December 2, 1999    
This Date's Issues: 3656 • 3657  • 3658

Johnson's Russia List
#3656
2 December 1999
davidjohnson@erols.com


[Note from David Johnson:
1. Central European Economic Review: Sergei Kovalyov, Why West Should 
Worry. Chechnya paves way for authoritarianism.
2. The Village Voice: Lucy Komisar, RUSSIAN CONS AND NEW YORK BANKS.
3. MSNBC: Transcript of chat with former prime minister Yevgeny Primakov.]


********


#1
Central European Economic Review
Wall Street Journal Europe
www.wsj.com/ceer
November 29, 1999 
Why West Should Worry
Chechnya paves way for authoritarianism
By SERGEI KOVALYOV 
--A well-known human rights campaigner, Mr. Kovalyov is a deputy in the
Russian Federation State Duma. 


Once again, Russia has stumbled into the Chechen trap. 


Was the trap fashioned in the headquarters of Chechen field commanders? Or
was it hammered out in the secret labs of the notorious international
terrorist Osama Bin Laden? Or did it take shape in the Russian Defense
Ministry building on Moscow's Arbat Square? Or did it come to life behind
the Kremlin walls, where the entourage of the rapidly degenerating
president is weaving a web of intrigue in an attempt to block from power
the dangerous and energetic contenders: Yury Luzhkov and Yevgeny Primakov. 


Unfortunately, we don't have answers to these questions, and I'm afraid we
never will. When it comes to conspiracy, Kremlin courtiers are at least as
good as international terrorists. 


How did it all start this time around? First, [the Chechen fighters]
Shamil Basayev and Khattab staged a mad raid, and Russia again turned its
attention to the rebellious republic. By August, the federal army was
fighting furiously with Chechen bands in Dagestan. Then explosions came
thundering in Moscow and Volgodonsk. The country was gripped by a mystical
terror. In the meantime, Russian troops were advancing toward the borders
of the Chechen republic. 


Then, Prime Minister Vladimir Putin announced an "antiterrorist operation"
against Chechnya. The Russian government refused to negotiate with Chechen
President Aslan Maskhadov. Next came massive air and missile attacks aimed
at towns and villages of the breakaway republic. Russian divisions
advanced slowly into the Chechen heartland, and meticulously destroyed
everything that moved along the way. And all of this was taking place with
the loud approval of public opinion. 


Now, troops are advancing ever closer to the Chechen mountains, and with
them Russia is moving towards its historical fate. What mask will the demon
of Russian history wear this time? Will it be the mask of another
disastrous defeat that could lead to turmoil, riots and the loss of
government control over the country? Or will it be the mask of a military
victory that could bring to power a man with a hysterical ringing voice and
the white eyes of a transient madman? 


A military victory [in Chechnya] is still possible. All that's needed is
the physical elimination of all Chechens capable of carrying arms.
Reportedly, our military top brass proposed just such a "final solution of
the Chechen question" in the summer of 1996, just after Mr. Maskhadov's
troops recaptured the capital Grozny. But to his credit, [Krasnoyarsk
governor] Alexander Lebed -- who at the time was the secretary of
[President Boris Yeltsin's policy making] Security Council -- rejected
these cannibalistic proposals and began peace talks. The talks were met
with nearly universal public approval. 


These days, the atmosphere is different. When a popular television anchor
speaks about Chechnya, his words are preceded by the opening chords of
"Rise up, great country ... " -- the Soviet people's unofficial anthem in
the war against the Nazis in 1941-1945. Regional newspapers are teeming
with headlines such as the following one from Nizhny Novgorod's Delo:
"Chechnya must die if Russia wants to survive." 


In any case, if the second Caucasus war continues, all that's left of
freedom in Russia will disappear. This is already happening now.
Newspapers, magazines, radio and television are bending over backwards to
prove their loyalty to the government and support the official lies about
the events in the Northern Caucasus. Some officials have threatened to
prosecute civilian organizations that circulate petitions calling for an
end to military conscription. And human-rights activists in the provinces
are being labeled CIA agents. For the first time since August 1991, some
Russian leaders are openly saying the military-industrial complex should be
restored to its former status. 


This is our likely future. It will be up to us to deal with it. But how
will the rest of the world -- which considers itself civilized -- coexist
with an authoritarian Russia? How will Europe reconcile its conscience with
the destruction of an entire people? It simply won't. People in Europe are
tired of Russia. They'll just stop giving it credits, and that will be it.
They will be relieved not to have to think about it for a while. Just a
few years ago, American political scientists routinely referred to Russia
as an odd country that belonged in Asia, not Europe. In Asia, as everyone
knows, human blood is cheaper than in Germany or in the Netherlands. 


For a while, Europe might forget about Russia, but when a bellicose
monster again towers like a terrifying ghost on the edge of the Continent,
it will be forced to remember. Whether angered by defeat or inspired by
victory, this monster will no doubt have done away with the "fifth column"
of the country's democrats. 


Today, Europe can still influence the course of events. It can still help
both Russia and the Chechens. We need active and persistent help. We can't
cope with the situation on our own. To my delight, I've noticed that the
West is responding more actively to the Caucasus bloodletting than it did
during the previous war there. Is this the result of the Kosovo experience? 


It even seems that public opinion in Europe has gone too far, in some
ways. Many Europeans still don't recognize the importance of containing
terrorism. It's obvious that one can't fight terrorism the way Mr. Putin
and the generals are doing it, but one has to fight it somehow. Even if the
Russian security services do turn out to have invented the claim that
Chechen terrorists planted the bombs in Moscow, the criminal raid of Mr.
Basayev and Mr. Khattab into Dagestan was a very real event that called for
decisive actions. 


