February 8, 2001   

This Date's Issues:   5080 • 5081 

Johnson's Russia List
#5080
8 February 2001
davidjohnson@erols.com

[Note from David Johnson:
1. Reuters: Putin backs Russian pensions shake-up.
2. AFP: Russia approves Putin plan to weed out political parties.
3. BBC Monitoring: Communist leader slams executive authority. (Zyuganov)
4. Novaya Gazeta: Corruption is among the main problems for Russia's secret services.
5. Izvestia: Herman Gref and his team are working on a new economic development plan.
6. Robert Huber: The Edward L. Keenan NCEEER Endowment. 
7. RIA: CRIMINAL BUSINESS UNDERMINING ECONOMIC SECURITY OF RUSSIA.
8. Reuters: Russia independent TV says may be forced off air.
9. gazeta.ru: Chubais to Sacrifice Deputies.
10. RFE/RL: Russian Society Faces Human Rights Emergency. (Views of Lev Ponomaryov)
11. Andrew Miller: Re 5074-Anti-American Pop Music.
12. The Carnegie Moscow Center: Lilia Shevtsova, Elective Monarchy Under Putin: Perspectives on the Evolution of the Political Regime and its Problems.
13. Washington Times: Bill Gertz, Joint U.S.-Russia Exercises Heighten Fears Of Espionage.
14. UPI: Berezovsky offers to settle NTV's debts.]


******

#1
Putin backs Russian pensions shake-up
 
MOSCOW, Feb 7 (Reuters) - Russian President Vladimir Putin on Wednesday
backed a reform of the pensions system -- a fresh assault on Soviet-style
social care which is expected to become an intolerable burden on the budget.

A change in the way pensions are paid is also one of the key structural
reforms preached to Russia by the IMF and World Bank. But the complexity of
the task in a country where people have learnt to distrust the government is
immense.

"The current pension system has outlived itself," Putin said in televised
comments at a meeting of senior officials.

The head of the country's pension fund, Mikhail Zurabov, was quoted by
Russian news agencies as saying after the meeting that Putin was to sign a
decree to form a special pensions reform committee, to be headed by Prime
Minister Mikhail Kasyanov.

Under the current Russian system, employers pay a social tax to the state
pension fund, which then pays pensions.

But the government says that, without reform, this system will collapse as
the birth rate falls and the population ages.

Experts predict that by 2020, there will be one worker for every pensioner.
In around 15 years, they predict that a gap of around 200 billion roubles ($7
billion) will open up in the pension fund which the budget will be unable to
fill.

"The new pension reform should preserve the rights enjoyed by today's
pensioners and those of people who have not yet retired," Russian news
agencies quoted Putin as saying.

The government is working on a system under which, from 2002, part of the
salary will be put into an account which will earn interest, while the rest
will go to the pension fund.

The government has said it expects to accumulate around nine trillion roubles
in the account by 2009, which would be invested in low-risk instruments.

However, where and how to invest the money is one issue which the government
must decide. People have little trust that the state can look after their
money after soaring inflation in the early 1990s reduced savings in state
banks to a pittance.

People are also estimated to be holding billions of dollars in private
savings at home because of their distrust of banks.

($1-28.47 Rouble)

******

#2
Russia approves Putin plan to weed out political parties

MOSCOW, Feb 7 (AFP) -
Russia's parliament approved President Vladimir Putin's plan Wednesday to
limit the number of political parties as part of the Kremlin's campaign to
centralize power.

The increasingly compliant State Duma (lower house) approved the
controversial Kremlin measure 280-109 in the first of three required readings.

Putin argues that the law will keep criminals and corrupt business barons
from funding fly-by-night parties that carry them into parliament and buy
them the immunity from prosecution that goes with a State Duma seat.

But Putin's outnumbered Duma opponents respond that he is simply creating a
political system in which Russia has a small number of centrist parties who
are on cozy terms with the Kremlin.

Wednesday's vote largely depended on the Kremlin's ability to win over the
more liberal Duma deputies who supported Putin's election and have backed his
legislation so far.

"We want to protect our political parties from their various sponsors, some
of whom are known to have criminal links," Central Election Committee
chairman Alexander Veshnyakov told Duma deputies.

"This legislation will help prevent parties being funded by corrupt
financiers, who use mischievous political strategies," said Boris Gryzlov of
the pro-government Unity faction.

However the largest Duma group, the Communists, vowed to fight the
legislation until it was amended to ensure that the Duma did not lose its
voice -- and that the parties secured official state funding.

"We will be voting against," said Communist Party boss Gennady Zyuganov.

"The presidency is trying to influence the Duma, after already taking care of
the Federation Council (upper house)," where Putin introduced instrumental
changes last year.

"This law will move us further away from democracy, influential political
parties and a strong parliament," argued independent Duma deputy Vladimir
Ryzhkov.

Putin's measure bans parties with less than 10,000 members or registered
offices in fewer than half of Russia's 89 regions.

The law would only allow registered political parties to participate in
national polls, excluding the more loosely organized regional movements,
which are currently allowed to field candidates at election time.

"We have agreed that this bill should be approved in the first (of three
readings), and then it can be perfected," Putin said upon introducing the
legislation.

Russian news reports suggest that the measure would outlaw two thirds of the
existing 180 political movements in Russia.

Under Putin's plan political parties would also be granted official state
funding after the 2003 Duma polls.

******

#3
BBC Monitoring
Russia: Communist leader slams executive authority
Source: NTV, Moscow, in Russian 0900 gmt 07 Feb 01

Now to Russian politics. The [State] Duma begins consideration of the draft
bills on political parties. [omitted: known facts]

Communist leader [Gennadiy] Zyuganov has said that today his faction will
unanimously vote against the president-proposed bill, which, he believes,
would enable bureaucrats to put their terms to political parties in case it
becomes a law.

