious quantities of gas as they spoke, provided 
a serious test. 

And there was still another five hours until Bryansk. 


From: "Michael Allen" <>
Subject: Infrastructure/4669-Oberg
Date: Tue, 5 Dec 2000 

James Oberg's piece on deterioration of Russian infrastructure mentioned the
sorry state of cranes at ports of the Russian Navy, that Adm Kuroyedov's
request for about $20 million for crane repair was ignored, and the role
this might have played in the Kursk disaster.

This reminded me of a "near-miss" in the Russian Far East, underscoring the
importance of the Russian Navy's cranes. This incident was much-discussed at
the time in the local press, although the most disturbing details I learned
from the Siberian & Pacific Russian Analyst. I noted little about it in the
central press.

On Fri 16 Jun 00 RCM-50 ballistic missiles were being unloaded at the
Pacific Fleet’s Ballistic Missile Technical Base near the town of Fokino,
about 50km from Vladivostok. (The nuclear warheads had already been
removed.) At about 1330 the cable on the crane apparently snapped and a
38-ton missile fell 25 feet back into the ship, rupturing the casing and
releasing some hundred liters of nitric-acid oxidizer (NO4). The liquid
vaporized, forming a dense yellow cloud.

The official response to the incident was disturbingly slow. Only five hours
later were people warned to stay indoors and roadblocks to the coast set up
in the nearby city of Nakhodka (pop. 162,000). Meanwhile, fortunately, the
yellow cloud measuring some 300-500 m2 had been carried by a breeze out to
sea where it dispersed. About twenty-two were hospitalized from the accident
site, nine with chemical burns to the upper respiratory tract, and another
fifty or so people in nearby dachas reported an acrid taste in the mouth and
coughing fits.

Things could have turned out very differently. A prevailing wind could have
carried the cloud toward population centers, rather than out to sea. Or more
ominously, the missile's propellant casing could also have ruptured in the
fall, with the resulting explosion of five tons of fuel obliterating an area
with a radius of half a mile, to say nothing of the other missiles that were
being unloaded.

Adm Kuroyedov must be grimly satisfied that his predictions were borne out,
and we can only be thankful that more serious consequences were avoided this

Michael Allen
Director, American Business Center Yuzhno-Sakhalinsk
(A joint program of the US Agency for International Development and US Dept
of Commerce)


Date: Tue, 05 Dec 2000 
From: "Paul Kindlon" <> 
Subject: Russian intelligentsia/4670
   Regarding the story about Russian Intellectuals who object
to the possible return of the Soviet anthem... well what noble
sentiments from a such a socially concerned group of people !
    For the overwhelming majority of Russians the " intelligentsia "
is an abstract concept at best. At the very least, the word refers to
a self-satisfied elite that has sold out and whose actions and words are 
increasingly irrelevant. With all of the massive problems this country
faces, including wholesale corruption within the governing class and
widespread poverty, the " intelligentsia " has found something to get
really upset about: a cultural symbol. 
     What nonsense. Ask any Russian why they prefer the old anthem
and you will hear essentially the same response: it's simply the best
piece of music compared to the other alternatives. This is a no brainer.
So strike up the band. 
And send the intelligentsia back to their cocktail parties.
Dr Paul Kindlon
Moscow State Linguistic University


Date: Tue, 05 Dec 2000 
From: Val Samonis <>
Subject: Trailblazing Foreign Investment: An Interpretation of Debt for
Equity Swaps between Russia and its Foreign Creditors 

Trailblazing FDI: An Interpretation of Debt for Equity Swaps between
Russia and its Foreign Creditors
By Val Samonis
The Center for European Integration Studies (ZEI), Bonn, Germany

Debt for equity swaps /DES/ do deserve a closer and serious look within
the context of Russia's foreign debt. At the most fundamental level,
DES consist of two steps: 1. the substitution of internal for external
debt /external debt buy back/; 2. the retirement of internal debt by way
of converting it into equity in the existing or newly created domestic
companies /foreign investment/. Devised in the late 1980s, debt for
equity swaps have been employed with some success as a vehicle for debt
reduction and foreign investment promotion in some developing countries
/e.g. Chile, Argentina/. This approach could be compatible with a role
DES can be realistically expected to play in post-communist countries
such as Russia. It's a trailblazing role for all the other foreign
investment inflows. Based on my research, debt for equity swaps look
like a vehicle of some potency for turning the curse of external debt
into a blessing of foreign investment inflows, also for Russia.

