
| ISSUE #67 | September 24, 1999 |
The Center for Defense Information's 1999 Military Almanac is now available in hard copy. The 68 page Almanac, a biennial publication, contains a wealth of information on the U.S. military and military spending, comparisons of U.S. and other significant military forces, and U.S. participation in international agreements and organizations that are concerned with defense and security matters. The Almanac sells for $15. It will be available shortly on CD ROM. Watch for a future message concerning this format. The Almanac can be ordered by calling (202) 332-0600 or writing to Center for Defense Information, 1779 Massachusetts Ave. NW, Washington, DC 20036. Or visit http://www.cdi.org
#1 Emotional Mikhail Gorbachev bids final farewell to his beloved Raisa MOSCOW, Sept 23 (AFP) - Mikhail Gorbachev bid an emotional farewell to his beloved wife Raisa on Thursday, as a host of European dignitaries attended the funeral of the Soviet Union's greatest and most glamorous first lady. Dignified in his grief, Mikhail Gorbachev spent the day on the verge of tears, supported by the couple's only daughter Irina and his sister-in-law Lyudmilla. Gorbachev, the last president of the now defunct Soviet Union, only gave his permission for a religious ceremony at the convent's cathedral church on the eve of the funeral. Despite his Communist past he is himself baptised. As the cathedral bells tolled, six pall bearers carried the plain wooden coffin to the graveside, set in the picturesque grounds of the historic Novodevichy monastery. Orthodox priests struck up in mournful song amid a cloud of sweet-smelling incense as the coffin was finally committed to the earth. Ex-chancellor Helmut Kohl led a high-powered German delegation at the funeral which included his long-serving foreign minister Hans-Dietrich Genscher, the speaker of the German Bundestag Wolfgang Thierse and Doris Schroeder-Koepf, wife of the current Chancellor Gerhard Schroeder. Former premier Yevgeny Primakov and his successor Sergei Stepashin were among Russian personalities to pay their last respects before Raisa's coffin was transported to Novodevichy. France, Italy, Spain and the United States were represented by their ambassadors. Britain's ex-premier Margaret Thatcher was not seen at the ceremony, despite reports that she would attend. Naina Yeltsin represented her husband President Boris Yeltsin, while Belarus President Alexander Lukashenko was among foreign leaders to file past Raisa's body in Moscow's Cultural Foundation which she created. Raisa, 67, died on Monday after losing a long battle against leukaemia, a blood disorder she had spent much time trying to combat through her charitable work. Gorbachev spent two months by his ailing wife's bedside in a clinic in the German city of Muenster as doctors fought vainly to save her life. He was in daily contact with Kohl, who paid a resounding tribute to Raisa and the man who played a key role in the reunification of Germany in 1990. "We spoke every day with Mikhail Gorbachev while he was in Muenster," Kohl said. "Raisa played a vital political role, from the beginning of perestroika (the reform movement launched by Gorbachev) to the reunification of Germany and the arms reductions negotiations. "When people talked of the Gorbachevs, they said: 'they are a couple'," added Kohl, the longest-serving chancellor in German history, underscoring the intense personal bond that linked the Gorbachevs during their 46-year marriage. On Wednesday, hundreds of ordinary Muscovites queued patiently to enter the ornate building in downtown Moscow where Raisa's body lay in state to pay their respects to the woman the business daily Kommersant described as Russia's "first First Lady." The last goodbyes said, Raisa's body, displayed in an open coffin on a podium surrounded by wreaths of flowers brought by mourners, was lifted into a waiting hearse. The funeral cortege then left for the cemetery in southern Moscow where the great and the good of Russian history are traditionally buried, including composer Dmitry Shostakovich, playwright Anton Chekhov, author Mikhail Bulgakov and former Soviet chief Nikita Khrushchev. Reviled during her husband's reign as Kremlin boss for her love of luxury and overseas shopping sprees, Raisa was quickly dubbed by critics as the "Red Tsarina," whose excesses went down badly in a country of shortages and poverty. However, Raisa's illness triggered a remarkable change of heart among many ordinary Russians, who had resented her glamour and influence over her powerful husband but who mourned her death. Mikhail Gorbachev has cut a tragic figure on the nation's television screens during his wife's last illness, and his evident love of the woman he married in 1953 touched a chord among the sentimental Russian populace.
