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Johnson's Russia List


December 16, 2000   

This Date's Issues:   4691 ē 4692


Johnson's Russia List
16 December 2000

[Note from David Johnson:
DJ: A request for comment. I have recently been reminded of an issue that has periodically arisen in the history of JRL. There are some people who do not contribute their views here because of concern that they will be subject to unwarranted or abusive criticism. While I have attempted to control such excess I would like to hear from recipients who have views or suggestions on the matter. Happy holidays in any case!
1. Reuters: Albright advises Russia to send Bush positive vibes.
2. AFP: US-Russian accord to prevent mistaken firing of missiles.
3. Dow Jones: OPIC Reinstates Political Risk Insurance For Russia.
4. Ann Stecker: Iím Called Mikhail Gorbachev. (song)
5. Reuters: Bush could forge new direction in U.S.-Russia ties.
6. Boston Globe: John Donnelly, 2 GOP stars poised to guide US abroad. (Powell and Rice)
7. Nicolai Petro: New book on Orthodoxy and democracy
8. Walter Uhler: Re: #4671, Pope Case a resurgence for Russian spy agency. (re Igor Sutyagin)
9. The Globe and Mail (Canada): Geoffrey York and Chrystia Freeland, Putin's progress. There is no doubt who rules Russia today. The President has won every battle to rebuild the central state: The Duma is docile, the governors silent, the media controlled, the oligarchs tamed.
10. Moscow Times: Robert Orttung, Justice Awaits Reform.
11. John Helmer: Putin's Cuban Game -- Make Them an Offer They Can't Refuse.] 


Albright advises Russia to send Bush positive vibes
By Elaine Monaghan

BRUSSELS, Dec 16 (Reuters) - Madeleine Albright used one of her last
meetings as U.S. Secretary of State with Russian Foreign Minister Igor
Ivanov on Saturday to advise Moscow to send positive messages to
President-elect George W. Bush. 

Albright, who prides herself in maintaining an honest, if sometimes stormy,
relationship with Ivanov despite diplomatic difficulties between the two
former Cold War foes, suggested he put himself in the new administration's

"They talked about the U.S.-Russian relationship and the secretary in
essence asked Minister Ivanov to put himself in the place of the new
administration coming in," a senior State Department official said,
speaking on condition of anonymity. 

She told him that Moscow needed to "think about how they are presenting the
U.S.-Russian relationship to a new administration as it comes in," the
official added. 

Russia has removed a thorn from relations by pardoning Edmond Pope, a
retired U.S. naval intelligence officer convicted in Moscow of spying, just
as Bush prepares to take office. 

But Albright had pointed out to Ivanov that while Washington was pleased
the cancer sufferer had been freed, it believed Pope had not been allowed
to mount a proper defence and his eight- month detention was unjustified. 

The U.S. government denies Pope was a spy, agreeing with his version that
he was trying to negotiate business deals over Russian military equipment,
including a high-tech torpedo which has been sold abroad before, and not
obtaining classified documents as Russian security services said. 

Moscow's bloody campaign in Chechnya, its stance on arms sales to Iran and
the length of Pope's detention have left a mark on the relationship as
President Bill Clinton prepares to leave the White House on January 20. 

"How would a new administration view things like their threat to abrogate
the arms embargo, their refusal to discuss Chechnya seriously in the OSCE
(Organization for Security and Cooperation in Europe), the long detention
of Mr Pope?" the official said, quoting Albright talking to Ivanov. 


At a meeting last month of foreign ministers of the OSCE, Europe's top
human rights watchdog, Russia blocked a declaration on Chechnya and failed
to agree to let a mission of the OSCE return to the region where the scale
of Moscow's campaign to crush Muslim separatists has been repeatedly
slammed by the West. 

Only on Friday Ivanov refused to sign a long-delayed deal on opening a NATO
information office in Moscow because of harsh words at a meeting of the
NATO-Russia Joint Permanent Council about civilian blood shed by Russian
forces in Chechnya. 

As Ivanov bristled, Albright had more advice, a participant in the meeting
said, telling him that one reason she had put on weight as secretary of
state was because she had developed a thick skin -- "and you should too." 

Potentially the issue which could most quickly lead to the new
administration imposing sanctions on Moscow is its withdrawal from a
confidential pact sealed by Vice-President Al Gore and then prime minister
Viktor Chernomyrdin on not selling conventional arms to Iran. 

But earlier this month the United State heard assurances from Russia at a
similar NATO-Russia meeting of defence ministers that it would only sell
defensive weapons to Iran. 

Bush would be bound to react to any suspicion that Moscow's sales to Iran
included technology that might improve Tehran's Sahab-3 missile, now in
development with a range of about 1,500 km (about 1,000 miles). 

"She simply underscored how important this issue is to us and frankly how a
new administration coming in is going to be looking at this as it begins to
assess its own policy towards Russia and begins to analyze what it sees as
Russian policy towards us," the official said. 


US-Russian accord to prevent mistaken firing of missiles

BRUSSELS, Dec 16 (AFP) - 
The United States and Russia on Saturday signed a new agreement aimed at 
preventing inadvertent retaliation in response to a false warning of missile 

"The result will be deeper confidence and greater strategic stability between 
our two nations which translates into a safer and more secure world," US 
Secretary of State Madeleine Albright said after signing a memorandum of 
understanding with Russian Foreign Minister Ivan Ivanov.

The accord, which expands an earlier agreement, aims to reduce nuclear danger 
by establishing a pre-and post-launch notification system for launches of 
ballistic missiles and space launch vehicles.

It also provides for voluntary notification of satellites forced out of 
orbit, and certain space experiments that could adversely affect the 
operation of early warning radars.

