October 21, 1999    
This Date's Issues: 3575   3576

Johnson's Russia List
#3576
21 October 1999
davidjohnson@erols.com


[Note from David Johnson:
1. Moscow Times: Andrei Piontkovsky, Paper Excuses Berezovsky's Role in War.
2. Oxford Analytica: Russia -- Caucasian Consequences.
3. Reuters: Russia suspects $600 mln Aeroflot cash laundered.
4. Stanislav Menshikov: Looking for article on Social Security in Canada for a Russian journal.
5. Itar-Tass: Russian Apartment Blasts: Trace Leads to Chechnya.
6. RFE/RL: Paul Goble, Criminalizing Politics.
7. Nezavisimaya Gazeta: The War at Their Own Expense. THE STATE CANNOT PROVIDE THE MILITARY IN CHECHNYA WITH MONEY AND EQUIPMENT.
8. Itar-Tass: Assassination of Russian Federal and Local Legislators.
9. Los Angeles Times: Richard Paddock, Greasy Palms Are Rampant in Russia.
10. Financial Times (UK): Business smacks strangely of morals. John Thornhill scents changing attitudes at one of the country's biggest companies.
11. The Times (UK): Anthony Loyd, A war beyond fear for Chechnya's warriors.
12. Itar-Tass: Chechnya RUSSIA'S Internal Affair- US Defence Secretary.]


******


#1
Moscow Times
October 21, 1999 
SEASON OF DISCONTENT: Paper Excuses Berezovsky's Role in War 
By Andrei Piontkovsky 


One of the most surprising publications to appear over the last week was a 
large article by Vitaly Tretyakov, the editor of Boris Berezovsky-controlled 
Nezavisimaya Gazeta. It speaks about the nature of the new Chechen war and 
about the state of the Russian political elite more than anything that has 
been written or said about them until now. More precisely, it doesn't speak 
so much as spill the beans. After all, the article was not wholly about the 
problems in Chechnya. It is primarily a long and boring discourse on the 
latest stage of the information war between the oligarchs. Its whole purpose 
is directed toward proving that there is less crap on the snow-white frock of 
Berezovsky than there is on the clothes of his competitors. Carried away by 
this idea, the author brings up Chechnya only in passing in one paragraph, to 
advance his main point. But it is worth quoting in full: 


"It is totally obvious that the Chechens in Dagestan were lured there - they 
were allowed to plunge into this business in order to get a legal 
justification to establish federal authority in the region and to begin the 
active phase of the fight against terrorists gathered in Chechnya. It is 
clear this was the work of the Russian secret services (and is not to be 
confused with the bombings in Moscow) that was sanctioned at the highest 
level." 


Lets re-read this passage attentively, priceless as it is for historians, 
psychiatrists and investigators. Tretyakov is not advancing an original 
scenario. 


He speaks about the secret services arranging Shamil Basayev's incursion into 
Dagestan as an established fact or axiom that is totally clear for his 
well-informed readers. The only new point he wants to make in his article is 
that Berezovsky made his own patriotic contribution to this brilliant 
operation of our secret services. 


As such, the Russian political elite takes as a given and a must that 
Basayev's march into Dagestan entailing the deaths of hundreds of Russian 
soldiers and hundreds of innocent Dagestanis and the destruction of dozens of 
villages was arranged by the Russian special services and was "sanctioned at 
the very top" with a single goal - "to give Moscow a legal justification" to 
unleash a full-scale war that, just like the 1994-96 war, would kill 
thousands of Russian soldiers and tens of thousands of civilians. 


But in this case, how do the president and prime minister who sanctioned this 
operation, the oligarch who helped and the editor who proudly heralded it 
differ from international terrorists Basayev and Khattab? 


The editor, touching up the image of his beloved oligarch, nevertheless 
understands he is letting the cat a little too far out of the bag and decides 
to bracket the gem in parenthesis: "(and is not to be confused with the 
bombings in Moscow)." 


And why not? Both Basayev's raid on Dagestan and the explosions in Moscow 
served to strengthen the automatic perception that Chechens are terrorists to 
destroy. 


The explosions in Moscow strengthened this. And if for the sake of absolute 
values like "geopolitical interests in the Caucasus," "consolidation of the 
political elite," "the greatness of Russia," the presidents, the oligarchs 
and the editors can, with an untrembling hand, sacrifice hundreds of lives in 
Dagestan, what would keep them from another redemptive sacrifice in Moscow? 


A city with such leaders - who are guided by such opinions - is a doomed 
city. 


*******


#2
OPINION-Russia -- Caucasian Consequences
By Oxford Analytica


OXFORD, England, Oct 21 - Russia's military operations in the North
Caucasus have, so far, received broad domestic support and enhanced the
popularity of Prime Minister Vladimir Putin. This stands in contrast to the
1994-96 conflict. The difference can be explained by the successful
characterisation of the enemy as terrorists combined with the low level of
conscript casualties. Moscow politicians have united broadly behind the
military strategy, with opposition limited to extreme reformist groups. Two
key consequences emerge from this situation. Firstly, Putin's political
future is tied to the continued success of the campaign. Secondly, the
nationalist fervour sparked by the conflict has reduced international
investor confidence and led to domestic calls for increased defence spending. 


Russian forces appear to have gained the upper hand in Dagestan. They also
claim control over the northern part of Chechnya and are poised to attack
the capital, Grozny. The military action has coincided with an increase in
Putin's popularity rating. In mid-August opinion polls suggested that only
a small minority of the population had confidence in President Boris
Yeltsin's new appointee. However, within a month, his support has increased
sixfold. The most recent surveys suggest that just over 50 percent of
Russians approve of the government's performance. These rapid rises in
popularity indicate how Russians are prepared to back politicians who
appear to be doing a moderately effective job, especially in a crisis.
Conversely, it also suggests that support can melt away just as quickly if
the situation changes. 