#4 Russia: Lawmaker Questions U.S. Interest In Corruption By Andrew F. Tully Washington, 23 September 1999 (RFE/RL) -- A member of the Russian state Duma is skeptical about America's sudden interest in financial corruption in his country which he says has been around for so long. Yuri Shchekochikhin, who is also the editor of the Moscow newspaper "Novaya Gazeta," testified Wednesday before a Congressional hearing on Russian corruption. American law enforcement officials are investigating whether Russian businessmen, criminals and senior officials "laundered" as much as $15 billion through the Bank of New York. Recent American news accounts say some of that money may have included aid from the International Monetary Fund. "Money laundering" is transferring illegal profits through many bank accounts until the source of the money cannot be traced, and the funds appear to be legitimately earned. Shchekochikhin said recent American news reports about Russian money laundering and other corruption remind him of a "bombing attack." Shchekochikhin said: "The constant publications in the press here, and releases, remind me of a bombing attack. ...All of this happened a long time ago. ...America knew about this. ...Why only today?...I want to warn you about making -- about coming to conclusions about the money-laundering situation in the Bank of New York." Shchekochikhin testified on the second of two days of hearings by the House of Representatives Banking Committee, which plans to hold further hearings on Russian corruption in the coming weeks. On Tuesday, U.S. Treasury Secretary Lawrence Summers testified before the same committee that Russia's problems with financial corruption should not drive the United States to abandon the Russian people. He did say, however, that Washington should be stricter in its financial dealings with Moscow. And the secretary said the administration of U.S. President Bill Clinton supports the decision by the International Monetary Fund to loan Russia money that can be used only to repay existing debt to the IMF. After Summers spoke, two members of the Nixon Center, a conservative think tank, testified that the Clinton administration was at least in part to blame for the current scandal. Paul Saunders and Dmitri Simes said the administration had been aware for a long time that Russian banks were stealing public money, and yet it pushed for billions of dollars in IMF loans to Russia anyway. Wednesday's hearing began with testimony from James Robinson, the U.S. assistant attorney general in charge of the Justice Department's Criminal Division. Robinson said American law-enforcement agencies need more resources to fight the illegal flow of Russian foreign money into the United States. He said such "capital flight" threatens to corrupt Russia's financial institutions. The assistant attorney general said the meetings last week in Washington between U.S. and Russian law-enforcement officials about the money-laundering investigation was "productive." Hours later, Russian Foreign Minister Igor Ivanov echoed that. Speaking with reporters at the White House, Ivanov said Moscow has agreed "to fully cooperate" in the investigation with the United States and all other nations involved. Also testifying at the House Banking Committee hearing on Wednesday was Thomas Renyi, chairman of the Bank of New York. He stressed that his institution has not been formally charged with wrongdoing. But Renyi conceded that the bank was slow to recognize the questionable flow of money through one of the accounts involved in the scandal because the holder of the account was married to one of the bank's executives. Otherwise, Renyi said, the Bank of New York acted responsibly and according to accepted practice, and he said it has instituted new procedures to prevent similar trouble in the future. Meanwhile, a parallel Congressional investigation into Russian corruption is opening in Washington. Deputy Secretary of State Strobe Talbott, the second-ranking diplomat in the Clinton administration, is scheduled to testify Thursday (today) about the scandal before a hearing of the Senate Foreign Relations Committee. Also on Thursday, U.S. Attorney-General Janet Reno and Summers, the treasury secretary, are expected to announce a new joint initiative of the Justice Department and the Treasury to fight money laundering. Robinson mentioned the program during his testimony Wednesday, but declined to give details. During Wednesday's congressional hearing, Representative Jim Leach, the chairman of the Banking Committee, asked Shchekochikhin why he believes so much money is being siphoned out of Russia. The Russian legislator replied by recalling the end of World War II, when Charles DeGaulle became president of France. DeGaulle, he said, asked the French to put all their money into French banks, and promised that "not one centime will be lost." Shchekochikhin said there is no one in Russia today who can make the same assurances to the Russian people. Therefore, he said, Russians are eager to get their money out of the country. In his words: "And of course lack of trust in the government is the first or the foremost reason." The Russians do not distrust only their own leaders, Shchekochikhin said. They also have become disillusioned with the United States, at part because of its conduct in Vietnam, in Iraq, and in Yugoslavia. "Well, right now, the hope for America in Russia is gone," says Shchekochikhin.
