Johnson's Russia List
#6115
5 March 2002
davidjohnson@erols.com
A CDI Project
www.cdi.org
[Note from David Johnson:
1. www.emperors-clothes.com: Rick Rozoff, MUSHROOM CLOUDS AND A COKE
(a satire).
2. Luba Schwartzman: ORT Review.
3. The Russia Journal (US Edition): Matt Taibbi, McDonald's saves Russia.
4. Izvestia: Georgy Ilyichev, RUSSIANS ARE TRUE IN THEIR DISLIKE FOR
AMERICA. (re polls)
5. AP: Russian Journalists Start Company.
6. Washington Times: Robert Stacy McCain, Al Qaeda eyed for Russian nukes.
7. Transitions Online: OUR TAKE: On the Fly. (re Georgia)
8. Paul Greenberg: Leaving Katya.
9. RFE/RL: Kathleen Knox/Rim Guilfanov, Tatarstan: Status Under Scrutiny
As Lawmakers Change Constitution.
10. Obshchaya Gazeta: Prominent Economist Eyes Steps To Strengthen
Economy.
(Interview with Yevgeniy Yasin)
11. Moscow Times: Gregory Feifer, Berezovsky Promises to Show Film in
London.
12. Business Week: Paul Starobin, Russia's World-Class Accounting Games.]
*******
#1
www.emperors-clothes.com
MUSHROOM CLOUDS AND A COKE (a satire)
by Rick Rozoff
4 March 2002
General Vlasov News Agency
Moscow, March 4, 2002
In late-breaking news today President Putin rebuked what he called
"alarmists" in his own government who had raised eyebrows with what
President Putin called "unauthorized statements" opposing the nuclear
annihilation of what they called "Russia."
"This is no tragedy," said the characteristically enigmatic Putin, "if it
helps the international fight against deadly terror."
Mr. Putin's remarks, praised by State Department Spokesperson Richard
Boucher as proving that "Russia has finally chosen the path of civil
society," were uttered during a chat with reporters who caught up with Mr.
Putin as he left the presidential gym.
"Make it quick," quipped the characteristically poker faced leader,
sweating from his daily five hour jujitsu workout. "I gotta meet some old
colleagues from the USIA office in Berlin to get my orders - I mean, to
order lunch. Two Big Macs, plenty fries. They're paying," said the
President, flashing his characteristic smirk.
Reporters asked Putin if he was concerned about reports of a U.S., German,
French, Turkish, Norwegian, Dutch, Luxembourgian and Monocan military
buildup in Kyrgyzstan, Tajikistan, Uzbekistan, Azerbaijan, Armenia, Georgia,
Khazakistan and other Russian neighbors and traditional allies.
"Hell no," answered Putin, with characteristic bluntness. "They're free to
welcome troops, warplanes, surveillance installations and nuclear missile
batteries from whatever source as long as they say it's to combat deadly
terror."
A reporter from Sovietskaya Rossia asked, "Didn't the American foreign
policy establishment create and for twenty years sponsor the very Islamist
terrorists - including the ones in Chechnya - whom they now claim they must
enter every country to destroy?"
"Typical cold war thinking," said Putin with characteristic scorn. "By
creating Islamism our American partners have awakened the world to the need
to crush it, thus laying a practical basis for the international war against
terror. We can only be grateful."
Queried about NATO efforts to overthrow the government of recently
reelected Belorussian President Lukashenko, whose country forms a joint
economic and military union with Russia, the highly inscrutable president
displayed characteristic nonchalance. He reacted similarly to questions
about current unrest in the former Soviet Republic of Moldova, which
according to hard-liners, has been instigated by NATO powers.
"I try to focus on pressing social problems at home, like crushing
communists and firing trouble makers," said Putin. "That's my assignment - I
mean job. My job. As President of, you know, NATO - I mean, Russia.
President of Russia. Whatever," explained the affable if characteristically
phlegmatic reformer.
Nibbling an American power bar, Putin confirmed that he was stepping up
delivery of Russian military attack helicopters to the Pastrana regime in
Colombia thus assisting efforts to further the peace process there by
eliminating peasants, trade unionists and other terrorists.
"We might bomb Venezuela on the way," commented the poker faced Putin.
"They could be harboring terrorists, who knows?"
The President expressed gratitude that in exchange for unilaterally
closing Russian military bases in Vietnam, Cuba and elsewhere and providing
Russian troops to NATO's missions in Bosnia, Kosovo and elsewhere NATO's
Secretary General, Lord George Robertson, "is now willing to take my calls.
He even offered to inform me of future NATO humanitarian wars, after they
start," said Putin, with characteristic satisfaction.
As the impromptu press conference ended, a reporter informed the President
that Georgian troops led by US Special Forces had entered Russia in hot
pursuit of suspected al Qaeda members fleeing Georgia and that the
Americans, who are limited to strictly noncombatant functions, had called in
nuclear strikes against the southern Russian City of Rostov to flush out
terrorists who also may be hiding in Moscow, St. Petersburg, and Minsk.
The philosophical Putin was characteristically unruffled:
"Russia's a problem and somebody's got to solve it," he said. "No, wait a
minute - not Russia, terrorism. Terrorism's the problem. Whatever. The point
is, what's the tragedy if this helps the international fight against deadly
terror? Now no more questions. I'm late for lunch."
*******
#2
ORT Review
www.ortv.ru
Compiled by Luba Schwartzman (luba7@bu.edu)
Research fellow at the Institute for the Study of Conflict, Ideology and
Policy at Boston University
HEADLINES,
- Georgian President Eduard Shevarnadze has declared that he trusts
Russian President Vladimir Putin completely, but is not sure whether this
feeling is mutual. At the same time, President Shevarnadze stressed that
during the last two meetings with the Russian president -- in Moscow and
in Alma Ata -- he could see that President Putin views Georgia as a
"unified, complete, and strong" nation. Shevarnadze supports cooperation
between Russian and Georgian power organs but does not foresee Russian or
American participation in the Pankissi Gorge operation.
- President Putin met with Accounting Chamber Chairman Sergei Stepashin to
discuss increased financial control of the budget and state regulation of
alcohol sales.
- President Putin also met with State Property Minister Farit Gazizullin
to talk about the recent privatization program and preparations for the
annual shareholders meetings for entities in which the government holds
controlling shares.
- The General Council of the United Russia Party met in Moscow to discuss
upcoming parliamentary and presidential elections. The party's primary
goal is to ensure President Putin's victory in 2004. United Russia counts
on winning a number of gubernatorial positions and a majority of seats in
the next State Duma.
- Russian Prime Minister Mikhail Kasyanov met with OPEC (Organization of
Petroleum Exporting Countries) leaders who asked Russia to further cut the
amount of oil it exports.
- Russian Defense Minister Sergei Ivanov has began his trip through
Russia's northwestern region. He visited the Kursk nuclear submarine at
the Roslyakovo dock, the headquarters of the Northern Fleet, and the
"Peter the Great" flagship.
- President Putin has signed a decree improving the payments system for
military servicemen and increasing salaries for officers.
- Renowned cellist Mstislav Rostropovich has been awarded Azerbaijan's
highest state honor, the Medal of Independence.