Ivanov, who earlier met NATO foreign ministers here, stressed the memorandum 
aimed at strengthening strategic stability, and expressed the hope that it 
would eventually lead to a global system of control of ballistic missiles.

Albright said the US and Russia would invite other nations to join in the new 
missile and space launch notification system.

"This reflects the fact that proliferation is a threat to every nation and 
that contributing to stability is every nation's responsibility," she added.

The memorandum complements an agreement on sharing early warning information 
signed last June by President Bill Clinton and Russia's President Vladimir 

The new system will be located at a Joint Data Exchange Center in Moscow 
agreed under the Clinton-Putin accord.

It will greatly expand the numbers and types of launches subject to 
notification to include shorter-range ballistic missiles, sounding and 
research rockets and most space launch vehicles.

US officials said the exchange of data from the new system would strengthen 
strategic stability by promoting increased mutual confidence and assurance of 
the peaceful intentions of both sides when ballistic missiles or space launch 
vehicles were launched.

It would further reduce the risk of a missile launch resulting from a false 
warning of ballistic missile attack.

President Clinton and former President Boris Yeltsin gave the go-ahead for 
such early information in 1998 when they signed a joint statement on exchange 
of information on missile launches and early warning to reduce the 
possibility of inadvertent retaliatory launches due to false warning of a 
ballistic missile attack.


OPIC Reinstates Political Risk Insurance For Russia
December 16, 2000

WASHINGTON (Dow Jones)--The Overseas Private Investment Corporation (OPIC) 
will again offer political risk insurance against inconvertibility to U.S. 
investors in Russia on a case-by-case basis, OPIC President George Munoz 
announced Friday.

"This reinstatement of inconvertibility insurance is a reflection of the 
progress that the Russian government has made in implementing economic 
reforms," Munoz said in a statement. 

OPIC inconvertibility insurance protects investors from new currency 
restrictions that prevent the conversion and transfer of investment returns. 

Russia's decision to put a moratorium on debt repayments and restrict 
conversion of the ruble into foreign currency in August 1998 prompted OPIC to 
stop offering this protection. OPIC has continued to offer insurance against 
expropriation and civil violence in Russia. 

OPIC said it currently provides around $810 million in political risk 
insurance to 46 projects in Russia in the communications, manufacturing, 
energy, mining, financial services, and other services sectors. ) 


Date: Fri, 15 Dec 2000 
From: Carmen MacDougall <> 
Subject: lighter for list

Something fun to consider including on the list.† Every year at the Carnegie
holiday party, Ann Stecker writes and sings a song, highlighting the year in
Russia...Here's this year's: 

Iím Called Mikhail Gorbachev 

(To the tune of:† "I'm Called Little Buttercup" from HMS PInafore, Gilbert &
by Ann Stecker, Carnegie Endowment for International Peace 

Iím called Mikhail Gorbachev, Mikhail S. Gorbachev, 
Now Iím in good company. 
Boris Yeltsin retired 
Before he was fired 
And been replaced by an ex-KGB. 

Who with all of his cunning, 
Has the oligarchs running 
And an American spy put in jail. 
But the army is shrinking 
And a sub went a-sinking 
Yet we have some great nukes up for sale (at bargain prices). 

Oh, we survived Augustís ire, 
Both the bomb and the fire 
And we have a new anthem and flag. 
As Putin shakes Castroís hand, 
They will strike up the band 
Then theyíll sing the ole Stalinist rag! 

Iím called Mikhail Gorbachev, Mikhail S. Gorbachev 
The U.S. canít preach any more. 
They may talk about Putin, 
But see how theyíve been disputiní 
ĎBout whether itís Bush or its Gore! 

Carmen MacDougall 
Vice President for Communications 
Carnegie Endowment for International Peace 
1779 Massachusetts Avenue, NW 
Washington, DC 20036 
fax: 202-332-0925 


Bush could forge new direction in U.S.-Russia ties
By Carol Giacomo, Diplomatic Correspondent

WASHINGTON, Dec 15 (Reuters) - Relations between the United States and
Russia, which experts say are now at a critical juncture, could undergo
fundamental change as President-elect George W. Bush takes power in

Over the past year, he and his advisers outlined views that critics fear
would turn Russia back into an enemy. But Republicans have insisted the
Bush positions are more realistic and would better protect U.S. interests. 

Many details of Bush's policy are left unclear. 

But during the election campaign, Bush himself raised expectations for
significant changes in U.S.-Russian ties, calling for nothing less than a
"new strategic relationship to protect the peace of the world." 

This is likely to be underpinned by Bush's stated conviction that "Russia
is a great power and must always be treated as such." 

But the president-elect's approach is also expected to reflect a tougher
line toward Moscow on missile defenses, aid, corruption, arms control and
Chechnya, as well as a greater proclivity to take on Russia when it acts
against perceived U.S. interests. 


Bush advisers had accused the Clinton administration for having too
"romantic" a view of Russia after communism fell and the country moved
toward democracy and capitalism. 

"People know that policy toward Russia has failed," Bush foreign policy
adviser Condoleezza Rice told reporters last September. 

Bush may have a freer hand in dealing sternly with Moscow now that the
Russian president is Vladimir Putin, who has made strides in reforming the
economy but has set back the cause of democracy by weakening all major
sources of power independent of the executive branch. 

On missile defenses, Bush has publicly promised to "develop and deploy"
national and theater systems, despite strong opposition from Russia, as
well as China and NATO allies. 

The Washington Post reported on Dec. 10 that Bush told the Russian foreign
minister directly last April that the U.S. commitment to build a missile
defense system was "a political fact of life that Russia and other nations
had to absorb." 

The issue is certain to be a continuing flashpoint between Washington and
Moscow, in addition to other capitals. 

