January 20, 2001   

This Date's Issues:   5038 • 5039

Johnson's Russia List
#5039
20 January 2001
davidjohnson@erols.com

[Note from David Johnson:
1. AP: Advocates Convene Moscow Congress. (human rights)
2. Dimitri Simes and Paul Saunders on US-Russia relations.
3. Business Week: Paul Starobin, The Trials of a Russian Drug Czar. Can Moscow rein in Vladimir Bryntsalov?
4. Los Angeles Times: Maura Reynolds, Russia's 'Cruel' Soldier Comes Home. Rights groups say Lt. Gen. Vladimir Shamanov is guilty of war crimes in Chechnya. But voters in a Volga region that elected him governor hope he can impose order.
5. New York Times: John Sullivan, The Grad Student Sent into The Cold. (Joshua Handler)
6. ISAR publication: NGOs and Caspian oil extraction.
7. Andrei Liakhov: On Soviet Debt and CMEA.
8. Vek: Irina Demina, DO WE NEED ALIENS? Migrants can degenerate into a dispossessed and uprooted group.
9. Interfax: McDonald's fast food presence in Russia continues to expand.
10. strana.ru: Russian officials boycott George W. Bush's inauguration celebration in Moscow.]
 
******

#1
Advocates Convene Moscow Congress
January 20, 2001
 
MOSCOW (AP) - Veterans of the Soviet-era human rights movement said they fear
Russia's government is threatening civil liberties as it tries to push its
policies in the post-Communist era.

Longtime members of the human rights movement joined with activists from
younger rights organizations at a national congress in Moscow Saturday to
discuss perceived threats to rights.

Sergei Kovalyov, a liberal member of the lower house of Parliament, said in
his keynote address that he didn't see massive, Soviet-style repression
returning to Russia.

``However, selective, 'precision repression' to help the authorities realize
their goals - I consider that entirely possible,'' Kovalyov said.

He pointed to the prosecution of several environmentalists on charges of
revealing state secrets, as well as the 15-month-old war in Chechnya, where
Russian military and police are accused of widespread human rights abuses.

Delegates to the congress also expressed concern over a draft law that would
severely restrict the number of political parties, as well as a bill that
could open the way for constitutional changes by a narrow group of people
controlled by the president.

Kovalyov said human rights activists should also be alarmed by alleged
government attempts to gain control over the media and the growing autonomy
of police, prosecutors and security agencies.

******

#2
Date: Fri, 19 Jan 2001
From: Paul Saunders <psaunders@nixoncenter.org>
Subject: Simes/Saunders in Washington Times

Dear David:
I hope you might find the attached of interest.
Best wishes,
Paul

Dimitri K. Simes is President of The Nixon Center; Paul J. Saunders is the
Center's Director.

Although Russian nuclear weapons and nuclear materials present a great danger,
overstating the threat does a disservice to broader American interests.  A
recent draft report released by the Secretary of Energy's Russia Task Forcethe
Clinton Administration's eleventh-hour guidance to its successorsis a case in
point.
 
The report argues that "the most urgent unmet national security threat to the
United States" is the possible theft of nuclear weapons or weapons-usable
material from Russia for use against Americans.  On this basis, it calls for a
significant expansion in the Clinton Administration's non-proliferation
programs in Russia in order to "secure and/or neutralize in the next eight to
ten years all nuclear weapons material in Russia" and to stop the flow of
dangerous technologies out of the country.

Though high-powered official commissions are rarely willing to admit that
their
topic of study is not the greatest challenge facing America today, Russia's
"loose nukes" are indeed a major problem with potentially devastating
consequences for the U.S.  But the notion that protecting Russia's nuclear
materials from its own population is our "most urgent" priority, as the report
argues, is a dangerous oneparticularly coming from a prominent and bi-partisan
(though not fully balanced) group.

Most troubling, it suggests that American policy toward Russiaand other
matters
that affect itshould be subordinated to the goal of maintaining and expanding
U.S. access to super-secret Russian nuclear facilities.  This would have a
profound effect on other American objectives, including national missile
defense, further NATO enlargement, and Russia's payment of its debts.  How
could we then risk alienating or undermining the Russian government by taking
positions contrary to Russian preferences?  It would also give Moscow enormous
leverage once Kremlin leaders sensed the depth of our commitment to such
programs.

Offering the Kremlin such leverage is particularly inappropriate because the
nature of Russia's evolution makes the nuclear stockpile, like everything else
under Vladimir Putin's rule, subject to greater state control.  Boris
Yeltsin's
Russiasimultaneously anarchic and semi-authoritarianis giving way to the
growing stability of Putin's "guided democracy."  As prominent Russian
journalist Masha Gessen writes, the result has been that "safetyor at least
stability of a sortis not so unattainable" and "trains run on time, planes
fly,
and the postal service works once again."  This trend affects "loose nukes" as
well.

Though the growing role of the security services is (to put it mildly) not a
universally encouraging development, it has a clear silver lining with respect
to the security of Russian nuclear materials.  Russia need not become a
totalitarian police state for its security agencies to perform adequately in
the area of nuclear safety.  In fact, they seem to have been quite capable of
rounding up suspects when it is a political priority.  The relative
effectiveness of the Russian security apparatus in "political" cases calls
attention to a fundamental point: as Russia's transition comes to an end, the
deliberate decisions of its leadership will become more important than
potential accidents resulting from its decreasingly chaotic internal
condition.  For example, Russia's atomic energy ministry, Minatom, has been a
vocal champion of expanding technology transfers to Iran; the Russian
government more generally has tolerated if not encouraged the provision of
nuclear and other sensitive technologies to the Islamic Republic.  Moscow also
recently reneged on an agreement between Vice President Al Gore and Russian
Prime Minister Viktor Chernomyrdin that was to have restricted Russian
dealings with Tehran.