The West must demand that the Russian government stop the war. It is
inflicting more suffering on peaceful civilians than on Chechen fighters.
The Russian army must stop its advance into the depth of Chechen territory,
and the Russian air force and artillery -- which are shelling populated
areas -- must cease fire. Mr. Putin must begin direct talks with Mr.
Maskhadov immediately. At the same time, the West must demand that Mr.
Maskhadov extradite the masterminds of the assault on Dagestan -- Mr.
Basayev and Mr. Khattab -- to face Russian (or perhaps international)
prosecution. 


Once they are extradited, Chechnya will have every right to demand that
Russian troops withdraw from its territory. The West must also demand that
Chechnya's leaders commit to cooperating with Russia (or maybe Interpol) in
the search for the terrorists who set off the blasts in Russian apartment
buildings. If these terrorists don't turn up in Chechnya, then, well, so
much the better for Chechnya. But if they are really hiding in the
republic, Grozny will have to do its utmost to arrest and extradite them. 


Finally, the Chechen government must be confronted with a forceful
ultimatum; it must do everything possible to put an end to the disgusting
business of hostage taking. You might ask, what's the wisdom of talking
with a weak government that poorly controls the situation in the country?
My response: the West is already negotiating with Mr. Yeltsin. 


Chechnya is dying, and it needs international help. I'm thoroughly
convinced that in dying, Chechnya is dragging Russia into the abyss along
with it. And that means Russia needs international help as well. Today,
there's only one way to provide this help, and that is to apply forceful --
even ruthless -- pressure on both sides of the conflict. I will not repeat
what I've already written and said many times, but the most important
point is this: by helping Russia, Europe is investing in its own future. 


*******


#2
The Village Voice
December 1 - 7, 1999 
RUSSIAN CONS AND NEW YORK BANKS
BY LUCY KOMISAR (LKomisar@msn.com) 


After it was revealed in August that $7 billion to $15 billion had been
siphoned out of Russia through the Bank of New York, the nation's
influentials were shocked, shocked. America's most sophisticated financiers
were vulnerable to tawdry Russian fraudsters? The press gasped at the
scale, congressional committees mobilized, and the Clinton administration
trumpeted an anti-money-laundering strategy. 


But the scandal was no surprise to federal immigration agent Thomas D.
O'Connell. Nor was it the first time a New York bank had been soiled by
money believed stolen by Russian con men. Though it has not been reported
until now, the Bank of New York and other New York banks—including
Chemical, Chase Manhattan, and Citibank— were and most likely still are
conduits for the proceeds of a still-to-be-tallied series of crimes, with
at least a thousand shell company bank accounts laundering dirty cash.
Indeed, O'Connell suspects that hundreds of millions of tainted dollars
have passed through the New York banks into offshore havens. 


O'Connell described one scam in detail after this reporter discovered the
court record last year. O'Connell was then heading an inter-agency federal
investigation of money laundering and other international crimes. The FBI,
IRS, Customs, and O'Connell's agency, the Immigration and Naturalization
Service, had monitored two Russians with unusual banking habits. In 1993
and '94, the pair used Chemical and Chase (now merged), Citibank, and the
Bank of New York to launder almost $2 million embezzled from a St.
Petersburg TV station. That case was among the many that calls into
question the melodramatically proclaimed surprise of Bank of New York CEO
Thomas Renyi, who told the House Banking Committee in September "how
dismayed I have been by the suggestions in the press that the Bank of New
York has been involved in, or been used as a vehicle for, money laundering
or other illicit activities." 


Another big New York bank also moved funds on a grand scale. O'Connell said
investigations into the activities of one of the men in the St. Petersburg
swindle revealed roughly a thousand bank accounts used by Russian crooks.
"Most [of the accounts] were out of the Chemical Bank in Dag Hammarskjold
Plaza in New York City. The first four or five bank statements I saw had
hundreds of thousands of dollars going through them," he said. "The money
would be wired in from Russia and then go out [offshore] to the Cayman
Islands or the Isle of Man or Switzerland in two or three days. There's at
least a thousand of them, and in each one there's money being wired into
the U.S., hundreds of thousands of dollars." He said the total of the money
moving through all the accounts investigators examined ran into "hundreds
of millions." 


This story underscores dangerous failures in U.S. bank practices and
federal and state policies. Banks routinely establish accounts for phony
companies without doing effective "due diligence" to check out their
customers. Law enforcement agents are hamstrung by state corporation
recording procedures that make it hard to ferret out bogus companies set up
by crooks. Once money moves through offshore secrecy havens such as the
Cayman Islands, it's generally impossible to locate or recover, because
those jurisdictions won't open bank records to law enforcers. 


O'Connell believes dozens of the owners of the targeted accounts were
linked to Russian organized crime. He says one customer was Vyacheslav
Kirillovich Ivankov, at the time the most powerful Russian organized crime
leader in the United States. Ivankov was convicted of extortion in Brooklyn
in 1996 and sentenced to 10 years in federal prison at Raybrook, New York. 


The bank accounts were discovered because investigators were tapping the
fax of a Russian immigrant, Alexandr Yegmenov, who'd provoked the attention
of law enforcement authorities from almost the moment he set foot in this
country. The St. Petersburg fraud that brought Yegmenov down offers a
fascinating glimpse into the money-laundering process. The details were
obtained from court records and interviews with government investigators. 


All the banks discussed in this piece were given several opportunities over
the past several weeks to respond. A Bank of New York spokesperson declined
to comment on any of the cases. PR officials at Citibank and the now-merged
Chase and Chemical banks promised to look into the issues. Follow-up
queries brought the reply that they were still looking. 