If DES strategy is adopted in Russia, it is advisable to follow some
useful lessons from the accumulated global experience :

1. DES are rarely done at par. The attraction of DES is strongly
positively correlated with the size of discount on the secondary debt

2. DES are self-limiting. After some debt is converted into equity, the
price of the remaining debt goes up on the secondary market. For
example, Chile's debt traded at 79 cents on a dollar in 1991, up from 58
cents in 1988. When the size of the discount goes down, so does the
potential for DES.

3. The discount is best split equally between the foreign and domestic
partners to DES.

4. The foreign partner is likely to face a demand to keep DES capital
invested for a minimum period of some 3 or more years, with some
three-year waiting period for the repatriation of the first dividends.

5. At least in some important cases /e.g. Celulosa del Pacifico in
Chile/, preferred shares was the solution chosen. However, the Western
partner's participation in management should be viewed as the overriding
consideration in Russia.

6. Since creditor banks do not normally possess the expertise necessary
to successfully run nonfinancial companies, they are well advised to
form joint ventures with the appropriate partners from outside the
financial sector or simply unload the relevant loans onto them.

7. The foreign partner is likely to face a demand for some additional
investment, that is over and above the DES capital.

8. To minimize the domestic political opposition (e.g. in Russia),
debtor country investors would have to be made eligible to participate
in any such program.


Christian Science Monitor
December 6, 2000
Pope case a resurgence for Russian spy agency 
A verdict is expected this week in the first post-Soviet spy trial of an
By Scott Peterson and Fred Weir

The controversial trial in Russia of American Edmond Pope, a former US
naval intelligence officer accused of stealing state secrets, could end
this week. But whatever the verdict, analysts say that Mr. Pope's case is
one of many brought by Russia's Federal Security Service (FSB) that appear
part of a wider crackdown designed to reestablish the influence of this
successor to the KGB. 

The result may be the end of the free-for-all sell-off in post-Soviet
Russia - of everything from space technology to state secrets - that marked
the 1990s. The case also blurs the line between what is and isn't
classified information in the new Russia, and shows how the distinction is
being redefined almost daily. 

Pope - the first American put on trial for espionage here since 1960, when
Gary Powers's U2 spy plane was brought down over the Soviet Union - was
nabbed 10 months ago and charged with illegally obtaining secret designs
for a Russian Shkval torpedo, which can reportedly travel underwater at
speeds of 230 miles per hour - five times faster than any others. 

His closed trial, which began on Oct. 26, has been marred by constant
procedural upsets. These include the court's refusal to hear a key witness
who wished to retract his testimony against Pope, on grounds it was
extracted by the FSB under duress. 

Pope's lawyers say he was seeking to buy old technology that Russia has
already exhibited and offered for sale around the world, which was only
classified as secret by a state commission following his arrest. 

Pope says he accessed only legal sources of information in his plan to
adapt a 20-year-old Russian military design to civilian purposes. 

President Clinton has asked Russian President Vladimir Putin - a former KGB
agent - for clemency on "humanitarian" grounds. 

Open sources or secrets? 

But Russian prosecutors - who have denied Pope medical treatment for cancer
during his months in prison - say that the torpedo designs he was gathering
were top secret. They have asked the maximum sentence of 20 years in
prison, and a $250 million fine for damage to Russia's defense industry. 

Pope's case is hardly unique. In the 16 months since Mr. Putin came to
power, there have been a spate of arrests of Russians similarly accused of
treason for handling materials they did not know were secret. 

"The FSB is trying to rebuild their influence" after being sidelined in
Russia's post-Soviet rush to open its society and adopt Western ways over
the past decade," says Yuri Ryzhov, an influential expert and aeronautical
engineer at the Russian Academy of Sciences. "They are not only supported
by state power, but by many in society. People don't feel they need civil
rights. There is almost no popular resistance against these cases." 

