March 29, 2001 

This Date's Issues:   5175 • 5176

Johnson's Russia List
#5176
29 March 2001
davidjohnson@erols.com

[Note from David Johnson:
1. Reuters: Putin asserts control in government changes- press.
2. Moscow Times: Pavel Felgenhauer, Hope Glimmers for Reform.
3. BBC Monitoring: Russian MP looks at president's motives in latest reshuffle, highlights caution. (Nemtsov)
4. Vremya Novostei: WHAT PUTIN'S MOVE MEANS. When the Time of the Cabinet's Economic Bloc Reshuffling Will Come?
5. strana.ru: Gleb Pavlovsky: Government concept changes, executive authority integrates.
6. The Independent (UK): Geoffrey Lean, Caviar may be banned as sturgeon numbers slump.
7. Novaya Gazeta: Oleg Lurie, THE FOREIGN BANK ACCOUNTS OF ALEXANDER
VOLOSHIN.
8. www.fednews.ru: STATEMENT BY THE PRESIDENT OF THE RUSSIAN FEDERATION VLADIMIR PUTIN MADE AT A CONFERENCE IN THE KREMLIN.
9. New York Times: Judith Miller, U.S. Reviewing Aid Meant to Contain Russia's Arsenal.
10. Itogi: Dmitry Pinsker, THE USELESS ARMADA. Government relies on quantity of PR consultants, not quality of policies.]

*******

#1
Putin asserts control in government changes- press
 
MOSCOW, March 29 (Reuters) - President Vladimir Putin has used a shake-up of
his security apparatus to boost his authority and assert independence from
the shadowy group that catapulted him to power, newspapers said on Thursday.

On Wednesday, Putin appointed his close confidant Sergei Ivanov defence
minister from his post as top security adviser and drafted in a loyalist
parliamentary leader to lead the interior ministry.

Analysts said the reshuffle had weakened the influence of the group known as
the "The Family," a tight-knit group of aides to former President Boris
Yeltsin instrumental in Putin's rise to prime minister and then Kremlin
chief.

"The changes considerably weaken The Family," Sevodnya said.

"It appears the aim of Putin was to distance The Family from strategically
important areas -- the 'power' ministries and atomic energy. But shutting out
The Family completely from the decision-making process is not yet likely,"
the daily said.

Kommersant said while the whiff of financial scandal had never been far from
ousted atomic energy minister Yevgeny Adamov, he had been removed for being
"excessively active in reaching nuclear deals with Iran."

Adamov had been negotiating with Tehran to build three nuclear reactors, in
addition to one under construction at Bushehr on the Gulf. "With tensions
rising in relations with the United States, Adamov's Iranian projects were
inappropriate," it said.

SECRET PACT WITH YELTSIN

Citing Kremlin sources, Sevodnya said Putin had promised Yeltsin he would not
change key ministers for a year after his election victory. Two days after
the anniversary, he made his move.

"He Did It!" screamed the banner headline of Vremya Novostei. "For a long
time the president did not want to replace anyone, even when it was clear
there was a need to do so."

Kommersant dismissed Putin's claims that he had made the changes as part of a
bold plan to demilitarise public life.

"The president has clearly decided to strengthen personal control over the
activities of the power ministries," it said.

The appointment of Boris Gryzlov, parliamentary leader of the pro-Kremlin
Unity Party, was greeted with scepticism by interior ministry officials, the
paper said. But it said they welcomed the appointment of a top police chief
as one of his deputies.

Izvestia said naming Lyubov Kudelina as Russia's first woman defence minister
was a "real sensation."

Putin was placing "like-minded people" in key positions, the paper said. It
said the changes "were only preparation for more serious steps in different
political and economic spheres."

Troika Dialog investment house said in a daily briefing that it expected no
shake-up of economic portfolios until early May. It predicted Prime Minister
Mikhail Kasyanov would keep his job.

*******

#2
Moscow Times
March 29, 2001
Hope Glimmers for Reform
By Pavel Felgenhauer  
 
President Vladimir Putin has ousted his defense minister, Igor Sergeyev,
and replaced him with Security Council Secretary Sergei Ivanov. For more
than half a year, Sergeyev has been a lame-duck minister, partially
isolated from real decision making and openly scorned by many of his staff.
His ouster may indeed lead to serious military reform being implemented
here at last.

For more than two years, it has been an open secret that Sergeyev and his
No.2 in the military hierarchy -Chief of Staff Anatoly Kvashnin - have been
locked in a bitter personal conflict. Most of the time, the two were barely
on speaking terms, but last summer the fray became public when Kvashnin
presented a plan to drastically reduce Russia's strategic nuclear rocket
forces and shift expenditures from nuclear to conventional forces. Kvashnin
also proposed that ultimately the downsized strategic rocket forces should
be eliminated as a separate branch and made a division of the air force.

Sergeyev, a professional strategic rocket force officer, saw this as a
personal challenge and lost his temper in public. Sergeyev accused Kvashnin
of "criminal stupidity" and of attempting "to harm Russia's national
interests." But in the end the Kremlin supported Kvashnin and adopted a
reform plan that would downgrade the strategic forces.

Last fall Kvashnin, supported by many influential generals, put forward a
plan to split the present military hierarchy, creating a civilian defense
ministry that would handle procurement and logistics, while a purely
military general staff would command the troops. Putin in turn announced
that Russia should have a civilian defense minister and, at the same time,
Ivanov (a two-star KGB general) was suddenly retired from active military
service. It was obvious that Putin was facilitating Ivanov's move to
succeed Sergeyev. Sergeyev's days were numbered.

Alexei Arbatov - deputy chairman of the Duma defense committee - told me
last week that "at present there are two totally different defense
doctrines being implemented by the Defense Ministry at the same time." The
one championed by Kvashnin emphasizes the conventional forces as a defense
against outside threats. The other, pushed by Sergeyev, urges a return to a
traditional Cold War nuclear deterrence posture. If Sergeyev and Kvashnin
both stayed, they would have continued to pull the military in different
directions, creating havoc and internal strife and forfeiting any
possibility of meaningful reform.