- Two men suspected of planning the explosion in the Vladivostok offices
of two oil-trading companies have been arrests. The bomb had been hidden
in a present (a desk lamp) brought by "Santa Clause" and his helper
Snegurochka. It exploded when the lamp was plugged in. Three people were
injured; one of them later died in the hospital.
- A series of successful special operations has been completed in the
North Caucasus. A large terrorist base was destroyed in Chechnya's
Vedensky region and a hostage was freed from a settlement in North
Ossetia.
- Another hostage has been freed in Chechnya. Musin Minnagayaz was
captured almost 17 years ago. He was offered a well-paying job, but was
instead enslaved.
- The National Academy of Film has been established in Russia. Film
director Vladimir Naumov has been elected President. The Academy will
take over some responsibilities from Nikita Mikhailov's Union of
Cinematographers. It will hold the first annual Golden Eagle film
festival on May 29, 2002. The winning film will receive a prize of
$25,000.
- The Krasnodar police has posted a 1 million Ruble reward for information
leading to the arrest of 6 criminals who escaped on March 1st.
- Professional trials have been introduced in a number of regions in the
Voronezh oblast.
- Ukraine's tax inspectors have found no violations in Leonid Grach's
registration for the parliamentary campaign.
********
#3
The Russia Journal (US Edition)
March 1-7, 2002
McDonald's saves Russia
While some Western observers would like to convince the public such
attributes as an abundance of sushi restaurants illustrates the country's
success with democracy, the argument could not be farther from the truth.
By Matt Taibbi
Some years ago, New York Times columnist Thomas Friedman made what I
thought at the time was the single dumbest argument ever to appear in the
editorial pages of a major newspaper. Friedman said that those looking for
proof of the beneficence of globalization should look no further than the
fact that no two countries with McDonald's had ever gone to war against one
another. It was as though tribal resentments dating back hundreds and even
thousands of years could be erased overnight, if we were to just take all
the AK-47's out of the hands of Somali warriors and replace them with Arch
Deluxes.
In a way, of course, Friedman was right. If these people had something
better than sand to eat, they probably wouldn't be fighting. But he wasn't
proposing that we actually feed these people. He was just arguing that we
should support the general spread of McDonald's to excess-income areas
around the world as a buffer against military aggression.
As my friend John Dolan put it in a review of Friedman's book, "This is
what passes for insight, in what passes for the mind of Thomas Friedman."
I used to think that Friedman was the be-all, end-all of bad columnists.
But times change. It happens in any profession. NFL wide receiver Shawn
Jefferson used to play for the New England Patriots, but now plays for the
Atlanta Falcons. This year he said, "I used to think Terry Glenn was the
greatest athlete I'd ever seen. Well, move over, Terry. Michael Vick is in
town."
Move over, Friedman. Bill Terry is in town.
Also of the Times, Terry one-upped Friedman with his Feb. 23 piece, "Arise,
Ye Prisoners of Starvation."
Terry in this piece takes one of the storied cliches of Russia coverage,
the "sushi-as-indicator-of-economic-health" piece, and goes one step
further. With the keen instincts of a great cultural observer, Terry
decides to penetrate the "myth" of the plethora of sushi restaurants as the
great sign that Russia has finally gotten on its feet, and look beneath the
surface for the Real Story:
"One way to measure Russia's slow recovery from the 70-year coma of
Communism is to count lobster tanks and sushi bars. Old Russia hands like
me, who remember when a banana was more wondrous than a Faberge egg, swoon
at the profusion of delicacies available these days in the bright showcase
cities of Moscow and St. Petersburg.
"My own crude index of the economic condition, however, is the brazen
yellow M that now seems to illuminate every other corner of this
winter-gray city. California rolls and foie gras are evidence of the great
wealth enjoyed by an industrious few, some of whom are even industrious at
legitimate businesses. McDonald's is a barometer of how the wealth has
seeped out beyond the elite."
In just two paragraphs, Terry has perfectly captured the essence of almost
all cultural reporting in the past 15 years or so. This was an age of
relentless crusading against "elites," only the crusade was always a bit
problematic. "Elitism," for the last 15 years or so, has been what the
corporate world has chosen to call any effort to rein in the market.
Government regulation, the idea that a snooty coterie of liberal
politicians knows better than the market, is "elitism." Any effort by trade
unions to retain their status is likewise "elitism," as "elitist" union
leaders, by their efforts to oppose the will of large companies, are
depicted as trying to reduce the business world's ability to provide U the
consumer with the products you choose so democratically.
Likewise, in academia, the whole discipline of cultural studies was
revolutionized by a new wave of market-friendly professors, who argued that
harping over the "dumbing-down" phenomenon was nothing more than elitism,
that eggheads who believe that dumb TV programming is forced on an
unwilling populace in order to sell them more stuff are simply elitists who
don't know how to enjoy a good game show.
The whole effort identifying these villains as elitists, of course, was a
canny PR strategy employed by corporations who understood that ordinary
people increasingly viewed THEM as the elite. The great corporate insight
of the '90s was to cast capitalist growth as democratic revolution, to show
dot-com CEOs in dreadlocks and to argue that every time you clicked on to
monster.com or etrade, you were making a democratic choice, "talking back"
to an elite that would otherwise reduce your options.
Now, here in Russia, Terry is going to tell us that the spread of
McDonald's, instead of evidence that a giant corporation has succeeded in
sucking up the excess cash of a few Russians, is evidence that democracy
has become firmly entrenched even here:
"Drop into a McDonald's here, and you find Russians who scarcely existed a
dozen years ago - Russians with decent clothes and healthy teeth, Russians
with jobs that give them spare time and cash for a family splurge, Russians
with, polls show, a flicker of optimism. You find Russians who have more or
less achieved their plaintive ambition to be 'normal people.'"
This portrait of happy populism relaxing in its spare time is contrasted
specifically with the nightmare of the top-down "elite" that preceded the
era of McDonald's:
"The Soviet Union had one insatiable customer, the state, which prescribed
what farms could grow, established quotas, set prices and monopolized
distribution. No one wanted to dismantle this creaky arrangement for fear
of chaos, hunger and revolt."
But the problem with Terry's picture is that the reality of the current
Russia is that of a massive effort at elitism - both in the economic and
political arenas. More than at any time since the collapse of communism,
ordinary Russians have no say at all in helping to shape their social
reality. The economy is dominated by massive energy conglomerates that make
their decisions in close consultation with a political autocracy somewhere
up on Mt. Olympus. Elections are increasingly rigged or real opposition
candidates are simply removed from the ballot. The Duma is a castrated
one-party trained seal. The last remaining free television stations have
been wiped from the scene. The "plaintive" ambition to become "normal
people" has been thwarted in the most important area: the effort to give
people control over their own lives.
I spent this past week working on a follow-up to a story I did two years
ago about a high school in southern Moscow. This survey of "normal people"
still shows teachers making $50 a month and high-school kids without rich
parents completely bereft of higher-education options. One of the students
I profiled two years ago was a hard-working boy named Kostya who had been
voted most likely to succeed. After high school, he failed to get into a
college he could afford, and took to drinking. One night, he and some
friends got drunk and beat up a drunk who was asleep in his car. The drunk
turned out to be an off-duty detective. Kostya is now in a medieval holding
prison called Matrosskaya Tishina, awaiting trial for kidnapping and assault.