[Zyuganov, speaking to camera in the Duma premises] We shall vote against
[the bill]. I had a detailed discussion with [Central Electoral Commission
Chairman Aleksandr] Veshnyakov. We gave our support to the bills on the Duma
[as heard] and on the elections of [regional] administrations' heads, but the
Electoral Commission failed to provide for fair elections and the executive
authority failed to provide for normal representation of political parties
and movements at the mass media.

The executive authority is unable to cope with any task. It cannot warm up,
feed, and normally manage [the country]. It got the Duma in its pocket and
now is trying to do the same with the Federation Council. It put forward the
[draft] bill on parties, which actually puts all parties under surveillance.

[Omitted: a Union of Right Forces MP says his faction would vote for the
presidential bill if their amendments are reckoned with in the second
reading; a Unity MP says Unity has some amendments as well]

[broadcast at 0904 gmt; video shows deputies on the Duma premises]

******

#4
Novaya Gazeta
No. 6
February 2001
Corruption is among the main problems for Russia's secret services
THE FEDERAL SECURITY SERVICE IS LOSING SKILLED STAFF, WHO ARE MOVING
INTO THE PRIVATE SECTOR. MANY OTHERS SPEND THEIR FSB WORKING HOURS
ENGAGED IN THEIR OWN BUSINESS AFFAIRS. THERE IS ALSO THE PROBLEM OF
RISING CORRUPTION - FSB AGENTS ARE ASSIGNED TO PRIVATE COMPANIES, AND
TAKE BRIBES FROM THEM.
[from WPS Monitoring Agency, www.wps.ru/e_index.html]

     According to our sources close to the top at the Federal Security
Service (FSB), the most skilled and active staff are continuing to
leave this agency. They are mostly specialists who have worked at the
FSB for years.
     A source notes that most FSB staff who are meant to be monitoring
private companies actually spend entire days at those companies,
planning financial transactions at their offices, and reaching
agreements with their colleagues about joint financial operations.
They can make money by finding out the address of a potential business
partner, collecting information about the person, and checking whether
that person is a secret service agent.
     Another problem is connected with St. Petersburg FSB staff who
come to Moscow. As a rule, they get promoted in Moscow, they view
Muscovites with an inherent degree of suspicion, and they do their
best to prove their skill to Muscovites. However, they don't know the
ropes, i.e. they do not have the necessary links and contacts in
Moscow.
     But the main problem is the alarming rise in corruption within
the FSB. Money is all. Entire groups of FSB staff work for companies
in the private sector, sometimes even from their FSB offices.
     There is a widespread and legal practice of sending FSB staff to
work in the field at specific commercial banks or other companies,
supposedly to take care of vital state business. Such agents are also
sent out to state bodies (from the Duma to the Auditing Commission).
     Everywhere you look, there are small groups of secret service
agents, taking care not only of the state's interests, but also their
own personal financial interests.
     Business owners often ask FSB managers to send specific agents to
their firms who have been recommended to them by FSB agents previously
working there.
     It is also known that business owners and managers of state
agencies actively "feed" the bosses at the FSB, especially on such
occasions as birthdays or holidays. Usually they give money - from
$50,000 to $100,000.
(Translated by Kirill Frolov)

*******

#5
Izvestia
February 7, 2001
Herman Gref and his team are working on a new economic development plan
By Andrei Kolesnikov
HERMAN GREF AND HIS TEAM HAVE STARTED WORK ON THE ECONOMIC PROGRAM
FOR 2002-04. HOWEVER, THE CABINET IS FALLING BEHIND WITH REFORMS - AND
THEREFORE THE PROGRAM FOR 2002-04 WILL BE DELAYED BY TWO YEARS. NO
ACTION HAS BEEN TAKEN ON THE MOST IMPORTANT REFORM AREAS, LIKE NATURAL
MONOPOLIES AND PENSIONS.
[from WPS Monitoring Agency, www.wps.ru/e_index.html]

     The architects of the Gref economic development strategy have to
work out a program for 2002-04. The Cabinet is scheduled to consider
this program in mid-March. Before that, supposedly on February 22, the
Cabinet will consider a program for the next decade prepared by a
State Council commission headed by Khabarovsk Governor Viktor Ishaev.
     First, each member of Gref's team will prepare a plan for a
particular sector. Then a month-by-month schedule will be worked out
for the steps in the plan.
     Meanwhile, the strategic program of Ishaev's working group is
being completed. Some parts of the Ishaev strategy have been taken
into account by Gref's team, but the basic liberal premises of the
strategy will not be changed.
     There are many different assessments of progress on implementing
the plan of measures for 2002-04. On the one hand, the official
figures aren't too bad: 72 items of legislation are being prepared, 62
have been submitted to the Cabinet or the Duma, and some of them have
passed the first reading. However, the most important reforms -
restructuring the natural monopolies and reforming the pension system
- are not being implemented yet. Many reforms - such as land reform,
social reform, restructuring natural monopolies, and pension reform -
are being delayed for political reasons, since they are not popular.
     President Putin has repeatedly stressed the need to fast-track
bills aimed at deregulating the Russian economy. However, this package
of bills is still stuck somewhere in the Economic Development
Ministry.
     The Cabinet is falling behind with reforms - and therefore the
program for 2002-04 will be delayed by two years.

******

#6
Date: Wed, 07 Feb 2001
From: Bthnceeer@aol.com (Robert Huber)
Subject: the Edward L. Keenan NCEEER Endowment.

NCEEER is pleased to announce the creation of the Edward L. Keenan NCEEER
Endowment. With substantial contributions from a number of individuals, the
Endowment will strengthen NCEEER's resources for the support of advanced
research for Americans and colleagues from the former Soviet Union and
Central and Eastern Europe.