Now the situation has changed: Ivanov is a close Putin loyalist. But he is
also the most powerful political figure to occupy the post of defense
minister since Dmitry Ustinov - a Politburo member and No.3 in the
Communist Party hierarchy in the 1970s.

Ivanov can make decisions and can make things happen. He can implement the
reforms the military badly needs and actually create a smaller, more
capable, more professional army. Ivanov, fully supported by the Kremlin,
can bypass Russia's corrupt and ineffective bureaucracy. He can suppress
dissent within among the generals. But will this opportunity for meaningful
reform translate itself into real action or, as so often happens in Russia,
will we never move beyond encouraging sounding words?

During his first year as president, Putin has often promoted himself as a
champion of democracy, free markets and freedom of the press, but his
actual record is not as unambiguous as his speeches. Putin has announced
that "Russia should be demilitarized." And, indeed, it should. The
near-total militarization of the economy, society and government created
during the Cold War has been the main stumbling block to market reforms in
Russia.

But will Putin really dismantle the nuclear and conventional arsenals and
the defense industries that still give Russia the semblance of a military
superpower, but prevent it from becoming a normal modern state? Putin has
said he wants demilitarization. But he has also stated many times that he
wants to restore Russia's imperial grandeur and its armed forces. It is
simply not possible to pursue both these goals simultaneously. But which is
Putin's real aim and which is mere propaganda? We will know soon.

In any event, seeing Sergeyev and Nuclear Power Minister Yevgeny Adamov
ousted is an excellent thing in itself. It would have been even better if
Kvashnin and several other incompetent generals also were ousted together
with Sergeyev. If the Kremlin is serious about reform, they should be gone
soon.

Pavel Felgenhauer is an independent, Moscow-based defense analyst.
 
*******

#3
BBC Monitoring
Russian MP looks at president's motives in latest reshuffle, highlights
caution
Source: NTV International, Moscow, in Russian 1500 gmt 28 Mar 01

[Presenter Tatyana Mitkova] And now, Boris Nemtsov, head of the Union of
Right Forces faction in the State Duma, is ready to answer questions live on
our programme. Good
evening, Boris Yefimovich. What's your assessment of President Putin's
personnel reshuffle?

Reshuffle bears signs of Putin's hallmark caution

[Nemtsov] Firstly, I think there are two reasons why it was today that the
president took his decision. The first is that the president doesn't want to
be a hostage to bureaucracy. A huge number of the president's initiatives
have encountered enormous resistance. Let's recall, for example, the fact
that last year, the president spoke of the need to carry out military reform
but no action followed from what he said. Again, the president has said he
would put an end to terrorism in Chechnya but, as you know, we've got bogged
down in Chechnya and the latest acts of terrorism in Yessentuki and
Mineralnyye Vody speak for themselves.

I think this really is an attempt to bring in new people and deserves every
support and encouragement. However, what the president has carried out is a
Putin-style tactical move. Hardly anyone has been moved very far from him.
Sergeyev, who was defence minister, will be an aide. Rushaylo, who was
interior minister, will be Security Council secretary. This is where the
compromise component of the president's actions lies, in my view. In actual
fact, if the president really wants to push the country forward he needs
completely new people. He needs a new generation in power. He needs a
personnel revolution because he won't be able to do anything at all with his
old personnel, be it in the judicial sphere or taxes, protection of
investments or pensions payments. The president is, therefore, simply obliged
to bring in new people and I look on today's step as simply the start of
large-scale personnel changes and the eventual introduction of new people
into government.

Unity MP's promotion to minister signifies party's links to president

[Mitkova] Boris Yefimovich, to be more specific, why has your, now former
colleague, [Boris] Gryzlov become interior minister? In the light of what
you've said, why has [Vyacheslav] Soltaganov been replaced? Is it because of
model actions by the tax police or, on the contrary, because they weren't
any?

[Nemtsov] As for Gryzlov, I think it's a complete surprise and, personally, I
both sympathize with Gryzlov and wish him well in this walk of life. His work
is hugely complex. Most probably, the president wanted someone in that job
who was absolutely committed to him and in that sense Gryzlov fits the bill
entirely. Moreover, the president evidently wanted civilians in charge and
lastly he had to show that the Unity faction really is the president's
faction and [party leader and Emergencies Minister Sergey] Shoygu on his own
was obviously not enough. A second minister who belongs to the Unity faction
proves that the faction owes the president a great deal and will continue to
be invited into the country's leadership. So, the political motives for the
president's behaviour are obvious, I think.

There is another problem too. The police community is very much a cooperative
and doesn't really welcome strangers, keeps them at a distance, indeed, so
Gryzlov will need will-power and courage to show he can handle the tasks
facing his department. His main problem will be Chechnya. He will have to do
some really serious work on all these issues. I think heading a faction is a
complex matter but managing the situation and operations in the Caucasus,
including the police side of those operations, is far more complex so I can
only wish our, already former colleague, success. I hope the Unity faction,
and the other factions in the State Duma, will help Boris in his new role.

Removal of nuclear power minister seen as good for Russia

[Mitkova] What about Soltaganov and his transfer? And Adamov? Can it be said
that Putin is saying goodbye to Yeltsin's team?

[Nemtsov] You know I'd see Adamov's dismissal as ... having a positive
outcome for Russia. The law on importing radioactive waste is scarcely likely
to be adopted now and, moreover, the excessive cooperation between the Atomic
Energy Ministry and countries with unstable regimes, the so-called pariah
states, will also decline.

Removal of head of tax police "has different grounds"

If we're talking about Soltaganov, it seems to me that the president is
getting rid of people who are closely linked to a number of oligarch groups.
It might not even have to do with the activities of the Tax Police themselves
but with the president's point, which he has made many times, of keeping all
the oligarchs at an equal distance. So, this dismissal has quite different
grounds, I think.

Reshuffle as always in Russia came as a surprise

[Mitkova] And my last question, very briefly, if I may: did you personally
know that these changes were in the offing? Or the Duma? How will the house
respond to all these changes?