I visited the prison last week with a group of his friends to give him a
package of soap, socks and cigarettes. Because the prison had no waiting
room for "normal people," we had to wait outside in freezing temperatures
for two hours while we waited for the guards to deign to open the delivery
window. As a result, we were cold and desperate for a cup of coffee when it
was over.
As it happens, one of Terry's miracles, a McDonald's, is located right
around the corner from the prison. I offered to take the five kids out for
a hot meal there when we were finished. McDonald's has a special offer in
Moscow these days: two double cheeseburgers for 40 rubles. The kids
protested wildly at the extravagance of buying them all a meal and were
silent and embarrassed as they sat there putting away their 10
cheeseburgers with accompanying cappuccinos, which had cost me something
like 15 bucks.
Of those five kids, only one, who has a well-off father, is still in school
and on a fast track to anywhere except alcoholism and vagrancy. Today's
Russia has plenty of choices for them when it comes to taking their money -
even special cheeseburger offers. But as for choices that matter ... give
me a break.
(Matt Taibbi is editor of the eXile, a Moscow-based alternative newspaper.)
*******
#4
Izvestia
March 5, 2002
RUSSIANS ARE TRUE IN THEIR DISLIKE FOR AMERICA
Public opinion polls conducted in Russian regions in the last
decade showed no change in people's attitude towards America
Author: Georgy Ilyichev
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
ACCORDING TO OPINION POLLS CONDUCTED SINCE 1990, NO POLITICAL OR
ECONOMIC CATACLYSMS CAN CHANGE THE ATTITUDE OF RUSSIANS TOWARDS THE
UNITED STATES AND AMERICANS...
The United States was depicted entirely in black by Russians only
once in the past decade. This happened in March-August 1999 when
NATO's planes were conducting bombing raids on Yugoslavian cities and
villages. According to the All-Russian Center of Public Opinion
Research, over 30% of respondents in 33 Russian regions relate to the
potential enemy favorably or more or less favorably. In all other
cases, people's liking for America never fell below 50%.
The Public Opinion Foundation offers slightly different figures,
but they only confirm the picture. Throughout 2001, about one-third of
all people polled liked America, and antipathy towards the country was
admitted only by 15-17%. Those who were indifferent amounted to a
stable 44%.
Even the tragedy of September 11 and its consequences (the
counter-terrorism operation in Afghanistan) failed to change the
attitude of Russians towards America (80% of respondents admit this).
Russians are regularly critical of America's international policy. 48%
of respondents say that "America is playing a negative role in the
world nowadays". 52% of respondents assume that "America has become
the wealthiest nation through exploitation of other peoples".
The opinion of individual Russians with regards to America is
related to their political views. According to the Public Opinion
Foundations, supporters of Vladimir Putin are twice as positive about
America and Russian-American relations compared to supporters of
Gennadi Zyuganov. 45% of the former say that America is friendly while
only 25% of the Communists' supporters think so.
Moreover, city dwellers are more often apt to speak positively of
America than villagers. Russians with higher education are more
negative on the United States: 21% dislike the United States, 55%
consider it a hostile state, and 56% are convinced that the United
States is playing a negative role on the international arena.
(Translated by A. Ignatkin)
*******
#5
Russian Journalists Start Company
March 5, 2002
By MARA D. BELLABY
AP
MOSCOW - The team of journalists that ran Russia's last independent
national television station has set itself a task almost unprecedented in
Russia: Creating a broadcasting company that can't be manipulated by the
government or by the politically powerful media moguls who have dominated
the industry.
``This is commercial television. This is not state television. This is not
television run by a private individual,'' team head Yevgeny Kiselyov said
Monday. He hopes to attract as many as 30 investors so no one person can
use the station for his or own political purposes.
In Russia, that would be something of a novelty. Television stations, which
most Russians depend on for their news, have routinely been used to win
elections, curry political favor and punish enemies. Earning a profit and
providing objective coverage have often been only secondary considerations.
But the swift demise of the nation's only two independent national stations
over the past year has left many in the media industry scurrying to find a
more secure foundation.
That's not easy in Russia. The total amount spent annually for all kinds of
advertising is estimated to be about $1.2 billion. The challenge of turning
a profit in that environment is the reason many moguls saw their media
holdings as a political vehicle rather than a business venture, analysts
say. Journalists often found themselves caught in the middle.
``Russians are very cynical about journalists on both sides of the
state-private divide,'' said Gillian McCormack, who monitors the media
industry in the former Soviet Union for the European Union-funded European
Institute for the Media in Germany. ``Russians like the phrase 'Whoever
pays the piper calls the tune.' Unfortunately, that is to a certain extent
true.''
Kiselyov, who headed journalistic teams first at independent NTV and then
at independent TV6, said that is why it is so important to have a large
number and wide variety of investors in the new television enterprise,
which would be known as the Channel Six television company.
Among the dozen or so investors already signed up are some powerful
personalities, but all will hold equal shares. The new Channel Six company
will be among those bidding March 27 for the television frequency formerly
held by TV6, which was forced off the air in January after it lost a legal
fight with a minority shareholder that many saw as a blow to press freedom.
Later this year, another media empire is expected to be put up for sale.
The government-controlled Gazprom natural gas monopoly, which seized NTV
last year in a dispute about millions of dollars of unpaid debt, has said
it will soon unload its media assets.
While analysts are eagerly waiting to see who the winners are, they
continue to debate what was behind the shake-up to begin with.
Russian President Vladimir Putin said politics had nothing to do with
either case, blaming both on economic disputes. But others saw it as an
attack on the pluralism of the media.
``Freedom of the press is there, it is not even threatened,'' said Yassen
N. Zassoursky, dean of Moscow State University's Faculty of Journalism.
``But the freedom to run a media enterprise as you wish ... that doesn't
even exist.''
Boris Jordan, the American who runs the media companies that Gazprom
acquired last year, said that when he took over NTV and its sister
companies, they were losing $24 million a year. This year, he expects to
make a modest $4 million profit.
``We are proving that we can do it and do it without scandals and political
blackmail and all the other things that were being done,'' he said,
bristling at any suggestion that the new Gazprom-owned NTV is more timid
than the old station.
But even Jordan doesn't try to maintain politics had nothing to do with the
onslaught against former tycoons Vladimir Gusinsky - the NTV founder - and
Boris Berezovsky, who started TV6. Both men are bitterly opposed to Putin
and are living in exile to avoid prosecution at home.
``Obviously, it had politics involved in it because media is politics,''
Jordan said.
The separation is especially fragile in Russia, where officials often fall
back on old communist ways.
``The reality is that the government has too many levers to manipulate any
economic enterprise and that is one of our biggest difficulties,''
Zassoursky said.
*******
#6
Washington Times
March 4, 2002
Al Qaeda eyed for Russian nukes
By Robert Stacy McCain
U.S. officials feared in October that Osama bin Laden's terrorist
network had obtained a small nuclear weapon and considered the reports
credible enough to alert government agencies of the danger, according to news
reports.
An agent code-named "Dragonfire" alerted U.S intelligence officials that
al Qaeda terrorists had gotten the 10-kiloton device from Russian arsenals
and planned to smuggle it into New York City, Time magazine reports in its
latest edition.