To its credit, the Russia Task Force acknowledged the problem of Russian
cooperation with Iran, noting that further developments could "have a major
adverse effect" on U.S. nonproliferation programs in Russia.  But the problem
is much broader: Russia is also renewing its ties with former Soviet client
states, like North Korea, Libya, and Cuba, and according to some reports has
moved tactical nuclear weapons to Kaliningrad.  In this context, short of
abandoning its other important interests and principles, the U.S. seems likely
to enjoy less rather than more access to Russian nuclear materials, weapons
complexes, and research centers.

Putin's Russia is increasingly capable, both economically and politically, of
ensuring the security of its nuclear stockpile.  It is counterproductive to
continue to treat Russia, as Clinton has, like an adolescent unqualified even
to perform the most basic functions of a state without U.S. guidance and
subsidies.  If Mr. Putin wants Russia to be viewed as a serious power, he
should be told that reliably controlling nuclear materials, rather than the
media, would win him respect in Washington.

******

#3
Business Week
January 29, 2001
The Trials of a Russian Drug Czar (int'l edition)
Can Moscow rein in Vladimir Bryntsalov?
By Paul Starobin in Moscow     

It's three weeks before the New Year in Moscow and 54-year-old Vladimir A.
Bryntsalov, vodka distiller, pharmaceuticals tycoon, and member of parliament
to boot, is hosting a small dinner party in the opulent lounge at his
business headquarters. There's Bernadotte porcelain from Bohemia on the
table, and the Persian rug cost $2,500 per square meter, Bryntsalov remarks,
even though no one has asked the price. Over by the bar is a white marble
sculpture of a man and a woman locked in an embrace. A gold plate identifies
the work as The Kiss by Auguste Rodin. Bryntsalov says he purchased it at the
knock-down price of $200,000 from a government sanatorium in the Moscow
region. It fell into Russian hands as a ``trophy'' captured from the Germans
in World War II, he explains.
   A waiter sets down a tray holding a baby roast suckling pig, head
attached. Bypassing the cutlery, Bryntsalov grabs a hunk and tears the flesh
from its bones. His hands glistening with oil, he returns to an ever-present
conversational theme: his raging feud with Danish insulin maker Novo Nordisk.
The companies formed a marketing partnership in late 1995 but parted bitterly
three years later. Novo Nordisk accuses Bryntsalov of making insulin with
substandard raw materials obtained from other suppliers. Ever since,
Bryntsalov has been impugning the quality of Novo Nordisk's own product--and
at the dinner, he finds an opportunity to spit out another insult. ``Do you
know, this pig was alive in the morning,'' he declares, attesting to its
freshness. ``Better to have this than the crap chemicals from Novo Nordisk.''
   A rough man--but Russia is still a rough-and-tumble market. The big
Western drugmakers need local partners to navigate it and other emerging
markets. But sometimes the partners they find pose more problems than
solutions. Partners such as Bryntsalov give Russia a bad rap. He's a textbook
type of which there remain all too many in a country still afflicted by rogue
capitalism: A politically connected tycoon who operates on the edge, whose
strivings threaten to crowd out normal operators and who has joined hands in
business with the very regulators in charge of keeping watch on his industry.
And to date, the administration of President Vladimir V. Putin has failed to
rein him in.
   The flamboyant Bryntsalov is a self-made man, Russian-style. By his own 
account, he grew up in a shack in a province of south Russia, without an
indoor toilet, even though he bears a proud pedigree as grandson of a Cossack
general. He amassed a fortune--which he puts at more than $1 billion--from
vodka making and other businesses in the early days of post-Soviet Russia,
then poured much of the profits into the drugmaking business. In the
presidential campaign of 1996, Bryntsalov came in last, although his
outrageous antics--he carried a pistol at his side, and his young wife
reported being paid $18,000 a month for housekeeping--made him a household
name.
   He sustained a staggering blow in Russia's 1998 financial crisis, when the
ruble lost two-thirds of its value. Now he's on his feet again, in an
improved national economic climate. Managers at his drug factory, which he
gained control of in a 1992 privatization, say monthly sales of $16 million
in November were triple the level of sales a year earlier. Bryntsalov himself
says he expects to double sales this year. He owns virtually all shares of
the drug firm, ZAO Bryntsalov, whose worth, along with the land on which it
sits on the outskirts of south Moscow, he estimates at $1.6 billion. His
goal: to become the top pharmaceutical maker in Russia, a market where demand
for quality drugs is growing by 20% a year. ``I'm on the right path,'' he
says.
   Not everyone thinks so. Lately Bryntsalov's company has found itself on
the losing end of rulings from government bodies examining his business
practices. In a judgment last January, the Moscow Arbitration Court found in
favor of a Russian Ministry of Health claim that Bryntsalov sold the
government animal insulin instead of more expensive human gene-engineered
insulin, as called for in the contract. Bryntsalov says much of the criticism
is generated by foreign rivals, but he doesn't, in fact, entirely absolve
himself of blame. For example, he maintains that his company and Novo Nordisk
joined hands to trick the Russian government into buying animal insulin
instead of human gene-engineered insulin. ``We are both criminals,'' he
declared. Novo Nordisk says the Arbitration court finding against Bryntsalov
alone speaks for itself.
   The Moscow Arbitration Court decision is not the only one that has gone
against him. Last February, the Russian Antimonopoly Commission ruled against
Bryntsalov in a trademark-infringement claim brought by Novo Nordisk. The
commission instructed Bryntsalov to stop selling the disputed product. But
Novo Nordisk believes Bryntsalov is continuing to sell his insulin under the
Novo Nordisk name and is readying further action against him in the
International Court of Arbitration in Geneva. The Danish company also is
seeking a judgment against Bryntsalov in the same court on a $6.5 million
debt. Meanwhile, Diosynth, a Dutch producer of insulin crystals, last year
terminated supplies to Bryntsalov over concerns he was using the crystals in
formulas not yet approved by health regulators. ``His name and his company
were involved in activities that we did not consider appropriate,'' says
Peter van Straelen, Diosynth marketing and sales manager.
   Most troubling are the questions raised about the quality of his
insulin--a medicine on which 500,000 diabetics in Russia depend for their
lives. Hospitalized last spring after injections of Bryntsalov-made insulin
failed to help him absorb blood sugar, junior army officer Anatoly Lukoshkin,
46, from the Moscow-area town of Domodedovo, now says he would like to ask
the tycoon: ``Why are you producing insulin that is causing suffering to
people?'' The apparent problem: ``It's not concentrated enough,'' says Irina
Zamotina, a medical consultant for the Mordovia region, who conducted a
two-month test of the product last year after patients there said it wasn't
working. There have been similar patient complaints in Volgograd, too.
   Nor is insulin the only Bryntsalov product about which questions are being
raised. At a meeting of Western drug company representatives last November in
Moscow, an investigator for French pharmaceutical firm Aventis said the
manufacturer suspected Bryntsalov was counterfeiting a batch of Aventis'
Claforan, the leading antibiotic sold in Russia. Aventis pulled the entire
legitimate batch--several hundred thousand vials of the medicine--from the
Russian market because it was difficult for hospitals to tell the difference
