May 24, 2001 

This Date's Issues:   5267

Johnson's Russia List
#5267
24 May 2001
davidjohnson@erols.com

[Note from David Johnson:
1. RFE/RL: Andrew Tully: Chubais Views Economic Future Optimistically.
2. The Nixon Center: NTV: Past, Present & Future. A Conversation with Boris Jordan, General Director, NTV.
3. Interfax: MOST RUSSIANS GIVE PREFERENCE TO ECONOMIC DEVELOPMENT OVER DEMOCRATIC LIBERTIES.
4. strana.ru: Work stoppages in Russia on the wane.
5. Reuters: Russian parliament in new tough debate on parties.
6. Nezavisimaya Gazeta: Vladimir Lysenko, FROM A MULTI-PARTY SYSTEM TO A FEW PARTIES. The Duma is ready to follow the Federation Council's lead. This law will place political parties under bureaucratic control.
7. Arthur George: Chicago Days in Moscow festival.
8. James Oberg: request for information.
9. Vlad Ivanenko: Re: 5266-11 Boris Jordan on NTV.
10. Reuters: Putin wins backing for ambitious court reforms.
11. Vremya MN: YEVGENY PRIMAKOV: WHATEVER IS GIVEN BY GOD, SHOULD BELONG. TO SOCIETY AS A WHOLE. (interview)
12. Moskovsky Komsomolets: Alexander Budberg, THE "BOUGHT" UNITED STATES. How exiled tycoon Vladimir Gusinsky won Washington's support.] 

*******

#1
Russia: Chubais Views Economic Future Optimistically
By Andrew F. Tully

Anatoly Chubais -- the Russian energy magnate and political figure -- 
believes his country's revolution took place during the past 10 years. He 
says this was a time when Russia took the important step toward a market 
economy and democracy. He says these new institutions are not yet working 
efficiently, but he also believes they will never be reversed. Our 
correspondent Andrew F. Tully reports. 

Washington, 23 May 2001 (RFE/RL) -- Anatoly Chubais -- the chairman of the 
Unified Energy System (UES), Russia's electric utility -- says he is 
optimistic about his nation's economic future.

The business magnate says his major concerns are with the direction of 
Russian politics.

Chubais gave these assessments on 22 May during an appearance in Washington 
co-sponsored by two policy analysis institutions: the Carnegie Endowment for 
World Peace and the Center for Strategic and International Studies.

The UES chairman said he believes the changes in Russia since the breakup of 
the Soviet Union are irreversible. He said no one today says openly that 
private property should be nationalized, or that free elections should be 
ended, or that the Russian Constitution should be revoked, or that free 
speech is a bad thing. This is because these institutions -- these values -- 
have become an integral part of Russian life, according to Chubais.

"I do believe that this decade -- this 10 years of the Russian history -- was 
the real revolution, with the fundamental changes of the most important 
social [and] political institutions and values, and I believe that what is 
achieved in this 10 years' time is really [a] fantastical achievement." 

Chubais was quick to add that few if any of the country's new institutions 
and values are working efficiently. Primarily, he said, corruption undermines 
the rights of people who invest in business enterprises, and private property 
is not protected. And politically, he said, democracy and free speech are 
"under pressure."

But he said the very establishment of these institutions and values gives 
them the potential to become more efficient or even less efficient. But he 
emphasized that they probably will never be canceled outright.

He attributed these changes to the presidency of Boris Yeltsin. He said 
Yeltsin's hand-picked successor, Vladimir Putin, may not have the same 
enthusiasm for change, but he doubts that even the current president can or 
even would try to undo a decade of reform.

"I believe that this current situation in Russia [the Putin presidency] is 
something new comparing [compared] with the Yeltsin time, and that Putin is 
not Yeltsin, but at the same time I don't believe that there is a real chance 
for anybody, including Putin, to put the Russian history back."

The UES chairman cited his own company as evidence that Russia is 
irreversibly on the road to true capitalism. He said that in first years 
after the breakup of the Soviet Union, much business was conducted by barter 
-- or, too often, businesses were not paid at all for their goods or 
services. Now, he said, cash payment is increasingly becoming the norm. And 
he said UES has accepted no barter since the end of last year.

According to Chubais, this means that the Russian economy is becoming more 
"civilized."

Chubais said his main concerns about Russia's near future involve politics. 
He addressed this issue both as a political figure and as a businessman.

"My major concern is the human rights, the democracy, the freedom of speech 
because there is no market -- there is no market without freedom."

Chubais said he supports Putin's initiatives on reforming Russia's tax and 
pension systems, on legal reform, and on modernizing the country's military. 
But the only specific concern he cited was Russia's decision to restore the 
Stalinist-era national anthem. Several members of the audience asked for more 
details of his concerns, but his answers were general and sometimes vague.

Chubais was in the U.S. to meet with investors in the UES and to learn about 
America's experience with deregulating some electrical utilities, according 
to the Russian news agency Interfax. He also met on 22 May with U.S. Vice 
President Dick Cheney, who is President George W. Bush's leading expert on 
energy issues. Cheney's office did not immediately disclose details of the 
meeting.

*******

#2
From: The Nixon Center <NixonCenter@lists.postmastergeneral.com>
Subject: Program Brief -- Boris Jordan
Date: Wed, 23 May 2001 

"NTV: Past, Present & Future"
A Conversation with Boris Jordan, General Director, NTV
May 22, 2001
The Nixon Center, Washington, DC

Russian oligarch Vladimir Gusinsky lost control of the television
network NTV as a result of complete financial mismanagement, poor
business decisions, and a dangerous financial dependency on the Russian
gas monopoly Gazprom, said NTV's new General Director, Boris Jordan, at
a recent Nixon Center luncheon. Jordan also acknowledged that Gazprom's
seizure of management control of NTV from Gusinsky's Media-MOST holding
was in part politically motivated -- the channel was fiercely opposed to
the Kremlin -- and called Gusinsky's arrest last year "preposterous." 
Nixon Center Board member Lionel H. Olmer, a Partner at Paul, Weiss,
Rifkind, Wharton & Garrison and a former Under Secretary of Commerce for
International Trade, moderated the discussion.