Counterterrorism investigators went on their highest state of alert but
found nothing and later concluded the information was false, according to the
magazine.
Since the collapse of the Soviet Union in 1991, U.S. officials have
worried about the lack of security around the former Soviet nuclear arsenal.
A major concern is that terrorist organizations might gain nuclear weapons.
Sen. Richard C. Shelby said that al Qaeda being in possession of Russian
bombs is "always a possibility."
"We don't know how many Russian bombs are missing. Hopefully, none are,"
the Alabama Republican and member of the Senate Select Intelligence Committee
said yesterday. He added that the United States recognizes it has to be
prepared for that possibility.
"The administration is very much on the alert. This is a real threat,"
he said on ABC's "This Week," adding that the government is prepared to
protect against so-called "dirty" bombs — low-tech weapons that would
kill by
radiation.
There should be a "level of concern" about a nuclear threat from
terrorists, said Sen. John McCain, Arizona Republican.
"But I've seen no hard evidence any of these terrorist organizations
have acquired these weapons," he said yesterday on CNN's "Late Edition."
On CBS' "Face the Nation," Mr. McCain said, "Look, our great fear since
the collapse of the Soviet Union was that there was very large amounts of
[nuclear] material and technology and scientists around that might be
purchased in the old Soviet Union."
Mr. McCain said, "It seems perfectly logical that [acquiring old Soviet
weapons technology] would be one of the avenues that a dedicated group of
terrorists would pursue."
The intelligence report last October that al Qaeda had acquired a
Russian nuclear weapon — and was planning to detonate it in New York City
—
alarmed U.S. officials, since such a bomb could inflict huge casualties.
Although small by the standards of nuclear weapons (some U.S. warheads
have more than 100 times the explosive power), a 10-kiloton bomb detonated in
lower Manhattan could kill 100,000 civilians, subject 700,000 more to
poisonous radiation and flatten every building within a half-mile of the
blast, Time reported.
New terrorist attacks against the United States are a matter of time,
one counterterrorism official told Time.
"It's going to be worse, and a lot of people are going to die," the
anonymous U.S. official said. "I don't think there's a damn thing we're going
to be able to do about it."
According to the magazine, federal officials have assigned 100 civilian
government officials to 24-hour rotations in underground bunkers. This
"shadow government" would take charge if Washington is the target of the next
major terrorist attack.
In response to the reports of al Qaeda having a Russian nuclear bomb,
counterterrorism officials went on the highest state of alert. "It was
brutal," the magazine quoted a U.S. official as saying.
The October alert was highly classified. Neither New York Mayor Rudolph
W. Giuliani nor senior FBI officials were told of the suspected nuclear
threat, according to the magazine.
The Washington Post reported in editions yesterday that the government
has deployed hundreds of sophisticated nuclear sensors since November to U.S.
borders, overseas facilities and sites around Washington.
In hopes of thwarting any bid at nuclear terrorism, the Energy
Department is also developing a new generation of devices to detect nuclear
radiation, administration officials told the Associated Press yesterday.
Although the emphasis on radiation detection has grown in the aftermath
of the September 11 attacks, several administration officials said on the
condition of anonymity that they knew of no recent indications that al Qaeda
had made any new progress toward obtaining nuclear materials.
Sen. Larry E. Craig said radiation sensors were used at such recent mass
gatherings as the Salt Lake City Olympic Games and the Super Bowl in New
Orleans.
"We clearly are in heightened alert, and we should be," the Idaho
Republican said on CNN's "Late Edition." "At the same time, the American
people have to get on with their lives. But I want to make sure that they are
as safe as we can possibly make them."
*******
#7
Transitions Online
www.tol.cz
OUR TAKE: On the Fly
Russians shouldn’t be surprised that Washington and Tbilisi agreed to
deploy U.S. troops in Georgia. But smoking out terrorists from the
Pankisi Gorge will be meaningless unless Washington tries to douse some
other fires in the region.
The United States has deployed or is preparing to dispatch servicemen in
its battle against terrorism to a raft of difficult countries--the
Philippines, Sudan, Somalia, and Yemen, as well as in Central Asia--so
perhaps there should be no special surprise or concern that Washington
this week said it would send soldiers in mid-March to another trouble
spot, Georgia. Nor should it be a surprise: U.S. or Western military
cooperation with Georgia is nothing new, and Georgia’s military links
appear to have become closer since the events of 11 September.
Since Tbilisi’s security policy is so clearly aimed at counteracting
Russia’s influence, it is not particularly strange that there was some
gloating by Georgians. They have some good reasons to be unhappy with
Russia: leaving aside Georgians’ many accusations, Moscow has failed to
honor an agreement brokered by the Organization for Security and
Cooperation in Europe (OSCE) to reduce its military presence in Georgia,
and the impartiality of its peacekeeping in Abkhazia is highly
questionable. If Russians are upset that “the ring of Western influence
is getting tighter and tighter,” as ***Nezavisimaya Gazeta*** put it,
they should therefore direct some of their anger at the Kremlin: It is,
after all, the Kremlin that is largely responsible for the chronic
distrust that made many Georgians assume that Russia was behind last
week’s “suicide” of the head of Georgia’s security council, Nugzar
Sadzhaya.
Nonetheless, the arrival of U.S. soldiers is both something new and
something potentially disquieting. It is something new because this move
undoubtedly steps up Washington’s involvement in the region. As
President Eduard Shevardnadze said, “We have waited a long time, eight
years, for the United States to activate cooperation with Georgia in the
military sphere.”
It could possibly be disquieting on three fronts. First, there are hints
of opportunism on all sides. While Putin has reacted calmly, the
suddenness of developments suggests both Moscow and Washington were
scrambling for position. Georgia’s unexpected agreement in mid-February
that there are Chechen fighters taking refuge in the Pankisi Gorge
brought fresh pressure from Russia for a joint campaign. Georgia did not
accept. The claims grew louder, with Russia asserting that Osama bin
Ladin himself might be in the gorge. Then, suddenly, Georgia agreed to a
U.S. deployment. That was followed by Washington’s last-minute decision
to pull the plug on planned broadcasts in Chechen by Radio Free
Europe/Radio Liberty. As Moscow has been irritated by U.S. contacts with
the rebel leader Aslan Maskhadov, the decision can reasonably be seen as
an attempt to defuse Russian anger. If Russia and the United States
reached an agreement, it appears at least to have been made on the fly.
That is not the best testament to the warm and fuzzy relationship that
Bush and Putin appeared eager to develop.
The second possible concern is over Washington’s intentions. Is this, as
it is presented, merely a short-term move (if that’s how its
anti-terrorist efforts can be described), or is it part of a longer-term
effort to establish a U.S. presence on the rim of the ex-Soviet Union?
It would be premature to assume a longer-term aim, and Washington’s
statements so far about Georgia and Central Asia, combined with the
overriding need to have good relations with Russia, suggest some
Russians’ fears are overstated. The apparent scramble for position may
have been merely a desire to maintain its leadership of its
anti-terrorist efforts, preventing Russia from using the anti-terrorist
card for its own broader purposes. Even so, the deployment could easily
become meat for Russian hawks, who could seize on the vision of the
strategic benefits for Washington outlined this week by a U.S.