There are two main reasons why, in contrast to the 1994-96 war, the current
Caucasian crisis has so far brought the government public support. Firstly,
the bombs, which killed over 300 in Moscow during the early stages of the
Dagestan conflict, lent credibility to the official depiction of the
military action as an anti-terrorist campaign. This perception has endured
into the Chechen stage of the conflict. Secondly, the Russian reliance on
air strikes and artillery has helped to keep ground force losses at
acceptable levels. According to official reports, the North Caucasian
crisis has so far claimed only 179 Russian lives with 400 injured; the
figures for the Chechen portion of the operation are just 47 killed and 33
wounded. The protests from mothers, which emerged as a powerful political
force in 1994-96, have, so far, not been repeated. To prevent them, the
authorities have deployed professional soldiers in the front line while
using more politically sensitive conscripts in a supporting role. As long
as casualties remain relatively low and are biased towards career soldiers
rather than conscripts, public support is likely to hold. 


The Moscow political elite has also not opposed the conflict. MPs are
preoccupied with election preparations, ensuring their position on
candidate lists and the often petty objections of the central election
commission. Even when they turn their attention to the Chechen crisis, most
politicians are constrained by the ``patriot factor.'' All the major
political leaders try to project a strong patriotic image for fear of
losing votes by appearing less willing than the government to combat
terrorism and separatism. Aside from electoral considerations, a broad
political consensus exists among Russian politicians that the government is
handling the crisis correctly. This impression was reinforced when, earlier
this month, Putin consulted a number of former prime ministers and current
party and bloc leaders. This and other more private consultations, have
resulted in the Duma adopting a broadly cooperative stance on Chechen
matters. 


Opposition criticism of the Chechen campaign has been implicit rather than
overt. Yevgeny Primakov, head of the powerful Fatherland-All Russia
coalition, who is currently the most popular politician in Russia, has
taken a moderately critical line, although he held back from attacking
directly government policy. While accepting the military campaign in the
northern part of Chechnya, he opposes its extension to the south. He argues
that Russia should resolve the crisis through negotiation, albeit from a
position of military dominance. He has also stressed the danger of
identifying Islamic fundamentalism as synonymous with political extremism. 


One might have expected Primakov's close associate in Fatherland-All
Russia, the Mayor of Moscow, Yuri Luzhkov, to have criticised the
government over Chechnya, given his strained relations with the Kremlin.
However, Luzhkov prefers to focus on issues internal to Moscow rather than
direct his attention towards the handling of the North Caucasian crisis. In
any case, Luzhkov's stance as a Russian patriot and nationalist limits the
criticism he can level against, what has so far, been an effective
operation. The leader of the Communist party, Gennady Zyuganov, is also
constrained by anxiety not to weaken his patriotic credentials. He, too,
has endorsed government policy on Chechnya. 


The only substantial criticism of the Chechen campaign, as on many other
policy issues, has come from Yabloko, the most democratic and reformist
oriented of the centre parties (currently running third in the polls behind
Fatherland-All Russia and the Communists). Its leader, Grigory Yavlinsky,
has warned against complacency in Chechnya. While supporting ground
operations, he wants these used as leverage in a political dialogue with
Grozny, something which Putin has so far rejected. Yavlinsky's ally, Sergei
Stepashin, has been Putin's most telling critic. He played a leading role
in the 1994-96 war and was replaced by Putin this summer, in part owing to
his reservations about the use of large-scale military force in the
Caucasus. Drawing on the lessons of the 1994-96 conflict, Stepashin has
cautioned against Moscow's plans to install a government of Chechen exiles
since this stands little chance of commanding popular support within the
republic. 


As far as western governments are concerned, the Chechen crisis makes
involvement with Russia, already troubled by the Bank of America scandal,
even more problematic. Announcements in Moscow of plans for major increases
in defence expenditure have prompted the IMF and World Bank to threaten to
withhold further support. Such warnings will likely increase the unity of
Russia's political elite around a nationalist position of greater economic
and military self-reliance. Primakov, who is the best placed politician to
succeed Yeltsin next year if he decides to stand for President, recently
called for more resources for the defence industry, which he sees as the
``locomotive'' of economic recovery. The U.S. Senate's recent rejection of
the Comprehensive Test Ban Treaty (CTBT) has helped to strengthen the
consensus in Russia for higher military expenditure. 


********


#3
Russia suspects $600 mln Aeroflot cash laundered
By Elif Kaban

GENEVA, Oct 20 (Reuters) - Russian investigators believe some $600 million of 
hard currency was diverted from Russian state airline Aeroflot and laundered 
through Swiss banks, three times more than previously thought, Swiss court 
documents show. 


Newly released documents of the Swiss Federal Court in Lausanne, copies of 
which were obtained by Reuters on Wednesday, said the figure was formally 
communicated to Swiss authorities by Russian investigators probing the 
alleged laundering affair. 


The Aeroflot case is the latest in a series of high-profile Russian cases to 
land on the desks of a handful of cantonal magistrates at the Palais de 
Justice in Geneva. 


The biggest of these are the alleged laundering of up to $15 billion through 
the Bank of New York and a separate probe into allegations Swiss-based 
construction firm Mabetex paid bribes to Kremlin officials, accusations the 
Kremlin and Mabetex deny. 