NTV's Financial Condition

According to Jordan, NTV is in dire financial shape after years of
mismanagement by its founder, Vladimir Gusinsky. Jordan explained that
NTV had taken on some $1.5 billion in short-term debt from the state and
state-related businesses (including Gazprom) despite the fact that the
annual volume of Russia's advertising market is currently only $1
billion. As a result, he said, the network had no hope of repaying its
debts. NTV used what Jordan termed "black advertising" -- payments from
Russian companies to refrain from negative news coverage or guarantee
positive coverage -- in an effort to make up the shortfall.

Jordan also argued that the previous NTV management made a variety of
poor business decisions, such as spending $200 million to buy (rather
than rent) satellites to launch a satellite television service that the
Russian media market could not yet support. He expects to be able to
cut operating costs by 30% -- from $94 million to about $70 million --
strictly through more efficient management of the firm. Still, Jordan
admits that turning NTV around will be a major challenge: he said a
PricewaterhouseCoopers audit he requested stated that the company is not
an ongoing concern. According to Jordan, this language would usually
force an immediate filing for bankruptcy in the United States.

Moving forward, Jordan expects to begin looking for a strategic foreign
investor within 6-12 months, after reorganizing NTV and rationalizing
its operations. He expressed resistance to seeking Russian investors in
the network, arguing that it would again become a political tool of
Russian business interests. 

Gazprom, the Kremlin, and the Media

Jordan asserted that he exacted two commitments from Gazprom before
agreeing to take his current position. First, he said, Gazprom must not
interfere in the network's editorial policy. Second, he said, it must
sell down its stake in the channel. Nevertheless, one participant
questioned whether NTV had given sufficient and unbiased coverage to
allegations of poor corporate governance, insider dealing, and other
abuses within Gazprom. Jordan insisted that the channel was preparing a
major report on Gazprom in anticipation of a management transition
expected during the summer and promised other reporting on the gas
monopoly.

More broadly, Jordan emphasized that he was much more concerned about
threats to NTV's editorial independence from other Russian tycoons
seeking to exploit the network's weakness than those from the Russian
state. He argued that the NTV controversy has made the channel
"radioactive" from the government's perspective and suggested that the
Kremlin would be reluctant to create an impression that it was
interfering in its editorial policy.

In fact, Jordan said, he considered NTV to have had an easy time
compared to many regional media in Russia, which he suggested were
dominated by provincial governors. Regional media are even more
vulnerable financially than NTV, he said, and have become very heavily
dependent on local government subsidies or, alternatively, unofficial
subsidies in the form of "black advertising" by regional business
leaders supporting various political factions.

Plans for the New NTV

Mr. Jordan argued that NTV was never an independent network under
Vladimir Gusinsky's management because its reporting always reflected
his personal agenda. Jordan outlined four measures he is implementing
to protect the channel's editorial independence:

- NTV's staff elected its new chief editor and top news anchor, Tatiana
Mitkova, a highly respected television journalist known for resisting
direction from Soviet television officials;

- NTV's staff has also selected an eleven-member editorial board
composed solely of Russian journalists with no management participation
-- the first of its kind in Russia;

- NTV has prepared the first-ever "charter" for a Russian network
outlining relations between the editorial board and management and the
shareholders and management and establishing a code of conduct for
journalists; and,

- NTV will form an advisory board to include Russian, American, and
European journalists who will monitor its independence.

Though he admitted that rebuilding NTV will be a major challenge, Jordan
expressed optimism that he might be able to create Russia's first truly
independent television network. He urged outside observers to monitor
NTV's reporting and form their own judgments.

This Program Brief was prepared by Nixon Center Director Paul J.
Saunders.

******

#3
MOST RUSSIANS GIVE PREFERENCE TO ECONOMIC DEVELOPMENT OVER DEMOCRATIC LIBERTIES

MOSCOW. May 22 (Interfax) - As many as 69% of Russians believe the
advancement of domestic production to be in their interests above all
else.

This figure come from a representative poll of 1,600 Russian
nationals conducted by the All-Russian Public Opinion Center that was
reported to Interfax on Tuesday. Those interviewed were requested to
choose from a list four or five political tasks which they thought were
in line with their own interests and the interests of their families.

The other priorities named in the poll were the strengthening of
defense capabilities (47%) and the protection of domestic manufacturers
(47%).

These were followed by keeping Russia a great power (35%), the
advancement of Russian commodities on world markets (30%), the
development and strengthening of ties with other countries (24%), the
promotion of private enterprise and competition (18%), the development
of an open and competitive economy (13%), and the advancement and
strengthening of democracy and free speech (12%).

The last on the top ten of political tasks was the strengthening of
the vertical authority of the government (9%).

*******

#4
strana.ru
May 23, 2001
Work stoppages in Russia on the wane

According to figures released by the State Statistics Committee on May 23, 
there has been a sharp drop in work stoppages in Russia this year in 
comparison with last year. 

Only three enterprises and organizations were affected by strikes lasting 
more than one workday in April 2001. Some 140,000 people were involved in 
them. 

By contrast, in April last year 22 enterprises and 2.1 thousand people were 
affected by strikes, with the time thus wasted amounting to 7,000 man-days. 

This year's March saw only one strike (as against 83 in March of last year). 
The corresponding figures for February are 24 and 210 and for January - 40 
and 477.

People involved in the housing and utilities services and education resorted 
to strike action in April 2001. The work stoppage was over back pay. 

******

#5
Russian parliament in new tough debate on parties
By Ron Popeski

MOSCOW, May 23 (Reuters) - Russia's political parties geared up on Wednesday 
for a new battle in parliament over President Vladimir Putin's bill governing 
their activities, with several denouncing plans to control their finances. 

The bill, given initial approval in February, is due for a second reading in 
the State Duma, the lower house, on Thursday and officials said some 1,500 
amendments had been submitted. 

Most bills in Russia need three readings to become law, with the most 
detailed examination coming during the second reading. 