Analysts say the current wave of treason trials is in some measure a
reaction to the breakdown of order following the collapse of the Soviet
Union in 1991. 

"Over the past decade, things were too lax," says Alexander Pikayev, a
security expert with the Carnegie Endowment in Moscow. "Our national
security system collapsed, and we had political illusions about the
goodwill of foreign countries." 

Putin promised to establish a "dictatorship of law" in Russia, but the
attorney for one arrested military journalist speaks instead of a
"dictatorship of security services." The KGB was once an almighty structure
in the Soviet Union, but until recently - Putin's ascent to power is often
seen as the turning point - the FSB was on the defensive. Spy cases today
help justify its worth. 

"[FSB] attempts to prove their necessity follow the simplest way," Mr.
Ryzhov says. "They are looking for internal and external enemies." 

In the early 1990s, many former Soviet military and industrial secrets were
peddled around the world, often by ex-members of the KGB. "Such a unique
thing as the Buran shuttle was sold to Gorky Park, where it is now a
restaurant," says an engineer who helped design the Soviet Union's only
working space shuttle. 

"The bosses at Roscosmos [the Russian Space Agency] are selling everything
they can lay their hands on," says the engineer who requested anonymity. 

But the current FSB crackdown could be flying out of control. "It's one
thing to restore order," says Mr. Pikayev. "It's another thing to use
national security to suppress free speech and open exchanges of ideas." 

Problems have also afflicted the espionage trial of diplomat Valentin
Moiseyev, charged by the FSB with handing over secret documents to South
Korean intelligence. Just before the closing arguments late last month, the
presiding judge pleaded "illness" and quit the court. Mr. Moiseyev was
brought to a new courtroom, with a new judge, and told his trial would
begin all over again. 

"The FSB is incredibly incompetent in organizing cases because it has no
experience with operating in a legal environment, where charges must be
proven," says Andrei Piontkovsky, an independent political expert. "The
FSB's blundering actually gives some hope that courts might manage to
assert a bit of independence." 

Additional trials 

Another facing trial is Igor Sutyagin, a researcher at the prestigious
Institute for Canada-USA Studies in Moscow. He was investigated for
cooperating with two Canadian universities in a sociological survey of
civil-military relations in Russia, and for providing a British firm with a
digest of Russian press articles about military affairs. 

As a social scientist, Mr. Sutyagin never had access to classified
information. Still, he has been in prison for 13 months, and the FSB
announced recently that he will be tried for treason. 

"The FSB has always been suspicious about academic research and open
exchange of ideas," says Pavel Podvig, an expert at the Center for Arms
Control Studies in Moscow who worked closely with Sutyagin. On the day of
the arrest, the FSB searched Mr. Podvig's office and seized all his
records. "[The FSB] seem to sincerely believe that the way to protect
secrets is ... to jail and otherwise intimidate people who do scientific
research based on open and unclassified information," he says. 

Alexander Nikitin, a former Russian Navy captain turned environmentalist,
endured a five-year ordeal of incarceration and repeated trials after the
FSB charged him with treason for writing a report on the Russian Navy's
handling of nuclear wastes, in which he called rusting nuclear subs
"floating Chernobyls." He was finally exonerated by the Supreme Court in

But Grigory Pasko, another ex-naval officer who revealed information on
Russian nuclear abuses to a Japanese television station, was sent back for
a complete retrial by a panel of military judges in November. 

"Returning Pasko's case is an attempt by the FSB to take revenge for the
loss of the Nikitin case," says Yury Schmidt, Mr. Nikitin's lawyer. 

"The FSB is attempting to play an independent role, and to restore the
important political positions it used to enjoy. There are a lot of negative
signs," he adds. 