Russia fears that a national missile defense system that seeks to protect
U.S. territory, would seriously undermine or erode its nuclear arsenal,
which has been the basis of deterrence for the past 50 years. 

But the Carnegie Endowment for International Peace, in a recent report on
the need to "renew" U.S.-Russia ties, said any system that the United
States would be able to deploy in the next 10-15 years would not threaten
Russia in that way. 


The report argued that before moving ahead with missile defense, the Bush
administration should make a fresh assessment of the threat from missiles
capable of hitting the United States and redouble efforts to stem

And unless the missile proliferation threat significantly worsens (with
another North Korean test, for instance) then the United States should not
unilaterally defect from the 1972 Anti-Ballistic Missile treaty, which
limits missiles defenses, the Carnegie experts said. 

The Bush team has also signaled that the new president would end U.S.
support for billions of dollars in aid to Russia from the International
Monetary Fund. 

Bush "does think further IMF funding doesn't make sense at this point,"
Rice, who is expected to be Bush's National Security Adviser, said in an
interview during the campaign. 

She has complained about Russia's lack of a rule of law, a senseless tax
policy and rampant corruption and blamed the Clinton administration for
missing an opportunity to really transform the Russian economy. 

The Bush team has also declared its intention to withhold international
financial assistance to Russia because of the Russian government's attacks
against civilians in the breakaway province of Chechnya. 

"Even as we support Russian reform, we cannot excuse Russian brutality,"
Bush said in his major foreign policy speech in November 1999. 


Bush has expressed skepticism about the process of negotiated arms deals
that has been a staple feature of the U.S.-Soviet and then U.S.-Russia

But he has endorsed further reductions in nuclear weapons and has hinted he
might take unilateral action, which could dramatically change the
international security environment. 

The United States and Russia are already committed under the START II
treaty to slash their nuclear arsenals from more than 6,000 deployed
weapons to 3,000-3,500 weapons by 2007. 

The Carnegie report argued that Washington should unilaterally reduce its
level to 1,000 to 1,5000 weapons. 

Putin has suggested that Russia, which is finding it increasingly difficult
to maintain its nuclear arsenal because of economic problems, would take
similar action. 

Bush, concerned that vast amounts of Russian nuclear material cannot be
accounted for, has declared his intention to press for an accurate
inventory of this material and to seek expanded funding from Congress to
dismantle as many of Russia's weapons as quickly as possible. 

Tensions in the U.S.-Russia relationship could flare over plans to expand
NATO further, Moscow's transfer of conventional arms and nuclear expertise
to Iran and Putin's effort this week to breathe new life into ties with Cuba. 

But Moscow defused another problem this week by pardoning and freeing
American Edmund Pope, who was convicted of espionage after spending eight
months in jail. He denied the charges. 


Boston Globe
December 16, 2000
2 GOP stars poised to guide US abroad 
By John Donnelly, Globe Staff

WSHINGTON - He's a national hero and has held top jobs at the Pentagon and 
National Security Council. She's a virtual unknown, her only government 
experience as an NSC officer who specialized on an empire that no longer 

Retired General Colin L. Powell and Condoleezza Rice - in line to be the 
secretary of state and national security adviser, respectively, in the Bush 
administration - are about to walk onto the world stage on vastly different 

Powell, whose appointment to the Bush Cabinet is to be announced today, has 
an aura of prestige, even a flash of celebrity. Rice has pizazz, smarts - 
plus the president-elect's ear.

Their individual influence with President-elect George W. Bush won't be known 
until the crises begin. But with the all-but-announced Powell-Rice duo, an 
unprecedented elevation of African-Americans to two of the top three national 
security positions in US government, even Democrats who find much to fault on 
their policy stands give both high marks for their understanding about how 
the world works.

And, they say, with Bush's foreign policy experience as governor of Texas 
limited to Mexico and a few countries in Latin America, the new president 
will depend on the two to have a major imprint on everything from formulating 
more skeptical relations with China and Russia to restarting serious 
discussions with allies and Congress over national missile defense.

In previous comments, both have espoused caution when it comes to committing 
US troops overseas, but they embrace broader free-trade deals. Many observers 
believe that as one of their first steps the two would attempt to reduce the 
US troop presence in Bosnia, a goal Defense Secretary William S. Cohen has 
quietly pushed. 

But how will they work together?

''They have known one another for years, they have a relationship that goes 
back, and it is a strong relationship, a healthy relationship, an open 
relationship,'' said F. William Smullen, Powell's chief of staff. ''They talk 
frequently and have on a daily basis for the last several weeks, and they are 
going to continue that dialogue at the national level. It will have one goal: 
to serve the president, and in this town that's not always a common 

Powell, 63, a former national security adviser and chairman of the Joint 
Chiefs of Staff who worked closely with then-Defense Secretary Dick Cheney in 
the first Bush administration, has statesman-like credentials.

''This is a man who is better prepared to be secretary of state than any 
other person in post-Cold War history,'' said Ivo H. Daalder, an analyst at 
the centrist think tank Brookings Institution who served on the NSC from 1995 
to 1996 and who backed the candidacy of Vice President Al Gore. ''Powell was 
military adviser to the president in the last major military engagement. He's 
had to deal with ethnic conflicts. We haven't had a secretary of state who 
arrives on the seventh floor of the State Department with the kind of aura 
that General Powell has.''

Powell's leadership style, according to three people who have worked with 
him, is that he gives directions to deputies but doesn't meddle in how they 
carry out their jobs.

''He empowered you with authority to go off and do things, but he wasn't in 
your face all the time,'' Vice Admiral Gregory G. Johnson, commander of the 
Sixth Fleet, said from Malta. 

Johnson was Powell's executive assistant for 21 months beginning in 1991. 
''If you did wrong, he wasn't afraid to tell you. He was very quick to clear 
the air.''