Alexandr Yegmenov arrived in the U.S. more than 10 years ago, when he was
in his early thirties. Thomas O'Connell arrested him in 1990 as an
"overstay" when he was living at a fraternity house at Rensselaer
Polytechnic Institute in Troy. Seeking to block deportation, in 1990
Yegmenov filed a political asylum application. He claimed he had been an
economist in the dissident organization Sintez and had been detained in a
psychiatric facility for a month. Actually, the court records said, he had
been convicted in Russia in 1984 on weapons and unlawful sale of goods
charges and had served three years. That wasn't known by Immigration then,
and Yegmenov got asylum. 


A good capitalist, Yegmenov went into the corporate services business,
setting up shell companies—paper corporations that don't actually operate,
but are often covers to evade taxes or disguise transactions. He
established New York companies through his All American Corporate Service,
Inc., in Albany and filed for Delaware corporations with help from Delaware
Business Incorporators in Wilmington. 


"He would create a company in New York and subsidiaries outside the U.S.,
typically in the Caribbean," explained New York State police captain David
L. McNulty of the Bureau of Criminal Investigations, who helped collect
evidence. "Sometimes he was creating a couple of hundred corporations a
week all over the country. People came to him and said, 'I need four
companies outside the U.S. that the IRS can't get access to.' " 


To incorporate U.S. "subsidiaries," Yegmenov would dummy up supporting
documents to show that companies existed in Russia. O'Connell said, "I have
16 boxes and filing cabinets of his papers. I have two boxes full of
Russian stamps and seals he made for every Russian entity, from federal
police agencies to universities to hospitals. They bought a modem for the
stamping company and were modeming them images of the stamps they wanted.
We seized a Russian typewriter. They use thin paper and bind it with white
string. He had all that stuff." The Grand Jury indictment called Yegmenov
"a master forger." 


He promised fast service. O'Connell said, "He was buying people at the New
York State Department of State drinks and dinner to expedite the
incorporation process. At one time he had a box of blank New York State
certificates of incorporation that an employee at the Department of State
gave him. They had a watermark and seal. (Two state clerks were disciplined.) 


Yet Yegmenov was sloppy. Some clients wanted to use the companies to back
up requests for business visas, claiming that the "American subsidiaries"
of their "companies" needed them to work here. The INS got suspicious about
the large number of applications Yegmenov was filing. Investigators
discovered that he had printed business cards for many of the companies at
the same two addresses,1 Columbia Place and 283 State Street in Albany. 


They tapped his fax machines and hit pay dirt. They learned that he had set
up thousands of shell companies. They would find 4000 in New York, a
thousand in Delaware, a few hundred in Pennsylvania, Massachusetts, Ohio,
and other states, and a couple of dozen in havens such as the Isle of Man
and the Cayman Islands. 


The faxes led authorities to a Yegmenov client named Mikhail Syroejine and
the $2 million embezzlement case. Syroejine was 28 in 1993 and had just
been appointed deputy director of St. Petersburg's GTRK Channel 5, a
government television station. He was responsible for company purchases. 


Prosecutors charged that Yegmenov helped Syroejine set up TV & Radio of St.
Petersburg, Inc., which was registered in August 1993 in Albany in the name
of Syroejine's wife, Anna Potyomkina. Syroejine was secretary, and his real
boss, TV station director Bella Kurkova, and her deputy chief, Victor
Pravdyuk, were listed as shareholders. Yegmenov that day also established
several other shell corporations to use in the scheme. And Syroejine opened
an account for TV & Radio of St. Petersburg at Chase Manhattan Bank in
Manhasset, New York, with a $200 deposit. Then, Syroejine arranged to
"purchase" new Sony TV equipment from TV & Radio of St. Petersburg, also
known as Channel 5. Channel 5 paid $2 million into the account of thephony
company between December 1993 and February 1994. 


St. Petersburg TV officials would later insist that Syroejine had persuaded
them that the cheapest way to buy the Sony equipment was via a three-way
contract between GTRK, V.N. Express (one of the New York shell companies),
and Jojan Consultants, Ltd., a company registered in Dublin. (Dublin offers
corporate secrecy, hiding owners' names from government investigators and
courts.) 


But as it often does in these cases, some of the money ended up fueling the
U.S. economy. In April 1993, Syroejine had gotten a nonimmigrant visa from
the U.S. consulate in Vienna, and in March 1994, he disappeared from St.
Petersburg and showed up in America to micromanage the scam. On March 18,
1994, half a million dollars was wired from a Liechtenstein account to a
New York Citibank account he controlled, and between March and May, checks
drawn on Citibank paid for a $20,000 Rolex watch, a 1994 Jeep Grand
Cherokee, and a Chris Craft 380 Continental pleasure boat. 


Money launderers move cash through multiple accounts to obfuscate paper
trails. Between August 1993 and May 1994, Syroejine opened accounts at
Chase, Chemical, Citibank, and the Bank of New York, and shifted hundreds
of thousands of dollars between them until he sent nearly $2 million out of
the country. Some $430,000 went to Barclay's Bank in Limassol, Cyprus.
Another $400,000 was sent to an account called Mand Stifftung, opened in
the name of Valeri Martioukhine at Verwaltung Und Privatbank Vaduz in
Liechtenstein. More than a million dollars went to Jojan Consultants at
Lloyd's Bank in the U.K. 


By May 1994, close to delivery time for the illusory Sony TV equipment,
V.N. Express had replaced the now defunct TV & Radio of St. Petersburg as
the "supplier" and taken over its $600,000 banked assets. Syroejine sent a
fax from V.N. Express stating that because of the "provocative behavior" of
one of Channel 5's representatives, V.N. Express refused to deal with it
anymore. Channel 5 never got more of an explanation or the equipment, nor
could it get in touch with V.N. Express or Syroejine. 