NCEEER is delighted that long-time supporter and friend of NCEEER, Edward L.
(Ned) Kennan, Professor of History at Harvard University, and Director of the
Dumbarton Oaks Research Library and Collection, has enthusiastically agreed
to lend his name to the Endowment.  We are pleased to honor Ned's
distinguished career and extensive contributions to the field of Eurasian and
East European studies.  Ned was there at the creation of NCEEER, and he
personifies our scholarly mission.

As a result of a number of public and private partnerships, NCEEER has
emerged as the largest supporter, among national research organizations of
postdoctoral research in the humanities and social sciences concerning
studies of Eurasia and Eastern Europe.  Nevertheless, the external funding
environment is an uncertain base of support for NCEEER's programs.  Creating
an independent endowment is essential to ensure that NCEEER can continue, as
it has for over twenty years, to provide the resources that scholars need and
policy makers use for research about Eurasia and Central and Eastern Europe.

For further information on the Keenan-NCEEER Endowment, or if you wish to
make a contribution to the Endowment, consult our web page at www.nceeer.org.

Best,
Dr. Robert T. Huber
President, NCEEER

******

#7
CRIMINAL BUSINESS UNDERMINING ECONOMIC SECURITY OF RUSSIA

MOSCOW, 7 February, 2001. /RIA Novosti correspondent Gennady Lisenkov/.
Chairman of the State Duma security committee Alexander Kulikov announced on
Wednesday that the shadow economy had become a matter of national concern
rather than a departmental law-enforcement issue, as the current level of
criminal business was seriously undermining the economic security of the
state. The deputy based his position on the fact that, according to him, 40%
of the country's economy was currently engaged in the shadow sector.

Kulikov explained that, in the opinion of various experts, the budget was
only receiving 50% of liable taxes. The overall figure of so-called "dead"
tax-payers, i.e. those juridical persons who are registered, but do not
present their accounts to the state tax inspectorate and do not pay taxes,
accounts for 30% of all tax payers.

The deputy said that this money "works" in parallel commercial structures of
various types of filial companies and dummy firms in economic areas where
high returns can be made: alcohol, gambling and show business. Kulikov
suggested that the criminal capitals were then laundered through investments
in highly profitable shares and real estate.

While referring to experts from the Federal Tax Police, the deputy claimed
that the shadow economy had been legalised to a considerable degree, which
had led to its transformation into a whole empire involving massive
resources.

******

#8
Russia independent TV says may be forced off air
By Peter Graff
 
MOSCOW, Feb 7 (Reuters) - Russia's only independent national television
station said on Wednesday it could be forced off the air after special police
and prosecutors sealed computers at its bank.

The head of the natural gas monopoly Gazprom (GAZP.MO) (GAZPp.L), locked in a
battle to wrest NTV television from its founder, took out a full-page
advertisement in the Wall Street Journal to announce that he was fed up with
talks and planned to seize control.

NTV is by far the most influential source of information in Russia outside
the Kremlin's control, and its founder, Vladimir Gusinsky, says officials are
forcing him to sell out to Gazprom to muzzle criticism of President Vladimir
Putin.

Gusinsky owes Gazprom hundreds of millions of dollars, and the
state-dominated gas behemoth says it just wants its money back. But police
have raided Gusinsky's offices dozens of times in what his supporters call a
clear-cut state vendetta.

Gusinsky himself is in Spain under police guard, fighting extradition to
Russia, where he is wanted on fraud charges he calls bogus and politically
motivated.

In a sign of how the quarrel has made strange political bedfellows Gusinsky
got a surprise $50 million offer of help from his one-time arch rival, Boris
Berezovsky.

BANK COMPUTERS SEALED

In a letter to Putin, the heads of NTV, Gusinsky's TNT cable television and
Ekho Moskvy radio said 20 men from the prosecutor's office and the FSB
security police, successor to the KGB, had sealed computers at its Moscow
bank, Image Bank.

They said the act could force the stations off the air by making it
impossible to pay their bills.

"Instead of civilised investigative activities, acts of force are being
carried out in the centre of the Russian capital which look to the public eye
like crude blackmail and an attempt to halt broadcasts by NTV, TNT and Ekho
Moskvy," they wrote.

They called on Putin to intervene, "and demonstrate... loyalty to the ideas
of democracy and free speech in Russia."

Gazprom chief Rem Vyakhirev's statement was the clearest sign yet that the
gas monopoly is determined to seize control of NTV and the rest of Gusinsky's
Media-Most empire.

In his Wall Street Journal advertisement, Vyakhirev declared Media-Most
"effectively bankrupt" and called on shareholders to sell out to Gazprom or
give their voting powers over in trust.

"We have decided that Gazprom must deploy all means available to gain control
over the key operating subsidiaries of Media-Most in order to restore
efficient management of the company and save the business of Media-Most from
otherwise inevitable disintegration," he wrote.

"The public is continuously misled and attention is diverted from the
business and ethical nature of the dispute toward a worn-out rhetoric of
'freedom of speech'."

BEREZOVSKY OFFERS BAILOUT

Gusinsky has already been forced to turn over 46 percent of NTV to Gazprom to
cover debts and is scrambling to find cash to pay back nearly $300 million
more in loans that come due in June. Gazprom is trying to seize another 19
percent stake pledged as collateral for those loans.

Berezovsky's offer is the latest in a series of last minute bids aimed at
keeping NTV independent. He offered to lend Media-Most $50 million and start
talks on a $262 million credit.

"I am sure that it is not only in our corporate interests but in the
interests of the whole of Russian society to prevent a restriction in freedom
of speech, the greatest bearer of which remains NTV," Berezovsky said in an
open letter.

CNN founder Ted Turner and international financier and philanthropist George
Soros have expressed interest in buying a blocking stake in the company.
Turner wrote to Putin asking for guarantees that the state would not
interfere in NTV.