[Nemtsov] My own overall assessment is fairly positive regarding what has
happened today. Of course, the Duma didn't know anything about it. We - I
mean the Union of Right Forces - are not a ruling party and we didn't know
anything about it. We do think, however, that having new people in power who
are focused and knowledgeable is exactly what Russia needs so all in all
we're fairly positive about it.

I'm even willing to risk saying that a lot of the Russian government didn't
know about the reshuffle. Generally, when there are personnel changes here in
Russia it is a matter of particular importance, a particular state secret
and, as a rule, perhaps two, three or four people know about it.

[Mitkova] Thank you.

*******

#4
Vremya Novostei
March 29, 2001
[translation from RIA Novosti for personal use only]
WHAT PUTIN'S MOVE MEANS
When the Time of the Cabinet's Economic Bloc Reshuffling
Will Come?
    
     Vyacheslav NIKONOV, President, Politika Fund:
     It is the beginning of personnel reshuffling all looked
forward to but only after the presidential Message to the
Federal Assembly. Putin has started with the responsible
question on the power bloc not to solve serious problems later
"in a scuffle." It is clear that the President has started
conducting his own personnel policy. I suppose reshuffling of
the Cabinet's economic bloc is likely to take place shortly
after his Message to the Federal Assembly is read. What is
more, I am absolutely sure that it will be a large-scale coup
in the economic bloc and the Cabinet as a whole.
    
     Gleb PAVLOVSKY, Effective Policy Fund:
     I suppose the present personnel changes are part of
preparations to begin fulfilling the second stage of the agenda
for the second year of Vladimir Putin's Presidency, which will
be laid down in his Message to the Federal Assembly. It is
obvious that we are in the period of transition to the next
package of tasks, which require specification of the executive
branch team and consolidation of all the policy guidelines,
which are very complicated, because reforms are conducted in
different areas at the same time. The issue at hand is actually
concentration of all the guidelines in one mechanism of
executive power. To put it differently, the government is being
turned from an economic Cabinet, which it was before, into an
integral mechanism built in to the presidential power vertical.
I do not think I can give any concrete time schedules for
economic bloc reshuffling. I suppose this will be connected
with the work Mr. Kasyanov is doing now, first and foremost.
And he is working on a concept of the government bloc
organization.
    
     Boris MAKARENKO, Center for Political Studies:
     By his personnel steps the President has put the power
bloc completely under his control in order to be able to carry
out plans for the military reform and enhance its effectiveness.
Reshuffling of the Defense Ministry leadership is particularly
indicative. The President has not nominated another general, as
this should not have been done under any circumstances, and put
in this office a civilian who, on top of everything else,
enjoys his complete trust. I think only such a man can get down
to the implementation of the reform in principle. About the
same logic underlies all the other appointments. We will not
have to wait a long time for changes in the Cabinet's economic
bloc either. I think government reshuffling will begin as early
as May, but the White House residents will begin fearing this
already tomorrow.
    
     Andrei RYABOV, Moscow Carnegie Center:
     Reshuffling in the upper echelons of power has been the
talk of the town a long time now. At the same time, President
Vladimir Putin was criticized for postponing it. Judging by
everything, political events that happened in March, above all,
a crisis, which has not happened (but which has given many
people ground to doubt whether the President really controlled
the situation in his inner circle), prompted Putin to make
serious, quick and decisive changes.
     The root cause of the President's personnel changes lies
in the line-up of forces he inherited from his predecessor. The
question was which moment would be chosen to change it. In
March, critical mass seemed to have reached the point which
induced the President to make the steps that he has been
expected to make a long time now. Economic bloc reshuffling is
unlikely to happen any time soon. As I see this, it is
necessary to have a clear economic strategy before making any
changes in the economic bloc.
Only after such a strategy is offered and the question how to
implement it is solved personnel changes required for this are
to be made. I think the President is still pondering about such
a strategy.
    
     Vladimir ZHARIKHIN, Inter-Regional Fund of Presidential
Programs:
     The presidential personnel changes are telltale evidence
of the strengthening of Putin's group in the coalition
government, which was created after Boris Yeltsin's
resignation. The President nominated his closest associates
Sergei Ivanov and Boris Gryzlov to the government posts that
are not subjected to any influence. The Interior and Defense
Ministries will always be the Interior and Defense Ministries
with their respective possibilities. At the same time, the
influence of the Security Council depends on the desire of the
President. These steps are undoubtedly a manifestation of the
strengthening of Putin's team.
Changes in the economic bloc can take place next month. By the
way, if anyone who is not seen in the Kremlin corridors every
day said today that he expected precisely such changes, I would
say that it was all lies. Nobody expected such changes. Putin's
policy, in particular, with regard to personnel appointments is
not discussed in principle. All the questions concerning
cardinal decision-making are beyond public discussion - this is
one of the elements of Putin's style of work. It may happen, of
course, that no further personnel changes are planned this
year. I have the feeling, however, that the present personnel
changes are not an isolated fact but the beginning of quite a
definite campaign.
    
     (Transcript by Maria Nikiforova.)
    
*******

#5
strana.ru
March 29, 2001
Gleb Pavlovsky: Government concept changes, executive authority integrates
 
The very logic of infusing fresh blood into the Cabinet has been changed,
along several lines at once. Putin has renounced the "spectacular dismissal
logic" Yeltsin-style, which was to be followed by fading personnel shifts:
selection of a new team, its conflicts with the Duma, adjustments, the lot.
Now we have a package of new, single-criterion appointments that is
substituted for one dismissal (that dictated the necessity of a number of
appointments). For the first time, too, a big number of appointments obey
rather strictly the logic of political competence.

Thus, the logic of appointments is clear: political certainty, a set of
abilities, and concepts of proved worth instead of professional seniority and
being a ministry insider. And, if you will, intellectualism. We see the
priority placed on the political certainty of the figure of each new
minister. And that is quite new.