Johnson and several others described Powell as politically astute. ''He's the 
most sophisticated pragmatist I know,'' Johnson said. ''He knows the art of 
the possible in Washington. He knows that D.C. is populated with very large 
egos, and you're not going to get it done with in-your-face tactics.''

Inside previous administrations, tensions almost always arose among the 
secretary of state, the national security adviser, and the defense secretary 
over who has final word with the president. Often one person, such as 
Secretary of State Henry A. Kissinger in the Nixon administration or to a 
lesser degree national security adviser Samuel R. ''Sandy'' Berger in the 
last years of the Clinton administration, emerges as dominant. Sometimes 
there are battles that become public, such as those during the early Reagan 
years between Secretary of State George P. Shultz and Defense Secretary 
Caspar W. Weinberger.

Rarely is there peace.

But those who know Powell and Rice believe they may work in concert. One of 
their reasons was that Powell, more than a decade ago, was able to help 
broker good relations in his job as national security adviser in the last 
year of the Reagan administration. Shultz was secretary of state and Frank C. 
Carlucci was defense secretary.

''Colin, George, and I met every morning at 8,'' Carlucci remembered in an 
interview this week. ''It was just to go over the day's work, and it had an 
extraordinary effect on the Reagan administration's last year in the foreign 
policy area, which had been very difficult before. George and I might have a 
difference of opinion, and Colin would turn to one of us and say, `Come on, 
Frank, that's BS.' He had a way of saying to one or the other of us that you 
ought to back down, and frequently we did.''

Carlucci also knows Rice; they served together on the board of Rand, a Santa 
Monica, Calif., think tank. ''It was a very intimidating board, but she was 
not intimidated. She was not bashful at all. She's got a good degree of 
self-confidence,'' he said.

The former defense secretary doesn't believe Powell and Rice would clash. 
''Sometimes there's a healthy tension between State and NSC. The water will 
find its own level,'' he said. ''But it's very hard not to get along with 

Rice, 45, fluent in Russian, a student of Soviet military history, was a 
specialist on the Soviet Union at the NSC during the collapse of the empire 
and the fall of the Berlin Wall. After leaving the NSC, she spent a short 
time at the John F. Kennedy School of Government at Harvard University and 
then became provost at Stanford University in 1993.

It was at the NSC that she developed close ties to then-President Bush. ''She 
was front and center then with all that was happening, and made a big 
impression,'' said Michael McFaul, a Russia specialist who was at Stanford 
during Rice's tenure as provost. He now is an analyst at the Carnegie 
Endowment for International Peace in Washington.

''She'll be a strong personality,'' said McFaul, who supported Gore in the 
election. ''Throughout her life and career, people have continually 
underestimated her because she is a young black woman in a field dominated by 
old white men. People assume before they know her she is some kind of token, 
and she is not.''

Graham Allison, director of the Belfer Center for Science and International 
Affairs at the Kennedy School of Government at Harvard, who has known Rice 
for years, also sees racial stereotyping as one of the reasons she is often 

''It partly, undoubtedly, has to do with being a black woman, but nobody who 
has worked with her very long has underestimated her,'' Allison said, 
pointing particularly to her job as provost at Stanford, where she piloted 
the university through a difficult financial period.

Allison also believed that Rice's experience compares favorably to that of 
many national security advisers, including those now seen as giants.

''Compare her with Henry Kissinger,'' Allison said. ''Well, Kissinger was a 
professor at Harvard before he was national security adviser, and she was a 
professor at Stanford. Kissinger was a part of the foreign policy 
establishment, and she is a part of the foreign policy establishment. And 
Kissinger never had the administrative capabilities that she has.''

Still, Powell and Rice would enter their positions with what McFaul called an 
''asymmetry of experience.''

''My personal assessment,'' he said, ''is I don't think it is going to 
matter. Powell has the presence, but Condi's big trump card over anybody is 
her personal relationship with the president.''


Date: Fri, 15 Dec 2000 
From: "Nicolai N. Petro" <>
Subject: New book on Orthodoxy and democracy

Those interested in Orthodoxy and politics will want to take note of the
appearance of Emperors and Elections: Reconciling the Orthodox Tradition
with Modern Politics (Troitsa Books, 2000), by Dr. Nikolas K. Gvosdev,
Associate Director of the J. M. Dawson Institute of Church-State Studies at
Baylor University.

The book tackles the question of whether Orthodox Christianity can play a
role in stabilizing democratic and republican traditions in the states that
comprise the traditional heartland of Eastern Orthodoxy. Relying on a
detailed analysis of history and doctrine, Gvosdev finds that, not only can
Orthodoxy co-exist with the institutions of modern democracy, but that
ďOrthodox concepts about the dignity of the individual and the importance
of the community can make a valuable contribution to modern political

Nikolas K. Gvosdev received his D.Phil. from St. Antonyís College (Oxford)
in Modern History. He is the author of Imperial Policies and Perspectives
Towards Georgia, 1760-1819 (St Martinís Press, 2000), and of the
forthcoming Eastern Perspectives on Church and State (Mellen Press, 2001).

Emperors and Elections can be ordered at
or directly from the publisher by e-mailing, or
calling 631-424-6628; fax 631-424-4666.