Berezovsky and Gusinsky were famous for years in Russia for a bitter pulbic
feud over their rival media empires.

But Berezovsky, once a Kremlin insider, has fallen out of favour under
President Vladimir Putin. He says he was forced to give up effective control
of ORT, Russia's most popular television channel, which is 51 percent state
owned.

******

#9
gazeta.ru
February 7, 2001
Chubais to Sacrifice Deputies
 
After Energy Minister Gavrin and Primorye Governor Nazdratenko were
dismissed on Monday over the energy crisis in the Far East, President Putin
ordered the head of the presidential administration to "strengthen the
management structure of RAO UES." According to our sources, UES chief Anatoly
Chubais will not be affected, but his deputy will have to go.
 
Some observers have jumped to the conclusion that the presidential
order will lead to Anatoly Chubais' dismissal. Chubais has earned himself a
reputation as one of Russia's best managers but is also known for his
involvement in politics. Chubais was appointed head of the Russian energy
monopoly in April 30th 1998, after being dismissed from his position as vice
premier.

The chiefs of Russia's natural monopolies are guaranteed material wealth and
a certain degree of political influence, (others include Gazprom's Rem
Vyakhirev or Railroad Minister Nikolai Aksyonenko). Having found himself in
an extremely difficult situation, Chubais has decided to make a sacrifice.

Immediately after Gavrin's and Nazdratenko's dismissals were announced,
Chubais sent a letter to the head of the presidential administration
Aleksandr Voloshin, who is also the Chairman of the Board of RAO UES
directors. In the letter Chubais suggested Voloshin fire his, Chubais'
deputy, Anatoly Koptsov who is responsible for managing energy crises in the
regions.

Voloshin has not yet reacted to Chubais' suggestion but then again he does
not need to make a hasty decision. According to the RAO UES charter, members
of the company's board can only be appointed or dismissed after approval from
the board of directors and the UES board is not due to meet until February
26.

Obviously, Chubais is not trying to say that Koptsov is the only UES top
manager to blame for the energy crisis. However, if Chubais went by his own
thesis that, "activity should be judged by results," his own resignation
would seem to be more reasonable. Some observers even assume that Koptsov's
dismissal could only do more harm to Chubais; rumours would circulate that
the president is influenced by Chubais and according measures would be taken
to prove Putin's independence.

This Gazeta.Ru correspondent talked to Anatoly Koptsov about his possible
dismissal on Tuesday. Koptsov seemed upset, but did not confirm the rumours.
He just said sadly "Whatever happens will be for the best."

According to Gazeta.Ru's sources, Koptsov will not be the only UES official
to be dismissed over the Primorye crisis. The general director of the RAO UES
far-eastern subsidiary "Vostokenergo" Vladimir Rud could also lose his post.
He can only be dismissed on Chubais's order and reportedly the appropriate
document is ready for Chubais to sign.

On Wednesday Chubais is leaving for Primorye to make a first hand assessment
of the state of affairs in the region. He has already told the press that
"the situation in the Far East is beyond grave." Vladivostok power plants
have only one-day's supply of coal and the temperatures are again falling. If
there are more power cuts, it is quite possible that no sacrifice will save
Chubais.

Ivan Chelnok
 
******

#10
Radio Free Europe / Radio Liberty
http://www.rferl.org

Russian Society Faces Human Rights Emergency

(Washington, DC--February 7, 2001)  Civic activists in Russia have declared
a human rights emergency in that
country in response to the actions of President Vladimir Putin and his
government. And they have taken the additional step of creating a civil
opposition to what they see as the growing threat to civil liberties in
their country.
     Lev Ponomaryov, the executive director of the All-Russia Public
Movement "For Human Rights," told an RFE/RL briefing in Washington
yesterday that Putin's actions over the last year had prompted some 1,000
human rights activists representing 430 groups from throughout Russia to
meet in Moscow in January and to take the unprecedented step of declaring
a human rights emergency.
     Ponomaryov said that the human rights situation in Russia had
begun to deteriorate several years ago but that it had "become worse" in
the months since Putin came to power.  He said that "almost every day now"
brings fresh reports of official actions against the constitutional rights
of Russian citizens.
     Often, these attacks on human rights occur without much publicity,
Ponomaryov said, pointing to a recent instruction issued by the Office of
the Prosecutor General stripping those being investigated of the ability
to ask for the participation of non-governmental officials in that
process.  Because public defenders are so often in collusion with
prosecutors, Ponomaryov continued, that limits the rights of individual
citizens.
     Moreover, he said Russian citizens cannot count on the courts to
defend their rights as citizens of Western countries normally do.  The
courts work too closely with the executive power, he said, and that is why
his group and others like it throughout Russia serve as ombudsmen to work
with the executive branch to correct problems.
     Ponomaryov added that in his view, the greatest threat to human
rights at present are Kremlin plans to rewrite the constitution via what
he called "a nomenklatura process" in which most Russian citizens would
have no say at all.  Such a process, he said, might be used to effectively
strip Russians of many of the rights the current constitution now
specifies that they enjoy.
     Because of this, he said, the human rights organizations of Russia
have been forced to declare themselves to be a civil opposition to the
executive power, not in order to seek office for themselves but to
pressure the government as well as political parties and movements to
defend civil and human rights.

*******

#11
From: "Andrew Miller" <andcarmil@hotmail.com>
Subject: Re 5074-Anti-American Pop Music
Date: Tue, 06 Feb 2001

JRL #5074 carried the Time magazine story of increasing anti-American
vitriol to be found in the lyrics of Russian popular music, and in Russian
youth culture generally.  This was not the first JRL item to document the
phenomenon (a prior report had been made by The Wall Street Journal). 
Having spent four years in residence in Russia, I am reluctant to imagine
the extent of the reaction in Russia if American rock groups were reported
to be singing such songs about Russians - and I would fear for the safety of
American diplomatic personnel.