The Russian politics is losing its departmental and branch nature, with
ministers becoming politicians, not in the TV-crowd-charmer sense of the
word, of course. They are politicians and technologists all at once,
politicians, who are in the business of drawing up concepts, politicians, who
are prepared to translate them into life, putting on the line their
popularity and career. But it is what the democratic style is all about. In
what is happening I see the further Europeanization of power.

Actually each of the new appointees is a bearer of the new cabinet concept,
who both complicates it and makes it clearer. Sergei Ivanov is a strong
political figure connected with the policy of modernizing the army and
military economy, with the policy of protection of national interests. By
letting Ivanov join the Government, moreover in capacity of Defense Minister
(under Yeltsin, it was regarded as a sacrifice and a demotion), Putin
simultaneously strengthens the Government politically and builds it into the
presidential vertical.

Boris Gryzlov's appointment confirms Unity's claim to being the party of
power to an even greater extent than Unity itself is prepared to be. The
leading role in the party of Unity's parliamentary faction has been confirmed
as well. Besides, Gryzlov is evidently an ideological figure, being a liberal
and a conservative and a supporter of greater protection of ownership rights
and of the fight against crime in any form, including one originating inside
bureaucracies.

It is a new signal for the Russian parliamentary setup: it is time parties
got used to a situation where their leaders will have to assume
responsibilities instead of propping up political weakness with
organizational acumen as before. Leaders will be joining the executive
authorities while parties will put forward new leaders.

Characteristically, the appointment occurred after the recent
communist-provoked parliamentary crisis, in which it was precisely Gryzlov
who was not afraid to take an extremely clear-cut position, going against
certain opportunistic moods current both in the faction and the party.

Yet another new element is that the political leadership of the Interior
Ministry is changing the conception of the ministry in the long term and
brings in new intonations - a cabinet is emerging that is ready for
resistance which Putin's course of reforms may be confronted with, and ready
to protect property rights and combat terrorism - both external and internal.

Now we obviously have a government that is growing stronger with
simultaneously increasing unity - a presidential cabinet of ministers.

Behind all this is discarding the main element in the legacy of the
revolutionary epoch, what I would call domination of the presidential
headquarters over "economic cabinets." It means in fact a complete revision
of Boris Yeltsin's government concept, which envisaged the operation of a
presidential headquarters while an economy-wise government was a kind of a
rear unit, a separate service corps which pursued an economic policy while
cautiously looking back at presidential commissars. Yeltsin established such
a system in the form of an "economic cabinet of Yegor Gaidar," and it
remained unchanged since late 1991. As a result, we had a decade of
commissariats, Korzhakovs, week governments and unending confrontation
between the Kremlin and the parliament.

This concept also produced the logic of dismissals, priority of resignation
over appointment. It was more important immediately to depose a prime
minister and appoint a new one in his place and select a new team for a new
prime minister. This practice has also been discarded. Today we see that
appointment is becoming more significant than resignation.

Now at the top of executive power we have a strong government, which
implements the President's program and is capable of standing up for itself.
This may be called "de-revolutionizing" the executive power branch with ever
less room left for commissars and headquarters.

The government is becoming ever more politically homogenous. It means that it
will be increasingly difficult to disguise incompetence behind "personal
loyalty to the President" - the government will now have to carry an immense
load, as competition in loyalty will not cover serious failures.

The government's greater ideological unity and the fact that it is
identifiable politically make it a homogeneous political mechanism ahead of
the president's message. The mechanism is ideologically totally oriented
toward Putin's policies on behalf of Russia's national interests and is an
integral part of the presidential vertical.

Russia is acquiring a united Cabinet of political ministers, civilian
ministers sharing a common program, which is, in effect, the president's
program. A Cabinet in line with a program is the logic behind a Cabinet
becoming a political one.

Once the reorganization of the economic block has been competed, a strong
Cabinet will come into being with a program free from a Marxist division into
"economists" and "power ministers." Protection of property rights is the main
prerequisite for effective reform and the materialization of human rights.

Essentially, that is a very logical package of appointments ahead of a
presidential message. Why do these resignations and appointments come before
the message? Boris Yeltsin's logic was just the reverse: a message followed
by symbolic dismissals. Essentially, this is the apparatus' integration on a
principled platform. However, it cannot get under way under a non-integrated
government. Otherwise, various factions of the apparatus will look to various
factions in the government.

The government's formation is not yet complete but, basically, a Cabinet is
taking shape which is ready for the resistance that the program contained in
the president's message will meet, including resistance on the part of the
apparatus. The strong government that has come into being is both a civilian
and presidential government, a government ready to hold its ground, which
means it is ready to face one of the most dangerous forms of opposition in
Russia - opposition within the apparatus.

What we are witnessing is the transformation of an economic (sometimes
described as "technical") Cabinet into a strong majority government with a
clear-cut program. Needless to say, it is a Cabinet of Putin's majority.

*******

#6
The Independent (UK)
29 March 2001
Caviar may be banned as sturgeon numbers slump
BY GEOFFREY LEAN
ENVIRONMENT EDITOR

CAVIAR, THE ultimate luxury food, may be making its last appearance on
Christmas menus - as a result of the fall of Communism. The sturgeon that
produce the "black gold" are rapidly approaching extinction because they are
being over-fished by the independent states that have emerged since the
collapse of the Soviet Union.

The annual catch of the fish in the Caspian Sea, where 90 per cent of the
world's population of sturgeon live, has slumped by 97 per cent because they
have become so rare.

Early next year an international conference will try to decide on emergency
measures to protect them before they disappear and the World Wide Fund for
Nature (WWF) says that there may be a global ban on caviar within six months.

Caviar - the name is Persian for "bearing eggs', from the roe of the sturgeon
- has been a luxury for more than three centuries. A spokesman for one
importing firm said good quality caviar should be eaten only from a
mother-of-pearl spoon because a silver or metal one would spoil the taste,
and it should be accompanied by nothing apart from "a good Brut champagne''.
Peter the Great employed 50 fishermen to keep the royal tables stocked with
the "food of kings''.

One of the first Bolshevik acts after the Russian revolution was to make it a
state monopoly and strictly control its trade. The Communists took care to
conserve the supreme symbol of capitalist indulgence.