Debate on the bill has already prompted some of 180-odd parties and other 
groups which emerged in the aftermath of communism's collapse to regroup to 
improve their chances in elections frequently clogged with more than a dozen 
candidates. 

The legislation seeks to reduce the number of political groups in Russia by 
setting a minimum of 10,000 members to establish a party and eliminating the 
practice of broad-based "movements" competing in elections. 

It would also require parties to function on the basis of public funding, 
linked to electoral performance and subject to stringent checks. 

PRINCIPLE NOW ACCEPTED 

Most major parties, which initially feared the bill would give the Kremlin 
greater control over political life, now accept the principle of reducing the 
number of groups competing for the attention of often disaffected post-Soviet 
voters. 

But both the Communists, the largest group in the Duma, and right-of-centre 
parties reject provisions on finances. 

"Today, the money is with right-wing parties...They have sacks of money and 
have never been checked," Communist leader Gennady Zyuganov told Ekho Moskvy 
radio, saying his party had proposed 300 "very significant" amendments. 

"It is important to have a law enabling parties to exist and operate 
properly, not another straitjacket." 

Parties to either side of centre -- including the Union of Right-Wing Forces 
(SPS) of former deputy premier Boris Nemtsov and the Fatherland-All Russia 
party of ex-premier Yevgeny Primakov -- also oppose the financing rules. They 
are also unhappy at rules empowering authorities to wind up parties. 

The Russia Regions group objects to provisions barring parties based in 
specific regions from running. 

Alexander Veshnyakov, head of the Central Election Commission, predicted the 
bill could become law in July. 

ANTI-LAUNDERING MEASURE 

"I hope that the same number of Duma deputies which backed the bill on first 
reading will vote for it on second reading," he told a news conference. "Many 
of their proposals have been taken into consideration." 

He said the bill contained "additional guarantees against excesses by 
individual officials" and that the rules on financing would bar cash 
donations "which provide a legal chance to launder money." 

Putin's version of the bill won 280 votes in February, the only one of five 
drafts to clear the barrier of 226 needed to pass in the 450-seat Duma. 

The president has had little trouble securing passage for most legislation he 
has proposed since winning election just over a year ago. He has also 
consolidated central authority by severely cutting the powers of regional 
governors. 

Later this week, the Union of Right-Wing Forces holds a congress to bind its 
many currents into a single political party to try to shore up opinion poll 
ratings. 

Fatherland-All Russia clinched a merger agreement last month with the 
pro-Kremlin Unity Party, formed only weeks before the 1999 parliamentary 
election with the sole purpose of supporting Putin, who was prime minister at 
the time. 

******

#6
Nezavisimaya Gazeta
May 24, 2001
FROM A MULTI-PARTY SYSTEM TO A FEW PARTIES
The Duma is ready to follow the Federation Council's lead
This law will place political parties under bureaucratic control
Author: Vladimir Lysenko, Duma member and leader of the Republic Party
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
ADOPTION OF THE LAW ON POLITICAL PARTIES IN THE PRESIDENT'S VERSION WILL DRAMATICALLY CHANGE THE RULES OF POLITICS IN RUSSIA. THE PROVINCES WILL INEVITABLY BE REMOVED FROM POLITICS ON ALL LEVELS, AND ALL POLITICAL DECISIONS WILL BE MADE IN AND BY THE CENTER ALONE. 

It seems that construction of what is called the "state power 
hierarchy" is approaching its conclusion. Reorganization of the 
Federation Council (a "surplus" and therefore absolutely unnecessary 
house of parliament, as it is called) has been taken care of; now for 
the Duma. As it turns out, putting the lower house into its place 
within the power hierarchy or "the unified political field" (which 
essentially means a field controlled from the federal center) does not 
even require amending electoral legislation or the Constitution. 
Passage of the law on political parties will suffice.

Debate of the bill in the first reading six weeks ago resulted in 
criticism by the Duma, the public, and the media. It certainly seemed 
then that the bill would be significantly amended for the second 
reading. More than 1,500 amendments were proposed. Unfortunately, all 
of them were only minor.

Why? The answer lies in who drafted the amendments. The largest 
factions (Communists, Unity, and Fatherland - All Russia) did not 
propose a single amendment. All amendments mostly originated in 
democratic factions (the Union of Right Forces and Yabloko) and 
Russian Regions. That is why the Duma Committee for public and 
religious organizations, chaired by Viktor Zorkaltsev, member of the 
Central Committee of the Communist Party, made only insignificant 
changes to the bill, without bothering to amend the essentials. The 
president's version of bill benefits the former (Communists) and 
current (Unity) pro-government parties, fixing their advantages over 
others and transforming the multi-party system into a system of only a 
few parties. That is not all there is to it. In future, this system 
will be amended further - until only two parties remain in Russia.

Adoption of the law on political parties in this form will 
dramatically change the rules of politics in Russia.

Firstly, it will result in a drastic contraction of the political 
field and its participants. Analysts already speculate that only three 
political parties stand a chance of making it into in the next Duma.

What about other political parties and movements? What about the 
Russian citizens who dislike these three "favorites"? Essentially, 
political parties are told to disband or squeeze into the "three 
political niches" indicated by the state.

The new law gives parties two years to undergo re-registration, 
but the procedure promises to be difficult. Justice Ministry 
bureaucrats will require lists of 10,000 names of party members (with 
full personal details on each of them). At least 45 regional branches 
of the party should have no fewer than 100 members each, and the rest 
no fewer than 50. Only a few existing political parties meet these 
criteria at present. The Communist Party of the Russian Federation, 
successor to the CPSU, has about 300,000 members. The data on other 
parties' numbers is either contradictory or altogether absent. In 
accordance with the previous requirements, most federal political 
parties have 5,000 members, more or less. It means that they will have 
to canvass for new members. Given the public's political apathy, only 
the wealthy or those close to the government may hope to boost their 
numbers to any significant degree.