On Wednesday, Geneva magistrate Laurent Kasper-Ansermet told Reuters that he 
had just begun investigating yet another Russian money-laundering case that 
involved the affairs of Russian alumunium tycoon Lev Chernoi, but he declined 
to give details. 


Reuters has not been able to contact Chernoi for comment. 


In the Aeroflot affair, Russian prosecutors assisted by Swiss authorities 
have been investigating whether hard-currency revenues belonging to Aeroflot 
were misappropriated. 


The Swiss court documents of hearings in the Areoflot case said the money was 
allegedly laundered through diverse financial operations including purchases 
of stocks and property, capital increases and issues of credits. 


The cash allegedly laundered included $400 million Aeroflot profits and $200 
million in air traffic fees, they said. 


In line with Swiss practice, the documents did not name any individuals but 
referred only to Mr U, B, P, G, K, M, F AND N. 


The Swiss authorities say they have blocked bank accounts following a request 
from the Russian chief prosecutor's office, but the holders of the accounts 
have not been identified. 


The Lausanne court documents said accounts had been frozen at Credit Lyonnais 
and Credit Agricole Indosuez in Geneva and Credit Suisse and UBS in Lausanne. 


Two Swiss-based companies previously named as under investigation in 
connection with Aeroflot, Andava SA and Forus Services SA, have repeatedly 
denied any wrongdoing and no criminal proceedings have been launched against 
them. 


*******


#4
From: Stanislav Menshikov <menschivok@globalxs.nl>
Subject: Looking for article on Social Security in Canada for a Russian
journal
Date: Wed, 20 Oct 1999 


A serious Russian journal is looking for a good article describing the
social security system in Canada. The idea is to educate the Russian public
as to the ways these things are done in various countries. The journal would
be happy to reprint it with due acknowledgement.


Do our Canadian friends have any ideas?


******


#5
Russian Apartment Blasts: Trace Leads to Chechnya.


MOSCOW, October 20 (Itar-Tass) -- The Russian security service (FSB) has 
discovered 23 people associated with explosions of apartments blocks in 
Russia, Alexander Zdanovich, head of the FSB Public Relations Centre, told 
journalists on Wednesday. 


During search raids at the suspects' places of residence the police 
confiscated the summaries of lectures on methods of waging hostilities and 
staging terrorist acts, Zdanovich stressed. 


"The comparative analysis revealed that practically all the lectures had one 
single orientation set by one centre. We know this centre. These are 
Khattab's training camps," Zdanovich went on to say. 


Khattab is of Jordanian origin. He has been staying in Chechnya for several 
years, he has the status of a field commander and is heading a militant 
group. About 2,000 terrorists had concentrated at his camps before the 
federal troops set up the security zone around Chechnya. 


Zdanovich said Khattab was closely linked to international terrorist Osama 
bin Laden who hires mercenaries and controls the flow of funds used to stage 
terrorist acts in different parts of the globe. 


******


#6
Russia: Analysis From Washington -- Criminalizing Politics
By Paul Goble


Washington, 20 October 1999 (RFE/RL) -- Moscow's ongoing efforts to portray 
the Chechens as "criminals" and "terrorists" appear to be intended to 
generate support at home and forestall criticism abroad concerning the 
Russian government's military moves in the North Caucasus.


But this demonization of an entire people not only has offended many in 
Russia and the West: It has had the effect of severely limiting Moscow's 
future options, reducing the chances for a negotiated settlement, and thus 
making a wider, longer, and bloodier conflict ever more likely. 


And because this effort to classify an entire nation as criminals violates 
fundamental principles of human rights, it is leading ever more governments 
in the West to reconsider their assessments of Russia's progress away from 
totalitarianism and, as a result, to reassess their current relationships 
with Moscow. 


Only some of these consequences appear to have been on the mind of Russian 
Prime Minister Vladimir Putin when he called on Tuesday for an international 
effort to combat Chechen "terrorists."


Speaking to a G-7 law enforcement seminar in Moscow, Putin said that his 
government had launched its military campaign against Chechnya in order to 
fight "criminals" and "terrorists." And he appealed for "all countries" to 
support Moscow's effort since "it is not possible" for any one country to 
"wipe out" such groups on its own.


In repeating charges he has made before, Putin appears to have three distinct 
goals. 


First, Putin clearly hopes to win popular support among Russians by depriving 
the Chechens and their cause of any standing of legitimacy.


Second, he apparently hopes to prevent any quick end to the conflict either 
by an end to the Russian military advance against Grozny or by the 
negotiations that many Russian officials have advocated. Such an end to 
hostilities would likely cost Putin much of the domestic support he has 
gained since launching the campaign.


And third, Putin certainly hopes to deflect any Western criticism of what 
Moscow is doing in Chechnya by suggesting that the Chechens are part of a 
broader, Islamic challenge to the West as well.
But in pursuing these goals, Putin may be creating a situation in which he, 
his government and even his country could lose much more. Labeling the 
Chechens a "criminal" group, something other Russian officials have been 
doing for some years, has had the unintentional effect of unifying the 
Chechens.


Even more, such charges have undercut support for moderate Chechens, such as 
President Aslan Maskhadov, who have called for talks and boosted the prestige 
of those, like Shamil Basaev, who argue that the Chechen nation can achieve 
its goals only through force and suggest that Chechens have nothing to lose 
if they launch attacks on Russian civilians.


And that shift of opinion within the Chechen community thus opens the way to 
ever more violence if Russian forces continue their attacks on Grozny and if 
Putin continues his campaign of demonization.