“commercial intelligence company,” Stratfor. It argues that a U.S.
presence in Georgia would give Washington the ability to pressure
“Russia's strategic position along its entire western and southern
border,” influence the flow of oil from the Caspian, establish a base
from which to attack Iraq, and “pressure […] neighboring Caspian states
to accept U.S. involvement in their oil and gas exploitation areas if
Washington so chooses.”
Russia’s foreign minister over the weekend called on Washington to prove
that it is not using the “fight against terrorism as a pretext for
strengthening its position in Central Asia,” and said that tensions are
bound to develop if no one knows (or just Bush and Putin know) what each
other’s cards are. Some tensions are already emerging: the chairman of
the international-relations committee of the Duma said Russia’s
parliament should discuss recognizing the independence of Georgia’s
breakaway republics, Abkhazia and South Ossetia, in response to the
Americans’ arrival. The regions of Abjaria and Djavakheti too could
easily become a little more itchy.
Washington has naturally tried to downplay fears and asserted, in the
words of a State Department spokesperson, that it is “working for the
stability and the security of the Caucasus.” But its approach to
stability in the region also gives a third cause for concern.
True, Washington is adopting a relatively broad-based approach to
security in the region. During the past week it did, for example, send a
team of senior military men to Armenia and Azerbaijan to talk about
securing borders and about Nagorno-Karabakh. However, what this region
needs is political, rather than military, solutions. Equally important
the emphasis should not be on bilateral efforts but rather on enhancing
the existing multilateral efforts in the region: bolstering the efforts
of the OSCE’s Minsk Group to bring peace to Nagorno-Karabakh and
supporting calls for the replacement of Russian peacekeepers in Abkhazia
with an international force. Russian and Georgian newspapers have been
filled with speculation about a carve-up of the region by the great
powers. Multilateral efforts would help to remove that dangerous
perception--and, of course, help to prevent such a carve-up. Given its
weakness and strategic importance, Georgia--even more than Central
Asia--would probably best find security within a multilateral security
system.
And then, of course, there is Chechnya’s role in regional stability. It
is perfectly reasonable for Washington to judge that broadcasts in
Chechen are not worth causing international aggravation. But its
diplomats should not be silent on Chechnya (or on Georgia’s and Russia’s
plan for the “voluntary” return of refugees from the Pankisi Gorge.
Militant Islamists and pockets of foreign fighters certainly aggravate
Chechnya’s problems, but it is Russia’s war in Chechnya that is the
fundamental cause of instability. If Washington is aiming for regional
stability, rather than just trying, in Bush’s phrase, to “smoke out”
militants, it must push for peace in Chechnya. A little campaign against
pockets of Al Qaeda forces will not help the United States much, or
Georgia--or, for that matter, Russia.
*******
#8
Date: Fri, 01 Mar 2002
From: Paul Greenberg
Subject: Leaving Katya Review in the New York Times, Washington Post and
Philadelphia Inquirer
Dear Mr. Johnson,
I'm the author of a Russian-American love story LEAVING KATYA. The book just
got written up very favorably in the New York Times, The Washington Post and
The Philadelphia Inquirer. I'm wondering if you could post the below
announcement to your list?
Thanks
Paul Greenberg
www.leavingkatya.com
Leaving Katya, a post-Soviet love story by Paul Greenberg praised in The New
York Times, The Washington Post and The Philadelphia Inquirer
Love may mean never having to say you are sorry, but loving a foreigner may
mean never fully understanding what is going on in your romance.
In the Philadelphia Inquirer, Carlin Romano writes that Paul Greenberg's
first novel, Leaving Katya (Putnam, $24.95), "wonderfully radiates the
uncertainty, the serendipity, the peculiar pain, of international
romance...Plainly drawn from the ex-TV-producer and writer's own poignant
experiences, it sometimes drolly, sometimes achingly, captures the clash of
idealistic ambition and sensible doubt that often tears such liaisons apart."
Daniel is a young American studying at the University of Leningrad in the
early '90s. Just before returning home, he meets Katya, an aggressively
ambitious Russian woman. After a magical evening together, Daniel leaves for
the States.
Unable to get Katya out of his mind, he sends her a postcard, inviting her to
America. She takes him up on the invitation, and before you can say "from
Russia with love," they marry.
"Some writers, eager to exploit foreign settings or characters for literary
prestige, adopt artificial style common to the culture at hand. Greenberg
never lets Daniel's voice fall victim to that modernist cliche, even if it
means a parallel story, Leaving Daniel, must be left to some other writer,"
concludes Romano.
Carolyn See in the Washington Post adds: "This is a terribly funny
novel...You laugh out loud when you read this book."
Comparing Leaving Katya to the work of Henry James Richard Eder in the New
York Times notes "Greenberg, comic and knowing, has done a rare thing
extremely well. Instead of asserting itself abroad, this 'abroad' has
asserted itself through Katya upon an American."
*******
#9
Tatarstan: Status Under Scrutiny As Lawmakers Change Constitution
By Kathleen Knox/Rim Guilfanov
Lawmakers in the central Russian republic of Tatarstan have given preliminary
approval to an overhaul of the republic's constitution. The debate goes to
the heart of the "special status" Tatarstan enjoys within the Russian
Federation -- a status that has made it one of the most independent of
Russia's 21 autonomous republics.
Prague, 4 March 2002 (RFE/RL) -- Tatarstan's State Council, or parliament,
last week gave strong backing, in a first reading, to a revision of the
republic's constitution.
Critics say the new wording -- which describes Tatarstan as a subject of the
Russian Federation -- further erodes what relative freedom the republic
gained from the federal center during the 1990s.
But Mintimer Shaimiev, Tatarstan's president since 1991, told deputies
Tatarstan will remain what he called a sovereign state. He said under the
changes, Tatarstan will retain the right to own natural resources. He also
said the revisions will further develop the Tatar language as it retains its
equal status with Russian. And he noted the new version maintains the
principle that Tatarstan "republic citizenship" can exist alongside Russian
citizenship.
Shaimiev said the changes are necessary for the republic's 1992 constitution
to keep up with the times. But he insisted a 1994 power-sharing treaty with
the Russian Federation remains the key document underpinning Tatarstan's
status within the federation.
That treaty secured Tatarstan powers beyond those enjoyed by Russia's other
autonomous republics and reflected the republic's relative importance -- it
has large oil, gas, and coal deposits and Russia's oil and gas pipelines run
through it -- as well as political sensitivities. A high proportion --
roughly half -- of Tatarstan's 3.8 million citizens are Sunni Muslim Tatars,
under Moscow's rule since Kazan fell to Tsar Ivan the Terrible in the 16th
century. Tatars are Russia's largest national minority, with many living
outside Tatarstan.
The 20th century saw periodic attempts to create a Tatar republic, even
before Russia's Bolshevik Revolution of 1917. But the modern-day roots of
Tatarstan's special status go back to the period immediately preceding the
USSR's disintegration in the early 1990s. A key moment came in August 1990,
when then-Russian President Boris Yeltsin -- in an apparent bid for support
in his rivalry with Soviet leader Mikhail Gorbachev -- made his famous remark
that Russia's autonomous republics should take "all the autonomy you can
handle."