between real and faked product. Russia's Interior Ministry police are probing
the case.
   Although some Russian regulators have clearly clashed with Bryntsalov, the
tycoon has deep ties to other branches of the government. His drug company,
ZAO Bryntsalov, has a partnership to produce insulin with a research arm of
the Russian Health Ministry--the State Institute of Blood &
Pharmaceuticals--that advises the Ministry's State Quality Control Dept. on
insulin-quality issues.
   The institute gave Bryntsalov a $5 million insulin production line in
1998: The line was purchased initially for the state with foreign credits
guaranteed by U.S. taxpayers' money through Eximbank. A probe of the
government's diabetes program conducted by Russia's budgetary watchdog, the
Audit Chamber, concluded that the move violated federal laws. Then, last Dec.
9, Bryntsalov's company sent a letter to endocrinologists across Russia
citing the institute's ``experts' conclusion'' in support of the letter's
claim that Novo Nordisk is not producing human gene-engineered insulin, as it
says it does, but a synthetic. Novo Nordisk is preparing a suit against
Bryntsalov's company for defamation.
   Meanwhile, Bryntsalov's partner, institute director Georgi Khylabich, is
helping the State Quality Control Dept. evaluate the quality of imported
insulin, including products made by Novo Nordisk. Together, the institute and
the quality control regulators would decide whether to restrict imports of
insulin on quality grounds, Khylabich told BusinessWeek. He said that at this
point he had not formed a firm conclusion on Bryntsalov's claim against Novo
Nordisk. Yet the department last September awarded ZAO Bryntsalov a prized
``GMP'' certificate stating that it met international standards of good
manufacturing practice. Responding in writing to questions posed by
BusinessWeek, Ramil U. Khabriev, the quality control boss, said ZAO
Bryntsalov makes ``duly registered'' insulin.
   Bryntsalov's political connections seem to work wonders in Russia's
regions, too. In Mordovia, Bryntsalov insulin is still being supplied to
patients even though endocrinologist Zamotina, based on her tests,
recommended a switch back to insulin made by producers in Germany, Denmark,
and the U.S. Few patients have that alternative, since the insulin is paid
for by the government, and they lack the funds to buy another brand on their
own. Officials declined to comment, but Zamotina suspects she is being
overruled because of political ties between the local government and
Bryntsalov. When asked about his use of his political contacts to win
government drug tenders, Bryntsalov counters that political influence is no
less important in U.S. business.
   Bryntsalov, a member of Russia's State Duma, the lower house of
parliament, is also championing a bill that would jack up tariffs on drug
imports. But he faces an uphill battle. ``It's aimed at limiting
competition,'' says Duma Deputy Alexander M. Afanasiev, chairman of the
Duma's subcommittee on the pharmaceutical industry. Putin's Kremlin, which is
attempting to bring in more foreign investment, is also opposing the bill.
Ever hopeful, Bryntsalov has enthusiastically joined Putin's Unity party.
Bryntsalov did achieve one victory last year--passage of a bill shifting the
tax burden from vodka producers to distributors--and is planning to restart
vodka production at his Moscow plant.
   At $2.5 billion a year, Russia's pharmaceutical market is small compared
with the $100 billion U.S. market. But Russia's double-digit growth is
attracting foreigners. ``Russia is a totally undeveloped market of 150
million,'' says Jacques Farge, country manager for Aventis in Moscow. Still,
the risks are great. ``It is extremely unfortunate that Mr. Bryntsalov and
his group of companies have become, to a large extent, the face of the
Russian pharmaceutical industry,'' says attorney Paul J. Melling, counsel for
the Association of International Pharmaceutical Manufacturers, a Moscow group
representing foreign drugmakers that do business in Russia.
   Meanwhile, the trading war with Novo Nordisk is costing Bryntsalov a
bundle. To gain ground on the Danish company, whose share of the Russian
insulin market tops 50%, Bryntsalov's company--now holding only about 5% of
this market--is slashing prices by as much as 40%. ZAO Bryntsalov is selling
medicine and related products at an annual rate approaching $200 million,
according to managers, but profits are modest. ``We are prepared to withstand
any losses for the purposes of squeezing Novo Nordisk out of the market,''
says Viktor Kolomin, a senior manager at the plant, whose insulin section is
operating at only 20% to 30% of capacity.
   But Bryntsalov says this is only a temporary predicament. ``We'll master
the production technologies of products   made by foreigners,'' he told
BusinessWeek. ``We make good medicines and the prices are low.'' Asked about
accusations of counterfeiting, he demanded a definition of the practice and
challenged anyone with a claim to take him to court. He added that pirates in
the Russian market are selling faked copies of medicines bearing the
Bryntsalov company name.
   Not everyone has parted ways with Bryntsalov. In some cases, raw-materials
suppliers in the global market may not   know that his company is the end
destination for their product. Diosynth hooked up with Bryntsalov through a
trading intermediary he often uses, Trans-Medica Pharma, a Hamburg company
that specializes in the pharmaceutical substances market. At first, according
to Diosynth, Trans-Medica said that the crystals were bound for Russia. It
only disclosed the final destination--Bryntsalov's company--after Diosynth
insisted on it as a condition for going ahead with the transaction.
   Indeed, Bryntsalov has kept up relations with a key foreign partner--Jack
O. Nutter II, an aide to then Senator Bob Dole in the late 1970s who operates
a Washington, (D.C.)-based lobbying firm, Nutter & Harris Inc. Nutter is the
president of Ferane USA, a Bryntsalov subsidiary that exports drugmaking
equipment to ZAO Bryntsalov.
   Nutter has assisted Bryntsalov on various projects for eight years,
recently arranging for the sale of a seven-bedroom home in Great Falls, Va.,
bought by Bryntsalov for $1.9 million in 1994. On a trip to Moscow last
summer, a failed bid to smooth ties between Bryntsalov and Western
pharmaceutical executives, Nutter got an earful about the tycoon. Still, he
defends Bryntsalov as ``a builder'' attacked by foreign competitors because
he beats their prices. Some Russians just wish the Health Ministry would
crack down on the builder. ``I used to trust the government,'' says Yulia
Mokhova, 70, of Domodedovo, a diabetic who developed kidney complications she
blames on Bryntsalov's insulin.
   Bryntsalov himself, a fitness buff, appears to be in fine health. After
the pre-New Year's repast of suckling pig, the tycoon offers a nocturnal tour
of his possessions. First stop: his ultramodern home on the factory property,
built around an indoor tennis court and containing a swimming pool, Turkish
bath, and sauna. In the bedroom shared by his two young children is a plate
stacked with $50 dollar bills--earned by the eight-year-old boy's
pharmaceutical trading activities, claims Bryntsalov. Then it's over to the
garage, where the standout in his collection of 15 automobiles is an
armor-plated Mercedes S 600 with bulletproof windows.
  And finally, the factory works. The tycoon turns on the lights in the
section where insulin is made and points to a gleaming array of
machinery--$12 million worth of goods, he says. It's what will bring him his
triumph, sure to come, over Novo Nordisk and all of his foreign rivals.
``They think we are some god-forsaken farmers, but we drive Mercedes cars and
we use advanced equipment,'' he says. Russia's ``wild tribes'' will devour
the invaders, as they have always done, he vows. ``We should roll up our
sleeves and fight using all possible means.'' The putative king of
pharmaceuticals is already set to rule.