The Times (UK)
5 December 2000
Putin's nuclear dump 
Putin’s contempt for Russia’s environment could lead to nuclear
catastrophe. Richard Beeston reports 

Russia’s fragile environment is facing its most serious crisis since Soviet
times, with the Putin Government pushing through reforms that threaten
wildlife and nature reserves and raise the prospect of another nuclear
catastrophe. From the dense forests of the Far East — the habitat of the
endangered Siberian tiger — to the delicate tundra of the Arctic circle,
plans are under way to exploit these great tracts of wilderness. 
Simultaneously, the Ministry of Atomic Energy is moving ahead with plans to
import some 20,000 tonnes of spent nuclear fuel from 14 countries for
storage in sites across Russia. 

In the past, the Soviet Union’s environment was sacrificed in the name of
communist progress, but this time huge profits from mining, timber, oil and
the nuclear industry are the main prize. 

Last week, Russia’s fledgeling environmental movement suffered a damaging
blow when attempts to halt the Government and hold a nationwide referendum
on the issue were defeated. Under Russia’s constitution a referendum can be
held if more than two million citizens sign the required petition.
Activists succeeded in raising support from 2.5 million people, but, to the
anger of environmentalists, the electoral commission disqualified 600,000
signatures. “This was done intentionally to stop us,” says Ivan Blokov, the
campaign director at Greenpeace Russia. “They want to prevent all attempts
to save the environment. Economic interests have been put above all else,
including human health.” 

Most of the blame is being directed at President Putin, who has made no
secret of his contempt for the environmental movement and last year
suggested it was a front for “foreign secret services”. 

One of the first moves he made after his election victory in March was to
abolish the State Environmental Committee and the State Forestry Committee
— the main environmental watchdogs — and to place them under the control of
the Natural Resources Ministry, which is responsible for granting
commercial licences. 

“It is a bit like putting the fox in charge of the chicken coop,” says
Thomas Nielsen, of the Norwegian group Bellona, an environmental group in
Russia. “Profits are now the priority over the environment.” 

As a result of the move, big staff cuts are being made, which could see the
disbandment by the end of this year of the 60-strong anti-poaching force in
the Far East, which is protecting the remaining 450 Siberian tigers. 

Many key jobs are also under threat, from forestry officials to
environmental officers — who are already badly overstretched and
underfunded as they safeguard the largest country on the planet. 

The biggest immediate worry is the nuclear industry. Later this month, a
Bill before the Duma, the lower house of Parliament, will prepare the way
for the Ministry of Atomic Energy to open up Russia as a storage site for
imported spent nuclear fuel. 

Despite the nation’s appalling experience with nuclear power, the ministry
says that the contracts could be worth £13 billion. But environmentalists
insist that Russia does not have the capacity to transport and store safely
the 20,000 tonnes of highly radioactive waste at the three proposed sights
on the Volga, in the Urals and in Siberia. 

Despite the setback over the referendum, some environmentalists insist that
the fight is not over and that Russian public outrage may yet force the
authorities to back down. 

“Whatever the authorities said, we still got more than two million people
to back us and in that sense we have scored a victory,” says Igor Chestin,
the director of the World Wide Fund for Nature in Russia. He insists that
Putin and the Duma could be persuaded to give way to public opinion, which
demonstrated its power earlier this year with the outcry over the sinking
of the nuclear submarine Kursk. 

But the authorities are capable of fighting back — sometimes resorting to
old KGB methods of intimidation. Last week, for example, the naval
prosecutor in Vladivostok reopened a criminal case against Captain Grigori
Pasko, a journalist on a naval publication, who revealed details of the
dangerous state of Russia’s nuclear submarines to Japanese television. Last
July he was sentenced to three years, but was released early to take
account of the time he had already spent in detention. A new conviction
would probably lead to a much longer sentence. 

Russia’s Natural Resources Ministry has not commented on the case, but does
say that it could have a constructive relationship with the environmental
movement as long as it tones down its public campaigns and engages the
authorities instead of challenging them.


December 5, 2000
Bill to Give Putin Czarist Powers

On Tuesday LDPR deputy Alexei Mitrofanov briefed journalists about a draft
bill submitted to the lower house by the pro-Kremlin Unity faction deputy
Vitaly Lednik. The draft bill proposes to endow the head of state with the
power to appoint regional leaders. 