But the most serious consequences of Putin's continuing efforts to portray 
the Chechens as a uniquely criminal nation are likely to be felt elsewhere. 
Such charges may very well poison relations between ethnic Russians and 
non-Russian groups within the Russian Federation by opening the door to the 
possible demonization of others.


Such charges are also likely to complicate Moscow's relationships with the 
post-Soviet states. Not only are these countries certain to see such charges 
as evidence of growing nationalist fervor inside the Russian Federation, but 
they may see such descriptions of the Chechens as an implicit commentary on 
their ethnic communities.


Such comments by a Russian prime minister are already having an impact on 
Moscow's relations with the West. Even governments and peoples who sympathize 
with Moscow's effort to combat terrorism appear to be increasingly disturbed 
by Putin's broad brush approach to the problem.


Putin's remarks in recent weeks have prompted some Western observers to raise 
questions not only about what Moscow is now doing in Chechnya but also about 
the Russian government's policies in other areas. And that examination has 
led at least some in the West to adopt a more critical approach.


Putin's rhetorical effort may have counterproductive results far greater than 
anyone in his entourage appears to have anticipated. 


******


#7
Russia Today press summaries
Nezavisimaya Gazeta
20 October 1999
The War at Their Own Expense
THE STATE CANNOT PROVIDE THE MILITARY IN CHECHNYA WITH MONEY AND EQUIPMENT
Summary
The Chechen war reveals the attitude of the state to its defenders. What is 
going on in Chechnya now resembles large-scale maneuvers with human losses. 
The problem is that the goal of operations and the status of the military 
participants has not yet been determined.


Presidential Decree number 1155 of September 27 defined combat actions in 
Chechnya as an anti-terror operation. This document also instructed the 
government to develop a document that would regulate the legal norms of 
military operations and determine social guarantees for the military 
participants. However, the government has not issued any document yet. The 
indetermination causes financial problems. Currently officers and soldiers 
receive only their main salaries plus an additional fifty percent - equaling 
two thousand rubles on average. They are also paid a "travel allowance" of 55 
rubles a day. But drafted soldiers do not even get this allowance.


Speaking with a Nezavisimaya correspondent, an officer in the Lebazhinskaya 
brigade, which is now fighting in Chechnya, said, "We do not want a promise 
of one thousand dollars, but we want triple salaries for combat activities, 
which they must pay to us, according to law."


The military are also very much concerned about rumors that talks between the 
federal center and Chechen leaders may start already this week. In this case 
the 58th Army advance units, which have come close to Grozny, will be left at 
their present-day positions, and all mistakes of the previous campaigns will 
repeat themselves.


******


#8
Assassination of Russian Federal and Local Legislators.


MOSCOW, October 20 (Itar-Tass) -- Russia has seen numerous assaults and 
murders of lawmakers over the past five years. 


The latest assassination took place on Wednesday morning: Victor Novosyolov, 
a deputy of St. Petersburg's Legislative Assembly was killed in an explosion 
in his service car in Frunze street. 


More than five years ago, Andrey Aizderdzis, a deputy of the State Duma, or 
the lower house of Russian parliament, was shot dead in Khimki near Moscow on 
April 24, 1994. The major version of that assassination was connected with 
his banking activities. 


On November 1, 1994, Valentin Martemyanov, a deputy of the State Duma, was 
beaten up ruthlessly by unidentified persons and died of injuries in a Moscow 
hospital. 


The town of Zaraisk just outside of Moscow saw the murder of State Duma 
deputy Sergei Skorochkin on February 2, 1995. Officials linked the crime to 
the man's business activity. 


Shortly after midnight on November 26, 1995, Sergei Markidonov, a deputy of 
the State Duma, was assassinated in Petrovsk-Zabaikalsky, in East Siberia's 
Chita region. 


On December 20, 1995, Yevgeny Leontyev, a deputy of the State Council of the 
Komi Republic, was shot and killed in Vorkuta. 


Oleg Chertov, a deputy of the Regional Legislative Assembly, vice-president 
of Stock company "Omsk Tyre", was killed in Omsk on February 26, 1996. 


On August 1, 1996, a deputy of the Legislative Assembly of the Krasnoyarsk 
territory Alexander Rozhin was assassinated in Krasnodar. 


Vladislav Yastremsky, a deputy of the Karelia Local Legislative Assembly, was 
found killed in his apartment in the town of Borovoy in this Northwest 
Russian republic on November 23, 1996. 


On March 3, 1998, Georgy Stepanenko, a deputy of the Sverdlovsk Regional 
Legislative assembly, was shot dead at the entrance to the building he lived 
in. 


On March 21, 1998, the city of Kizlyar was shocked by the assault on Alexey 
Kolko, a deputy of Daghestan's National Assembly. He died of injuries on 
April 7, 1998. 


Regional Duma deputy Leonid Novopavlovsky was assassinated in Central 
Russia's city of Tambov on April 30, 1998. 


On July 3, 1998, (retired general) Lev Rokhlin, a deputy of the State Duma, 
was killed in his cottage in the village of Kotovo in the Moscow region. 


Sayed Fatakhov, a deputy of the Daghestan's National Assembly, was killed in 
Kaspiysk, at the entrance to his house, on July 22, 1998. 


On November 20, 1998, Galina Starovoitova, a deputy of the State Duma, was 
shot and killed on the staircase in the building where she lived in St. 
Petersburg. 


A deputy of the Local Duma, Alexander Bulatov was killed in Turinsk in the 
Sverdlovsk region on January 19, 1999. 