******

#4
Los Angeles Times
January 19, 2001
Russia's 'Cruel' Soldier Comes Home
Rights groups say Lt. Gen. Vladimir Shamanov is guilty of war crimes in
Chechnya. But voters in a Volga region that elected him governor hope he can
impose order.
By MAURA REYNOLDS, Times Staff Writer

    ULYANOVSK, Russia--There's a word that makes Lt. Gen. Vladimir Shamanov
smile. That word is "cruel."
     Perhaps Shamanov smiles because he's heard it before, that he was
reputed to be "the cruelest general in Chechnya." Perhaps he smiles because
he doesn't really mind the reputation.
     For whatever reason, he smiles, and then answers the question in a voice
that booms like artillery fire.
     "I called in tanks to fire on the locations that were firing on us," he
says. "And three days later, people began to cry, 'Shamanov is cruel. That's
what Shamanov is.'
     "Well, I couldn't care less what kind of Shamanov they call me," the
general-turned-politician continues. "All I care about are the soldiers under
my command, whose lives I answer for. I bear that responsibility. And what
names I get called as a result--that worries me much less. The kind of
general I am is a Russian general."
     Many Chechens and human rights workers believe that Shamanov is a war
criminal. They have documented instances in which troops under his command
summarily shot and killed Chechen residents and looted homes. They also have
documented instances in which Shamanov knowingly ordered his troops to fire
on positions where civilians had gathered.
     "His subordinates are definitely guilty of war crimes, and I believe a
serious investigation would show Shamanov's direct guilt in war crimes as
well, that he ordered them," said Oleg Orlov, director of the Moscow office
of Memorial, the human rights group founded by the late Nobel Peace Prize
laureate Andrei D. Sakharov.
     But most Russians don't share such views. Like Ratko Mladic, the general
who led Bosnian Serb troops during their 1992-95 war, Shamanov is a hero
among his own.
     That's especially true here in Ulyanovsk, a downtrodden Volga River city
and region that was the birthplace of Bolshevik leader Vladimir I. Lenin,
where Shamanov was elected governor last month. His new job is part of a
campaign by a second Vladimir--Russian President Vladimir V. Putin--to bring
order to the nation's unruly provinces.
     "Cruelty, cruelty," mumbled Rimma Vasilyevna, a red-haired caretaker in
this city's grandiose Lenin Museum. "If Shamanov is cruel, it will probably
be better for us. What we need is cruelty."
     Ulyanovsk is a hard-bitten place, a region about 450 miles east of
Moscow with only a handful of large factories to provide jobs for 1.5 million
residents. Although state statistics show it ranks about average in income
and output, discontent runs deep.
     "We've been standing still while everyone else moved forward," said
40-year-old Stanislav Pilipenko, a military officer. "I hope Shamanov will
carry us forward."
     For the past 14 years, since well before the 1991 collapse of the Soviet
Union, Ulyanovsk has been run by one man: former Communist boss and
subsequent governor Yuri Goryachev. He kept bread cheap--about half a cent a
loaf--but did little else, voters say. He was defeated by Shamanov, 56% to
24%, a hefty margin considering that Goryachev controlled all the local
media.
     Voters acknowledge that they knew little about Shamanov when they cast
their ballots except that he's a certifiable war hero: He was decorated twice
with the nation's highest honor, the Hero of Russia.