Meanwhile, U.S investigators learned through Interpol of Yegmenov's 1984
Russian convictions and jail term. The Justice Department's Office of
International Affairs passed the information to the Russians, and in 1995,
Russian prosecutors began looking into the disappearance of $1.87 million
from Channel 5. 


On November 13, 1995, the FBI arrested Yegmenov in Brooklyn. Agents seized
Syroejine at his Santa Monica condominium. The two men were indicted in
November 1995 for money laundering. Yegmenov was also charged with visa
fraud. The U.S. calculated the total theft of the Channel 5 case at
$1,949,460.66. Authorities would not say whether any money was recovered. 


O'Connell had the INS run a computer search to pull all the visa
applications Yegmenov had filed. It found about a thousand. "They were for
the Brighton Beach crowd," he said. "Ninety-eight percent of the companies
were out of Brooklyn." Brighton Beach in Brooklyn is a center for Russian
criminals. 


Then U.S. agents used the applications to lead them to the bank accounts of
the phony companies. O'Connell explained, "Each company that petitions for
an alien has a file, a lot of supporting documents. I had at one time a
thousand of those files, each for different companies, all sent to our
service center in St. Albans, Vermont. We had the center start asking the
petitioners for additional documents, including bank statements. Most were
out of the Chemical Bank in Dag Hammarskjold Plaza in New York City. Some
were from the Bank of New York, a couple from Citibank." He said the
Russian Mafiya was using many of the bank accounts to bring in large sums
by pretending that they were paying for contracts in the U.S. 


When investigators sought to locate other shell companies Yegmenov had
incorporated, they were stymied by state corporation department practices.
There was no way to run a computer search to locate corporations by filer.
New York State Police agents had to search by hand the papers of every
corporation filed with the state over a period of time and pull folders
with recognizable names such as Yegmenov or someone from his office.
Sensing the surveillance, he started using other petitioners' names.
Limited to tagging files that bore names they knew, investigators still
discovered roughly 4000 New York State shell companies Yegmenov set up. 


But investigators could get banking information only from corporations
sponsoring people to get visas, not from those set up just to launder
money. O'Connell explained, "The only reason we know about the bank
accounts is because of the supporting documents. If Alex incorporated 3000
companies that didn't apply for visas, where do you start looking? Do you
search every bank to see if it has accounts from those corporations? It's
an impossible task." 


Examining each company would have been useful. Yegmenov's enterprises dealt
in more than visas and money laundering. Officials said some Delaware
companies he set up appear to have been used for exportation of stolen
cars, weapons trafficking, and motor oil excise tax fraud, in which crooks
import diesel and call it home heating oil to avoid paying taxes. Other
Yegmenov firms specialized in bilking medicare and medicaid with phony
invoices, say for fictitious wheelchairs. Yet others provided fake
documents for manicurists' licenses. Authorities suspected that certain
auto body shops he incorporated in New York were used by car-theft rings
that changed plates and shipped cars to Russia. 


Yegmenov pleaded guilty in 1995 to money laundering and visa fraud. He
served about a year in prison or in INS detention, and was deported. In
Russia, he was jailed for a year on the St. Petersburg TV station charge,
then released. A source said that Syroejine had been freed on bond, but
from January 18, 1996, most court records in his case were sealed,
including any indicating its disposition. None of the other station
officials in Russia were charged with crimes. 


The Justice Department and U.S. attorneys who handled the case declined to
provide information on grounds that aspects of it are still being
investigated. There are thousands of Yegmenov companies suspected of being
used for illegal purposes. 


"I get calls all the time on the companies he opened," O'Connell said. "It
created a lot of awareness in the U.S. State Department. Every once in a
while, I'll get a call from the Office of International Affairs. The legate
to Moscow or St. Petersburg has one of Yegmenov's companies on his desk and
what should he do about that. I tell them, 'Don't give the guy the visa.' "
He added, "I'm sure somebody by now has taken Yegmenov's place." 


The money-laundering scandals reported here and in recent months are
probably the tip of the iceberg. Putting together Russian government
estimates, about $50 billion leaves that country illegally each year.
Nobody knows how much is capital flight, or how much is the proceeds of
embezzlement or other crimes. But U.S. government officials say that
Russian organized crime is developing importance on a par with the Italian
Mafiosi, Colombian drug traffickers, Japanese gangsters, and Chinese
triads. Internationally, estimates are that $500 billion to $1 trillion in
criminal money from all sources ends up in U.S. and European banks each year. 


The major economic powers, led by the United States, have failed to
challenge the structures that facilitate money laundering by Russians and
others. They have refused to act to end the corporate and bank secrecy that
lets crooks hide behind shell companies and anonymous offshore accounts. On
the contrary, major American and international banks have subsidiaries
offshore where they assiduously help clients evade the laws of their own
countries. 


Congress shares the blame. Yegmenov's clients might not have moved their
illicit money undetected so easily had Congress not killed the "Know Your
Customer" rule proposed by U.S. bank regulators last December. The law
already requires banks to perform "due diligence" on their big customers
and report "suspicious transactions." The proposed rule would have made
them spell out their procedures—to identify the owners of accounts, to
determine big-money customers' sources of funds, to monitor large
transactions, and to flag those that were not normal. 


Now, the scandals have put anti-money-laundering legislation back on the
agenda. House Banking Committee Chairman Jim Leach (Republican of Iowa) and
senators Charles E. Schumer (Democrat of New York), Paul D. Coverdell
(Republican of Georgia), and Carl Levin (Democrat of Michigan) have
introduced measures requiring banks to keep records of account owners'
identities and to ban correspondent or concentration accounts that
commingle funds of an institution's customers without identifying them, a
way offshore banks commonly move clients' money. The bills would make it a
crime for banks in the U.S. to knowingly handle money traceable to foreign
government corruption, and they would expand the list of crimes that
trigger money-laundering charges. 