On August 28, 1999, Aidar Israilov, a deputy of the city council, was 
assassinated in Tatarstan's industrial centre of Yelabuga. 


On Wednesday morning, the St. Petersburg Legislative Assembly cancelled its 
regular meeting upon receiving word about Victor Novosyolov's death. The 
Council of the factions met behind closed doors to monitor all information 
about the tragic accident in which their peer died. Three suspects have been 
detained on the spot. The investigation continues. 


******


#9
Los Angeles Times
October 20, 1999 
[for personal use only]
Greasy Palms Are Rampant in Russia 
Bribery dates back at least to the first czars. But in the era of gangster 
capitalism, it's a prerequisite for everything from good health care to 
university admission to a well-dug grave. 
By RICHARD C. PADDOCK (paddock@latimes.ru) 


MOSCOW--On the day baby Gleb came into the world, his way was made a 
little smoother by a Russian tradition that is centuries old: His family paid 
a bribe. 
Health care is supposed to be free in Russia, but when Gleb was born 
Oct. 4, his father gave the obstetrician $300 to make sure the boy and his 
mother received the best possible care. For the doctor, it was like getting 
nearly a year's pay. 
Earlier this year, Alexei D. Krykov, 72, was laid to rest in keeping 
with the same custom. His widow, Zinaida, paid for a plot and a funeral at 
the state-run Khovanskoye Cemetery and then gave the gravediggers a bottle of 
vodka each to make sure they dug a proper hole. 
From the cradle to the grave and at every conceivable stop along the 
way, bribery is an indispensable part of Russian life. It softens the edges 
of an authoritarian society and enables citizens to circumvent a ponderous 
state bureaucracy. It is an example of market forces working in a country 
where the government doesn't. 
"I don't think there's anything wrong with paying bribes for good 
treatment," said Gleb Khokhlov, 36, little Gleb's father, who makes $100 a 
day in the construction business. "When the life of your baby is at stake, 
you don't count your money. You pay what they tell you." 
While investigators search from Moscow to Switzerland to New York for 
evidence of high-level Russian corruption, the Russian people cope with graft 
as a matter of everyday existence. The Bank of New York money-laundering 
scandal has alarmed the West, but ordinary Russians are more concerned about 
finding money to pay what they call vzyatki. 
You want to enroll your child in the best school? Give the principal a 
$500 donation. You want to avoid the draft? Spend $5,000 for a medical 
exemption. It's time to pass a university exam? Chip in to get the professor 
a new TV. Need a driver's license? Don't bother with the driving test. Pay 
$400. 
"The practice of graft has become pervasive and universal," said Sergei 
A. Arutyunov, a leading anthropologist and member of the Russian Academy of 
Sciences. "Everything is bought and sold. Everyone who is in charge of 
something in this country, even something small and insignificant, is in a 
position to take bribes." 
The practice of bribery dates back at least 450 years, to the time of 
the first czars. Despite Stalin's efforts to stamp it out, bribery survived 
Communist rule to flower in the past eight years under gangster capitalism. 
Authorities say that more than 6,200 bribes were reported in the first 
nine months of this year, but they estimate that's less than half of 1% of 
the bribes that actually changed hands. 
Despite more than $20 billion pumped into Russia by the International 
Monetary Fund to stimulate so-called reforms, the country still has one of 
the most bloated bureaucracies in the world. There is no tradition of paying 
taxes, and the government collects far less than it needs to stay afloat. 
Government workers, including doctors, teachers and police officers, are 
paid so little that they cannot support themselves on their salaries alone. 
For underpaid bureaucrats, each contact with a member of the public is 
an opportunity to extract some sort of payment. The higher an official's 
position, the greater the opportunity to collect bribes. 
In a sense, it is an alternative system of taxation--a kind of 
government by tollbooth where citizens are assessed for the specific services 
they require. The more money they appear to have, the greater the bribe they 
are likely to pay. It is an echo of the Communist past: From each according 
to his ability, to each according to his needs. 
"The culture of graft is hard-wired in the Russian mentality because the 
people have never been free in this country," Arutyunov said. "They have 
always had a servile psychology. In order to get something, they had to beg 
for it, even if it was something guaranteed by the state." 


Officials Are More and More Demanding 
Some recipients of bribes prefer to think of them as gifts and only hint 
at the kind of payment they expect. Bribes for small services often take the 
form of a bottle of alcohol or a box of chocolates. Sometimes, the exchange 
is not so different from tipping. But increasingly, officials are becoming 
blunter, asking for and receiving dollars stuffed into envelopes. 
Teacher Marina V. Prokhortseva, 32, gave birth in September to Artyom, 
her second child. At each checkup, she brought gifts of perfume or chocolate 
for the doctor. During the month leading up to the delivery, the doctor 
called her every day and told her where she could be reached in an emergency. 
In the hospital, the doctor stayed constantly by Prokhortseva's side. After 
Artyom was born, she and her computer programmer husband paid the doctor 
$200--a bargain compared with the $600 they paid nearly six years ago when 
their daughter, Angelina, was born. 
Now Prokhortseva knows that paying a vzyatka at the maternity ward is 
just the beginning. To get Angelina into the right preschool two years ago, 
Prokhortseva and her husband bought $500 worth of musical instruments for the 
school. Now it is time to find a new school, and she expects to pay another 
$500 to get her daughter into a good one. 