     Putin Comes to Aid of Criticized Commander
     And they know he has the Kremlin's blessing. When Shamanov came under
criticism last winter for his troops' brutality, Putin came to his defense,
vowing that Russia "would never abandon" such a general.
     Indeed, Putin is relying heavily on generals in his drive to strengthen
state control of the provinces. Last summer he appointed seven presidential
"viceroys," each charged with keeping an eye on a dozen or so regions. Of the
seven, five are generals in the military, police or former KGB who, like
Shamanov, are on leave but maintain their rank.
     The Ulyanovsk region, it seems, is moving straight from communism to
Putinism.
     In an interview last week on his first working day as governor, Shamanov
in effect acknowledged that the Kremlin asked him to run, calling it "a
matter from the sphere of state relations."
     And he took umbrage when asked about the incident in Chechnya that has
triggered the most criticism: the siege of Alkhan-Yurt, a village seven miles
south of Grozny, the separatist republic's capital.
     For most of the war, Shamanov--as commander of the 58th Army--was one of
the top three Russian generals in the war zone. He directed the western
front, which at the time of the siege of Alkhan-Yurt in November and December
1999 was encircling Grozny from the west and south. Shamanov personally
directed the attack on Alkhan-Yurt, which he described as a choke point to
block the rebels' retreat from the capital.
     According to a report by Human Rights Watch, Shamanov ordered artillery
strikes on the village of 9,000 without taking serious precautions to ensure
that civilians would not be targeted.
     Once the town was seized, his troops went on a rampage, killing at least
17 and perhaps as many as 40 civilians, pillaging their homes and raping
several women, according to the report. Some of the looting was videotaped by
a Russian television crew and witnessed by a deputy prime minister. There was
enough furor that Shamanov was called to Moscow to give an account.
     But just days before former President Boris N. Yeltsin resigned a year
ago and Putin became president, the uproar suddenly abated. Shamanov was
awarded his second Hero of Russia. The military prosecutor announced that he
could find no evidence of a crime having been committed in Alkhan-Yurt.
     In the interview, Shamanov insisted that he gave civilians ample time to
leave before calling in the artillery.
     "When you're being fired at and your soldiers are dying . . . what are
we supposed to do, just stand there and let them fire at us?" Shamanov asked.
"We said, peaceful civilians, please leave this place, since you haven't been
able to throw the bandits out by yourselves. . . . So the civilians leave,
and afterward we begin to deal [with those left] with the language of
firepower."
     And he asserted that his troops had never looted, calling the allegation
"absolute nonsense."
     From friends and foes alike, Shamanov gets credit for fiercely defending
his troops. Unfortunately, his critics say, this often came at the expense of
Chechen civilians, who hold the same citizenship as his soldiers.
     "He has a serious xenophobic streak," said Orlov of Memorial. "He's
cruel, but it comes from his sense of duty. He's honest about it, but that
doesn't make it less frightening."
     Shamanov said four commissions, naming one from the Organization for
Security and Cooperation in Europe, had reviewed the events in Alkhan-Yurt
and found no wrongdoing. But Mans Nyberg, spokesman for the OSCE in Vienna,
said the group has not investigated Alkhan-Yurt or any other allegations of
human rights abuses in Chechnya.
     Alkhan-Yurt is not the only instance where questions have been raised
about Shamanov's actions. Human rights workers can rattle off the names of
other towns and villages where Shamanov's forces are believed to have looted
and pillaged and killed: Katyr-Yurt, Shami-Yurt, Gekhi-Chu. Even now, while
Shamanov is on leave, unidentified groups of Russian troops arrive in
villages and sow terror by calling themselves shamanovtsy: Shamanov's men.

     A 'One-Man Curse on the Chechen People'
     Aslambek Aslakhanov, a retired police general who is Chechnya's
pro-Kremlin representative in the Russian parliament, calls Shamanov a
"butcher" and a "one-man curse on the Chechen people."
     "Chechens talk about Shamanov like a plague that has descended on their
heads, a disease like AIDS," Aslakhanov said. "He is drowning in blood. He
cynically believes that all Chechens--men and women, even children--are
bandits."
     Diederik Lohman, director of Human Rights Watch's Moscow office, said,
"The forces under Shamanov's command are most often named as perpetrators of
torture and other human rights abuses in Chechnya."
     At an Orthodox Christmas festival in Ulyanovsk's town square, Venera
Sokolova, 52, was charging 40 cents for a horse-and-sleigh ride. She has high
hopes for Shamanov and said she had never heard about Alkhan-Yurt.
     "How can you avoid being cruel in a war?" she said, her iridescent pink
lipstick glistening. "I'm sure he had to do what he did. I'm sure he had his
reasons. And besides, we don't know the real facts."
     "War is war. Cruelty is part of it, isn't it?" said Farit Avbazov, a
36-year-old construction worker at a nuclear power plant. "We need more
people like Shamanov. Under him, people will do their work. A lot of the
banditry we have here comes from Chechnya. First we have to solve the problem
there, and then we can deal with the problem here."
     Indeed, that is the overriding sentiment here and around Russia: that
there has been too much disorder for too long. And that, said Semyon
Zasmanovsky, a 70-year-old retired engineer, triggers an age-old Russian
reflex.
     "We have no democrats and no democracy," he said. "All we know how to do
is vote for someone who will be a voshd [a strong leader]."
     "Slowly but surely," Shamanov said, "[Putin] is uniting a new formation
of people around him. What we are witnessing is an unmistakable changing of
the guard of the Russian elite.
     "And your humble servant, it would seem, is one of that new Russian
elite."