The Clinton administration, with a Treasury Department strongly influenced
by banks and investment companies and a traditional policy of welcoming
capital no matter what its origins, has introduced a much weaker bill that
would merely expand the list of money-laundering crimes to include theft of
public funds by officials, arms trafficking, and crimes of violence, and
would give U.S. courts jurisdiction over foreign banks that violate U.S.
money-laundering laws. It would not address offshore bank and corporate
secrecy or the need for clear identification of U.S. company owners and
bank customers. 


The American Bankers Association, which fiercely lobbied against the Know
Your Customer regulation, is now opposing new laws to flush out dirty
money. John J. Byrne, ABA senior counsel, worries about "pressure from
examiners and media and the public that may force the bank to report
possible criminal activity more frequently than they would have in the
past." He said international clients would say, "I don't think it's
anybody's business in the U.S. how I do my business. I'm going to go to a
country where they're not going to ask all these penetrating questions and
take my business elsewhere." 


For now, in other words, no effective law forces a bank to screen out the
likes of Yegmenov and his clients. 



Hiding the Money 


Lax state regulations make it easy for crooks to hide their connections to
shell companies and bank accounts. 


Neither New York nor Delaware, for example, demands that owners and
officers be listed on incorporation filings. Company directors are supposed
to be listed on the annual Delaware franchise tax filing, but lawyers often
name themselves or leave a blank. A clerk at the New York State Division of
Corporations said a requirement for biannual filings signed by the chairman
of the board was not enforced, because the legislature hadn't passed an
implementing law. A Delaware corporation division clerk said when papers
come through with directors not listed, the lack of data is ignored. 


Immigration agent Thomas O'Connell and Anthony Russo, the IRS agent on the
Alexandr Yegmenov investigation, agreed that company owners and officers
should be named in incorporation papers and that state incorporation
computers should be configured to facilitate searches of owners, officers,
and filers. Then, Russo said, "If we had an allegation against a suspect,
we could go there right away and see that he formed 5000 corporations,"
instead of having to hunt for them by hand. 


Tell us what you think. editor@villagevoice.com 


******* 


#3
MSNBC.com
Transcript of chat with Yevgeny Primakov
1 Demember 1999


Today: 
Yevgeny Primakov, Russia's former spymaster, foreign 
minister and prime minister will chat exclusively on 
MSNBC on Dec. 1 at 11 a.m. ET. As Russia heads into an 
intense year of political maneuvering, with parliament 
and presidential elections on the horizon, Primakov 
remains the country's most popular politician and a 
leading contender to take over at the Kremlin when 
President Boris Yeltsin retires next year.


Host Yevgeny_Primakov says:
Hello to all of the distinguished participants from whom 
I expect smart questions and I will try as I was asked to 
take no more than 3 minutes to respond to questions


Host Yevgeny_Primakov says:
I have never had personal encounter with Internet, this 
is my first time so please be merciful in your 
assessment. If I like this tool I will use it because the 
Internet expands our possibilities and I think this will 
be to our benefit because I will be more aware of 
questions from the internet users. I'm ready to take your 
questions now.


Host Chris_MSNBC says:
Question from Master1:


When your granddaughter is your age, what kind of Russia 
will she live in?


Host Yevgeny_Primakov says:
You know, it's somewhat strange for me to even imagine my 
beloved (grand)dauther, who is 2 years old, to reach my 
age and become an elderly woman,
but I truly hope that she will not only live for as long 
as I do but Russia will be a totally different country. 
We're doing all we can to ensure Russian will be a 
different country then.


Question: What’s your view of property ownership as a 
means of stabilizing the national currency?


Host Yevgeny_Primakov says:
The first and foremost we're always saying a 
macroeconomic policy can't exist as a goal in itself. The 
government's regulatory activity is still an essential 
element especially during this difficult period of 
transition to a market form of society and the need for
government interference is for the economy to be market 
oriented. We are not in a position to try to review the 
ownership regulations that have taken place in Russia, 
but when circumstances aren't working in an efficient 
manner, I suppose in this
instance we must review the processes that must have 
taken place in the past
As far as our difference from to her platforms. We are 
against the leftist vision, we are against those in 90s 
preaching the so called theory of liberalism and the 
people who were leading the situation in the direction 
where the country was living off its exports, primarily 
of energy resources
whereas in the industrial output was rapidly declining, 
as well as in agricultural sector.


Host Chris_MSNBC says:
Question from Alex Novak: 
Who would you vote apart from yourself for a president? 
And why? What do you think about Vladimir Putin as 
Russian future president?


Host Yevgeny_Primakov says:
First of all I would like to say that I haven't yet made 
decisions on whether or not I'll participate. If I will, 
I will vote for myself, if I don't then I will give it 
some thought as to whom to vote for. At this point in 
time I will not reveal the secret to you over the net.
As to Mr. Putin, my attitude is positive, I know him 
personally as a decent individual.


Question: Russian question inaudible.


Host Yevgeny_Primakov says:
No, I don't think so at all; I believe that in such a 
multinational state as Russia it's critical. The internal 
experience shows federalism in the state which occupies 
so much territory, the
federal constitution helps to optimize the relations 
between center and regions.


Host Chris_MSNBC says:
Question from Ivan Potapov: Dear Mr.Primakov,
Don't you think that present Russia needs a young and 
upcoming President but not a man of former Soviet leader 
Brezhnev's age.
Thank you.