According to Mitrofanov, the draft bill calls for amending article 18 of
the bill ‘on general principles of the organization of executive and
legislative authorities in the regions of the Russian Federation.’ 

As it stands, article 18 of the above-mentioned law stipulates that the
citizens of Russia’s 89 regions elect the heads of regional administrations
by secret ballot. Once elected, governors or presidents, as regional
leaders are called in the so-called autonomous republics, form their
cabinets on their own. 

If the proposed draft bill is passed, Russia’s administrative structure
will undergo revolutionary changes. 

Admittedly, some observers believe that there would be sufficient
opposition in the State Duma to prevent a further widening of the
president’s authority. 

Alexei Mitrofanov told Gazeta.Ru that if the bill is adopted, “the
president will be able to appoint governors, heads of administrations, and
correspondingly, presidents of republics.” 

Mitrofanov said that Lednik composed the proposed draft bill after he “had
observed the (governor’s) elections in the Kaliningrad Region,” where the
key candidates Yegorov and Gorbenko “spent such large amounts of cash on
their election campaigns, which could have been used for far more worthy
causes, such as to help the disabled or mothers with many children.” 

According to Mitrofanov, Lednik believes his initiative is historically
justified; “For under the Czar, voevodes (provincial rulers) were not
elected, but were delegated by the Czar himself and reported to him

Also the deputy cited Belgium as an example. “Belgium is a great, highly
developed state where such appointments are confirmed by the King,” Lednik
said. “We have elected the president, he appointed the head of the
government and the Duma approved that appointment.” The same scheme should
be applied to local authorities, holds Lednik. 

“There is a law authorizing the president to sack governors, then why is he
not able to appoint them?” 

Vitaly Lednik says he is prepared to compromise and give the Duma the right
of vote, but only after the president has exercised his right. 

When asked how he thinks the Duma’s will react to the draft, Lednik said:
“Everything will depend on the president.” 


Russian TV stations air their woes
December 5, 2000
By Peter Graff

MOSCOW (Reuters) - Russia's state-dominated natural gas monopoly Gazprom said 
Tuesday it had taken possession of the largest unrestricted voting stake in 
NTV, once the only nationwide independent television network. 

On the other side of Moscow, armed and masked police raided the offices of 
ORT television, Russia's most-watched station in which the state has a 51 
percent stake and controversial businessman Boris Berezovsky 49 percent. 

Quarrels over NTV and ORT have taken center stage in President Vladimir 
Putin's professed plans to rein in the political power of businessmen known 
as the "oligarchs," who won riches and influence under his predecessor Boris 

Russian news agencies said the ORT search by men from the Moscow air 
transport prosecutor's office was linked to charges that the station had 
failed to pay duty on imported videos. 

"They have taken off their masks, apparently to show us they are not afraid 
of us, but they are armed with automatic rifles," ORT General Director 
Konstantin Ernst told rival NTV. 

He said he was baffled by "the level of proportionality of the strike." 

Gas giant Gazprom said it had taken possession of 46 percent of NTV's shares. 
That meant self-exiled founder Vladimir Gusinsky finally had forfeited his 
Media-Most holding company's majority stake in what had been the most 
influential source of news outside the Kremlin's control. 

Gazprom's announcement completed a deal announced last month after months of 
bitter wrangling, which Gusinsky had described as a Kremlin crackdown on 


Media-Most spokesman Dmitry Ostalsky said its share of NTV had been cut to 
49.5 percent, including 19 percent pledged to Gazprom to cover debts due next 
year, shares Media Most cannot trade without the gas giant's permission. A 
U.S. investment fund holds the remaining shares, Ostalsky said. 

Ostalsky stressed Gazprom did not have control of the station under the deal. 
But the deal's future depends on a major foreign shareholder buying a large 
stake in NTV soon, and none has yet come forward publicly. 

So far the only financiers to feel real pressure have been Gusinsky and his 
one-time rival Berezovsky, who once called the shots at ORT although the 
state had a majority share holding. 