'A Long Chain of Bribes You Have to Pay' 
"More children, more bribes," she said. "Their birth is just the 
beginning of a long chain of bribes you have to pay throughout their entire 
childhood." 
It doesn't stop there. Consider what it takes to get into college. 
Nadezhda, like some others interviewed for this story, did not want to 
be identified by her last name. She was 16 when she enrolled last year in a 
special college preparation course for the 12 entrance exams required to get 
into prestigious Moscow State University. She soon learned, to her horror, 
that she was expected to pay the principal a bribe. 
"The teachers dropped a hint that even if I were a genius, I would never 
pass 12 exams with good grades," she said. 
She was sure her father would pull her from the program, but he took the 
demand for money philosophically. 
"We live here, and we have to live according to their rules," she 
recalls him saying. "We will not prove anything if we refuse to pay." 
He visited the school and gave the principal an envelope containing 
$250. 
"I had no trouble getting my certificate," she said. "Those who bribed 
the principal were given the answers for the written tests in math, physics 
and chemistry beforehand." 
Another popular method is to hire a tutor who is a university instructor 
and can guarantee admission. These tutors charge up to $50 an hour for as 
many as 50 lessons. To ensure a pupil's success at exam time, the student 
turns in his pen along with his exam so the teacher can correct any mistakes 
in the same ink. 
Once students reach university, the practice of bribery continues. 
Sometimes they pay cash, sometimes they give bottles of vodka, sometimes they 
buy the professor something he or she wants. 
"Last winter, 10 of us bribed our teacher of philosophy with a Samsung 
color television set," said Yegor, 25, a dental student. "I am not against 
bribery. I work and study, but I do not have time to learn the whole bulk of 
questions in literature, history or philosophy. It has many advantages both 
for students and teachers. They get money, and we pass our exams." 
Over the past eight years, millions of new drivers have hit the streets 
of Moscow, providing a great source of revenue for traffic inspectors. The 
method of issuing driver's licenses helps explain why the city's motorists 
are among the worst in the world. 
When Irina, a 20-year-old student, enrolled in driving school, the first 
thing the class learned was that no one would pass without paying $200 to the 
traffic inspector who gave the driving test, she said. 
In the end, she paid the $200, knowing it would be cheaper than flunking 
and having to pay for the driving course again. When she took the exam, the 
inspector had her drive 20 yards and then told her to pick up her license in 
a week. 
"During the test, I was really shocked when I saw that half the people 
could hardly start the car," she said. "I got really scared when I realized 
how many bad drivers there were on the roads of Russia. Most of them must 
never have opened a book of traffic rules." 
Once they are on the road, drivers must run the gantlet of the notorious 
traffic police, known as the GAI. 
In Moscow, officers stand at major intersections and pull over motorists 
at random. They need no probable cause or suspicion of wrongdoing. If the 
driver's documents are not in order, a bribe of $12 can solve the problem. 
Avoiding a speeding ticket is a bargain--as little as $2. Evading arrest for 
drunken driving costs at least $100. The more expensive the motorist's car, 
the bigger the bribe. 
The GAI's corrupt practices are so widespread that the force has long 
been the butt of Russian black humor. In one joke, a patrol officer asks his 
captain for a pay increase because his wife has just had a baby. There is no 
money for a raise, says the captain, who decides to help out the poor 
patrolman anyway. The captain goes to his storeroom and comes back with a 
25-mph speed limit sign. "Here," he says. "Take this. You can use it for a 
week." 


Judicial System Has Its Own Miscreants 
For those unlucky enough to land in court, bribes are still an option. 
Investigators, prosecutors and judges have all been known to accept bribes, 
though few are ever prosecuted. 
"We have a situation where a detective investigates multimillion-dollar 
cases for just $100 a month, and he doesn't even have an apartment of his 
own," said suspended Prosecutor General Yuri I. Skuratov. "He is in a 
position to make all sorts of executive decisions on how the case will be 
investigated. In return, he is paid hundreds of thousands of dollars, which 
is enough for him to live in affluence for the rest of his life." 
The state bureaucracy is the place where the most money can be made. 
Clearing goods through customs, issuing government contracts and privatizing 
state property all offer lucrative opportunities for corrupt officials. 
When Mikhail G. Delyagin worked last year as a senior aide to First 
Deputy Prime Minister Yuri D. Maslyukov, he was paid $100 a month--hardly 
enough to live on in Moscow. He supplemented his income by lecturing and 
writing. 
"Officials who can't do that either have to lead a very miserable life 
or take bribes," he said. "Any man from the street can come into an 
official's office with a draft document and get a signature and a seal for a 
bribe. That is probably why the government sometimes issues regulations that 
contradict state law." 
Throughout the government, Delyagin said, bribery is an organized 
activity in which officials receive money and pass it up through the chain of 
command. 
"Some state agencies may actually function as smoothly working 
bribe-taking mechanisms, where bribes are distributed from the lowest-level 
bureaucrats to the very top of the organization," he said. 
In such a department, an employee who refuses to accept bribes won't 
have a job for long. 
"By displaying such honesty," Delyagin said, "he will disrupt the 
functioning of the entire organization." 
For Russians who grew up with the Soviet promise of free health care, it 
has been difficult to adjust to the new way of doing things. While medical 
care is still free in name, the quality of care is so poor, and supplies are 
so limited, that only the truly poverty-stricken venture to seek treatment 
without paying something. 
Vyacheslav A. Kuznetsov, a professor of electrical engineering, was 
suffering from a kidney ailment and needed an immediate operation. The wait 
for surgery was five months, and he worried he wouldn't live that long. 
So Kuznetsov met with a hospital official and gave him an expensive 
bottle of French cognac to start things off. Two weeks later, he was on the 
operating table. He ended up giving the surgeon $200, a similar bottle of 
cognac and a car stereo. During his recovery, he paid the doctor $80 a day 
for two weeks for medicine that was supposed to be free. 
"Today, bribes have become morally justified because the salaries are 
ridiculously low and the ruling elite rips off the country without a twinge 
of conscience," the professor said. "This perverted mentality has led to a 
situation where it is impossible to live in Russia without paying bribes. He 
who does not pay does not live--he simply muddles along." 
Alexei Krykov died in April. Last Wednesday, his wife and friends 
gathered at the cemetery on the outskirts of Moscow to remember him. They set 
up a small table on the empty grave site next to his, laid out pickles, 
potatoes, bread and a bottle of vodka, and drank to his memory. 
Zinaida, his 69-year-old widow and a retired passport office clerk, said 
she survives on a pension of 500 rubles a month--the equivalent of about $20. 
The vodka she gave the gravediggers at the time of the funeral amounted to 
more than a tenth of her monthly income, but it never occurred to her to do 
otherwise. 
"I wanted them to do a good job, and, to get people to do a good job, 
you always have to give them something, especially at a cemetery," she said. 
"It's a tradition." 
Svetlana Safonova of The Times' Moscow Bureau contributed to this 
report. 