I would like to express my disappointment that the Russian readers of the
JRL, who are many, do not respond to such reports by either supporting or
distancing themselves from them - disappointing too, of course, is the more
general silence of the general population and the regime that represents it.
  This it seems to me is highly detrimental to U.S.-Russian relations; as
for me, I think it would be more conducive to the development of these
relations to know that a majority of Russian JRL readers have an
anti-American attitude than to be confronted by ambiguous silence, and of
course if Russian readers do not share these views then it is most
unfortunate that their position remains unclear.  As time goes by and Russia
more and more abandons the values of limited government and personal liberty
which most Americans hold dear, Americans will be less and less willing to
give Russians the benefit of the doubt in such cases.

Russians have serious problems understanding American psychology, in no
small part because Russian society generally operates to exclude most
American culture and information, much less tourism and interpersonal
interaction, and while these problems are of course mutual the plain fact is
that Americans can far better afford to pay for their ignorance than can
Russians.  Most Russians, for example, find the ravings of the lunatic
Vladimir Zhirinovsky to be nothing more than good entertainment.  Few stop
to consider that many Americans may take his pronouncements, for example
concerning the return to Russia of the territory currently known as the
State of Alaska, at face value and be deeply offended by them.  Public
statements by any Russians, much less officials of the Russian government,
disavowing the babblings of Zhirinovsky (or other anti-American
pronouncements) are therefore regrettably few and far between.

On last night's episode of NYPD Blue, the villain was a young Russian woman
who seduced her African-American gardener and then framed him for murdering
her oil oligarch spouse.  Her crime was uncovered when her blatant racism
was noticed within seconds of her meeting with an African-American police
detective, who concluded that her relationship with the gardener could not
have been genuine and was therefore a setup.  Several times during the
episode, Russian police were stereotyped as fundamentally corrupt and more
feared by Russian people than Russian criminals.  It seems to me that if
Russians wanted a serious relationship with the United States they would
undertake a basic study of American culture, which would start with
television. In my opinion, no such study has been undertaken even at the
very highest levels of Russian diplomacy. Once Russians understood the vast
number of Americans who regularly watch shows like NYPD Blue, and the
signficance of such entertainment in their cultural lives, they might well
begin to appreciate the total failure of their foreign policy towards the
U.S. and the grave danger of alienation and confrontation that they now,
needlessly, risk.

It would be very interesting to read some accounts from JRL readers of
Russians who are experts in dealing with Americans and who are currently
enjoying a fruitful and productive relationship with American capital and
influence (especially interesting would be instances where the American side
benefits in equal measure). Such Russians ought to be identified and
supported.  Interesting too would be to read a translation from a purely
Russian source of an article mentioning some American good points from which
Russians might have something to learn.  As for me almost every Russian I
have ever met attributes American economic success, for example, to pure
luck.

Andrew Miller
Villanova, PA

******

#12
The Carnegie Moscow Center
http://www.carnegie.ru

Elective Monarchy Under Putin: Perspectives on the Evolution of
the Political Regime and its Problems
By Lilia Shevtsova
Lilia Shevtsova is co-chair of the "Russian Domestic Politics and Political
Institutions" project, along with Thomas Graham, Michael McFaul, Andreai
Ryabov, and Leonid Smirnyagin. The project conducts research on Russia's
domestic politics, the evolution of political parties and governance
institutions, shifts in the political mindset of the masses, and the
problems of federal system evolution and the regional politics in Russia.
[The original Russian paper is located at:
http://pubs.carnegie.ru/briefings/2001/issue01-01.asp]

Today, President Putin faces a serious challenge: he must force the power
structure that he has inherited to work. The regime which emerged under
Yeltsin can be conditionally termed an "elective monarchy". It functions as
a monarchy but requires democratic legitimization because all other forms
of government - authoritarian, partisan, ideological, and
inherited-monarchical - have been exhausted in Russia. This regime, though
adaptable, is unable to implement consistent reforms and manage crises. It
feeds the irresponsibility of both the political class and the society. All
its resources and capabilities ultimately serve a single purpose -
self-perpetuation of the ruling corporation. The optimal form of existence
of such a power type is stagnation.

Back to a Bureaucratic-Authoritarian Regime?

Putin has attempted to regulate the elective monarchy, though not rejecting
its main principle - democratically legitimized autocracy. The reforms
implemented in 2000 were meant to form a "driving belt" mechanism, which
would allow a transition to governing by way of subordination and
unification of political life, within the Yeltsin model of power. In this
manner, steps were taken to co-ordinate the relationships between the
Center and the regions, enhance the Federation's unitary nature, weaken the
political role played by large businesses, increase the Federal Assembly's
loyalty to the President, neutralize the main centers of influence and
pressure, and form a manageable multi-party system.

Concurrently, Vladimir Putin attempted to replace a number of the
supporting elements of the Yeltsin regime. Thus, in trying to overcome
reciprocal conspiracies, he began to introduce the principle of
subordination. Those in power are now trying to rely not on the old shadow
"network" of balances that includes various groups and clans, but rather on
the central bureaucracy and power structures. Anti-Communism was rejected
as a factor consolidating both the authorities and society. In fact, there
was a stated intention to form a bureaucratic-authoritarian power regime
within the framework of the elective monarchy.