After his inauguration as president, Putin said Russia must have a free 
press, but that the commercial media's owners were abusing that freedom by 
campaigning "against the state." 

Both Berezovsky and Gusinsky are abroad, refusing to return to answer 
prosecutors' questions in separate criminal cases. 

The armed raid on ORT was reminiscent of a tax police raid on Media-Most that 
marked the beginning of legal problems for Gusinsky. He was briefly jailed in 
June, and prosecutors said on Monday they had issued an international arrest 
warrant for him. 

Ostalsky said Gusinsky had nothing to fear from the warrant because the 
Western countries where he lived would ignore Russia's extradition request. 

Gusinsky and Berezovsky have both said criminal cases have been fabricated to 
silence their criticism. 


Russia economists defend govt, say policies working
By Julie Tolkacheva

MOSCOW, Dec 5 (Reuters) - Russia's economy is in good shape but the 
government, which has been criticised for dragging its feet on reforms, is 
right to seek foreign debt relief, leading Russian economists said on 

Presidential economic aide Andrei Illarionov last week accused the government 
of having squandered the opportunity to implement structural reforms this 
year at a time when high oil prices have provided a cushion for the economy. 

The criticism sparked renewed speculation in the Russian press that President 
Vladimir Putin might be about to dismiss Prime Minister Mikhail Kasyanov or 
reshuffle the cabinet. 

"There have been voices in the media that the government is in a weak 
position. It is being criticised for the situation in the economy," former 
Economy Minister Yevgeny Yasin, a veteran reformer, told a news conference 
organised by The Economic Forecasting Club, a group comprised of independent 
specialists in macroeconomic analysis. 

"From my point of view the situation in the economy is unusually favourable 
and this is not only motivated by trend factors such as oil prices," he said. 

Yasin praised the government for pushing a new tax code through parliament 
and for reducing barter operations. "We have been struggling with this 
(barter) problem for many years and this year it is practically solved," he 

Russia's gross domestic product is expected to grow by about seven percent in 
2000, the highest level since the 1950s. 

"The main source of growth is, of course, a favourable macroeconomic policy 
and significant changes in business motivation," Oleg Vyugin, executive vice 
president at Troika-Dialog, told the news conference. 

The economists said reforms such as restructuring natural gas monopoly 
Gazprom (GAZP.MO)(GAZPq.L) or national power grid UES (EESR.RTS) or breaking 
up the Railways Ministry monopoly could not be done overnight. 

Illarionov also suggested the government, instead of pressing for foreign 
debt forgiveness and restructuring, should pay off its $48 billion debt to 
the Paris Club of country creditors in time and in full. 

But Vyugin, a former first deputy finance minister, said the government was 
right to seek relief on its foreign debts, although the current trade surplus 
meant it could honour all of its obligations. 

"Russia is right in seeking to reduce the debt burden because there is no 
guarantee it will be able to pay every year if conditions change." 


BBC Monitoring
Russian official warns against problems with USA over trade with Iran 
Source: Ekho Moskvy radio, Moscow, in Russian 1317 gmt 5 Dec 00 

[Presenter] Our guest is Vladimir Lukin, deputy speaker of the State Duma. 

Let us start with the situation surrounding our relationship with Iran and 
henceforth our relationship with the USA... 

[Lukin] The agreement with the USA not to conclude new accords with Iran was 
a mistake on our part. And a serious mistake it was. 

[Q] Is this what we are doing now? Recognizing our mistake? 

[A] I am not a member of the government. I am only expressing my own point of 
view. I expressed it back in 1995, too. This was a mistake because a 
statement that we do not intend to trade with a third country and to trade in 
goods, which are legal under international law, is absurd. When absurdities 
did reign supreme in our country, that was perhaps permissible but generally 
it is complete nonsense. We can conclude or sign an international agreement 
under which we can pledge, in keeping with the international law, not to 
trade in some sort of items - for instance in missiles or missile technology, 
provided there is an appropriate agreement, or we can pledge that we do not 
intend to trade in nuclear weapons. That way all we are doing is honouring an 
agreement we have signed. But pledging not to trade in arms in advance of 
such an agreement or not to conclude contracts on construction of some sort 
of legally permissible sites is the theatre of the absurd. This cannot be 
allowed. It is a different matter that we must carefully consider what is 
good and not good for us. Yes, the USA does not like our trading with Iran, 
but the USA does not like our trading with anybody, even with those with whom 
we have developed our trade. Do they like our trading with China, for 
instance? No, of course, not. Do they like our trading with India? No. You 
see, the USA has a very amusing position and it is this: generally, one is 
allowed to trade in arms. But as far as particulars are concerned, Russia is 
trading with countries we do not like. Therefore, Russia must not trade with 