Host Yevgeny_Primakov says:
It seems to me that what Russia needs is a president 
who's in good physical shape with good working ability 
irrespective of his age, who is forward thinking, 
appreciates democratic values without an intention to 
break up national tradition, willing to start everything 
from clean slate
That doesn't mean we must import into our future concepts 
and ideas which haven’t stood test of time. At the same 
time I'm against the situation when a country should give 
up it's own history. I would like to say that it's not a 
matter of anybody’s age. One can be a conservative in his 
young years and a progressively minded person when he 
comes
of age. You can be an old man in thinking as a teen and 
young in your thoughts


Host Chris_MSNBC says:
Question in Russian about Russia and Belarus relations. 
Q: You said there many benefits in a unified state, are 
there shortcomings?


Host Yevgeny_Primakov says:
I suppose the advantages are more significant. They 
almost displace the disadvantages. At the moment we do 
not have a uniform playing field with Belarus and they'll 
have to
bring their legislation in compliance with Russia’s. We 
are entering this path without having solid legislative 
bases on both sides. I don't think this should be 
regarded as an absolute to unification
Some are saying wait til dust settles down, then we'll 
sign the treaty. I believe this will shove us back from 
unification. I think we should sign now


Host Chris_MSNBC says:
Question from Octopus:
The media always refers to you as a “former spymaster.” 
What kind of spying did you do? Was it against the United 
States?


Host Yevgeny_Primakov says:
I am afraid I will have to answer this question with a 
question. Do you think someone who used to be the head of 
foreign intelligence would personally meet with agents or 
crawl under the barbed wire? If you think so, you're 
mistaken. The (intelligence) chief is a person engaged in 
analytical work, coordination with a view to address the 
broad issues.
Here is a joke, which I like a great deal and which 
reflects the status a great deal today.
One person was summoned to work undercover, he was 
advised to get used to the role of a young millionaire, 
told he’ll drive around in Rolls Royce somewhere in CA 
and there has to be a driver. The second car can be your 
own. The conditions are as follows:
Such and such people will get in touch with you as needed 
to transmit information. Go ahead and try to work and 
we'll here from you in 5 months
5 months later they call him in and everything stays as 
planned. But the assignment will change. Instead of being 
a young millionaire you will be a one eyed beggar on the 
street.


Host Chris_MSNBC says:
Question from Russian site: If the Fatherland-All Russia 
Block wins majority what regional policy would you 
advocate in the Duma?


Host Yevgeny_Primakov says:
I think that what needs to be done first and foremost is 
to define functions of the government. We in Russia have 
3 - federal, local and subjects of the federation. The 
first thing that needs to be done is distinguish between 
levels, each tier to be aware of its responsibilities.
Laws should be mandatory for all levels of authority


Host Chris_MSNBC says:
Question from MAX:1. What do you think about Mayor Yuri 
Luzhkov? Was (TV presenter) Dorenko telling the truth 
about him ?


Host Yevgeny_Primakov says:
That was blunt and downright lie, slander. Let me just 
give you one example. On TV it was said the Luzhkov 
allegedly, I can't help laughing when I think about it, 
masterminded a plan to assassinate one of the
managers of an American hotel (in Moscow) and the 
allegation went further to say the person shot was able 
to mutter that Luzhkov was to blame.
I said to him, you greeted Mr. Kalashnikov, the man who 
perfected the machine gun. Why wouldn't you ask him 
whether he thinks 14 bullets can be fired out of his 
submachine gun, 3 hitting the head and still the person 
can give an interview and point out his murderer? This 
example should be sufficient to show what
examples of peopled trying to pour dirt on Mr. Luzhkov


Host Chris_MSNBC says:
Question from Russian Site: What do you think about the 
participation of Georgia and Azerbaijan in finding a 
solution to the Chechnya conflict.


Host Yevgeny_Primakov says:
It seems to me that the most important thing these two 
countries can do to discontinue mercenary weapons across 
their territories and therefore unable to get into 
Chechnya
I know both the leaders (of Georgia and Azerbaijan) deny 
anything is crossing their territories to get to Chechnya 
and I hope this is the case


Host Chris_MSNBC says:
Question from Max: If you were the President of Russia 
what would you do to stop bandits and criminals in Russia 
,which are the real problem?


Host Yevgeny_Primakov says:
What I would do is simple stand up and fight the 
criminals, the bribe takers. I believe this country and 
Russian society are healthy enough and whenever in the 
West, an attempt is being made to show Russian 
entrepreneurs as downright gangmen.
I am opposed to that and inclined to speak straight 
forwardly and with authority about it.
The majority of society is quite healthy and should any 
elements be personifications of evil, they need to be 
fought against on basis of applicable laws


Host Chris_MSNBC says:
Question from Russian Site: what branches of economy 
should be primarily developed?


Host Yevgeny_Primakov says:
This is a very good question, because at this moment 
we'll hardly be able to push forward the whole industry. 
This doesn’t mean that certain enterprises must be shut 
down,
but priorities on the development of select industries, 
agricultural, industry and personally I'd prefer to see 
fundamental science developed as well as high tech 
industries, aircraft, space and a few others.


Host Chris_MSNBC says:
Question from James: What are your views on the recent 
"spy" allegations make by Russia against the 
United States?


Host Yevgeny_Primakov says:
When I worked at the Foreign Intelligence Service, we 
always tried to downsize the activity in intelligence 
areas and proceeded to take on different means of 
cooperation such as information exchange.
It's well known we have formal Russian residents in US 
and vice versa that maintain contacts with officialdoms. 
Unfortunately no country in the world could give up 
intelligence completely.
It's definitely required to implement new methods of 
work, limit your exposure in order to prevent return of 
the days of the cold war.


Host Chris_MSNBC says:
Q: What is your point of view on free land trade to 
stabalize rates of currency?


Host Yevgeny_Primakov says:
Free land trade without any conditions is unacceptable to 
Russia in the conventional sense. Every region has its 
own specific set of conditions and issue should be on a 
different aid basis in view of conditions from that region


Host Chris_MSNBC says:
Question from James Babicky: Mr. Primakov, Being the WTO 
is in the U.S. this week, do the Russian manufacturers 
and distributors have easy access too U.S. markets, 
because I had hoped to see Russian goods within the last 
8 years though I have seen very few?