In Europe, about 5% of the population of any given country are 
members of political parties. Experts say that in Russia this figure 
does not exceed 0.5%. It means that the party system as a political 
institution has not taken root in our society yet. All the same, the 
new law is to do away with most federal political parties and with 
absolutely all local and regional public-political organizations. At 
least 50% of the politically active citizens of Russia are members of 
these organizations. The provinces will inevitably be removed from 
politics on all levels, and all political decisions will be made in 
and by the center alone. It means reverting to a unitary state, a loss 
of one of the major achievements of the past decade - the federal 
structure of the state. Lawmakers themselves invite part of the 
population to shift to non-parliamentary, street politics.

Secondly, adoption of the law will preserve lack of 
accountability for all executive power structures. Despite proposals 
of authors of the alternative drafts to introduce the practice of the 
party which wins a parliamentary election forming the government (or 
at least to allow Cabinet members and the president to be party 
members, to enable them to defend their policies), the president's 
version of the bill preserves the anachronistic postulate that only 
lawmakers may be party members. It means that parties alone can be 
involved in lawmaking. All real (executive) power in Russia is to be 
remain in the hands of the bulky bureaucratic apparatus. It will also 
mean that we will have "a president for all the people" (like in 
Yeltsin's case): meaning no one's president, accountable to no one and 
relying on his inner circle only.

Thirdly, adoption of the law will mean that political parties 
will be funded by the state every year, a detail which will be frowned 
upon by the majority of Russians, still living below the subsistence 
minimum.

Besides, finances of the political parties will be open for state 
inspection at any time. The Auditing Commission will be able to 
initiate audits of party budgets and sponsors, companies and 
individuals alike. It isn't hard to foresee that oppositionist parties 
will be audited more regularly and thoroughly, while the numbers of 
companies and individuals eager to support oppositionist parties will 
steadily drop.

And last but not least: the bill leaves intact numerous 
mechanisms for bureaucratic supremacy and tyranny over political 
parties. The matter concerns the so-called suspension of activities 
and other, more subtle tricks.

In other words, instead of enforcing public control over the 
state through political parties, the law will place political parties 
themselves under bureaucratic control. It automatically does away with 
even the possibility of the appearance of a strong constructive 
opposition, without which any state is doomed to stagnation and 
authoritarianism.

The law does not allow the party system to evolve naturally. 
Instead, the state itself is going to decide what kind of parties 
Russia needs and which ones it can do without, and what kind of party 
system Russia needs. Needless to say, the decision will be in favor of 
a two-party system; because this is what the president likes.

Will we ever learn from our own past mistakes, and from the 
experience of other democratic states?

******

#7
From: Arthur.L.George@BakerNet.com
Subject: Chicago Days in Moscow festival
Date: Tue, 22 May 2001 

One newsworthy event of note is that the Mayor's Offices of Chicago and
Moscow are holding the Chicago Days in Moscow festival next week (May
28-June 3), which features about 15 separate events showcasing Chicago for
Muscovites, including various classical and blues concerts, an exhibition at
the Manezh, a poetry reading, a business delegation, a joint medical seminar
and surgery on prostate cancer, establishment of a sister orphanage
relationship, a Chicago drama theater performance, radio and TV programming,
and various charitable donations. Details are available on the festival
website, www.chicagodays.com, which includes press releases to date. I'm
interested as I am Chairman of the Chicago-Moscow Sister Cities Committee
which is organizing the event. It would be nice if something about it could
go on this List. It could be from the Chicago press release, or something
that we submit for you. Would this be interesting? I would think so
because it is an example of how cooperation at the people-to-people and
local governmental levels continues despite tensions at the national
government level. A Moscow festival will follow next year in Chicago.

******

#8
From: JamesOberg@aol.com (James Oberg)
Date: Wed, 23 May 2001 15:23:37 EDT 
Subject: request for information 

I'm putting the manuscript of my book 'Star-Crossed Orbits: Inside the 
US/Russian Space Alliance' (McGraw-Hill, November 2001) to bed, and need one
final item: what is the status of the oil well and refinery fires in the 
Grozniy area and throughout Chechnya? A year ago, forty of them were on
fire. 

Have they all died out or been put out? For some reason when I asked NASA
for 
photographs from space which might show smoke plumes (like the ones from the
Kuwait wells in 1991), I was told that nobody ever glanced in that
direction. 

*******

#9
Date: Wed, 23 May 2001 
From: Vlad Ivanenko <vivanenk@uwo.ca>
Subject: Re: 5266-11 Boris Jordan on NTV

I have recently finished a paper on effective tax rates for Russian
economic sectors. The calculations are based on the input-output table for
1995. While the paper is not about mass media in Russia, I was puzzled to
discover in national accounts that the sector "Other activities related to
production", to which it belongs, is the only sector that is
gross-unprofitable. The single most important reason is excessive
expenditure on labor. Proportionally to total costs, labor expenses in the
sector is even higher than in banking.

Boris Jordan's assertion that there are so many wealthy contenders for
NTV' favor is consistent with macro-statistics showing that mass media in
transition has not been about making money commercially. 

Vlad Ivanenko, Ph.D. candidate in economics
Dept. of Economics, 4004 SSC,
University of Western Ontario
London, Ontario N6A 5C2, Canada

*******

#10
Putin wins backing for ambitious court reforms
By Peter Graff

MOSCOW, May 23 (Reuters) - President Vladimir Putin on Wednesday won backing 
from parliamentary leaders for an ambitious overhaul of Russia's Soviet-era 
legal system that the Kremlin says will reduce corruption and protect civil 
rights. 

Dmitry Kozak, a Kremlin aide who led a commission drawing up the reforms, 
told reporters the first four of 11 bills would go immediately to parliament 
with the rest to follow soon. 

Leaders of the State Duma, the lower house, gave broad support after meeting 
Putin, saying their objections to some details of the bills would be unlikely 
to derail the measures. 

"Even I did not expect such support from the State Duma," Kozak said, adding 
that he expected all the bills to pass in the summer, or autumn at the 
latest. 

The legislative package is extraordinarily complex, revising Russia's 
Soviet-era criminal, civil and commercial legal codes as well as setting out 
procedures to investigate wrongdoing by lawyers and judges. 