So, the next question is then this: with whom shall we trade? Will you share 
with us your own market? After all, the USA is far ahead of everybody else in 
the world, as far as arms trade is concerned. They say to us, then: no, we 
will never share it with you. Not only do they say that, they are also trying 
to push us out of our own markets. 

[Q] So, do you think they are simply unwilling to share the market? 

[A] Yes, 90 per cent of the issue is about market sharing. And sharing it in 
the way that we are simply told without ceremony: "My friends, we are the 
bosses here." But why? Who has said so? 

[Q] As far as I know, the arguments put forward by the USA and Russian power 
structures differ. Moscow says that the USA has violated the confidentiality 
of that secret memorandum. Therefore we can violate it, too, as it were. What 
would you say to that? 

[A] That is true they have violated confidentiality but I would not go as far 
saying that this was the main reason. The problem is simple. Iran is entering 
a new phase in its development. The situation there is no longer the way it 
was during the rule of Ayatollah Khamenei. There are major changes in Iran. 
It has a president who has said his aim was to open doors to third countries 
and to the outside world, including the West and the USA. Both the USA and 
Europe are preparing for trading with Iran, including in weapons. 

[Q] But as I can see, the USA recognizes that there are positive changes in 
Iran, so why are they afraid? 

[A] They are afraid of nothing. Simply, if there are positive changes today, 
then tomorrow or the day after tomorrow they will announce that because of 
these positive changes they begin to trade in arms with Iran, and then we 
will have to get out of there. That is how simple and clear it is. Crystal 
clear, I would say. 

[Q] Our listener, Vladimir Vladimirovich, asks this question: It seems that 
the USA is playing the role of an international racketeer. 

[A] I do not wish to use strong words here. After all, I have said half of 
what I really wanted to say. The other half relates to something else. Did we 
really need announce publicly that we had decided to pull out of our 
agreements and that we would engage in trade with Iran. That is a different 
matter altogether. Essentially, I think we must never give up for nothing our 
market share in Iran. But if we do decide to give it up we will need good 
compensation. The second part of the question is whether we acted correctly 
in diplomatic terms. Have we used enough of our head and diplomacy here? In 
my view, not enough. 

[Q] So, what should we have done? 

[A] We should have said calmly to the USA: dear USA, there is a wrongly- 
worded provision in our agreements. Therefore let us have a serious chat, and 
if you are worried about anything else apart from the fact that Iran is our 
market - not yours, then let us have another chat about it. But 
fundamentally, we do not promise that we will not conclude lucrative 
contracts. If you have even more lucrative contracts to offer, let us have a 
chat about them, too. What are your lucrative offers? If they are good 
enough, then we can take a fresh look at our own lucrative contract. 

[Q] As far as I understand, there is movement in that direction now. The 
arrival of a group of US experts in Moscow may lead precisely to that. But 
the problem is that we may come under financial pressure from the USA, for 
instance, from international financial institutions, given that we have an 
enormous debt. 

[A] When I talked of what we should have done in that situation I meant that 
above all, before launching into that sort of pyrotechnics, we should have 
clearly calculated what we might win and what we might lose as a result of 
the pyrotechnics. At the moment in the USA, they have a relative power 
vacuum, and, perhaps, our move is connected with that, given that there is 
no-one to answer us now. Well, true, suppose the US commission is coming now, 
but on whose behalf? President Clinton? But tomorrow we will not have 
Clinton. The likeliest thing is that we will have Bush, who will send his own 
commission as a minimum measure, having changed the membership of the current 
one. At the most, however, he will not send any commission but bang his fist 
on the table in his office and start making things difficult for us. And the 
question is: can he make it so difficult that the orders we have now will 
begin to seem to us not that lucrative after all. 