*******

#5
New York Times
January 14, 2001
The Grad Student Sent into The Cold
By John Sullivan

The knock on the door came on a late October afternoon in 1999 when Joshua
Handler was about to leave his Moscow apartment to do some shopping.

"A message from Igor from Obninsk," someone whispered into his intercom.

Mr. Handler, puzzled, opened his door and came face to face with large man
wearing a colonel's uniform. It was the Russian counterintelligence police.
They were there to search his apartment.

"One minute the hallway was empty," Mr. Handler said in a recent interview
in his office at Princeton University. "The next it was filled with 10
people."

For the next five hours, Mr. Handler stood by as a team of agents combed
through his one-room apartment, reading his papers and peering at his
laptop computer. The colonel handed Mr. Handler his office phone number,
and the officers left, taking his papers and his computer.

"They were very polite," Mr. Handler said. "They did not push in the door,
they did not break anything."

It all seemed bizarre, Mr. Handler recalled. He was not a diplomat or a
spy. He was a graduate student, in Moscow to study arms control
negotiations between the United States and Russia. One minute he was
thinking about dinner, and the next about John le Carre.

In the year since the police searched his apartment, Mr. Handler has the
odd distinction of being the infamous graduate student at Princeton
embroiled in a high-profile Russian espionage case. Although he has never
been charged, or even identified as a suspect, Mr. Handler still sees his
name pop up periodically in the Russian news media. And, after leaving the
country soon after the search, he has not been able to return to Russia to
complete his doctoral research.

Russian experts say Mr. Handler's brush with the Russian intelligence
system is a very real problem facing researchers and journalists there. As
Russia tries to define what information is secret and what is public, the
line often shifts, and researchers can find that information that was open
one month is forbidden the next.

"Russia is still a place without rules," said Celeste Wallander, senior
fellow at the Council on Foreign Relations. "When one talks to people in
Russia, the rules are not clear about what is secret and what is not, what
is legal and what is not."

Mr. Handler's apartment was searched on the same day that a Russian friend,
Igor Sutyagin, was detained by the Russian security service. Mr. Sutyagin,
a researcher at Russia's U.S.A.-Canada Institute, has since been arrested,
and charged with treason. According to Web sites posted by Mr. Sutyagin's
supporters in Russia, the government has not produced any evidence that he
was engaged in spying.

The legal warrant the agents showed Mr. Handler claimed that the
justification for his search was an investigation labeled "Case 52," which
is the official name of Mr. Sutyagin's case. "It said I was not accused but
they had the right to search my apartment because I might be a witness,"
Mr. Handler said. He said he did not know what link he could have to the
case and has never been given any specifics.

An evening with the Russian state security service may not be part of any
typical graduate research project, but then again Mr. Handler is not a
typical graduate student. Instead of spending the last 10 years in
libraries or classrooms, he spent the time traveling the world for the
environmental group Greenpeace.

"In the last 10 years, I spent about 2.5 years in Russia," Mr. Handler
said. As a research coordinator for Greenpeace's nuclear-free seas
campaign, he spent a great deal of time investigating contamination caused
by nuclear accidents and arms production.

"I spent months in the Russian far east and far north investigating these
problems on the ground," he said. "We brought our ships twice to
Vladivostok and twice to Murmansk to look at nuclear waste."

But Mr. Handler said he was never involved in anything like the current
situation when he worked for Greenpeace. As far as he knows, the visit from
intelligence agents had nothing to do with his earlier work for the
environmental group.

Mr. Handler telephoned the American embassy as soon as the agents left his
apartment. At a subsequent interview at the embassy, he recalled, American
officials made it clear that Mr. Handler had become involved in something
over his head.

The embassy strongly recommended his quick departure, said Mr. Handler,
adding that the message he received was that "basically, things were going
on that I did not understand and I would be better off leaving." He said
the consulate had contacted the Russian government and "my staying was not
being helpful."

Mr. Handler said he was followed around Moscow by teams of men for the next
several days and decided to leave because it had become impossible to
continue with his research.

Last summer, Harold Shapiro, the president of Princeton University, wrote
the president of the Russian Academy of Sciences protesting the security
service's actions. Dr. Shapiro said any suspicions of Mr. Handler were
"totally groundless," and said "such treatment of a U.S. academic
conducting open research in Russia is extremely destructive to the
important collaborative relationships between Russia and U.S. researchers."

Mr. Handler said he had spoken several times to Russian investigators by
phone, although they have not offered any further information about the
search. Nor have they returned his papers and computer.

*******

#6
Date: Thu, 18 Jan 2001
From: "John P. Deever" <john@isar.org>
Subject: Publication: NGOs and Caspian oil extraction

Dear JRL readers:

ISAR: Initiative for Social Action and Renewal in Eurasia, a US-based NGO,
invites you to download free copies of our recent publication "Reaching Out to
Protect the Caspian"-the Winter 2001 issue of Give & Take: A Journal on Civil
Society in Eurasia-from http://www.isar.org.

FSU-based NGO activists who contributed to this issue explore the combination
of environmental problems in the Caspian, which go beyond the well-publicized
sturgeon and seal disasters. Threats include radionucleotides that have
drained into the Caspian after years of underground nuclear testing, not to
mention the obvious risks posed by increased oil extraction across the
region.
Local NGO activists-well aware of the need to balance economic development
with
environmental protection-discuss successes and failures in their dealings with
the giant transnational corporations that have stepped up production in the
region. Unusual for ISAR is the inclusion in this issue of the voices of those
who work in the oil industry itself; for example, Matthew Bateson of Offshore
Kazakhstan International Operating Company (OKIOC) persuasively describes his
struggles to reach compromises with environmental NGOs in Kazakhstan. Bateson
and others who attended ISAR's September 2000 Seminar on NGO Interaction with
Transnational Corporations in Almaty, Kazakhstan engaged in spirited dialogue
during a roundtable at that event, one which is transcribed in this issue of
Give & Take as well.