#5 Izvestia 23 September 1999 Scandal Of America By Vladimir Abarinov The current hearings in the U.S. Congress on corruption in Russia are motivated by America's own economic interests, writes IZVESTIA. It is not accidental that at this very moment the new head of the World Trade Organization (WTO), Mike Moore, said that there was no ground so far for Russia to become a member of that organization. Moreover, he said that out of the big countries China was one of the most likely candidates for membership -- it may join the WTO within the nearest few weeks. "These words reflect the U.S. official position," the paper points out. "The U.S. Administration actively supports the anti- dumping investigation with respect to Russia. The obstacles to Russia's admission to the WTO and the scandal around the Russian mafia are the best way of delaying the lifting of the trade restrictions against Russia, imposed back during the Cold War. Moreover, the Clinton Administration promised in public that in September it would recognize Russia as a country with a market economy. Now it can safely not do it." As for the hearings per se, the Russian delegation invited to participate wants to receive documents proving that Russian money is really laundered in America. The delegation head, Alexander Kulikov (a communist Duma member) said flatly on his arrival in Washington: "If such documents are not produced, we will have the right to say that the interests of the Russian state are discredited purposefully to achieve certain political goals." But the American reality is such, the paper notes, that normally the Congressmen do not deal with any documents -- they simply hear witness testimony. The purpose of congressional hearings is to formulate the problem and then decide what to do about it. The paper also notes that many important witnesses, such as Natasha Gurfinkel-Kagalovskaya and Lucy Edwards from the Bank of New York, Geneva banker Bruce Rappaport and Russian financier Mikhail Khodorkovsky refused to come to testify in Congress. The suspended Russian Prosecutor General, Yury Skuratov, said he was unable to come but promised to cooperate. The former Swiss Federal Prosecutor Carla del Ponte was also absent due to her new assignment in the Hague. As for the U.S. Administration, sharply criticized now for the "loss" of Russia, it is represented at the hearings by Secretary of the Treasury Larry Summers. The latter tried hard to defend Washington's Russia policies, saying that a stable, democratic, prosperous and disarming Russia was in America's interest. Other leading U.S. politicians, the architects of Bill Clinton's Russia course, such as Madeleine Albright, Strobe Talbott, Al Gore, Sandy Berger and Willian Cohen, also vigorously uphold this course in numerous public statements, the paper says.