The old Soviet Union had a treaty with Iran, the only other country then
bordering the Caspian, to regulate sturgeon catches and conserve the stocks.
But this collapsed with the break-up of the Soviet Union at the beginning of
the Nineties. The new nations of Kazakhstan, Azerbaijan, and Turkmenistan,
which appeared around the world's largest inland sea, see the sturgeon as
"hard currency with fins", conservationists say. The price of a pound of
high-quality caviar can range from pounds 300 to pounds 2,000.

The sturgeon, the world's largest freshwater fish, can live for 100 years but
it takes 18 years to reach sexual maturity and females spawn only three times
in their lives, making the species extremely vulnerable to over-fishing. The
new states have resisted all control on catches, and 90 per cent of the fish
are caught before they have spawned, which means the chance to reproduce has
gone.

Though sturgeons can grow to weigh more than a ton, they are so heavily
exploited that catching one weighing 100lbs-plus is rare.

The fish are also threatened by dams, which prevent them migrating up rivers
to spawn, by pollution, by plans to exploit oil from the sea - and even by
radioactive debris from the Chernobyl nuclear disaster.

Russia has tried to save the fish by releasing 80 million fry every year and
banning catching them in the sea. But the rapid decline of the species, which
has survived since the age of the dinosaurs 250 million years ago, continues.

Earlier this month, the committee of the Convention on International Trade in
Endangered Species met to try to work out measures to conserve the fish. They
meet again early next year.

Stuart Chapman, head of the species programme for WWF-UK, says: "This is the
last chance for countries to tackle the sturgeon crisis.''

*******

#7
Novaya Gazeta
March 26-April 1, 2001
THE FOREIGN BANK ACCOUNTS OF ALEXANDER VOLOSHIN
Alexander Voloshin: how much has he cost the Russian Federation?
Author: Oleg Lurie
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
THE CORRUPTION.RU WEBSITE ALLEGES THAT ALEXANDER VOLOSHIN, HEAD OF THE PRESIDENTIAL ADMINISTRATION, ACTED IMPROPERLY DURING PRIVATIZATION PROCEDURES IN THE MID-1990S. THIS CONCERNS PRIVATIZATION OF THE SIBNEFT OIL COMPANY AND CERTAIN OTHER ENTERPRISES; ALLEGEDLY, VOLOSHIN HAS TRANSFERRED MILLIONS ABROAD.
 
WRITING ABOUT ALEXANDER VOLOSHIN, HEAD OF THE PRESIDENTIAL ADMINISTRATION, IS A VERY INTERESTING EXPERIENCE. I HAVE WRITTEN SEVERAL ARTICLES ABOUT VOLOSHIN; BUT SOMETHING STRANGE HAS BEEN HAPPENING THESE LAST SIX MONTHS. WHEN MY ARTICLE ON THE SUSPECTED EMBEZZLEMENT (PRESUMABLY BY VOLOSHIN) OF $100,000 FROM SHAREHOLDERS OF THE AGROSERVIS COMPANY WAS PUBLISHED, I WAS APPROACHED BY DETECTIVES FROM THE MOSCOW MUNICIPAL PROSECUTOR'S OFFICE. THEY PRESENTED A WARRANT AND CONFISCATED ALL MY DOCUMENTS AND MATERIALS, SAYING I HAD BECOME A WITNESS IN THE CASE OF "REVEALING SECRETS OF THE INVESTIGATION". (WELL, THIS IS A STATE SECRET NOW, BECAUSE VOLOSHIN HOLDS ONE OF THE TOP POSITIONS IN THE STATE.)
 
THE OTHER DAY I FOUND AN AMAZING DOCUMENT ON THE CORRUPTION.RU WEBSITE. IT WAS RELATED TO VOLOSHIN...
 
      It is common knowledge that Voloshin played an active role in the
so-called "wild privatization" of 1994-97. This was the period when
oligarchs took over Russia's major enterprises. They got these assets for
virtually nothing, thanks to some extent to Voloshin.
      Between 1995 and 1997 Voloshin headed the Federal Fund Corporation
(FFK) established by the Russian State Property Fund. FFK represented the
latter at specialized auctions where state property was sold. Apart from
the Russian State Property Fund, the list of founders of Voloshin's agency
included the AKM company (Voloshin again) and the National Automobile
Alliance (Boris Berezovsky). As always, the teacher and the pupil were
inseparable when there were some chunks of property to redistribute.
      FFK seriously bent the rules in the process of privatizing the
Sibneft oil company. In fact, this was a process of transferring Sibneft to
the control of Berezovsky and Roman Abramovich. Moreover, the Auditing
Commission and other auditing agencies uncovered numerous infractions on
Voloshin's part in the way FFK organized auctions back in 1995-97. FFK and
its agents participated in organizing 61 special auctions, with a total
value of 8,728,955,000,000 non-denominated rubles. Commission taken by
Voloshin's agency amounted to 418,989,000,000 rubles, or almost $83 million.
      Actually, Voloshin and his team were actually entitled to only $28
million of this. The rest was misappropriated. In other words, Voloshin's
FFK agency robbed the federal budget of $55 million.
      Along with that, FFK deliberately undervalued the lots. Specialists
of the Auditing Commission say this practice cost the Russian budget
another $23 million. It should be noted that all this data concerns only
ten auctions.
      Having made so much money by 1996, Voloshin needed a place to keep
it. He wasn't very innovative. Voloshin transferred all the money abroad.
His "business partners" Sokolov and Semenyaka did the same.
      The website shows a sample signature card for opening bank accounts,
belonging to the offshore company Glynford Financial Services Limited,
registered at 102 Sydney Street, London. Bank account No. 300000 1200201 at
the offshore subsidiary of Guta-Bank in the Bahamas. Voloshin, Sokolov, and
Semenyaka have primary signature rights. Alexander Voloshin is director of
the company.
      The account was opened on May 31, 1996, when privatization operations
of the three friends were over. Our sources say millions of dollars of
"Russian money" were transferred through the account of Glynford Financial
Services.
 (Translated by A. Ignatkin)

*******

#8
TITLE:  STATEMENT BY THE PRESIDENT OF THE RUSSIAN FEDERATION VLADIMIR PUTIN MADE AT A CONFERENCE IN THE KREMLIN
[RTR VESTI PROGRAM, 17:00, MARCH 28, 2001]
SOURCE: FEDERAL NEWS SERVICE (http://www.fednews.ru/)

     Anchor: Good day. This is Vesti with Anna Titova in the
studio. It became known less than an hour ago that Vladimir Putin
has made changes in Russia's force agencies. The President has just
announced them in the Kremlin and we have just received this film.