* * *
Price List 
In a country where everything is for sale, Russians pay bribes as a 
matter of course in their everyday lives. Here is the cost of some ordinary 
and some not-so-ordinary bribes: 
Avoiding arrest for drunk driving: $100 minimum 
Getting a doctor's certificate of disability: $60 to $1,000 
Enrolling a child at a good nursery school: $200 to $500 
Passing a university exam: A bottle of vodka to $150 
Getting a driver's license without driving school or test: $400 
Avoiding military service: $5,000 
Obtaining a phone line without a long wait: $600 to $1,000 
Getting access to an important official: $1,000 
Getting permission to install a police-style flashing light on car roof: 
$1,500 
Clearing an imported car through customs: $3,500 
Getting an arrest warrant withdrawn: $10,000 
Halting a criminal investigation: $30,000 to $100,000 
Canceling a contract killing: $50,000 
Compiled by The Times' Moscow Bureau from interviews and Russian media 
reports. 


********


#10
Financial Times (UK)
21 October 1999
[for personal use only]
RUSSIA: Business smacks strangely of morals 
John Thornhill scents changing attitudes at one of the country's biggest 
companies


Over the past decade, Alfa Group has emerged as one of Russia's most powerful 
financial-industrial groups by making the most of the country's collusive 
business climate. Since Russia's financial crash last year, however, things 
have begun to change.


The group, which has interests ranging from commercial banking to supermarket 
retailing to oil, now aspires to play by a more competitive set of western 
standards that it believes will give it an edge over its domestic rivals. 
Whether Alfa achieves this crossover will say much about the evolution in 
thinking among some of Russia's oligarchs.


It may also be a good indicator of just how far Russia can progress along the 
path towards competitive capitalism or whether it will remain stuck in what 
President Boris Yeltsin has called a "freakish model", half way between the 
planned and market economies.


Mikhail Fridman, Alfa's chubby 35-year-old chairman, does not pretend his 
"conversion" to a more open way of business is driven by pure ethics. Rather, 
it reflects hard-headed self-interest: in the moral wasteland of Russia's 
post-crisis business world - where default and asset stripping have been the 
practice of the day - the more trustworthy operator will be king.


"It seems to me that morality is an economic category. Morality is not simply 
the 10 commandments that Moses received on Mount Sinai. It is the collective 
experience explaining the most effective means of leading one's life, most of 
all in the economic sense," he says.


"It seems to me that our strategy will be the most effective and the most 
profitable."


It is undoubtedly true that since the August 1998 collapse Alfa Bank, the 
commercial bank which lies at the heart of the group, has treated its foreign 
creditors better than have most other troubled Russian banks.


Mr Fridman argues Alfa could have saved money by dumping on its creditors, 
but this would only have destroyed its reputation. The reward for fair 
treatment has been that Alfa Bank has attracted many more corporate clients 
since the crisis and has been able to expand its retail branch network.


Mr Fridman believes Alfa Bank now has an opportunity to build a stronger 
business over the next three to five years. To this end he has hired Alex 
Knaster, the former head of Credit Suisse First Boston's Moscow office, and 
Alexander Tolchinsky, the former head of McKinsey's Moscow office, to raise 
the professional standards within its commercial and investment banking 
businesses.


In Mr Fridman's view the free-wheeling days of Russian capitalism are over. 
The economy has entered a new stage of development as the market matures. "We 
previously achieved speedy results not because we were so talented but 
because we were presented with a historic chance: the Soviet empire fell 
apart, there was a transition towards private property," he says. "But to 
grow further we need to be prepared for long, laborious, routine work and to 
build our organisation brick by brick."


Some foreign bankers, who have grown cynical of the ways of Russian business, 
say they have heard such fine-sounding rhetoric before from other oligarchs - 
most notably from Vladimir Potanin, the head of the Interros conglomerate - 
only to be disappointed later.


Moreover, Mr Fridman's talk of a new morality in business will raise a hollow 
laugh at BP Amoco, which is locked in a bruising battle with Tyumen Oil 
Company (TNK), the Siberian oil group in which Alfa Group has a 25 per cent 
stake, over the fate of Chernogorneft. The British-US oil group has accused 
TNK of employing extremely rough tactics in its attempts to win control of 
Chernogorneft.