From: (Walter Uhler)
Date: Fri, 15 Dec 2000 
Subject: Re: #4671, Pope Case a resurgence for Russian spy agency

One can only hope that President Putin's welcome pardon of Edmond Pope 
will not divert America's attention from the other Federal Security Service 
repressions mentioned by Messrs. Peterson and Weir. I'm particularly 
concerned about the fate of Igor Sutyagin, who I met and befriended in Moscow 
in September 1998. His correspondence with me over the following twelve 
months demonstrated both his brilliance and patriotism. Two instances were 
especially impressive. 
At our meeting in Moscow, Igor became grave and clearly irritated when I 
solicited his thoughts about NATO expansion. Before answering, he grabbed 
his wallet, from which he extracted and unfolded a piece of newsprint. He 
read an excerpt which stated that America's Secretary of State, James Baker, 
had assured Mikhail Gorbachev that, with the unobstructed inclusion of a 
unified Germany in NATO, there was little reason to expand NATO's borders in 
the future. That said, Igor gave me his answer: The Clinton administration's 
support for NATO expansion was nothing less than a "STAB IN THE BACK!" 
During our subsequent exchange of letters and e-mails over the next year, 
I was the recipient of yet another outburst -- in reaction to America's 
bombing of Yugoslavia. In that particular missive, Igor enumerated the 
international laws violated by the United States and NATO and asked why 
Russia should continue to trust the US to honor its obligations. 
You might imagine my surprise, then, to learn that Igor had been 
incarcerated; charged with treason. That shock quickly turned to outrage 
when it became apparent that Igor, who had no access to state secrets, had 
been set up by the Federal Security Service. Its thirteen-month search for a 
crime -- while denying Igor his basic human rights both under Russian and 
International law -- reminds me of the worst abuses committed by the KGB. 
It is worth recalling that Gorbachev credited Margaret Thatcher for 
convincing him of the following: "Human rights are an extraterritorial, 
universal, all-human value." Unless checked by democracy, Stalinist 
repressions might reemerge after Gorbachev's departure. Thus, without 
democracy, the Soviet Union would "never achieve real trust in foreign 
Gorbachev acted upon that knowledge.
Trying and convicting Igor in secret will indicate that Russia has 
forgotten an important lesson -- and savaged a Russian patriot in the 


The Globe and Mail (Canada)
16 December 2000
Putin's progress
There is no doubt who rules Russia today,
from Moscow. The President has won every
battle to rebuild the central state:
The Duma is docile, the governors silent,
the media controlled, the oligarchs tamed

Vladimir Potanin still swaggers. The 39-year- old banker and nickel baron, 
one of a cabal of Russian tycoons known as the oligarchs, still prowls 
through his plush offices with a boxer's coiled pugnacity. He still measures 
the size of his holdings as a percentage of Russia's gross domestic product 
(he claims to control 4 per cent at the moment).

Mr. Potanin even continues to enjoy one of the small but overt symbols of the 
oligarchs' traditional status as men literally above the law: a special, 
"killer" licence plate, which gives him the right to flout ordinary traffic 
laws, a not insignificant privilege in gridlocked Moscow.

But for all his attitude, Mr. Potanin is not quite as bold as he was in the 
halcyon days before an unknown KGB officer from St. Petersburg astonished 
Russia and the world by emerging as Boris Yeltsin's successor.

The oligarchs were the arrogant kings of the wild capitalism of the Yeltsin 
epoch. Mr. Potanin, for example, did a stint as deputy prime minister and was 
part of the business clique that secured Mr. Yeltsin's re-election in 1996.

But the new Kremlin chief, Vladimir Putin, has made it his central mission to 
strengthen the enfeebled Russian state and rein in its rivals for power -- 
especially the oligarchs.

For Mr. Potanin, the message has come through loud and clear. With all the 
passion of the newly converted, he now insists that big business has no right 
to meddle in politics.

"It is impossible to live in a country and to fight against the government's 
politics," Mr. Potanin declared in an interview. "That might be all right for 
politicians, or for revolutionaries, but not for businessmen. Business cannot 
and should not fight against the state."

This phrase is repeated like a mantra by the other oligarchs. "I can't say 
the state is always right, but it is impossible to fight the state," said 
Vladimir Yevtushenkov, head of the vast Sistema business empire, whose 
holdings include one of the country's largest telecommunications companies.

Added another oligarch: "The Kremlin told all of us, 'You will have to stand 
at attention and salute.' So we are all standing at attention and showing our 

The oligarchs, with their shrewd understanding of Russian politics, have 
grasped an essential point: They can keep their wealth and their influence, 
as long as they refrain from direct interference in Mr. Putin's power.

Before his election this spring, Mr. Putin had vowed to eliminate the 
oligarchs as a class. But only two of them -- media barons Vladimir Gusinsky 
and Boris Berezovsky -- have been forced into exile. Most of the remaining 
oligarchs have kept a firm grip on their financial empires and their 
back-room connections, even if their public comments are slightly more humble.

Mr. Potanin still enjoys access to the highest levels of power. He cut short 
his interview with The Globe and Mail to dash off to the Kremlin to meet Mr. 
Putin to discuss a nickel project in Cuba.

"All of that talk that Putin has an allergy to the oligarchs is nonsense," 
Mr. Potanin said breezily. "I don't have any problems in my work with the 
President. If a question is extremely important, I think you should have 
access to the highest person."

Unlike Mr. Yeltsin, a flamboyant and mercurial leader of unabashedly earthy 
appetites and an equally meaty passion for fighting the Communists, Mr. Putin 
is a cooler, more controlled man with few apparent ideological convictions.

He has restored the melody of the Soviet anthem, but he has also backed a 
re-energized drive for capitalist market reforms. He has flexed Russia's 
military muscle in a bloody campaign in Chechnya, but he has also promised 
deep cuts in the army.

Yet if most of Mr. Putin's beliefs remain obscure (even his own election guru 
refers to him as a "black box"), one central tenet has emerged. The President 
is convinced that in the 10-year transition from communism to something else, 
the Russian state has become catastrophically weakened. The one unambiguous 
goal that has emerged from his first year in office has been an all-out 
campaign to rebuild the central state.