Later that month the Tatar Supreme Soviet took Yeltsin at his word and
declared Tatarstan a Soviet Socialist Republic, elevating it to the same
status as Russia and the other union republics.
This was frowned on in Moscow, but the Kremlin was on the verge of accepting
Kazan's demand for a treaty-based relationship when the 1991 coup in Moscow
intervened to sound the Soviet Union's death knell.
While the union republics peeled off to become independent states, some
nationalist Tatar politicians called for outright independence, and relations
with Moscow became strained. But a republic-wide referendum in March 1992 was
more modestly worded. It asked: "Do you agree that Tatarstan is a sovereign
state and a subject of international law that builds relations with Russia
and other republics and states on the basis of equal treaties?"
A majority said "yes."
Shaimiev said at the time that Tatarstan did not want to secede from Russia.
Instead it wanted a compromise in the form of a bilateral treaty with Moscow.
It took another two years for those talks to produce a result: the February
1994 treaty "on the delimitation of authority and the mutual delegation of
powers" between Tatarstan and the Russian Federation.
This set out 15 areas where power fell to Tatarstan, 17 that came under
federal control, and 22 areas where there would be joint authority.
Foreign, defense, and monetary policies would all remain Moscow's
responsibility. But Tatarstan gained the right to establish political and
economic ties with foreign states so long as they did not run counter to the
Russian Constitution. It was also given certain tax and budgetary powers and
ownership of the republic's mineral wealth and other resources not designated
as federal property.
The compromise ensured that Tatarstan enjoyed a greater degree of autonomy
than any other Russian autonomous republic. For a while the "Tatarstan model"
was even touted as a possible example for other Russian regions with strong
nationalist tendencies, such as Chechnya.
The tricky wording of the 1994 treaty satisfied moderates on both sides but
was inherently ambiguous.
The treaty, for example, states Tatarstan is united with the Russian
Federation on the basis of the Russian and Tatar constitutions, and then on
the basis of the treaty itself. But Tatarstan's 1992 constitution said
plainly that Tatarstan is a sovereign state.
James Hughes, an expert on Russian federalism at London's School of
Economics, said the phrasing was sufficiently vague to satisfy both sides:
"That power-sharing treaty was a very ambiguous document, which reflected the
desire on both sides to come up with some compromise solution which would, on
the one hand, preserve Tatarstan as a member of the Russian Federation and,
on the other, be sufficiently ambiguous to give the Tatars a sense that they
did have some kind of sovereignty."
The changes given preliminary approval by Tatarstan's State Council last week
bring the constitution more into line with the treaty.
Article 1, for example, now states clearly that Tatarstan is a "full subject
of the Russian Federation" and united with Russia.
Hughes says the change in wording can be seen as part of attempts by Russian
President Vladimir Putin to rein in the regions and bring them under stricter
central control. But Hughes says there's a difference between Putin's
rhetoric and his more conciliatory approach in practice.
"You could say [the revisions] could incrementally lead to greater central
control over time, but I suspect that in practice it'll not lead to any
significant change in the power arrangements. What it will do is change the
symbolic aspect of politics, of the political relations between Moscow and
Tatarstan."
He continues: "The treaty and the Tatarstan Constitution embody very symbolic
terms about the nature of its sovereign status: it's a subject of
international law, its relations with Russia are regulated on an equal basis,
and so on. These are very symbolic statements that hint at the desire of
Tatarstan for the status of an independent nation-state. But of course it
never quite goes that far because the reality is it's impossible for
Tatarstan to assert that given its geographic location and given its
dependencies on Russia economically. These terms are loaded with symbolic
resonance and to change them will change the symbolism within Tatarstan
politics, but it's not going to lead to any significant change in power
relations as such."
Shaimiev touched on these symbolic aspects in his speech last week to
parliament. He cited Tatarstan's status as a "subject of international law,"
which he said is a term usually used to describe independent states. It's the
same with Tatarstan citizenship, he said -- the concept is out there because
Tatarstan is considered a state, but it has no real bearing on day-to-day
life.
Damir Iskhakov from Kazan's Institute of History says, however, the changes
are more significant than the term "revision" suggests: "The political
situation has changed and the position of Tatarstan within Russia has changed
too. That's why Tatarstan had to create, for all intents and purposes, a new
constitution. Although it's called a new version, in actual fact it's a new
constitution."
Iskhakov says many of the freedoms Tatarstan gained in the 1990s have already
been eroded, thanks to the reintegration of Tatarstan's tax service into the
federal tax system. Tatarstan used to hand over some 30 percent of taxes to
the federal center and kept 70 percent. Iskhakov says the situation is now
reversed.
The changes to the tax system were part of Putin's efforts to redistribute
tax revenue toward poorer regions and is tied in with his plan to bring the
regions under stricter federal control. Tatarstan now comes under one of the
seven administrative districts that Putin created to subsume all of the 89
federal subjects.
"Yes, [the constitutional amendments are] undoubtedly a significant change in
Tatarstan's status. In fact even before this position is fixed in the
constitution there were changes taking place in the real powers that
Tatarstan enjoyed. First and foremost the economic mechanisms were taken
away, there was a redistribution of financial flows and the formulation
that's being proposed now practically fixed the real position of Tatarstan. I
think that after the previous constitution, Tatarstan was not a full but a
half-state. And now it's just become an autonomous [republic]."
Tatarstan's National Movement is against the changes and has launched a
"Hands Off Our Constitution" campaign. Members argue the new constitution
calls into question the results of the 1992 referendum that strengthened
Kazan's hand in its bid for more freedom from Moscow.
The draft revision, kept under wraps till the eve of last week's session, is
now in the public domain for wider discussion and will go for two further
readings in the State Council starting in late March or early April.
(Rim Guilfanov is a broadcaster in RFE/RL's Tatar-Bashkir Service.)
*******
#10
Prominent Economist Eyes Steps To Strengthen Economy
Obshchaya Gazeta
28 February 2002
[translation for personal use only]
Interview with Yevgeniy Yasin, director of the Expert Institute, by
Dmitriy Dokuchayev, under the rubric "We Are in the Market," time and
place not given: "Better That Business Do It than the Bureaucracy"
Yevgeniy Yasin is experiencing feelings of
tenderness for domestic capitalists.
The report by Yevgeniy Yasin, director of the Expert Institute, at
the recent meeting of the governing board of the Russian Union of
Industrialists and Entrepreneurs (RSPP) has received wide play. The
author gave a rather unpleasant assessment of the current economic
situation and proposed a number of unusual formulas for correcting
things. Yevgeniy Yasin told Obshchaya Gazeta about his new program in
more detail.
[Dokuchayev] Yevgeniy Grigoryevich, the times when every prominent
economist considered it his duty to write his own program to save the
country sank into oblivion long ago. Why have you suddenly taken this
up again today?
[Yasin] It is probably from inertia that I continue programming
when nobody is asking me anything any more. And also it is not really a
program, but rather a report prepared at the request of the RSPP. I
consider it my professional duty to analyze the situation in the economy
and direct attention to bottlenecks. In this case I focused attention
on three problems. The first is the budget and its stability in
connection with the change in oil prices. I think that this is not such
a pressing matter. According to calculations that I have, even a drop
to $15 a barrel does not go beyond the safety line for the Russian
budget. The second problem is the financial system and converting
savings into investment. And the third is the nonmarket sector of the
economy, which must be fundamentally reduced.