A question arises: has Putin succeeded in his attempts to destroy the logic
of the Yeltsin-style power structure or will he have to, even partially,
return to the old rules of the game? The reformed elective monarchy has not
been functioning long, but there is already the impression that the
President has been unable to create a real "driving belt" mechanism. None
of the cleansing and regulating "revolutions" initiated by the Center has
been brought to its logical conclusion. The oligarchs have been
intimidated, however, the problems of separating business from power and of
developing uniform rules of the game for entrepreneurs (or of uniformly
distancing entrepreneurs from power) have not been resolved. Regional
elites have been quieted. Their influence on federal politics is now
limited, but quasi-authoritarian regimes in the regions continue to exist.
Opposition to the Center has been virtually liquidated, but given that
there are no civilized channels for opposition to manifest itself, it may
take on a destructive nature, external to the system.

It is clear why the creation of a "driving belt" mechanism has not been
completed. It is not so much a matter of the difficulties in bringing
together the diverse interests of the political classes and society to a
single common denominator. Rather, it is the Center's lack of vital
instruments of power and, most importantly, the readiness to resort to
force (or at least, up to this point) without which the system of vertical
subordination cannot function. The threatening tactics used by the Center
will only have a short-term effect and if used too frequently will only
serve to demonstrate the impotence of those in power.

As a result, for the maintenance of stability, the Center is forced to
return to "barter politics," making small concessions to disparate powers
and influential groups in exchange for their loyalty to the federal powers.
The right to stand for election for a third consecutive term obtained by a
number of regional leaders, the favorable climate created offered to
businessmen who are particularly close to the Kremlin, the mixed character
of state symbols to satisfy all of the main political orientations, the
selective approach to principle of the presumption of innocence, and the
struggle with corruption - these are a few examples of the return to
Yeltsin-style survival mechanisms. The internal heterogeneity of the ruling
team that prevents it from formulating a uniform and clear developmental
perspective is yet another indicator that the President is compelled to
rely upon different, sometimes opposing interests. This, corresponds more
with the Yeltsin's ruling practices rather than the "driving belt" mechanism.

Thus, the present political regime is attempting to strengthen the
administrative beginnings and vertical relations while at the same time
maintaining the backbone of the Yeltsin structure. What are the prospects
for this new political hybrid? Can it guarantee stability in Russia? Can
one hope that it will stimulate a breakthrough for modernizing the country?

The New Political Hybrid's Prospects

It seems that the current political regime, continuing to function within
the framework of an elective monarchy, will recreate the same conflicts and
limitations that caused the stagnation of Yeltsin's power. These were, in
the first place, three systemic-structural traps that manifested themselves
during Yeltsin's rule and that are already visible under the new leader.
First, political measures undertaken by the Center to "gather power" or
concentrate power levers in the same hands are strengthening not the
government as a whole but rather only a part of it - the regime of
governing. These measures cause the decay of the complex and distributed
state infrastructure that encompasses the court system, self-government,
parliamentarism, multi-party system, and various informal channels of
society's self-manifestation. Under such circumstances, any weakening of
presidential power may lead to an even more significant weakening of the
state.

Second, concentration of all power levers and controls in the hands of the
President renders him responsible for the entire development process,
including the failures that have been brought about by lower-level units of
the apparatus. This may lead to a rapid de-legitimization of the Center.
Furthermore, where distribution of responsibility is absent, all units of
management inevitably become irresponsible. For example, during the fire at
the Ostankinskaya Tower, without Putin's command, nobody dared to shut down
the electric supply. This is an illustration of how a pyramidal-style power
mechanism functions. However, this is by no means the only example of the
authorities' formal omnipotence ultimately turning out to be practical
impotence. History contains more than enough of these.

Third, if the political field is controlled by a single subject who is not
dependent on society and is able to recreate himself, it becomes impossible
to consolidate either power, or society. The leader who stands above the
struggle can only exist in a non-consolidated space because only this kind
of space requires an arbiter. Therefore, to justify his very existence, any
leader within the monarchical framework will have to stimulate the
occurrence of conflict in one way or another.

Inevitable consequences of "barter politics" already manifested themselves
under Yeltsin's rule. Then, the exchange of loyalty to the president for
property and power resulted in the general degradation of the latter,
causing the President to become a hostage to "court" groups. The current
tactic of making small concessions in the name of preserving the leader and
maintaining his high popularity ultimately satisfy nobody and will
therefore, sooner or later, make evident the leader's weakness and his lack
of internal energy.

The Illusion of Success

The ruling team, unable to achieve the desired result and unwilling to
admit its failures, is imitating already imitating action. The Center or
various departments are more and more frequently pretending that they are
establishing the rule of law, developing uniform rules of the game, gaining
victory in Chechnya, and understanding the logic of current processes in
general. Imitation is capable of capturing and creating an impression that
the sought-after goal is easily achievable. An illusion of success is thus
created - even if those holding power are inactive or unprofessional.
However, such a transition to a virtual world may prove lethal to those in
power simply because being detached from real societal processes may lead
to losing control over events. To an obvious extent, it was the feigning of
successes which caused the year 2000 to be a loss for economic reforms.

The Center's aspiration to utilize the "driving belt" mechanism and at the
same time continue to administer "barter politics" has quite naturally
resulted in a conflict. The regime's utilization of two incompatible
management mechanisms leads, on the one hand, to a devaluation of the
principle of subordination and, on the other hand, to a discrediting of the
principle of agreement. Politicians or entrepreneurs, who the Center expect
to be subordinate, have instead begun to bargain, hoping to strike a deal
that will untie their hands. But even upon making a deal none of the
parties is in a hurry to fulfil the conditions because the one who has got
power on their side may at any moment resort to administrative resources.

The Center's external pragmatism and repudiation of ideology only seem to
facilitate society's consolidation. In reality, they manifest themselves in
a zigzag style of politics that reflects poor vision.