On every front, Mr. Putin has won the battle.

The once-fractious State Duma, the lower house of parliament, is suddenly 
docile, even though the Communists are still the largest party. The upper 
house, the Federation Council, is loyal to the President. The regional 
governors have been battered into submission, especially after they saw how 
the Kremlin crudely arranged the removal of Kursk governor Alexander Rutskoi, 
who was deleted from election ballots on a technicality. The media, aside 
from a few outlets owned by Mr. Gusinsky, are now largely controlled by the 
state or its corporate allies. And the oligarchs have been tamed.

While he neutralizes his rivals at home, Mr. Putin is engaged in a charm 
offensive in the West, making 20 trips abroad in the nine months since his 
election, including a visit to Ottawa and Toronto that begins tomorrow.

It is a two-pronged strategy. By performing on the world stage, he can 
bolster his personal authority at home. And by bringing a friendly liberal 
message to Western audiences, he can defuse some of the foreign criticism of 
his more ominous steps in Russia.

At one level, Mr. Putin's drive to strengthen the Kremlin is a no-brainer. It 
is a truth universally acknowledged that the central government was one of 
the chief casualties of Mr. Yeltsin's pell-mell dismantling of the Soviet 
system, and that, as a result, Russia had degenerated into a condition of 
anarchy -- sometimes an exhilarating anarchy, but more often brutal and 

A year ago, the response to the question "Who rules Russia?" was the 
terrifying "Nobody" -- or an even more frightening answer: "Whichever local 
business prince has the most money and the biggest private army."

Today, in sharp contrast, there is no doubt it is Vladimir Putin who rules 
In an interview with The Globe and other Canadian media, Mr. Putin boasted of 
how he can guarantee parliamentary approval for his initiatives. Under his 
rule, there has been a "consolidation" of Russian society, he said. "Today, 
we are able to secure consolidated voting on many key issues."

This "consolidation" -- often known by other code phrases such as 
"strengthening the power vertical" -- is a polite way of saying that the 
opposition has collapsed.

"If there is anything that Russia as a democratic society suffers from today, 
it is the complete and utter absence of opposition," said Vitaly Tretyakov, 
editor of the Moscow newspaper Nezavisimaya Gazeta.

After silencing the governors and the oligarchs, the Kremlin has "seized the 
commanding heights of the electronic media," Mr. Tretyakov wrote recently. 
"The anti-Putin opposition that thrashed about feebly at the beginning of 
this year has long since been routed. . . . In Russia today, there is no 
ideology that is competitive in the eyes of the people, other than the one 
indicated by the word 'Putin.' "

Grigory Yavlinsky, leader of a liberal opposition party in the Duma, 
estimates that 370 of the chamber's 450 seats are reliably under the control 
of the Kremlin.

"The Duma and the Federation Council are simply part of the presidential 
administration," he said. "The absolute majority of Russians support the 
President, whatever he does. There is no social base, at the moment, for the 

Perhaps the most crucial issue is whether Mr. Putin understands where a 
strong state ends and a dictatorship begins. It is, as even his political 
allies acknowledge, all a question of where to draw the line. And many 
Russian liberals are beginning to worry that Mr. Putin's instincts will be to 
draw it a bit too close to authoritarianism for comfort.

"It is so very easy to cross the line," said Yegor Gaidar, Russia's first 
post-Communist acting prime minister and the intellectual mentor of the 
liberal market reformers who dominate the economic branch of Mr. Putin's 

"It is very easy to cross the boundary from the absolutely necessary battle 
with the oligarchs and with oligarchic structures into a battle against 
freedom of the press," Mr. Gaidar said in an interview. "It is a very 
delicate line. And there is no guarantee that our government and our young 
democracy very precisely understand where that line should be drawn."

Because of the messy way in which the Russian market economy and post-Soviet 
legal structures were built, the Kremlin can find a pretext to prosecute and 
jail almost anyone. Mr. Putin talks about "the dictatorship of the law," but 
in a place such as Russia, where laws are unclear and contradictory, this 
principle is all too easily synonymous with pure dictatorship.

The relentless persecution of Mr. Gusinsky, the media tycoon who is now in a 
Spanish jail on a Russian arrest warrant, may be an example of how the 
Kremlin can cross the line.

Even one of Mr. Putin's closest advisers, Gleb Pavlovsky, acknowledges a 
political motivation for the hounding of Mr. Gusinsky. "Putin conducted a 
surgical operation to liquidate the sources of opposition of the 'old' 
forces," he said in an interview. "Yes, this was politically motivated 
pressure on the old forces."

There is mounting Western concern about Mr. Putin's steps to consolidate 
power. "If Russia was a wobbly democracy under Yeltsin, it is now in the grey 
zone between democracy and authoritarianism," said a report this month by the 
Carnegie Endowment for International Peace.

It said the Putin administration was taking steps to weaken "all major 
sources of power" outside the Kremlin itself.

Russian bureaucrats have drafted a law that would further restrict the 
political party system. To gain legal registration, each party would have to 
prove that it has 10,000 members, including at least 100 members in each of 
45 regions. Each party would be obliged to renew its registration every year, 
and it could lose its legal status if it fails to participate in an election.

"The Kremlin will now have a score of excellent ways to get rid of annoying 
political forces without actually banning them," political analyst Boris 
Kagarlitsky commented. "This is Vladimir Putin's concept of democracy. There 
may be a number of parties, but they will all be more or less identical, and 
they will all be under control."

In the absence of any serious opposition, the Russian power hierarchy is 
dominated by Mr. Putin and four influential factions below him: the Russian 
military; the former Soviet KGB, now known as the FSB; the wealthy oligarchs; 
and the small group of liberal reformers who remain in key posts in the 
finance and economics ministries.