Mr Fridman responds that BP allowed Chernogorneft to slip out of its hands by 
mismanaging its parent company, Sidanco, over the past two years. "I consider 
that our position is aggressive, we do not hide that fact, but none the less 
we absolutely adhere to the spirit and the letter of the law," he says.


One Russian banker, who has been following the dispute, says: "You cannot 
expect to play by western rules in western capital markets and by Russian 
rules in the Russian oil market and expect to retain your credibility." He 
suggests Mr Fridman has a devil on one shoulder and an angel on the other and 
will respond to whichever voice promises him more money.


Mr Fridman acknowledges that such is the level of scepticism surrounding 
Russian business at present that he is unlikely to be taken on trust. But 
having raised expectations so high, he will disappoint all the more if he now 
fails to deliver on his good intentions.


******
#11
The Times (UK) 
October 21 1999
[for personal use only] 
A war beyond fear for Chechnya's warriors
'When I headed for Chechnya last week, I was told by one veteran
correspondent that there would be four separate levels of fear to break
through on the journey from Moscow. I have been through all four now, but
the fear remains' 
FROM ANTHONY LOYD IN URUS MARTAN


THERE was a small army of gunmen protecting me, and they spread out through
the rubble left by a new Russian strike upon Urus Martan, 15 miles
southwest of Grozny, as artillery rumbled away to the east. 


Bombed from the air by day then rocketed at night - a pattern growing
common now in central Chechnya - distraught survivors scrabbled around what
was left of their homes. The toll in this small town in a 12-hour period,
they said, was at least 16 dead. 


Similar strikes in Achoj Martan and Gudermes to the east probably trebled
the civilian toll. 


Then a green van arrived and a new group of bearded fighters disembarked,
eyeing us fixedly. There was no argument from my cortège, no dispute, no
discussion at all. They simply turned to me, said "OK, we go now", and we
were in vehicles and driving away within ten seconds. 


"Not a good place, and not good people," was the explanation of our sudden
departure. 


How different now Chechnya is for the foreigner compared to the 1994-96 war
years. Then Westerners were all but fêted as the messengers who broadcast
the Chechens' struggle for independence. But the three years of peace that
followed were cruel. Russian officials list 3,000 cases of kidnapping in
Chechnya during that period. 


Not included in those figures are the disappearance and presumed murder of
Fred Cuny, an American aid worker, or the six Red Cross workers who were
shot in their sleep outside Grozny in December 1996. Included are two
British aid workers ransomed then released, and three British and one New
Zealand telecommunication engineers kidnapped then beheaded. Grozny today
occupies a place similar to Beirut in the early 1980s as kidnap capital of
the world. 


"There's no way around it," a colleague warned me in Moscow. "Whatever your
character, whatever your professionalism, you represent nothing more than a
sack of ransom money in the eyes of most Chechens now." 


Though the Russians traditionally mythologise the Chechens as bandits and
gangsters, they were equally responsible for resurrecting the latest
kidnapping phase. 


During the 1994-96 war, the Russian Interior Ministry set up notorious
filtration camps in order to categorise Chechen prisoners, who in many
cases were simply civilians held in appalling conditions until their
families paid for their release. 


Financial conditions in the peace that straddled the two recent wars
worsened the situation. The Chechen capital lay destroyed, there were no
jobs, almost no foreign investment, aid workers were too frightened to
come, and Russia mounted an effective economic blockade of the state,
undermining the power of the moderate Chechen President, Aslan Maskhadov. 


If help did arrive, it usually came in the form of Islamic fundamentalists
from abroad, whose financial and military aid is clearly visible throughout
the state now, and whose presence was utilised by Russian anti-Chechen
propaganda. 


In this environment, hostility to the West and Westerners increased
dramatically. 


"The West isn't fighting us but we don't like them giving the Russians
money," said Movladi Udugov, a member of the Chechens' war office, the
State Committee for Defence. 


"The West paid for the first war here," he added. "And we aren't sure that
they won't pay for the second. We consider the West to be responsible for
the killing of Chechen people." 


In most Chechens' eyes, Russia's war against them is simply anti-Islamic
and the knock-on radicalisation is becoming a self-fulfilling prophecy. 


When I headed for Chechnya last week, I was told by one veteran
correspondent that there would be four separate levels of fear to break
through on the journey from Moscow. 


First, there would be the fear of going even to Ingushetia. Second, the
fear of entering Chechnya; then the fear of going to Grozny. 


And last the fear of going to the front. After that, I was told, there
would be nothing left to fear. 


I have been through all four barriers now but the fear still remains. As I
lie on my bed at night in this small village, in a 10ft-square room shared
with guns and gunmen, inside a walled family compound, sounds of late-night
footsteps or a car outside can still churn my stomach, and make me wonder
my price. 


*******


#12
Chechnya RUSSIA'S Internal Affair- US Defence Secretary.


ABU DHABI, October 21 (Itar-Tass) - U.S. Secretary of Defence William Cohen
believes the developments in Chechnya are Russia's internal affair. He said
this at a press conference in Dubai after the talks with Defence Minister
of the United Arab Emirates Sheikh Muhammad bin Rashid al Maktoum on
Wednesday. 


Cohen expressed the hope that Russia would agree with Chechnya and
everything would end peacefully. 


However, it is an internal affair, and each state has the right to take the
decision it considers most proper, the minister stressed. 


He added that negotiations between the parties should continue. The
Pentagon chief is on a trip to Middle East and Persian Gulf countries.
Cohen has already visited Bahrain, Qatar, Saudi Arabia and the United Arab
Emirates. He is also planned to make stops in Egypt, Jordan, Kuwait and Oman. 


*******