[Dokuchayev] What do you mean when you refer to the nonmarket
sector?
[Yasin] In our economy there is a part that has remained just as it
was under Soviet power. Take the housing and municipal services system.
It is being nourished at the expense of the natural monopolies, which
are managed accordingly. Everyone is asking, why are they so
non-transparent? But how could they be transparent if they are forming
a kind of second budget, the one that is not ratified in parliament.
And if the government faces some unforeseen but very necessary
expenditures, it "shakes up" the natural monopolies. I cannot offer
proof that, say, Gazprom or RAO YeES [Unified Energy System] gave money
to Putin's election campaign, but I have that suspicion. Because the
natural monopolies are the government's pocketbook.
[Dokuchayev] But you favor raising the tariffs for the natural
monopolies?
[Yasin] Yes, they can call me a paid agent of Gazprom, the Ministry
of Railways, or RAO YeES. The latter is most likely, because everyone
knows that Chubays is a friend of mine. But in this case I am acting as
a scholar. It is thought that Russia is developing and has competitive
advantages over all the rest of the world thanks to its low energy
prices. After the 1998 crisis the increase in tariffs began to lag
behind the overall growth in prices. And now we see that the
enterprises gobble up twice as much energy as their competitors abroad.
For example, the pipeline system in Siberia radiates steam directly in
the winter, and all this heat is wasted. But at such low prices nobody
cares!
When opponents say that it is important for us to find out what costs
the monopolies have, I agree. But should tariffs be measured by costs?
Only in Marxist-Leninist political economy are prices determined by
expenditures. But in a market economy there is a much more important
indicator: efficiency. If the tariffs promote squandering of energy, it
means that they are low. Even if the tariffs for gas were tripled and
those for electricity were doubled, as I propose, they would be 50
percent lower in our country than in the developed countries. Because
we pay 1.7 center for a kilowatt of electricity today while the
Americans, for example, pay 5...
[Dokuchayev] Don't you feel sorry for the poor people? We do not
make as much as the Americans...
[Yasin] I do feel sorry for them! Therefore I am proposing that
the wages of budget workers and pensions be increased. In that enclave
of the Soviet economy that we have still remaining, the natural
monopolies are subsidizing the budget, the housing and municipal services
complex, and the population. This means that we have to make it so that
they are paid full value for their services, so they can develop, and so
that there are incentives for energy conservation. And wages for people
can be raised by the corresponding amount, or even more. It is very
simple!
[Dokuchayev] Really. Except where can the money for this raise
come from?
[Yasin] The money will have to be taken from the budget. This
will require about 25-30 percent more money that we have now. But in
this case the budget would be relieved of all subsidies to maintain the
housing and municipal services complex. In addition, taxes from the
natural monopolies would increase by a rather respectable amount. I did
not do detailed calculations, but my estimates show that the resources
are secured in this way, including resources for raising wages.
[Dokuchayev] And what did not suit you about the existing financial
system?
[Yasin] Our economy is still growing today, although the growth
rate is declining. And it will fall to zero and below if we do not take
appropriate steps. But at the present time it is as if the economy is
operating off a starter. There was one surge of energy, the devaluation
of the ruble, then another--high oil prices. But no more surges are
visible. This means that the motor must start up--that is domestic
demand. It appears that this motor has now begun choking and coughing.
This is happening because we do not have a mechanism that operates to
convert savings into investment. I am referring to savings in the
macroeconomic sense, not just personal savings.
Thus, with savings at 33 percent of GNP we have investment of just
16.7 percent in circulation. The rest is export of capital, creation of
Central Bank reserves, pumping into hard currency, and foreign debt
payments. And little is left for investment. And then those who have
begun working in our country invest in themselves.
There are not many positive examples of different behavior: the
"aluminum king" Deripaska invests in the automotive industry, Severstal
also invests in the automotive sector, while Potanin's structures invest
in power machine building. But there is no normal mechanism for
transferring capital. And the normal mechanism is financial markets,
which develop, in their turn, where there is a banking system. The
appearance and flourishing of financial markets without a banking system
does not happen.
[Dokuchayev] So in your opinion, does something need to be done
with the banks?
[Yasin] The banking system is not supporting growth of the Russian
economy. It at best supports its functioning in a semi-shadow regime.
Because a significant share of the enterprises' demand for banking
services is connected with all kinds of doubtful transactions with
offshore zones, cash operations, and "black" wage payment schemes...
If we strengthen the banking system, it will begin to offer more
credit. This means that we will thereby increase liquidity and
monetarization and we will be able to get a new surge of economic growth,
the "motor" will not be wound up to full capacity. But in order for the
banks to offer more credit they must have more capital, because only then
will they be able to take risks. Mamut's recent idea of strengthening
the banks is right in principle.
[Dokuchayev] You have been criticized for playing up to big capital
in your report. And all your positive examples here are from the
"oligarchs"...
[Yasin] I have feelings of tenderness for the Russian capitalists.
At the present time I see only two driving forces that can pull Russia
forward--the bureaucracy and business. So now, I think that capital
will do this far better than the bureaucracy. My report ends by saying
that the Russian bourgeoisie already lost the country once, in 1917,
because they groveled before the authorities and were afraid to assume
responsibility. Today we face the possibility of repeating this
experience. Simply because the bourgeoisie is not playing its role.
*******
#11
Moscow Times
March 5, 2002
Berezovsky Promises to Show Film in London
By Gregory Feifer
Staff Writer
Exiled tycoon Boris Berezovsky has promised to show a documentary film in
London on Tuesday that he says will provide evidence that a series of
apartment building explosions in September 1999 was the work of the Federal
Security Service.
The government blames the explosions on Chechen terrorists but has yet to
produce evidence backing up the claim. Two suspects, neither of them
Chechen, have been put on trial. Both were acquitted last fall.
The FSB announced last month that all those responsible for the explosions
were "known," and that some have been arrested, but provided no further
information.
Two explosions in Moscow followed by a third in the southern city of
Volgodonsk, which left a total of about 300 people dead, served as
justification for the Kremlin to launch a second campaign in Chechnya.
Initial successes in the Chechen war contributed in no small part to
then-Prime Minister Vladimir Putin's soaring public approval ratings in the
months before he ran for president.
Critics said Berezovsky and other members of the clique of Kremlin insiders
dubbed the "family" had used the apartment building explosions as a ploy to
hold on to power in the waning months of ailing former President Boris
Yeltsin's administration. Putin, a former spy, had only recently resigned
as FSB chief to become prime minister.
The release of the film, expected at a news conference at 6 p.m. Moscow
time, coincides with the anniversary of the 1953 death of Soviet dictator
Josef Stalin.
Berezovsky did not respond to faxed questions Monday, but has previously
said "foreign" journalists worked on the film, declining to elaborate further.
The film is not expected to be shown on Russian television, but video
copies will likely circulate in Russia.
The Liberal Russia political movement, funded by co-chairman Berezovsky,
plans to stage a rally at Lubyanskaya Ploshchad at 6 p.m. The event,
organized in conjunction with human rights organizations, aims to declare
"unallowable the restoration of Stalinism" in Russia, a Liberal Russia
spokeswoman said.