At the core of the reforms are measures the Kremlin says will make Russia's 
woefully opaque court system simpler, fairer, more professional and less 
corrupt. 

One very liberal measure in the package is a bill that would strip 
prosecutors of the power to arrest people without an order from a judge, a 
right guaranteed by Russia's constitution but not yet available under law. 

Putin had earlier submitted such a bill to parliament, only to recall it in 
the face of fierce opposition from prosecutors, who said it would be 
difficult and expensive to implement. 

The new bill will put off those changes until 2004 while the government comes 
up with the funds to train and recruit judges to issue arrest warrants. 

Sergei Ivanenko, deputy head of the liberal Yabloko group in parliament, said 
his faction was disappointed by the delay but willing to accept it as a 
compromise. 

CIVIL, COMMERCIAL LAW CHANGES TO ATTRACT INVESTMENT 

No less striking are changes to the civil and commercial procedural codes. 
Foreign investors often cite the cumbersome nature of the Russian system as a 
major barrier to doing business. 

The reforms will help attract investment, said Professor Wilfried Bergmann of 
the German Foundation for International Legal Relations in Bonn, who has 
advised Russian officials for seven years. 

"With a new civil code we will have better rules, more clearness," he said by 
telephone, adding that the new laws include detailed rules on such issues as 
intellectual property that are considered key for foreign investors. 

Under the new laws, prosecutors would lose the power to initiate or interfere 
in commercial and civil court cases. 

"This is something that we would welcome.... It will reduce the cost of 
corruption," said Max Gutbrod, managing partner at the Moscow office of law 
firm Baker and McKenzie. 

"We see prosecutors as one of the instruments by which government influences 
the courts." 

*******

#11
Vremya MN
May 18, 2001
[translation from RIA Novosti for personal use only]
YEVGENY PRIMAKOV: WHATEVER IS GIVEN BY GOD, SHOULD BELONG 
TO SOCIETY AS A WHOLE

Below, our observer Stanislav KONDRASHOV interviews 
Yevgeny PRIMAKOV, leader of the OVR (Fatherland-All Russia) 
faction in the State Duma.

Question: In connection with the recent statement made by 
George Bush Jr., the questions, which have long been in the 
air, i.e., the United States' intention to create a national 
missile defence system and its possible withdrawal from the 
1972 American-Soviet ABM Treaty, have become even more topical. 
Bush dubbed this Treaty "archaic," while US defence secretary 
Donald Rumsfeld referred it to the Stone Age even earlier. Now, 
in order to mitigate the shock, Washington has sent its 
delegations across the world to consult other countries on this 
issue. Russia was also paid a visit (even though it was not a 
complete success) by a group of representatives from the 
Pentagon, the National Security Council and the State 
Department.

Answer: It is clear that equipment, as well as 
technologies, are constantly developing. To a certain extent, 
this inevitably leads to other changes influencing the 
production of weapons, their quality and characteristics. In 
this connection, I recall talks I had with Madeleine Albright 
in Helsinki while I was foreign minister...

Question: The talks concerned the ABM Treaty, didn't they?

Answer: And the differences between strategic and 
non-strategic air-defence systems. We envisaged the need for 
consultations if technologies made such breakthroughs and 
shifts and reached such a level that this would have a direct 
effect on the character of weapons. We did not regard the 
situation as being static. Neither did we refer the ABM Treaty 
to the Stone Age. To abolish it, to withdraw from it 
unilaterally, would mean to ruin the system of arms cuts which 
has been built on its basis. As for consultations, they are 
surely needed. I think such decisions can be found.

Question: Even the US allies look at the American plan, or 
intention, to withdraw from the ABM Treaty with caution. 
However, the United States is guided by the fact that it is the 
only superpower, the most powerful country in the world today. 
What is your forecast: will the United States withdraw from the 
ABM Treaty or not?

Answer: First of all, I don't think that the United States 
is a superpower. It is a fact that the USA is the strongest 
country militarily, the strongest - economically, and the 
strongest - in terms of its political influence. But the USA is 
not a superpower. A superpower is a category which has not only 
a quantitative, and not so much a quantitative as a qualitative 
dimension. This category appeared during the Cold War, when 
each of the two superpowers grouped around itself a whole 
conglomerate of states, which was in confrontation with another 
conglomerate, ensured the security of its states, and dictated 
terms of their behaviour to them. There is nothing like that 
now. And, to a certain extent, the Americans want to maintain 
this situation.

Either through inertia, or looking into the future. I agree 
with the opinion that the United States bends to create a 
unipolar world. But this is not a superpower. Superpower 
ambitions do exist, but they are not based on the existence of 
a superpower. 

Question: The very notion of a superpower can be 
disputable.

But let us take another category - that of strength. And add to 
that the American mentality, which, in the final count, is 
displayed by some American politicians, including George Bush 
Jr., who are not too well-versed in diplomacy. They cannot 
tolerate equality with someone who is unequal to them in 
strength. Our budget revenues are less than the US military 
spending by about ten times. Hence their logic.

Answer: However, I cannot but be surprised about this 
logic.

I'm surprised at it because, while being stronger, they cannot 
but take us into consideration. Russia is the world's second 
largest nuclear power and we could make irreparable damage to 
each other, if, God forbid, we launched military operations 
(against one another). Firstly, we are equal as regards the 
possibility of mutual destruction. And secondly, the Americans 
realise ever more clearly now that many regional crises and 
regional conflicts cannot be brought to an end without Russia.
Won't the Balkans teach them a lession?

What have the Americans achieved in Kosovo, for instance?
Now the situation is worse than it was when Serb units were 
stationed there, since Serb units contained extremism and 
separatism. Now the danger /of extremism and separatism/ is 
spreading to neighbouring countries. We warned the Americans 
about this. By the way, without us they would not have got out 
of the war which they had launched. Without us, they won't be 
able to resolve any issues in the Balkans. The same refers to 
the Middle East as well.