[Q] We have smoothly moved to another question. I understand you are 
expecting Bush to win... 

[A] Well, you cannot escape that fact. After all, I have studied the USA for 
quite some time. Therefore, this question is 98 per cent resolved... 

[A] Summing up, will our losses be greater? We do not have to be too precise. 

[Q] I believe that if we seriously irritate the USA, especially the 
republican administration, that is, those who will come to power 98 per cent, 
we will have serious problems, both financial and long-term ones, and 
problems relating to the work of whole sectors of our economy. We will have 
very serious problems... 


US questions Russian cohesion on missile defence
By Charles Aldinger

BRUSSELS, Dec 5 (Reuters) - Russia has put forward conflicting views on 
Washington's call to change the 1972 Anti- Ballistic Missile Treaty to allow 
U.S. deployment of a national missile defence, a senior U.S. defence official 
said on Tuesday. 

The official said ahead of Wednesday's meeting in Brussels between U.S. 
Defence Secretary William Cohen and Russian Defence Minister Igor Sergeyev 
that this appeared to reflect uncertainty on security issues in Moscow and 
Russian "domestic politics." 

The official, who asked not to be identified, was speaking after Sergeyev 
disavowed an arms control proposal from his nuclear missiles chief and 
rejected any change in the ABM treaty. 

"I think there is a lot of domestic politics going on in Russia today -- a 
lot of uncertainty and a lot of internal lobbying going on," the official 
told Reuters in an interview. 

"From the very beginning, Sergeyev has made it clear that he is against 
changing the ABM treaty. This is something that the Russians have to sort 
out. They have to come up with a unified view of what their policy is," he 

Sergeyev, who left Moscow on Tuesday for a NATO meeting in Brussels, will 
hold a bilateral meeting with Cohen early on Wednesday. 

In Brussels, the U.S. defence official said on Tuesday that a wide range of 
security issues, including plans to slash Russian military forces 
dramatically and restructure strategic forces, was causing uncertainty in 

"Some of that is reflected in (military) exercise patterns and in positions 
that you see various senior officers or national security advisers taking," 
he told Reuters. 


Last month, the head of Russia's Strategic Rocket Forces, General Vladimir 
Yakovlev, said it would be difficult to persuade the United States to ditch 
its plans for an anti- missile shield and to avoid rewriting the ABM treaty 

He proposed introducing an index of strategic weapons as a counterbalance. 

But Sergeyev said in written answers to questions from Reuters: "At the 
moment various opinions are being expressed about solving the problem of 
retaining the ABM treaty. 

"I should like to stress again that Russia's position on the question of the 
ABM treaty is consistent and unchangeable. Russia will not agree to any 
'adaptation' of the ABM treaty which would allow national anti-missile 
defences to be deployed and thus in fact destroy the treaty." 

Russian and Western arms control experts were more intrigued at the time by 
Yakovlev's comments than President Vladimir Putin's own revived proposal the 
same day to Washington for cuts in nuclear weapons. It was not clear then 
whether Yakovlev's comments were a trial balloon agreed with Sergeyev and 

Sergeyev, a former missile chief himself, seemed to leave little doubt he was 
disavowing Yakovlev's index idea, under which anti-missile systems would be 
bracketed together with nuclear strike forces. A country wanting to increase 
one component would have to make cuts in the other. 

The senior U.S. defence official said that Cohen would discuss a wide range 
of issues with Sergeyev in a bilateral meeting on Wednesday, including 
Washington's concerns over possible renewed Russian arms sales to Iran. 

U.S. concerns about arms sales to the Middle East region, already heightened 
by the crisis in the peace process, increased when Russia decided recently to 
withdraw from a 1995 pact not to sell conventional arms to Iran. 


CDI Russia Weekly:

Johnson's Russia List Archive (under construction):


Return to CDI's Home Page  I  Return to CDI's Library