The fact that the President does not even try to assume any
responsibilities has drawn much attention. Putin does not make promises,
which is natural considering the logic of the current regime. A
presidential monarchy, in principle, cannot have any responsibilities -
they create the impression of weakness. The "vertical" of power has taken
itself beyond all political forces and society, it does not depend on
anybody. This is its method of survival. Therein lies the strength of
Presidential power, but also its weakness. Without a system of mutual
responsibilities it is difficult to preserve power in times of crisis.

What we seem to envision before us - is a self-sufficient ruling
corporation, however, it is sooner an illusion than reality. It depends on
its ability to manipulate public opinion and, if for some reason its
devices fail to work, it may prove to be quite vulnerable. Putin depends on
popularity ratings more than Yeltsin did - this was pointed out by Yuri
Levada, Director of VTsIOM, having analyzed the foundations of the new
regime. As a result, the current President may turn out to be even weaker
and more of a populist than the former one; he may prove to have a smaller
field for maneuvering when implementing necessary structural reforms. At
any rate, an impression is being made that Putin's actions are determined
less by societal needs than by the necessity to maintain a high rating.
This orients federal politics towards preserving the status quo rather than
moving forward.

As paradoxical as it may be, the first Russian President had a more
consolidated base of support at his disposal than Putin. Yeltsin used
mobilized it with the assistance of anti-Communist ideas that proved to be
a rather solid fastener. The part of society that supports Putin today is
doing so, first of all, because of a sense of personal insecurity and
desire for order. The problem, however, is that each of these groups
understands order in its own way so that, at a critical moment, the
differences in interpretations of this key term may turn out to be a
dividing factor.

How Durable is the Model of Undistributed Power?

The retention of the President's high popularity rating, (around 65 percent
in December, 2000), can be explained, in the first place, by the lack of
alternatives to Putin as a national leader. During the past year the hopes
that were associated with his rule have radically weakened, and this should
have disturbed Putin. At any rate, it is clear that support not cemented by
public consensus with respect to basic values may turn out to be contextual
and temporary. The idea of a strong and effective government cannot become
the basis for such a consensus since it requires agreement within society
with respect to ways of constructing such a government.

Moreover,, the weakening of all other institutions aside from presidential
power compels the leader to rely on informal influence groups and leads to
the development of new shadow centers of power, and thus to the rise of yet
another "court" and favoritism. Simultaneously, the leader's dependence on
the apparatus becomes stronger. In a word, a situation well known from the
time of Yeltsin's rule is re-emerging. At that time, fearing the
independence of institutions of power, Yeltsin transferred part of his
responsibilities to his favorites. When that trust was exhausted, the
President brought his family into ruling. Nepotism was the last stage in
the degradation of power when the Russian political regime assumed
conspicuous patrimonial features.

Putin's attempts to rely on the Russian bureaucracy are doubtful and
expedient. It has yet to go through that evolution that turned the Western
"court servants" into a professional public or civil service, with codes of
behavior and honor as well as the criteria of professionalism. Russian
bureaucracy remains an element supporting the monarchy, with all the
consequences this implies: susceptibility to corruption as a means of
survival, gravitation towards shadow relationships, conservatism and fear
of change, servility. Turning this type of bureaucracy into a regime's
foundation would render all hopes for modernization doomed.

The main conflict between democracy and the gravitation towards
authoritarianism (which, under Yeltsin, tore the elective monarchy apart)
still remains to be resolved. The current Center's aspiration to totally
control political process threatens to eventually fully discredit democracy
and undermine the democratic legitimacy of power. The Kremlin will then be
left with only one option: to resort to forceful means of survival, which
are quite limited and ineffective. Thus, constructing power in the form of
a "vertical," without any security on the part of other independent
institutions ready to assume part of the responsibility for ruling and
potential failures by the Center, renders this vertical as vulnerable as a
house of cards. Under Yeltsin, the system of shadow balances and
distribution of power, though it led to its degradation, at the same time
also served as a cushion preventing against a collapse. The reliance on the
subordination principle renders power more fragile due to the real threat
of a sudden fracture in the "vertical."

All of the aforementioned leads to the following conclusion: even in its
current reformed state, the elective monarchy is incapable of providing
either stability or a reformist breakthrough, especially considering that
there is no organized subject for the latter. The aspiration to regulate
the monarchy, delimit the activities of other institutions and strengthen
subordination, deprives the regime of its former safety net and increases
the possibility for the evolution of extra-systemic and destructive forces.
In a word, the degraded Yeltsin regime may turn out to be more stable than
the current power, which is oriented towards a bureaucratic-authoritarian
approach but has no means to support it.

The only way out of this dead-end is to reject the model of undistributed
power, i.e., a transition to the construction of independent institutions
that would allow the formation of an effective and responsible presidency.
Only the development of such institutions can guarantee the efficiency of
this office. As unfortunate as it is, however, so far the movement has been
in the opposite direction. The only question that remains is what price
society and those in power will have to pay for their faith in a monarchy
that could not be overcome under Yeltsin.

******

#13
Washington Times
February 7, 2001
Joint U.S.-Russia Exercises Heighten Fears Of Espionage
By Bill Gertz

The Pentagon is conducting joint missile defense exercises with the Russian
military in Colorado, raising concerns among defense analysts that Moscow
will gain valuable information on U.S. war-fighting tactics.

A Pentagon official said the computer simulation exercises at the National
Training Facility in Schriever Air Force Base, Colorado, grew out of a
summit
meeting between President Clinton and Russian President Boris Yeltsin in
1999. The military cooperation was reaffirmed at a summit in September with
current Russian President Vladimir Putin.

The first phase of the current exercise scenario involves American and
Russian forces working together against an unidentified third country that
attacks with ballistic missiles, said the official who spoke only on the
condition of anonymity.

The two sides will then coordinate communications, warning and control
information for shooting down incoming short-range missiles.

A later phase will take place at Fort Bliss, Texas, in January 2002 using
hardware in what the defense official said were "limited field-training
exercises."