Question: I agree that this experience is indicative.
Americans, intoxicated with their might, behaved like a bull in 
a Balkan china shop, and the result is here to see. At the same 
time, Kostunica, while in Washington, agreed to extradite 
Milosevic to the Hague International Tribunal, since the 
Americans have linked this issue directly with that of loans to 
Yugoslavia. This is the pressure of strength, including 
financially.

Answer: What can they decide in the final count apart from 
such a symbolic jesture, or a symbolic move, as Milosevic's 
extradition to the international court? What problems have they 
resolved in such a way? Thank God, in Kosovo they have already 
started to regard Albania's Kosovo Liberation Army as an 
opponent, if not an enemy. And there was a time when they 
praised this army and called its soldiers freedom fighters. 
They have been forced even to let the Serb armed forces enter 
the buffer zone, realising that otherwise they won't be able to 
do anything in Kosovo.

Question: I would like to return to the previous issue: 
will the United States withdraw from the ABM Treaty?

Answer: It's hard to make any forecast. Logically, it 
should seek a modernisation of the Treaty instead of a 
unilateral withdrawal from it. It seems to me that the US may 
take that road (the one of the Treaty's modernisation.) 

Question: If we take the broader historical view of 
Russian- American relations, it looks rather gloomy. Over two 
epochs in our history, the past and the present, we have 
managed to ruin our country twice. First, by an insane arms 
race and the USSR's global confrontation with the United 
States, and then by crazy "market reform," an infantile 
rejection of our own country and its history for the sake of an 
attempt to join the so-called civilised world. The majority of 
people were hit by the reforms, if you look at the living 
standards, social security and the oppressing inequality gap, 
which emerged so suddenly.

Answer: We had to give up the confrontation anyway. Now it 
has already become clear that there are no two systems, there 
is no ideological confrontation any longer. The resumption, 
through inertia, of a confrontation with the United States 
would have revived the former, mildly speaking, erroneous 
scheme. But I would not pose the question: which is worse? Both 
schemes are worse. As for the 1990s developments, they had 
nothing to do with liberalisation. It was 
pseudo-liberalisation. Speaking of liberalisation in economic 
terms, it means the creation of equitable conditions for 
competition, a steep reduction in the tax burden in order to 
encourage production and give the people an opportunity to 
spend their funds for meeting their social, educational, 
medical and other needs, with a decreasing state role in these 
spheres. As for our liberals, they have made use of the state 
in order to give more to those who stand closer to power, to 
give them greater opportunities in using budget funds, give 
them tax and customs privileges, increase their quotas for oil 
exports, etc. There have not been any equitable conditions for 
competition. As a result, we have created an uncivilised form 
of a market economy in which groups of oligarchs have appeared 
and seized whatever they could.

Question: Speaking of the boundless theme of the Russian 
economy, which are its strategic tasks and which of them should 
be resolved in the near future?

Answer: I would single out three lines of necessary 
activity. The first one refers to the country's natural 
resources. Whatever is given by God, should belong to society 
as a whole. This is the way it works in many countries, in the 
majority of countries. The state takes a considerable portion 
of profit through royalties, through rental payments for the 
development of natural resources, and then gives it to society 
through the budget. This is one thing. Secondly, special 
attention should be given to the modernisation of fixed assets.
They are aging very rapidly now. In view of such a 
modernisation, we should change our customs, tax and credit 
policies, etc. And the third, and very important, line is as 
follows: the state should purposefully and selectively develop 
fundamental research in several R&D "breakthrough" areas, 
because we cannot do this all along the front now. And we 
should think of how to optimally use these fundamental 
discoveries in applied research and in production. Russia 
should not lose its remaining intellectual potential. Only the 
state can prevent this from happening, through state programmes 
such as those which we had for space and nuclear research, etc.

Question: And what about the funds?

Answer: The funds are needed, but not huge funds, as they 
say, in order to pay wages, for instance. The president of the 
Academy of Sciences believes (and I agree with him) that most 
of the best mathematicians are Russians. For instance, the 
United States offered one 30,000 dollars a month if he went 
there to work. He told the RAN president: If I get one thousand 
dollars here, in Russia, I won't go anywhere and live normally. 
This is a good example.

Question: My next question is about the CIS, not about its 
future, but about Russia's place and presence in post-Soviet 
space. Not in terms of domination or non-domination, but rather 
in terms of a niche which, as we know, cannot but be filled. It 
is not even being filled, it is being seized. To be more 
precise, other influences are extending to it. Take, for 
instance, Georgia, with Shevardnadze's willingness to deal with 
the United States and NATO, Azerbaijan as a target for American 
oil companies, Kazakhstan, etc. And what is most important, 
Ukraine.

Isn't Russia losing its positions even in its most natural, it 
would seem, space, not in terms of imperial categories, but in 
those of its natural, geopolitical and economic presence?

Answer: True, we are not as attractive to other countries 
as we would like to be. But it seems to me that a turnabout is 
occurring already now. It is explained by the fact that (CIS 
members') attempts to get re-oriented towards the West, Turkey 
and other countries have brought no results. And also because, 
no matter what, Russia lives better than the other former 
republics of the Soviet Union. This, first of all, refutes the 
allegations, which were widespread in the last years of the 
USSR's existence, that Russia's well-being was earned at the 
expense of the union republics. Now, it is clear to all that 
Russia lives better than the others. It seems to me that this 
gives rise to different kinds of sentiments. In Georgia, for 
instance, the movement in favour of the rapprochement with 
Russia is gaining momentum. Or take Moldova, for instance. It 
is 250 km away from the centre of Europe. It would be naive to 
think that it will not develop relations with Europe. It will 
develop them. At the same time, this does not prevent Moldova 
from declaring Russia its main strategic partner. One of the 
reasons for this is that it does not have its own economic 
niche in Europe. Therefore, Moldova needs our huge market and 
our goods. They suit the Moldovan consumer best as far as their 
range. It is perfectly clear that Moldova declared Russia its 
main strategic partner not only for some geo-political or 
military-political considerations, but also for economic ones.