ISAR does not sell subscriptions to Give & Take, as we did with Surviving
Together, our previous quarterly magazine-one which JRL readers may remember.
Instead, we offer Give & Take as a benefit of membership in our
organization.
To build readership, we are publishing Give & Take online free of charge at
http://www.isar.org. We offer it for download in Adobe Acrobat (.pdf) at no
cost as well.

The print version ($5 each, or contact us for reduced prices for multiple
copies) includes an 11" x 25" annotated poster map of the Caspian, delineating
regions under threat and demonstrating how these threats combine to harm
populations in all six littoral states (including Iran). The map is
double-sided with English and Russian on either side. Memberships-individuals
$35, NGOs/universities $45, and corporations $65-include a year of Give & Take
plus "ISAR in Focus," a newsletter describing the programmatic activities of
ISAR's field offices in Moscow, Novosibirsk, Vladivostok, and elsewhere in the
FSU.

Please send a $5.00 check drawn on a US bank to: ISAR, 1601 Connecticut
Avenue,
NW, Suite #301, Washington, DC 20009
--
John P. Deever
Publications Program
Initiative for Social Action and Renewal in Eurasia
1601 Connecticut Ave NW #301
Washington DC 20009
tel: 202-387-3034, fax: 202-667-3291
http://www.isar.org

******

#7
From: "Andrei Liakhov" <liakhova@nortonrose.com>
Subject: On Soviet Debt and CMEA
Date: Fri, 19 Jan 2001

On Soviet Debt and CMEA

It would be totally wrong to suggest that "the realistic terms of trade in
intra-CMEA exchange and the true value of the transfer-ruble will remain
mysteries forever" as was suggested by Mr.Vogel[5035]. While there were and I
think still are numerous reasons why Russia behaved the way it did during
CMEA dissolution it does not mean that trade inside CMEA was poorly
organised and/or accounted for. Even though the underlying principle of that
trade was essentially barter, the exchange ratios of e.g. Soviet gas for
Hungarian canned vegetables still had to be based on something. That
something was called CMEA Pricing Mechanism, the essence of which was to
allow the exchange ratios to be calculated on the basis of domestic (read:
heavily subsidised) prices for the relevant goods. Thus the price of
Siberian gas supplied to GDR was exactly the same as supplied to Latvia or
Lithuania (i.e. bearing very little resemblance to the real price at which
it was supplied to FRG). However the price of Karl Ceiss microscopes or
binoculars supplied in return (or ships and railway cars) was essentially
the same as set by the GDR Planning Committee (or Ministry of Economy, I
can't remember which one was actually responsible for these things). The
system was designed with the ultimate goal of facilitating rapid industrial
growth within the Community through supply of cheap energy carriers and
industrial machinery (the idea here was that e.g. GDR would be able to
produce very cheap high quality industrial machinery which would help to
keep low the prices of e.g. light agricultural aircraft produced in Poland
which in its turn will be cheaply sold to Hungary thus driving prices of
canned food supplied to the USSR down). Thus I would not dare to state with
any degree of surety that if that "Pandora box of arguments about economic
exploitation  in CMEA" is open in any time in the future, former partners
would be successful in  showing that they suffered "economic damage caused
by Soviet imposition of a harmful economic system" as at least in some cases
(like Bulgaria (simply see where its agricultural sector is now) and to a
lesser extent the same Chech Republic) the countries were able to restore
and develop its post war industrial potential solely (Bulgaria) or largely
(CSSR) due to the direct Soviet support and, later, through CMEA mechanisms.
While the figures of hypothetical losses caused by failure to export to the
World markets is uncalculable (taking into the account the history of post
war economic development in Europe it is plausible to suggest that the "Club
of 6" would have excluded its Eastern neighbours for the first 20 post war
years, they would be in no position to compete with Brits, Japanese and
Americans in other markets, and the World economic crisis of the 70ies-early
80ies could have excluded these countries from Europe too) the gains and
losses existed between various CMEA members are easily establishable (see
below). The non Russian CMEA ex-members understand this perfectly well, that
is why this issue was never raised in any public statements by officials in
these countries. 
 
However, the system never functioned properly, that is also a fact. I would
not go into the reasons of its failure, the only comment I'd like to make is
that to make it successful the members had to have a high degree of
political integration and not simple dominance of one member which in
addition could not allow its citizens to be mass exposed to even the
"mildest" of deviations from the "party line" popping out from time to time
in one member state or the other.

In terms of books and accounts - CMEA had plenty thanks to several thousand
bureacrats compiling endless reports, analyses and tables.

All this was literally abandoned in one week, sealed in the vast CMEA HQ in
Moscow and then.... my hope is that it was archived properly. But it's just
a hope. Unfortunately in the early 90ies there were too many vultures
circling around CMEA carcass looking to bite off the most lucrative piecies
(like International Investment Bank). Any such exercise required the
document trail to be destroyed. However as almost all the CMEA documents
were duplicated for the KGB, something most probably survived in the KGB
archives.

It must also be bourne in mind that the team of amateurs who by the will of
fate moved into the Kremlin in '92 was not interested in the slightest to
even define (forget about "defend") Russian national interests, which meant
a feeble, submissive and passive foreign policy, total dependence (imagined
or real - it is not a question of these remarks) on foreign aid/credits and
total ignorance (often deliberate) of the problems and issues they inherited
from the previous regime. Besides Yeltsin was never a man of numbers even at
his best times who liked to play a generous granfarther to the Heads of
neighbour states. His lieutenants were too busy filling their pockets to
sort out outstanding CMEA issues, which (i) would not produce any money in
their wallets and (ii) would not give them political weight in the eyes of
Yeltsin and/or IMF/WB/Clinton Administration.      