Host Yevgeny_Primakov says:
I think it's very bad that we are not trying to penetrate 
the American retail market. I suppose two parties should 
be held responsible. The first is ourselves, we must 
develop our export industries and at the same time there 
are certain restrictions which impedes our penetration of 
foreign markets including US.
We must enjoy the same level of freedom that's available 
to others.


Host Chris_MSNBC says:
question from Russian Site: What are your views on 
Russia’s hidden economy and amnesty for citizens who are 
in black market?


Host Yevgeny_Primakov says:
My attitude towards tax amnesty and the whole attitude is 
positive. I believe it makes sense retrospectively to 
offer it with exception of cases of criminal background. 
At the same time I would accompany this step with moves 
that would prevent
funds earned in an illegitimate way. Retrospectively, I 
am the supporter of this idea


Host Chris_MSNBC says:
Question from BrodDogg: What are your thoughts on Russias 
current offensive against Chechnya and what, if any, 
benefit for Russia do you see by doing this?


Host Yevgeny_Primakov says:
Russia exercises combat option in Chechnya with the goal 
of eradiating gunman, terrorists in order to save their 
own future. Maybe those on the net are unaware that 1,000 
(sic) people died in Russia as a result of explosions and 
bombings of residential houses.
I'm not aware of any other country where terrorists have 
taken such form. We must break the back of terrorism and 
this is why war is being waged. My (electoral) block 
supports this action. We're also being encouraged to 
negotiate with our enemies. I don't know who these 
discussions could be held with.
I know from experience in order for you to sit down, your 
counterpart must be in control on his side and must 
distinguish himself from the terrorists.
At the moment I don't see a single person inside Chechnya 
who'd be both. These negotiations are of the future, they 
need to be held, because destiny of Chechnya can't be 
resolved in a battlefield. This battlefield is to destroy 
future acts of terror


Host Chris_MSNBC says:
question from Russian site: what should be done to rescue 
Russia’s scientists?


Host Yevgeny_Primakov says:
First of all I believe that science should not be the 
last one on the list of aspects life that is being 
financed
and it's not on the state budget. We must provide for 
scientists to carry on their work. As far as I 'm 
concerned in the US today many highly qualified Russian 
scientists work. This is our intellectual potential and 
I'd like it to belong to Russia. But for that to be the 
case, respective conditions must be provided.
Talking about education, over the last couple of years 
we're seeing more and more of private schools of higher 
learning developing in Russia that offer tuition on a 
paid basis. It's likely those privately owned institutes 
must be preserved and there should be education offered 
by the state.


Host Chris_MSNBC says:
Question from Amerikanyets: Do you support allowing 
foreign religious groups to continue working in Russia?


Host Yevgeny_Primakov says:
These groups can be of different nature. There is a group 
out of Japan which ended its existence as a result of 
perpetrating several crimes such as explosions in 
Japanese subways. Such groups, religious sects, as far as 
I'm concerned should not be allowed to exist and practice 
in Russia.
But this certainly does not apply to a variety of 
different ones. As is well known in Russia, you have 
Catholic, Islam, Protestant and a variety of others such 
as Buddhism


Host Chris_MSNBC says:
question from Russian Site: how can the capital flight be 
curbed....


Host Yevgeny_Primakov says:
This is also a very interesting question. Such measures 
in my mind should be of economic nature. It would take to 
establish such conditions that would make it appropriate 
to invest in Russia rather than export out.
The confidence in state must be reconstituted because 
many take money out and put in foreign bank accounts. 
That's basically agreeing to fact that interest rates 
would be lower but can claim money back.
They don't place in Russian bank accounts for a variety 
of reasons. This confidence should be rebuilt


Host Chris_MSNBC says:
Question from Erik Loper: How would a person get involved 
in your campaign?


Host Yevgeny_Primakov says:
Pray for us. If this implies the participation of an 
American person in this campaign, if you tell good 
things, this would be pleasant. It would help us to keep 
up the good spirit and reflect the reality


Host Chris_MSNBC says:
Question from Sanitar: What book or film you most like?


Host Yevgeny_Primakov says:
As a person develops and matures his tastes change. This 
change can also take place as a result of the release of 
pressure caused by work. I have to read several hundred 
pages of material in the office so by the time I get home 
is just stare at the TV and stare at the channels.
Talking about reading during weekends, I am always happy 
to be able to read some historic novels or reminiscences 
of distinguished persons


Host Chris_MSNBC says:
Question from Russian site: how the foreign policy change 
if yor party gains a majority in parliament


Host Yevgeny_Primakov says:
I will tell you what the credo or the foreign strategy of 
our movement is. It is necessary to protect national 
interest of Russian and at the same time to avoid 
confrontation with other states.
In other words, we're quite firm on both these issues and 
probably this is the dialectics of foreign policy as 
demonstrated today


Host Chris_MSNBC says:
Question from Riva: What do you think about Boris 
Berezovski?


Host Yevgeny_Primakov says:
I am of negative opinion about this person


Host Chris_MSNBC says:
Question from Russian Site: What percentage of young 
staff should be in government? What age requirement 
should be for the president of Russia?


Host Yevgeny_Primakov says:
I would not be inclined to define anything as a specific 
percentage of so-called young staff in contrast to 
so-called experienced people. I'd be more inclined to 
talk about a blend of both. If a govt. is made of not 
young people it wouldn't be good, all young people would 
be equally bad.
I am against age restriction and was happy to see draft 
of law rejected by State Duma. I think that age in itself 
as a category shouldn't be regard as sole criteria
in attempt to evaluate potential of a political or state 
leader. Mr. ????? became German chancellor at 73 and did 
a pretty good job.
I think President Reagan in American minds was not worse 
president. Mr. Churchill who retired at 80 was a 
distinguished politician


Host Chris_MSNBC says:
Question from RobK: How much longer can Boris Yeltsin 
hold on to power? The world is getting the impression 
that he has one foot in the grave.