     Putin: As you know, a Commission on Military Reform has worked
for a year and a half and dealt not only with the Defense Ministry.
The Commission dealt with the entire military organization of the
state and all sectors connected with this area. And the time came
for the adoption of the appropriate personnel decisions. And they
were taken today.
     These decisions, I repeat, are the logical completion of one
of the stages of work to modernize the military component of our
country and they are as follows. Changes were made in the Defense
Ministry, the Interior Ministry and the Security Council. We
discussed this matter yesterday with the Defense Minister, with
Igor Dmitriyevich Sergeyev. We arrived at the conclusion that in
contemporary conditions, in conditions of the reform of the Armed
Forces, it is well-founded to have a civilian fill the post of
Minister of Defense of the Russian Federation. And Igor
Dmitriyevich has submitted to me a corresponding request on this
matter.
     I will now name the changes that were made and then we will
discuss with you in a working mode some questions connected with
these changes.
     Igor Dmitriyevich is leaving the post of Defense Minister of
the Russian Federation and Secretary of the Security Council of
Russia Sergei Borisovich Ivanov is appointed to this post. But
before speaking about the new minister I would like to thank Igor
Dmitriyevich Sergeyev for his tremendous contribution to the
strengthening of Russia's defense capability. Igor Dmitriyevich
spent his whole life in the Armed Forces, spent virtually his whole
life in the Armed Forces, he stood at the cradle of the rocket
forces. These are not empty words. He has, indeed, made a
tremendous contribution to the establishment of these forces, their
development and their strengthening at the present very complicated
stage of their development.
     Igor Dmitriyevich, as it is now fashionable to say, remains a
member of our team. He is moving over to the presidential staff and
will work as a presidential aide. He will be fulfilling very
important tasks not only for the head of state but also for the
whole of our country he will be organizing all agencies and
ministries, work on the problem including on the process of
negotiations on strategic stability. Igor Dmitriyevich, thank you
very much. Be seated. Thank you.
     Sergei Borisovich Ivanov headed the working group which
prepared the draft of the reform. I think that his appointment to
the post of Defense Minister is well-founded. Since he headed the
group that worked out the main parameters of the reform I think it
is fair to entrust to him their direct translation into life, their
implementation.
     At the same time, prominent and tested professionals are
coming to the Defense Ministry. The present Deputy Secretary of the
Security Council Colonel General Moskovsky is returning to the
Defense Ministry. There are some other changes as well. Colonel
General Puzanov has been relieved of his post of commander of the
Moscow Military District and appointed Deputy Defense Minister,
State Secretary.
     The commander of the Land Forces has been appointed as well as
the commander of the Space Forces. As you understand, the post of
Secretary of the Security Council has become vacant. This post is
an extremely important one to me as head of state because this is
a body which shoulders a tremendous responsibility today. I asked
Vladimir Borisovich Rushailo to accept this post. He has agreed.
Thank you, Vladimir Borisovich.
     Boris Gryzlov, leader of the Unity faction in the State Duma,
has been appointed Minister of Internal Affairs of the Russian
Federation. As we understand, this is a political appointment.
Returning to the Interior Ministry with him is the former Deputy
Minister of Internal Affairs Vladimir Abdualiyevich Vasilyev, an
experienced and knowing person. And I count on him...
     Today we discussed this with Vladimir Borisovich. As a person
who on behalf and on the instruction of the President coordinates
the activities of the force structures he will not be a member of
the Interior Ministry but will exert a direct influence on the
activities of the Ministry and give the ministers the necessary
assistance and support.
     Besides, I am counting on the Security Council paying more
attention to the problems of the Northern Caucasus in the new
conditions today. This includes interaction in the sphere of
personnel. This is not a chance decision. Among other reasons it is
connected with the changed situation in the Caucasus, with the
changed situation in the Chechen Republic. The fight against
corruption, money laundering and unlawful export of capital will
constitute an important component of the Security Council's work.
This sector of work in the Security Council will be headed by
Vyacheslav Fyodorovich Soltaganov who until now was acting head of
the country's Tax Police. He will be replaced by Mikhail Yefimovich
Fradkov.
     Mikhail Yefimovich, as you know, is a civilian, for quite a
long time he was Minister for External Economic Ties of the Russian
Federation. A candidate of economic sciences. When he was First
Deputy Secretary of the Security Council he dealt with problems of
the country's economic security.
     As you see, civilians are appearing in key posts in our
military agencies. This, too, was done deliberately. This is a step
towards the demilitarization of society's life in Russia. And along
to the appointment of civilians to key posts in these agencies we
are also appointing professionals along with them to each of these
agencies. For instance, Deputy Minister for Taxes and Charges
Sergei Vladimirovich Veryovkin is going to the Tax Police together
with Fradkov.
     These are not all the appointments that I will make. And there
are some that definitely will attract the public's attention. I
think that for the first time in our history we will have a woman
serving as Deputy Defense Minister of the Russian Federation. Till
now Lyubov Kudelina was a Deputy Minister of Finance.
     We discussed this with Igor Dmitriyevich Sergeyev yesterday.
He most vigorously supported this decision. Lyubov Kondratyevna is
well known and is very experienced. I will not say that the
chairman of the government was delighted by this decision. He feels
sorry that Lyubov Kondratyevna is leaving for the Defense Ministry.
But I think that in the present situation, today, she is more
needed there.
     The Minister of Atomic Energy Yevgeny Olegovich Adamov has
requested his resignation. This request has been granted. If
necessary, Yevgeny Anatolyevich himself will explain his motives,
his reasons to resign.
     I must say that Yevgeny Olegovich has done much in recent
years to strengthen this industry. This is a fact. And I think we
will thank him for his performance. The Director of the Kurchatov
Institute has been appointed to this post. Present yourself,
please. Sit down, Alexander Yuryevich Rumyantsev. He was the
director of the Institute from 1994. He is a Doctor of Physics and
Mathematics, a member of the Academy of Sciences and probably one
of the youngest officials of such rank. In fact, on this level he
is the youngest one.
     These are the main appointments which were made today. In the
remaining part of the day we definitely will meet with the
leaderships of these agencies and discuss the prime task to
organize work.