******

#12
Moskovsky Komsomolets
May 24, 2001
THE "BOUGHT" UNITED STATES
How exiled tycoon Vladimir Gusinsky won Washington's support
Author: Alexander Budberg
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
A FEW WORDS ON WHY THE UNITED STATES IS DEFENDING VLADIMIR GUSINSKY WITH SUCH ENTHUSIASM. IN THE PAST, THE STATE DEPARTMENT REGARDED GUSINSKY'S MEDIA EMPIRE AS ONE OF ITS OWN RESOURCES. THESE DAYS, GUSINSKY REGARDS THE STATE DEPARTMENT AND THE US CONGRESS AS HIS RESOURCES.

An interesting saga in unfolding in Washington. All this might 
have been taken as a textbook example of relations between various 
groups and forces in the American establishment - were not for the 
small detail that the saga directly concerns Russia. In early May, 
Congressman Tom Lantos proposed Resolution 128, calling for Russia to 
be suspended from the G-8. No more, no less. "Bearing in mind that on 
April 17 the daily newspaper Segodnya, one of the most liberal in 
Moscow, was hastily shut down; and that the news magazine Itogi, 
published in partnership with Newsweek, may be closed in the near 
future as well... Bearing in mind that Russian fiscal services are 
harassing TNT, a small cable TV station that allowed journalists 
thrown out of NTV to go on air with news that began with the Gazprom 
takeover... Congress considers that Russia's participation in the G-8 
should be suspended until it proves its total commitment to the 
existence of a free press, including the possibility of private media 
ownership... The president and secretary of state should take all 
necessary measures to suspend Russia's participation in the G-8 until 
the Russian government restores press freedoms and respect for human 
rights..."

For Russia and its prestige, for the Russian president and his 
prestige, the threat of being suspended from the G-8 is not something 
to be lightly dismissed. It is clear that the resolution is unlikely 
to evolve into anything more than a mere recommendation. On the other 
hand, similar resolutions do influence Russian-American relations. 
Details of talks between President George W. Bush and Chancellor 
Gerhard Schroeder of Germany were leaked to the public recently. Bush, 
not exactly a specialist in foreign affairs, said right away that the 
media in Russia is under attack. This is a result of deliberate 
attempts to shape public opinion. As things stand, the United States 
is the most powerful nation in the world. It doesn't really matter 
that the United States doesn't exactly want Russia to be transformed 
into an isolated and therefore embittered island. On the other hand, 
Lantos would probably be the first to note that protection of American 
values and freedoms all over the world is more in line with US 
national interests than anything else. Lantos, with a Hungarian ethnic 
background, understands it all too well. What he would find more 
difficult to answer, however, is why he is taking such an active part 
in a campaign funded by money of dubious origins. After all, even 
Gusinsky's staff who quit NTV and Segodnya don't call Gusinsky 
anything other than a felon.

In America, PR companies and lobby groups are full of former 
officials of state organizations, senators, members of Congress, and 
diplomats. They are "liaison officers" between customers and political 
institutions, because no company will initiate a serious PR campaign 
without at least a silent nod of permission from the State Department 
or other involved departments. In any case, the companies should not 
cross the boundaries of "national interests", which are outlined more 
or less clearly.

These "liaison officers" have a delicate job. They attend all 
kinds of political conferences and meetings, monitor the latest 
political trends, and report them to their media, companies, and 
customers. It is thanks to these people, who are usually members of 
boards of directors and move in the upper echelons of the 
administration, that the American political elite manages to form a 
common systematic policy in its efforts to influence public opinion.

Lobby groups can directly enlist the services of state officials, 
senators, and members of Congress. Not for money, of course. But if a 
"liaison officer" is an old member of the same political trust as a 
member of Congress, the two will always reach an agreement. 
Politicians cannot refuse the requests of people they have known for 
years, who have contributed to their campaign funds. They can handle 
some matter in the interests of a customer of a certain company. Later 
on, that company will help promote the right people to the right jobs. 
For example, a State Department official can get a customer invited to 
a dinner with the president; later on, the company involved will offer 
that official a good job. No bribes. No direct deals...

Political lobbying companies make hundreds of millions of 
dollars. China hired eleven American agencies to polish its image in 
the United States. France hired two. There is nothing shameful about 
it. And Americans no longer care about human rights abuses in China, 
or that the goods they buy are often made by prisoners, and so on. The 
State Department needs warm relations with China and actually 
encourages these agencies. Otherwise, public opinion may turn against 
China and jeopardize the policy Washington pursues.

There are some rules, however, that are not to be broken - or not 
until recently. A customer's money should be clean. If the money is 
not, taking it means breaking all the rules. Any ambiguity should be 
eliminated, because the dividing line between "achieve" and "buy" is 
too thin.

Two major players in American PR - public affairs firm APCO and 
law firm Akin, Gump, Strauss, Hauer & Feld, LLP - have been working 
for Vladimir Gusinsky for years.

It's difficult to assess the origins of Gusinsky's capital. The 
General Prosecutor's Office considers that he deliberately asset-
stripped his companies, transferring money to Gibraltar without 
bothering to inform other shareholders.

American sources themselves admit that "Gusinsky was reckless 
enough to compromise himself from the legal point of view when he 
transferred 80% of his assets to offshore zones..." and that "an 
independent audit of NTV shows that losses have been mounting over the 
last three years, reaching $57 million by the end of 2000."

Actually, $57 million is not that much. More than $1 billion was 
invested in Media-Most projects, more than it took to establish CNN. 
There is no exact data on how much Gusinsky invested in the election 
campaign in Israel, but some sources say the sum must have exceeded 
$80 million. Gusinsky also paid a great deal to his own security 
service which monitored conversations of Media-Most journalists. 
Viewed against this background, the meager $35-45 million paid to the 
American lobby groups over the last six years looks trifling. All the 
same, Gusinsky was considered an important customer by APCO and Akin, 
Gump. For such companies, the scale of the project is no less 
important than the money as such. Influencing all of Russia is great 
from this point of view. Over the years, various US officials have had 
different opinions on why they were interested in Gusinsky. So it is 
hardly surprising that when Gusinsky decided he needed the US 
government, no one noticed how the situation changed. In the past, the 
State Department regarded Gusinsky's media empire as one of its own 
resources. These days, Gusinsky regards the State Department and the 
US Congress as his resources.