Of the seven "super-governors" who were appointed by Mr. Putin to supervise 
Russia's 89 regions, almost all were drawn from the ranks of the military, 
the police or the security organs.

The military wields its influence through the war in Chechnya, the defence 
industry, the lucrative arms-exports business and the rising military 
tensions in Central Asia, where the Kremlin warns incessantly of the dangers 
of Islamic fundamentalism and terrorism.

The FSB exercises its own influence through its links to Mr. Putin (a former 
FSB chief) and through the espionage paranoia of recent months, which has 
featured a growing number of arrests and closed trials of alleged "spies" who 
are often just ordinary environmentalists, journalists or academics.

The latest example was the trial of U.S. businessman Edmond Pope, convicted 
of espionage and sentenced to 20 years in prison, though given a pardon this 

"This all fits into an attempt to restore in society the atmosphere of spy 
mania," said Maria Chudakova, a member of Russia's presidential pardons 

Mr. Yavlinsky recalls how the FSB tried to recruit some of his younger party 
members as informers. "My representatives were expelled from university 
because they refused to co-operate with the FSB," he said. "Putin is making a 
lot of decisions with the help of the FSB. These are the people who are close 
to him, and he understands them."

Russian media have reported that the FSB is trying to discredit the liberal 
reformers and install its own candidate as Russia's prime minister.

The President hotly denies these reports. The security agencies "do not 
interfere, must not interfere and will not interfere in the economic policy 
of the state," he said in the interview.

Despite the FSB's influence and the prosecution of media tycoons, Russia's 
independent media are continuing to work freely. A diversity of views, 
including opposition views, are expressed in newspapers and even on Mr. 
Gusinsky's television channel.

But many Russians, including journalists and business leaders, are worried 
that they will soon face a clampdown.

In the interview, Mr. Putin made a revealing slip when he suggested that the 
press criticism of the Kremlin could be regarded as "hooliganism" or 
"uncivilized" conduct. He quickly retreated from his comment, but left little 
doubt of his distaste for the opposition press.

Mikhail Zadornov, a finance minister in the Yeltsin era, looks to European 
history and sees a tendency for countries to lapse into a period of 
restoration at the end of their revolutionary phases.

The weakening of the opposition, the centralization of power, the unification 
of parliamentary factions and the revival of Soviet symbols -- all are signs 
that Russia is entering its own period of restoration after the revolutionary 
excesses of the Yeltsin period, Mr. Zadornov said.

"There is a real danger that the fragile elements of our weak democracy could 
be killed," he said. "The question is how deep will this restoration be."


Moscow Times
December 16, 2000
Justice Awaits Reform
By Robert Orttung 
Robert Orttung is the editor of the EastWest Institute's Russian Regional
Report, for which he wrote this comment.

With President Vladimir Putin's emphasis on introducing a uniform set of
laws across Russia, the country's leadership is paying new attention to the
problems of the court systems and the judges who work for them. At the
All-Russian Congress of Judges held in November, Putin and Supreme Court
Chairman Vyacheslav Lebedev stressed how much had been accomplished during
the last 10 years. The tone of their speeches contradicted reports from
judges in the regions, who pointed out the poor conditions in which they
work. While there has been progress over the last decade, a considerable
amount remains to be done. Putin indicated that he preferred gradual change
to radical reform.

The Russian court system consists of a Constitutional Court, courts of
general jurisdiction and arbitration courts, which focus on economic
disputes. The State Duma is considering legislation establishing an
administrative court system to make it easier to convict regional and local
authorities of abusing the privileges of their offices. Additionally, there
are charter courts in the regions and military courts. Nine regions are
experimenting with implementing a jury system. A system of bailiffs,
created in 1997, works to enforce judicial decisions. 

During the last decade, the amount of litigation in Russia has increased
dramatically as citizens and corporations see the legal system as
potentially providing relief. Lebedev estimates that there are three times
as many cases now as in 1994. Veniamin Yakovlev, chairman of the Supreme
Arbitration Court, told Nezavisimaya Gazeta that arbitration courts now
deal with twice as many cases as in 1995. A system of justices of the peace
is functioning in 33 regions to reduce the burden on the regular civil and
criminal court systems.

The most pressing problem facing the judicial system is the lack of
funding, according to Filipp Sterkin, the general director of the Supreme
Court's Judicial Department. Despite recent budget increases, there is
still not enough money to address the courts' current needs. In 1998, the
budget included 3.4 billion rubles for judges. In 2000, it rose to 7
billion rubles and will be 11 billion in 2001, according to current plans.
However, Sterkin told Vremya Novostei that the system needs at least 35
billion rubles to function at an acceptable level.

The lack of resources opens the judicial system up to corruption, as judges
make decisions to advance their personal economic interests rather than
apply the law. In particular, without federal financing, judges must rely
on regional or local authorities for things like office space, apartments,
municipal services and other necessities. They become beholden to the local
authorities, who in turn acquire the right to violate the law with impunity. 

Another problem is the lack of legislation implementing in practice the
general principles laid out in the Constitution. In many cases, the judge
serves as both the prosecutor and final arbiter, turning court cases into
something closer to inquisitions. Many of these practices are inherited
from the Soviet era. Also, many laws are contradictory, particularly those
on property rights. As a result, legal battles can drag on indefinitely as
one or another side puts forward new twists in its legal argument.

The lack of qualified personnel to staff the legal system further
compromises the execution of justice in Russia. Good judges are drawn to
higher salaries offered by private sector positions, leaving vacancies or
less qualified judges in their place. The remaining judges must deal with
ever-increasing workloads. There are currently 16,742 judges of general
jurisdiction, at a time when 35,734 are needed. Russia has one judge for
every 9,500 residents, while Germany has one for every 4,000 and England
for every 3,000, according to an article in Kommersant Vlast.