*******

#9
New York Times
March 29, 2001
[for personal use only]
U.S. Reviewing Aid Meant to Contain Russia's Arsenal
By JUDITH MILLER
 
The White House is starting a comprehensive review of all American aid
programs to Russia set up to stop the spread of nuclear, biological and
chemical weapons, a senior administration official said yesterday.

The broad review, initiated by National Security Council officials who have
previously been critical of some of these programs, is likely to change
significantly how Washington spends more than $760 million a year trying to
dismantle former Soviet nuclear, biological and chemical complexes and
prevent unconventional weapons and hazardous materials from being either sold
to rogue states and terrorist groups or stolen by them.

The senior official said that several of the programs, such as the Department
of Energy's $173 million program to strengthen the security and accounting
for fissile material at nuclear weapons storage sites, appeared to be "very
effective." Others, several administration officials said, may not be money
well spent, like the more than $6 billion long- term effort to help Russia
and the United States dispose of 34 metric tons of weapons-grade plutonium
each. Programs deemed ineffective could be sharply reduced, or even scuttled,
officials said.

The review comes at a time of growing tension between Russia and the United
States fueled by the administration's discovery of a suspected Russian spy in
the top ranks of the F.B.I., its determination to build a shield against
nuclear missiles, and its criticism of Russia for selling nuclear technology
to Iran.

The administration's adoption of what it calls a "realistic" or
"unsentimental" approach to Russia has prompted Russian officials to accuse
Washington of being out of step with the times, intent on reviving cold war
policies, and abandoning the previous administration's effort to treat Russia
as a partner.

Hence, the administration's review of nonproliferation policies risks
heightening tensions with Russia at a time of great internal change in that
country.

It could also fuel concerns among Democrats and other critics of President
Bush's more conservative stance toward Russia that the administration might
use the review to punish Russia for selling technology to Iran or to justify
deep cuts in nonproliferation programs. The senior administration official
stressed yesterday that the review was aimed at improving the quality,
effectiveness and transparency of the nonproliferation programs.

Its goal is not to punish Russia or undermine American commitment to helping
Russia safeguard dangerous weapons material and prevent the theft, diversion
or sale of unconventional weapons and expertise.

"This is not a challenge to Russia or an effort to dismantle nonproliferation
programs," the official said. "This is about enabling the progress we've made
to continue and making nonproliferation programs even more effective. We want
to strengthen nonproliferation."

The review is examining dozens of programs run mainly by the State
Department, Pentagon and Department of Energy that have poured millions of
dollars into Russia and the former Soviet republics since the cold war. Most
were created by the Clinton administration, but a few began as Congressional
initiatives backed by former President George Bush.

The wide-ranging programs have tried to help Russia dismantle its vast
unconventional weapons complexes, safeguard nuclear and other hazardous
materials and prevent the former Soviet scientists who produced them from
selling their products and skills to rogue states and terrorist groups.

The review is parallel to a broad review of Russia policy by the White House
recently but separate from it. The nonproliferation review will be conducted
by senior officials at the National Security Council and is expected to last
six to eight weeks, officials said. In the meantime, the official said, the
programs will continue.

Officials said it was also separate from the across-the-board cuts in fiscal
2002 budgets that the Office of Management and Budget has asked agencies to
make to accommodate President Bush's proposed tax cuts.

According to the review's "terms of reference," portions of which were read
to a New York Times reporter, it will explore, among other things, the
"cost-benefit ratio" of each major program and how well it serves America's
national interest, whether Russia and other countries should shoulder a
larger share of its cost, and whether the program should have a "sunset"
provision to ensure it does not continue after its objectives have been met.
It will also evaluate whether Russia has been sufficiently supportive of the
program and examine whether there are other programs that might better serve
nonproliferation goals or better ways of coordinating the programs.

While the official was reluctant to discuss the administration's attitudes
towards specific programs in advance of the review, he said that the
"scorecard" of the Department of Defense's Cooperative Threat Reduction
programs, which received $458 million from Congress in this fiscal year, was
"pretty impressive." By the end of 2000, an administration official said,
those programs, among other things, had deactivated 5,288 missile warheads,
destroyed 419 long-range nuclear missiles and 367 silos, eliminated 81
bombers, 292 submarine missile launchers and 174 submarine missiles, and
sealed 194 nuclear test holes and sites in Russia and other former Soviet
republics.

The official also praised the Department of Energy's program that permits the
United States to buy and convert 500 metric tons of highly enriched uranium,
the equivalent of 25,000 warheads, to low-enriched uranium that can be used
as commercial fuel in nuclear reactors. Administration officials said that
since the agreement was reached in 1994, about 110 metric tons of such
uranium has been purchased and converteded.

Administration officials and other experts criticized two programs â?" the
Department of Energy's $6 billion effort to dispose of Russian and American
plutonium, to which Congress has appropriated $280 million to date, and its
Nuclear Cities Initiative. Established in September, 1998 to stop the brain
drain from Russia's vast, closed nuclear cities and reduce the size of the
massive complexes, the program has been pummeled on Capitol Hill. In fiscal
2000, Congress halved the initiative's budget and placed other conditions on
spending.