Let's get back to Tom Lantos, who has handled Project Gusinsky 
since 1995. It was in 1995 that Lantos and ex-congressman Don Bonker 
had Congress pass the first resolution in Gusinsky's defense (after 
Gusinsky's quarrel with Korzhakov). Lantos is still in Congress, and 
Bonker is an executive with APCO. According to the US media, he even 
arranged meetings for Gusinsky with potential investors in 1999.

Lantos came to Moscow in 1999, when Gusinsky decided to challenge 
the people closest to Boris Yeltsin and when his media empire gave a 
lot of coverage to the Bank of New York affair. Lantos called the Bank 
of New York scandal "Yeltsingate", and spoke at length about 
corruption in Russia in an interview with Echo of Moscow radio.

In 2000, Lantos wrote an article for Segodnya in which he warned 
Putin of the serious international consequences of "harassing the 
independent media in Russia". His time came with Gusinsky's arrest - 
"Media-Most is being harassed for Chechnya, criticism of the Kremlin, 
and the Puppets political satire program." Lantos even hinted that a 
document in Gusinsky's support was being drafted. "Russia has two 
options now - back into totalitarianism or an apology to Gusinsky." 
Lantos also said that a group of US business leaders led by Robert 
Strauss would refuse to visit Russia unless harassment of Gusinsky was 
ended.

A few words about Strauss. A former ambassador of the United 
States in Russia, he is now chairman of the American-Russian Business 
Council, a conglomerate of hundreds of American companies. Strauss 
should be one of the major lobbyists for Russia in the United States, 
but... Strauss is a partner in the Akin, Gump law firm. So it is not 
surprising that the business leaders whose visit was promised to Putin 
by President Clinton never came to Russia. Some would-be participants 
in the visit admit that they had received telephone calls advising 
them in no uncertain terms to cancel the trip.

Last September Lantos arranged for Gusinsky to address Congress 
and journalists. In May 2001, Gusinsky's appearance at the Freedom 
Forum was organized by Lantos.

Akin, Gump handled almost all international court cases in which 
Gusinsky participated. That is why he was always so confident of his 
position. Akin, Gump missed only one case in London - and Gusinsky 
lost.

The United States has contracted the "virus of oligarchic 
barbarism" from Russia. It doesn't just refer to the origins of 
Gusinsky's capital. It doesn't even mean that lobbyists broke all the 
rules trying to have Russia suspended from the G-8 the moment the 
State Department made contact with Russia and a Russian-American 
summit was arranged. Much more interesting is the fact that form of 
relations between representatives of the US establishment has somehow 
changed. It seems that the traditional culture of relations is 
splitting along the seams. Dimitri K. Simes, president of the Nixon 
Center and an American political scientist specializing in Russia, 
said: "Russian oligarchs have lined their pockets in Russia and now 
have the best PR money can buy in the United States. Moreover, former 
US ambassadors, former White House officials, and ex-senators are 
working for them." Strauss responded instantly. He had The Washington 
Post (which had published Simes' statement) publish his letter: "You 
should be ashamed, Dimitri. This irresponsible statement... damages 
the new administration, the board of the Nixon Center, and many 
prominent figures in the American media, and particularly The 
Washington Post..." The letter ended with the words "Copies to Colin 
Powell and Condoleezza Rice".

Essentially, Strauss did two things. Firstly, he lashed out at a 
"dubious" immigrant who did not "understand the United States and the 
American people". Secondly, he attacked Simes in the best traditions 
of the Russian underworld: threatening Simes, the Nixon Center, and 
even the newspapers that might share the political scientist's concern 
that protection of Russian oligarchs was becoming a priority in US 
foreign policy. When Alfred Koch was in the United States, even 
Reuters reported that the people Koch had intended to meet were 
pressed into not meeting with him, "Sources in the staff of the 
Congress say Gusinsky's lobbyists telephoned members persuading them 
not to meet with Koch and hinting that their reputation could 
suffer..." Organizers of Koch's trip say that representatives of APCO 
(Don Bonker) and Akin, Gump (Tobi Gatie) were present at all meetings 
without an invitation. The pressure that was applied to investors 
planning to visit Moscow is now exceeding all possible limits.

Gusinsky's lobbyists are getting carried away. They cannot stop. 
Specialists of the Russian government are confident that the whole 
provocation related to Radio Liberty's plans to broadcast in the 
Chechen language was initiated by Akin, Gump. It is clear that Radio 
Liberty lacks the technical capacities to broadcast to Chechnya from 
Moscow. The whole provocation was organized in the hope that Russian 
officials would deprive Radio Liberty of its license and provide the 
anti-Russian campaign in the United States with a new pretext.

Whose interests Lantos defends, and who came up with the bright 
idea of suspending Russia from the G-8, becomes easily understandable 
if we compare several statements. In March, Igor Malashenko 
(Gusinsky's former partner and now an employee) wrote the following, 
"If Russia continues to slide toward totalitarianism... the West may 
respond, for example, by no longer inviting Putin to meetings of 
representatives of democratic states like the G-7 summit." The 
following words are Gusinsky's, "It is important for Western society 
to draw a line which the current Russian regime is not allowed to 
cross... G-7 states must be aware of that."

Lantos is also talkative, "The West needs more leverage to be 
used against Russia. Oil prices are high, and Russia will not need 
Western credits for some time yet. But if Putin considers himself a 
democratic leader, he should be eager for acceptance by the West. The 
G-8 should become the G-7 again."

According to his latest interviews, Gusinsky, a man who had never 
been able to judge situations accurately, and therefore lost his 
empire, decided to punish Russia all alone. He is out to show the 
world that he can handle Russia. Unfortunately, he brought the money 
for this purpose from Russia. After all, the whole campaign in America 
is unfolding using the money Gazprom invested in Media-Most.

*******

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