At the Congress of Judges in November, Putin announced plans over the next
10 years to double the number of judges at higher salaries. To attract
better people, the job needs to be made more prestigious. Currently, people
who seek to become judges are often those who otherwise would not be able
to secure an apartment or health insurance. A Moscow judge earns up to $350
a month, while a good lawyer earns no less than $1,000. In the regions,
judges earn between 1,500 to 5,000 rubles a month (less than $200). As a
result, standards for hiring judges are low and many simply do not have an
adequate knowledge of the law. 

Even when courts reach a just decision, there is a strong chance that it
will not be implemented. Before 1997, when the institution of bailiffs was
established, only 20 percent of court decisions actually were implemented,
according to Sergei Popov, the deputy chairman of the State Duma
constitutional legislation and state-building committee. Since then he
claimed that more than 60 percent of legal decisions are implemented.
However, there are clearly not enough bailiffs to go around. Although the
system requires 33,000 bailiffs, Russia currently employs only 7,500
according to Kommersant Vlast. In the past, the winner of a court case
could have paid a private firm from 10 percent to 50 percent of the
settlement to actually collect it. Now the bailiffs perform this work,
charging the party that refuses to implement a court decision 7 percent.

Beyond the headaches it causes for Russian citizens, the Russian legal
system is a big problem for foreign investors. "We constantly witness the
scandalous injustice of the judges, particularly in the regions,"
Konstantin Konstantinov, a lawyer for Chadbourne & Parke told Vedomosti. He
recommended that his clients avoid the Russian legal system if at all


Date: Fri, 15 Dec 2000 
From: "John Helmer" <> 

>From John Helmer in Moscow

In Havana, before his departure for Canada this weekend, Russia's
President Vladimir Putin appeared visibly uncomfortable with the effusive
Cuban leader, Fidel Castro. 

Despite the gap between Castro's rhetoric and the modest commercial
agreements that were signed, however, Putin was able to achieve a major
breakthrough with Cuba that had eluded both his predecessors in the Kremlin, 
Boris Yeltsin and Mikhail Gorbachev.

This was a deal to start the payback of Cuba's US$20 billion dollar debt to 
Moscow. And for the US$400 million investment required to kick-start
this deal, Putin has managed to extract the money from offshore trade
proceeds Vladimir Potanin, one of the Russian oligarchs, had been hoping to
keep for himself. 

According to the official word from Havana, Norilsk Nickel, Russia's leading 
mining company which Potanin controls, is now ready to invest US$300 million 
in Cuba's Las Camariocas nickel plant.

Until a few days ago, the project was something Norilsk Nickel officials 
said they would not decide until after a feasibility study was completed, 
and energy costs for the plant calculated. 

However, on December 7, Putin summoned Potanin to the Kremlin and told him 
the project had become a political priority for the Russian government in 
Cuba. Potanin was told Las Camariocas was an opportunity he could not 
afford to say no to.

The Las Camariocas plant, started during the Soviet period, is about 
two-thirds complete, Russian sources say. The original design capacity was
for 32,000 metric tons of nickel, and 1,300 tons of cobalt. 

Current planning by the Cubans calls for completion of the plant, and 
upgrading to a new capacity of 38,000 tons of nickel, and 1,700 tons of 
cobalt. The plant completion and new equipment are estimated to cost US$300 
million, and two years of work, before operations can begin. A proposed new 
nickel refinery for Cuba would cost another US$100 million.

Russian analysts see the project as an effort by the Kremlin to rebuild 
strategic ties with Cuba, after the administration of President Boris Yeltsin 
took an anti-Havana, pro-Washington line for the past decade, and severed 
trade ties in oil and sugar. The Cubans reacted by stalling on Russian
for repayment of an estimated $20 billion in rouble debt from the Soviet 

Annual trade turnover between the two countries fell to $900 
million, one-quarter of its Soviet peak. Since then Russia has dropped 
behind Spain, Venezuela and Canada on the list of Cuban trading partners.

Putin and Castro, Russian sources say, discussed the revival of 
investment and trade as part of a comprehensive scheme to enable Cuba to repay
its debts, and Russia to renew its strategic intelligence-gathering
on the island. The Norilsk Nickel investment was an offer Putin judged Castro 
could not refuse.

In this scheme, Norilsk Nickel's executives are being obliged to do what they 
claim they want to abroad -- on Putin's terms. And Cuba will start repaying
Russia in cash -- also on Putin's terms.

Norilsk Nickel deputy chief executive Yuri Kotlyar recently complained that
his company was being forcibly isolated by the government. "Today," Kotlyar 
said, "Norilsk Nickel is the only large [mining] corporation which has 
assets in one country only. Practically, there are no precedents in the 
world. Today we are second after Anglo-American in terms of the volume of 
sales. We have reached a level of production equal to Alcoa, the world's 
second metallurgical company."

On the other hand, Kotlyar said, Cuba was not where Norilsk Nickel's 
management have in mind to invest. "We are not going to agree on a 
technology that [the Cubans] propose, since this will require large 
volumes of oil, which is getting more expensive now and makes such projects

According to Kotlyar, "we will not participate in any political projects in
Cuba -- only in projects which will be beneficial for the share-
holders of our company. There is no other way. We have more than 20% of
foreign shareholders and they would not like it to spend their profits
on flawed projects."

Last week, the Federal Tax Police in Moscow announced they suspected Norilsk 
Nickel of concealing hundreds of millions of dollars in export profits from 
tax. Investigations have been opened at several of the mining company's 

This week Putin had Norilsk Nickel's agreement to do exactly what he wanted
in Cuba.


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