Liberal Russia has also planned protests and round-table conferences in
several other cities, including St. Petersburg, Rostov and Perm.
Berezovsky has said his film relies heavily on the documentation of an
incident in Ryazan the government says was an emergency exercise but
critics say was a foiled attempt to blow up yet another building.
Only a week after the explosion in Volgodonsk, residents of a Ryazan
apartment building noticed a suspicious car parked near a basement door.
Inside, police found bags of white powder wired to a detonator and a timing
device set for 5:30 a.m.
Police evacuated the building, claiming they had averted a terrorist act.
Investigators said the bags contained hexogen, an explosive. Two days after
the bomb's discovery, however, FSB chief Nikolai Patrushev announced his
agency had staged the incident, planting a dummy bomb in an exercise meant
to test public vigilance. All traces of the bomb were removed.
Vladimir Pribylovsky of the Panorama think tank said he doubted
Berezovsky's film would release any new information about the explosions,
adding that it would nonetheless call attention to the fact that the
government has yet to respond to charges that it was responsible.
Berezovsky turned against President Putin shortly after having played a
pivotal role in his election in 2000. The businessman now lives in London,
from where he directs criticism toward Putin, who he says is squashing
freedom of the press and undermining democratic values established under
his predecessor, Yeltsin.
Two years after winning office, Putin's public approval ratings remain
above 70 percent.
Berezovsky says Putin's presidency will not last long despite his ratings,
and that exposing the motivations behind the apartment bombings might help
undermine his administration.
Pribylovsky said the government would most likely respond to the film in
its usual manner -- silence. "Any bombs put under the president could
explode in the future," he added. "But as long as people believe in Putin
as the good tsar, nothing will come of such accusations."
Berezovsky, meanwhile, has in recent months come under renewed fire from
the FSB, which accused him of supporting Chechen terrorists. Berezovsky
acknowledged having given $2 million to rebel leader Shamil Basayev after
the first war, but noted that both men were government officials at the
time and the money was allotted for reconstruction work.
******
#12
Business Week
MARCH 5, 2002
Russia's World-Class Accounting Games
Investors say abuses are rife, and pressure is building on regulators to
step in to ensure that vital capital isn't scared off
COMMENTARY
By Paul Starobin
Starobin is Business Week's Moscow bureau chief
Edited by Thane Peterson
It's the financial scandal of the moment in Russia. A government watchdog
organization, Russia's Audit Chamber, is investigating the auditing of
energy titan Gazprom by PricewaterhouseCoopers, apparently spurred at least
in part by a BusinessWeek article highlighting shareholder criticism of the
auditing (see BW, 2/18/02, "Gazprom: Russia's Enron?").
The agency has already suggested that Gazprom, which is 38% owned by the
Russian government, replace PwC as its outside auditor. The energy company
is now organizing a tender to select an auditor for its 2002 accounts. PwC,
which has been signing off on Gazprom's books since 1996, may lose the job.
Shades of Enron? The PwC-Gazprom controversy may sound familiar to anyone
following the woes of the Houston energy company and its auditor, Arthur
Andersen. But, in fact, such problems in the largely unregulated
relationship between auditors and companies in post-Soviet Russia run much
deeper and are far more common than anything known in the U.S.
PLENTY OF COMPANY. Russian regulators now must act quickly to establish
tough uniform standards ensuring that auditors serve the interests of
shareholders, not management. Without such requirements, responsible
shareholder capitalism is unlikely ever to flourish in Russia, leaving the
country bereft of vital investment capital.
Gazprom is hardly the only company that may be failing to disclose
sufficient information to shareholders. Russian oil giant Lukoil, audited
by KPMG, another U.S. Big Five firm, also doesn't adequately report
transactions with businesses apparently connected to management, according
to Moscow fund manager Mattias Westman, director of Prosperity Capital
Management. KPMG says Lukoil's books are audited according to generally
accepted accounting principles, but investors like Westman remain
skeptical. "Big U.S. investment funds stay away from Russia because of lack
of confidence in disclosure," he contends.
Another Russian oil giant, Yukos, has shown that tightening financial
controls can give a company a major boost. Back in June, 2000, as part of a
package of reforms to improve corporate governance, Yukos set up an audit
committee headed by Jacques Kociusko, managing director of Paris-based
Kajis. Since then, the company's share price has skyrocketed by 850%.
HELD CAPTIVE? However, most companies have simply ignored calls by
Russia's Federal Securities Commission for voluntary action. The reason?
All too many are still headed by managers who cling to the view that the
enterprise is an engine to generate wealth for themselves.
Indeed, the central allegation by Gazprom's minority shareholders is that
PwC became a captive of the management of former CEO Rem Vyakhirev. Critics
say Vyakhirev scuttled attempts by minority shareholders to have the Big
Five's Deloitte & Touche review PwC's auditing of ties between Gazprom and
Itera, a Moscow gas producer. Critics suspect that Gazprom management was
using Itera as a front for the transfer of billions of dollars in assets.
Under pressure from Gazprom managment, PwC agreed to conduct its own review
of Gazprom-Itera ties. Gazprom declined to comment.
That's why several reforms are crucial. Most important, the PwC-Gazprom
matter flags the need for publicly held Russian companies to establish
mandatory, full-fledged audit committees, headed by independent directors,
to supervise the outside auditor. That's standard practice in the U.S. This
would complement steps to improve corporate governance adopted last year by
Russia's legislature, the Duma, including a measure that gives boards of
directors the right to dismiss a company's CEO at any time.
SCAPEGOATING. Tougher rules are also needed to police the selection and
payment of auditors. A recent review of Russian auditing practices by the
Paris-based Organization for Economic Cooperation & Development (OECD)
found that some Russian companies use so-called pocket auditors -- firms
run by cronies of the managers who help cook the books to enable companies
to evade taxes and disguise asset-stripping.
To combat such practices, Russian law should require companies to disclose
the criteria by which an outside auditor has been chosen, as well as the
fees paid to it for auditing, consulting, and any other work. As the OECD
is recommending, false statements should be punishable by Russia's Federal
Securities Commission. It would also help to require that the lead auditor
on each account be rotated periodically.
Of course, outside auditors such as PwC and KPMG shouldn't be made
scapegoats for every manner of corporate misdeed. In a Feb. 27 full-page
advertisement in the Russian business daily Vedomosti, PwC responded to
criticism by pointing out that auditors often recommend improvements in
corporate governance to clients but are not responsible for deciding
whether such reforms are adopted. That's fair enough: In the case of Yukos,
Chairman Mikhail B. Khodorkovsky credits PwC, its auditor, with playing a
helpful role in implementing shareholder-protection improvements.
Nor are auditors at fault for the murkiness in Russia law in many key
areas. Changes are needed to tighten legal definitions of related parties
and improve disclosure, says Roger Munnings, the KPMG partner in charge of
the Moscow office. However, auditors are losing credibility, in Russia and
elsewhere, for good reason: They too often seem willing to keep accounts at
all costs. It's high time for the lawmakers and regulators to step in.
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With support from the Carnegie Corporation of New York and
the MacArthur Foundation
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