The 30 Russian officers now working in Colorado will pretend to be operating
Russia's S-300 anti-missile systems and some 70 U.S. military officers will
practice using Patriot anti-missile systems.

The exercise is being paid for by the Pentagon, and the first phase will
cost
$735,000 when it is completed Sunday. It is the third joint U.S.-Russia
exercise.

"It's all designed for us to work together in a theater so that we can
protect our forces and objects," said the defense official.

The American and Russian soldiers will practice "how to coordinate and
communicate in engaging targets in a theater of operations."

The exercises have prompted fears that Moscow will obtain war-fighting data
that could be passed on to Russian clients like Iran.

"This seems to me to be typical of the type of thing arranged by the last
administration that should be suspended until the new administration has a
chance to review it," said William Van Cleave, director of the Center for
Defense and Strategic Studies at Southwest Missouri State University in
Springfield, Mo.

The idea of cooperating with the Russians may have some merits, he said
in an
interview. "But there are lot of problems sharing information and technology
with the Russians," Mr. Van Cleave said. "With our long experience with the
Russians, there is usually an intelligence-gathering objective of
meetings of this type."

Defense officials said the Russians used their access to U.S. military
missile warning technology in Colorado during a joint year 2000 rollover
exchange in December 1999.

At that time, Russian military forces fired Scud missiles against Chechen
rebels in southern Russia at the same time its officers were posted at a
missile warning center in Colorado.

U.S. intelligence officials believe the Russians fired the Scud so the
ussians in Colorado could gauge how well U.S. space sensors track missile
firings. By learning the sensitivity of the sensors, the Russian military
can
then develop the means to hide the missiles or deceive U.S. spy satellites.

A congressional defense aide said the joint exercise is "one more bad idea
from the Clinton administration that will haunt the Bush administration."

"It is a good example of the kinds of problems [Defense Secretary Donald H.]
Rumsfeld is going to have to root out," the aide said. "The idea of joint
action with the Russians against Russian clients is not even a bad joke."

Russia has stepped up military cooperation with Iran following disclosure in
December of a secret agreement between Vice President Al Gore and Russian
Prime Minister Viktor Chernomyrdin.

The agreement called on the United States to avoid sanctioning Russia for
arms sales to Iran in exchange for an end to the sales in December 1999.
Russia continued dealing arms and has stepped up transfers in recent months,
U.S. intelligence officials have said.

U.S.-Russia relations have soured in recent months over plans for a U.S.
national missile defense system, which Moscow opposes. Moscow also has
raised
U.S. and NATO concerns by moving tactical nuclear weapons to the Baltic
enclave of Kaliningrad, U.S. officials said. Moscow denied the claim.

Rep. Curt Weldon, Pennsylvania Republican and a member of the House Armed
Services Committee, said the missile defense exchanges seem "very
ill-conceived."

"I support engagement, but not engagement that is not totally thought
through," Mr. Weldon said. "I would hope Secretary Rumsfeld is fully briefed
on these programs."

The defense official dismissed suggestions that the exercises will benefit
Russian's intelligence services and said security arrangements call for
using
"generic" battlefield information to avoid compromises.

"They are not going to see how we tactically deploy," he said.

******

#14
Berezovsky offers to settle NTV's debts

MOSCOW, Feb. 7 (UPI) -- Russian billionaire tycoon Boris Berezovsky
stunned Moscow Wednesday by offering to settle the debts of the embattled
Media-Most holding and preserve the NTV television's status as Russia's sole
independent national network.

Berezovsky, who, like fellow tycoon and Media-Most founder Vladimir
Gusinsky, has quarreled with the Kremlin and stepped forward as an
unexpected white knight.

"Through my financial advisors, I am opening talks with Credit Suisse
First Boston to purchase its $262 million Media-Most debt," Berezovsky said
in a written statement.

Should the deal go through, Berezovsky would prevent a large bloc of
shares falling into the hands of state-controlled Russian natural gas
monopoly Gazprom.

Gazprom has acted as guarantor of the loan, which NTV and Media-Most have
been unable to pay back, and the gas company has moved aggressively to seize
total control of the media empire.

With Gusinsky accused of fraud and under house arrest in Spain pending
possible extradition to Russia, Media-Most has come under strong pressure to
give up the fight for independence.

In the latest blow to the group -- which includes NTV, the Ekho Moskvy
radio station, the daily newspaper Sevodnya, several magazines, Internet
sites and a satellite network -- Media-Most's accounts at Image Bank were
frozen by prosecutors, leaving reporters without paychecks for the first
time.

Media-Most's outlets have consistently broadcast critical reports of
corruption in the Kremlin and have repeatedly blasted the continuing war in
Chechnya, earning the wrath of the political establishment.

In an attempt to retain its independence, the group held talks with CNN
founder Ted Turner, who showed interest in purchasing a stake in the company
-- provided the Kremlin issues guarantees of non-interference in the
company's activities.

While President Vladimir Putin has welcomed the idea of an outside
investor, he has declined to provide guarantees that the company would be
allowed to continue with its line of reporting.

Berezovsky, a media mogul in his own right, recently lost control of ORT,
one of Russia's three national television networks.

He was forced to sell his 49 percent stake to businesses loyal to the
Kremlin. The state controls the remaining 51 percent of ORT, and is also the
owner of the country's third network, RTR.

Moves to bring NTV into the fold have raised alarm among liberal
politicians in Russia and observers abroad, as the station is the only one
with an independent voice capable of reaching a national audience.

"I am sure that it is not only in our national interests, but in the
interests of Russian society as a whole to prevent a restriction in freedom
of speech, the greatest outlet for which is NTV," Berezovsky's statement
said. Berezovsky's TV-6 network has a much smaller audience compared to NTV.

******

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