Host Yevgeny_Primakov says:
I wouldn't describe it the way you have. I think it's 
sacrilege to say things like that about acting president 
of country. As far as time remaining of him staying in 
power, I think it's limited by the constitution and 
presidential elections must be held in summer next year.
What I suggest we do first is have the Duma elections 
enter into the Duma, then we'll come back to this issue. 
I can tell you that far as I'm concerned there've been no 
negotiations nor trial tests nor any discussions regarded 
proposal for me to take this position.


Host Chris_MSNBC says:
Question from Igor: Do you think it is possible to have 
another Cold War?


Host Yevgeny_Primakov says:
I would like not to believe in that. It seems to me that 
we collectively will be able to avoid that, however, 
series of trends far as development cause concern, but it 
seems to me that among the leadership of most of the 
countries of the world,
big countries, there is a fair amount of smart people 
that are smart enough to avoid the return of the cold war


Host Yevgeny_Primakov says:
Q: What is your attitude toward abolishment of 
parliamentary immunity from prosecution?


Host Yevgeny_Primakov says:
My attitude is a positive one


Host Chris_MSNBC says:
Many people say that Vladimir Putin's backers in the 
Kremlin are manufacturing the war in Chechnya only to 
increase his popularity ahead of the election. Are they 
correct?


Host Yevgeny_Primakov says:
I don't believe that this is the case at all. I don't 
believe that even the cynical politicians have as much 
about this attitude to sacrifice lives of this many 
people in order to achieve this goals or objectives


Host Yevgeny_Primakov says:
Q: Why is your block being so criticized now?


Host Yevgeny_Primakov says:
That was a very correct observation. There is no other 
block or party who are being as criticized as we are. I 
don't want the
impression to be left that I'm trying to appeal in favor 
of foreign contributors or others. This is a mix of 
downright lies and slander. Probably because we are the 
most feared, because certain individuals are aware that 
as soon as
we are in a Duma we'll slap the bribe takers on their 
hands, maybe that's why there's so much criticism


Host Chris_MSNBC says:
Question from Marlin: Do you believe that your country is 
totally prepared for the Y2K problem. I am particularly 
concerned about the nuclear weapons.


Host Yevgeny_Primakov says:
I know that there's a lot of serious work being done in 
these areas. I n the minds of many, Y2K is fairly 
threatening and people are trying to take precautions 
against that


Host Chris_MSNBC says:
russian site: What’s your attitude to Mr. Gerashchenko, 
the head of central bank?


Host Yevgeny_Primakov says:
My attitude towards him is very good and I invited him to 
take this position when I was at head of govt. I've known 
him for years as a decent person and outstanding 
professional


Host Chris_MSNBC says:
Question from Independent Strategy:Does strengthening of 
the state's role in the Russian economy mean expansion of 
the government and state bureaucracy?


Host Yevgeny_Primakov says:
Our objective will be to avoid this as much as possible. 
You're right that the threat of danger of these negative 
aspects of state interference is there.
We must do everything in our powers to prevent government 
interference in the economy so it is associated with red 
tape. When we talk about the role of states in economy it 
isn't anything new we came up with.
President Roosevelt did much the same thing after great 
depression in US by providing basis for upsurge of 
American economy. Same was done in Germany after WWII.
Both were trying to increase role of state. And under 
certain circumstances this was necessity.


Host Chris_MSNBC says:
Question from Russian site: Is the country facing a 
threat of disintegration?


Host Yevgeny_Primakov says:
Unfortunately this problem truly exits, but I'm confident 
that every Russian citizen, every patriot will do 
everything it takes to prevent the breakage of 
territorial integrity of Russian state


Host Chris_MSNBC says:
Question from Caroline: Yevgeny Maksimovich - do you 
think Russia is a superpower?


Host Yevgeny_Primakov says:
You know what? In the sense that this term was used, if 
applicable to the US and the Soviet Union, this term 
itself had to deal with ongoing confrontation
and confronting political blocks and as the heads of 
corresponding alliances who stood above others as counter 
weights were concerned. In this regard, at this moment, 
Russia is not a superpower


Host Chris_MSNBC says:
Question from Russia: Should Russia change its law and 
constitution


Host Yevgeny_Primakov says:
First of all, I would be inclined to say that the 
constitution should be as consistent as far as its 
principles are concerned.
An example is the American constitution, which has been 
around 200 years. At the same time, certain provisions if 
confronted with reality demonstrate its lack of adequacy 
and in this case, changes are made even in cases where 
constitutions are several hundred years old.
I think certain changes should be made in the 
Constitution, but am against it being radically changed 
with every president. I think an end needs to be put to 
that. We have a constitution that needs to be preserved 
but with certain amendments and provisions on matters 
that don't stand the test of time and life.
I'd mention along with necessity to preserve presidential 
authority to optimize balance between President, prime 
minister and president of state


Host Chris_MSNBC says:
Closing remarks


Host Yevgeny_Primakov says:
You know what, I very much enjoyed this form of press 
conference. I'd like to thank all of those who were 
contributing questions both American and Russian sides. 
The questions were extremely interesting
and as far as responding it was a great pleasure to do 
so, I was doing my best. I'd like to wish all of you in 
this chat good health and lots of success and luck.
Why both success and luck? Because it's well known that 
90% of the passengers of Titanic were healthy. That's 
why I wish you not only health but luck too.


*******