The impending review received a strong endorsement yesterday from an
influential Democrat who helped pioneer nonproliferation programs with
post-Communist Russia. Former Senator Sam Nunn of Georgia said that any new
administration "should take a comprehensive look at programs to reduce the
threat of weapons, materiel, and know-how coming out of the Soviet Union."
The programs, he added, "need better cooperation and to fit into a broader
strategic picture."

Mr. Nunn, who now chairs the Nuclear Threat Initiative, a private group
financed by Ted Turner to reduce the threat of nuclear and other
unconventional weapons, presided this week over a conference in Atlanta on
nonproliferation challenges in Russia. He said that both Russian and American
participants would "favor strengthening those programs," despite some frank
discussion of their weaknesses.

Senator Nunn said that he hoped the review would give such programs a higher
priority in the new administration.

Howard Baker, the former Senate majority leader from Tennessee whom President
Bush has nominated as ambassador to Japan, urged the administration not to
cut money for nonproliferation programs in testimony before the Senate
Foreign Relations Committee yesterday.

Senator Baker was co-chairman of an Energy Department-backed task force that
recommended that $30 billion be spent over 8 to 10 years to help secure or
neutralize Russia's nuclear weapons-usable material and keep its scientists
conducting legitimate work.

Ronald F. Lehman II, a former director of the Arms Control and Disarmament
Agency in the Reagan and Bush administrations and a champion of cooperation
with Russia in nonproliferation, told the committee that all of the programs
would benefit greatly from a "bold review" and a "clearer vision of goals,
strategy, and priorities."

A concern among Democrats was articulated by Kenneth N. Luongo, a former
Clinton administration official who is executive director of the Russian
American Nuclear Security Advisory Council, which promotes American-Russian
cooperative security initiatives. He said that while he welcomed a review in
principle, he feared that it might not be fair and might reflect the
administration's biases. "A prejudiced review that looks at what can be
eliminated, and not what can be improved, is missing an enormous opportunity
and is likely to further rile relations with Russia," he said.

*******

#10
Itogi
No. 12, March 2001
THE USELESS ARMADA
Government relies on quantity of PR consultants, not quality of
policies
President Putin continues to operate in stagnation mode
Author: Dmitry Pinsker
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
ALL THE GOVERNMENT'S PR RESOURCES HAVE BEEN WORKING FOR MONTHS, BUT THERE IS NOTHING TO SHOW FOR ALL THEIR EFFORTS. THE PROBLEM IS THAT THERE IS NO POLICY FOR WHICH THEY ARE SUPPOSED TO CREATE A FAVORABLE BACKGROUND. SETTING UP YET ANOTHER PROPAGANDA DIVISION IS UNLIKELY TO CHANGE THE SITUATION.

     "We will remain in the shadows, emerging into the spotlight only
infrequently. We do not shape or draw up policies. We are here to
create a favorable informational background for implementation of
policies," said presidential aide Sergei Yastrzhembsky in his capacity
as head of the Information Directorate, a new structural subdivision
of the presidential administration.
     The appearance of a new bureaucratic structure might have gone
unnoticed, were it not for an already considerable number of
organizations operating in the area of "state PR". Apart from the
broad network of press services and PR departments of various
ministries and departments, including the Cabinet information
department and the presidential PR department, Media Minister Mikhail
Lesin is also involved in this particular sphere. A month ago he
announced plans to launch a PR campaign aimed at creating a positive
image of Russia abroad, particularly in the United States.
     The largest media holding in Russia, the All-Russian State TV-
and Radio-Broadcasting Company, is also on the list. Its CEO Oleg
Dobrodeev has successfully completed the process of absorbing state
media companies, initiated by his predecessors. The only independent
structures were the ITAR-TASS news agency and the ORT (Russian Public
Television) network, in which the state owned 51% by then. Officially,
ORT is independent even now. In practice, however, Dobrodeev had all
but taken over the network even before Boris Berezovsky decided to
part with his shares.
     The list of Kremlin propagandists would incomplete without Gleb
Pavlovsky's Effective Policy Foundation. The EFP, owner of a great
many on-line media outlets, received a generous grant from the Kremlin
last summer and set up another propaganda website: Strana.ru. It
should be noted that Pavlovsky does not restrict himself to consulting
with presidential advisers and working on political concepts and the
president's address to the Federal Assembly. He is audacious enough to
almost speak on behalf of Vladimir Putin, particularly when airing all
sorts of provocative ideas. Pavlovsky has not been reproved for this;
a sure sign that he must have been authorized to do so.
     This Great Armada of propagandists, imagemakers, strategists, and
thinkers has been working on a "positive image" for months.
Unfortunately, there is nothing to show for all their efforts. It's
not that they're all hopeless incompetents; the problem is that there
is no policy for which they are supposed to create a favorable
background.
     All attempts to create a positive image of the Russian government
are thwarted by the president's own inconsistency and the chaos in the
circles close to him. It's enough to recall the public clash between
the Kremlin administration and the Cabinet/RJES tandem over
restructuring the electricity monopoly; and the quarrel among senior
officials over foreign debts. Each time, the president did his best to
avoid the necessity of making a choice, taking a stand, and sorting
out conflicts within his team.
     The Kremlin administration does not include strategists who could
offer the president a promising program of action. As a result,
President Putin encountered a crisis of ideas last autumn. Since then
he has inevitably opted to work in stagnation mode, avoiding
unequivocal statements and resolute action.
     The president granted an interview to four Russian newspapers
last week. His answers do not even hint at any strategy or plan...
     The president will deliver his address to parliament on April 3.
The address has been postponed three times, for the same reason - the
lack of a central idea that could bind together old and new
initiatives for reorganizing the state apparatus, the economy, and
social affairs. Each topic, whether economic deregulation or
reorganizing the apparatus, is at the center of vicious battles in the
presidential administration and the Cabinet. As usual, Putin is not
ready to make a choice.
     Another propaganda division, headed by Yastrzhembsky, is unlikely
to change the existing situation. When it encounters a problem, a
bureaucratic system does not try to negotiate it. Instead, the system
spreads responsibility by generating more and more new structures.

********

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