The current Russian Administration while willing not to rock the boat too
much is looking for issues where it can score points relatively easy. CMEA
sorry saga is probably one of those as no Kremlin oligarch of note has
staked it as its own territory, hence the test probes in that direction by
various junior members of the Government. They are designed to test how safe
it would be to start sorting out CMEA jungle and whose interests VVP
Administration will have to calculate in.

As to Ms.Latynina piece so praised by Mr.Vogel - I would not consider it as
a serious journalism, as at least one has to know the subject matter and be
able to prove the allegations she makes in court. The problem with writers
like Latynina, who are numerous in Russia these days is that in 99% of cases
they repeat rumours or somebody else's opinion expressed in private as a
given, established fact uncovered and proven by that writer. As such
writings are impossible to publish in the West due inter alia to well
developed libel laws, a lot of Western observers take such Russian writings
on its face value. Believe me, they very rarely are what they purport to be.

And finally (David would excuse me as I have not marred DJRL with my ink too
much lately)and just to demonstrate how far off the mark Ms.Latinina is and
as a lawyer dealing with similar arrangements as part of my daily life, I
would like to comment that from purely legal-"mechanical" point of view the
payments to the Paris Club could be as easily diverted to private pockets as
the London Club debts. The reasons of the recent highly controversial moves
by the Russian Government in respect of these debts could be miles and miles
from those stated by Ms.Latynina (and they most probably are!)

Comments and arguments are most welcome.

*******

#8
Vek
No. 2
2001
[translation from RIA Novosti for personal use only]
DO WE NEED ALIENS?
Migrants can degenerate into a dispossessed and uprooted group
By Irina DEMINA
    
     Russia has not encouraged immigration until recently. The
problem of migrants came to our attention only when the
demographic situation deteriorated in the extreme.
     Analysts say that the Russian population is diminishing by
1 million a year. The president has recently admitted that the
optimal figure would be 500 million, but now there are only
145.6 million people in Russia. He believes that the country's
potential should grow through the attraction of ethnic Russians
who are currently living in ex-Soviet states. Over eight
million people came to Russia from them in the past ten years,
but four million emigrated from the country in the same period.
     Illegal immigration into Russia is growing every year. In
expert estimates, some 1.5 million people are living illegally
in the country, and fines are not an effective measure of
fighting illegal immigration. Besides, the same persons, who
have been living in Russia for five to eight years, are fined
now.
     This January the Russian government is to receive a
concept of the national migration policy. Olga Vorobyova, head
of the Migration Policy Department, says the draft concept
should be approved by May 2001 in order to be included in the
2002 budget.
The monetary situation in this sphere has never been good. The
federal migration programme was incorporated into targeted
programmes to be financed from the budget in 2002. Until 1998,
allocations to these programmes were provided only in half, and
it was only in 1999 that they received 100% of scheduled
allocations. As of October 1, 2000, they received only 51% of
the planned allocations.
     Premier Mikhail Kasyanov says that the regional, migration
and national policy should be harmonised. It has been suggested
that a single agency (ministry) should be created for this
purpose. But such coordinating organisation existed before,
meaning the government commission on the migration policy,
established in 1998. It expired without attaining any results.
The migration service is showered with criticism, but none of
its constantly changing heads was called to account for
drawbacks.
     In the meantime, the migration situation has been
deteriorating, becoming the most serious challenge to the
existence of the country, say specialists.
    
*******

#9
McDonald's fast food presence in Russia continues to expand
Interfax

St Petersburg, 18 January: McDonald's in 11 years has invested over 215m
dollars in Russia, senior manager of McDonald's in St Petersburg Olga
Yeliseyeva said at the opening ceremony of the 60th outlet in Russia and the
eighth in the city.

Last year McDonald's opened eight outlets in Russia: five in Moscow and one
in Moscow Region, Kazan and St Petersburg each.

The network is operating in 18 Russian cities and purchases over 75 per cent
of its materials from over 100 Russian producers.

Yeliseyeva said that in the next few years her company plans to annually open
15-20 outlets expanding to new territories.

The food-processing and distributing McComplex supplying the network is
located in Moscow. At the end of January McDonald's will be marking the 11th
anniversary of its operations in Russia.

******

#10
strana.ru
January 19, 2001
Russian officials boycott George W. Bush's inauguration celebration in Moscow

It has become known to Strana.Ru that there is a maturing opinion among the
invited leading Russian representatives of the presidential administration
and the government to boycott the reception at the U.S. Embassy in Moscow in
the evening of January 20 commemorating the inauguration of the U.S.
president-elect.

The reception is being given in honor of the inauguration of the newly
elected President of the United States of America, George W. Bush, and is to
take place from 7:00 p.m. to 10:10 p.m., exactly at the time when the newly
elected American President will be sworn in.

This can be regarded as an extremely scandalous and unprecedented
demonstration on the part of the Russian state elite: Russian ministers,
their first deputies and a number of ranking officials from the government,
as well as prominent figures from the presidential administration and its
subdivisions were invited to the ceremony.

"This is not an official decision, and because of that, in the given
situation, I would not like to speak out as an official person," one of the
governmental spokesmen told our correspondent. "But as for myself, we have
decided that it would be incorrect to go to the U.S. Ambassador's residence
in Moscow and smile in front of the American diplomats, including those who
issued a visa to Borodin, possibly knowing what kind of reception was in
store for him (in the United States). The Russian government spokesman
explained that, of course, the matter did not concern specific figures from
the U.S. Embassy.

*******

CDI Russia Weekly:  http://www.cdi.org/russia

Johnson's Russia List Archive (under construction):  http://www.cdi.org/russia/johnson