#6 Moscow Times September 24, 1999 PARTY LINES: Elections Are Political Y2K For 'Family' By Brian Whitmore Staff Writer Russia's super-presidential system was designed back in 1993. And while it may now seem incredibly short-sighted, it seems there is a design flaw f a bug if you will. The entire system could crash in 2000 when President Boris Yeltsin goes. Call it Russia's political Y2K problem. The problem is that the fabled "family" f that cabal of Kremlin insiders who got rich and powerful due to their proximity to Yeltsin f are bumping into a biological reality. One of these days, sooner or later, one way or another, Yeltsin is going to leave the Kremlin. The system as set up now works beautifully for the family and its state-assets-fattened oligarchs. But when Yeltsin leaves, things go a bit haywire f elections are supposed to choose his successor. For some oligarchs, this is the functional equivalent of the power grid crashing, electronic bank accounts evaporating, planes dropping out of the sky and other calamities associated with Y2K crises. The family f first daughter Tatyana Dyachenko, oil tycoons Boris Berezovsky and Roman Abramovich, Kremlin chief of staff Alexander Voloshin and presidential ghostwriter Valentin Yumashev f is safe as long as Yeltsin is alive and kicking (although the more feebly he's kicking the better). But as soon as he goes, they are toast f or so they appear to assume. This is what drives all the searches for a suitable successor f Viktor Chernomyrdin, Sergei Stepashin, Vladimir Putin, Alexander Lebed f to the same inescapable conclusion: no matter how loyal a president-in-waiting appears, there is no guarantee that he will not turn on the family once his wait ends. Once securely in the Kremlin, what use would Stepashin, Putin or Lebed have for Dyachenko, Berezovsky and Abramovich? None whatsoever. Any new president who wants to make a clean break in the public mind with the corruption of the past decade will need to at least appear to clean house upon coming to office. Either way, Berezovsky gets it. Therefore, the family won't trust any heir, no matter how loyal he may be to Yeltsin. When Sergei Stepashin was appointed prime minister in May, the consensus was that the Kremlin valued his "loyalty." There was also his law-enforcement background, which would come in handy if the need arose to declare a state of emergency. Just 82 days after his appointment, Stepashin was cast by Yeltsin on to the trash heap of loyal ex-prime ministers. Analysts like the respected journalist Alexander Zhilin said Stepashin's ouster came because he refused to go along with plans to subvert the Constitution and cancel elections. Enter Vladimir Putin. Putin's most attractive attribute from the Kremlin's point of view was his loyalty to Yeltsin. And yes, there is also his KGB background should emergency rule be needed. Putin has been in office for a month and the media is already whispering that he is on the way out f to be traded for Krasnoyarsk Governor Alexander Lebed, who was a Kremlin security tsar in 1996 and negotiated peace in Chechnya. But even if it's Lebed who ultimately comes to power through elections, why would he tolerate the family more than Putin, say, or Yevgeny Primakov? For the family, Y2K is a systems problem: It all crashes with elections. Solving Y2K means rooting the democracy out of the system like a line of defective computer code.
#7 Visit CDI's web site for up-to-date information on the crisis in North Caucasus. A new page (http://www.cdi.org/issues/Europe/), to be launched Friday, contains day-by-day time line of events, maps, and background information on the current conflict in Dagestan and Chechnya. From The Center for Defense Information The Weekly Defense Monitor VOLUME 3, ISSUE #37 September 23, 1999 War Threatens to Engulf Chechnya By Tomas Valasek, Research Analyst, tvalasek@cdi.org The war in Dagestan appears to be over for now as the rebels from Chechnya withdrew and the Islamic militants holding out in Dagestan abandoned their positions. But even as Russian and Dagestani troops consolidate their gains by removing dozens of mines and booby traps, another conflict looms on the horizon. This time, Moscow seems poised to launch an attack against hechnya itself. Russian jets, claiming to be targeting the militants' bases, have continued bombing Chechnya even after operations in Dagestan ceased. The intensity of bombing grew to over 100 raids a day this week. Following a series of bomb explosions throughout Russia, which Moscow blamed on the Chechens, Russian Prime Minister Vladimir Putin called for economic sanctions against Chechnya, imposition of a "safety zone" around the republic and the "destruction" of all Chechen guerrilla bands, along with the creation of a Chechen government in exile. Russian troops have already cut off all access points to Chechnya. Moscow is sending new military and police units to the region every day to bolster the force already there (officially 13,000 but up to 30,000 by some estimates). While devastating to Chechnya, the punitive measures could also prove difficult to sustain for Moscow. If the Putin-envisioned "safety zone" involves creating a chain of military outposts around Chechnya, these would be vulnerable to Chechen attacks. Further, any large-scale ground operations against Chechnya would trigger a nationalist response and likely draw Russia into another disastrous war. Chechnya's internal divisions do not necessarily translate into weakness vis-a-vis external enemies. The Chechnya of the late President Dzhokar Dudayev in 1994 was equally weak domestically, yet it mustered sufficient resolve and resources to defeat the numerically superior Russian forces. Moscow's posturing on Dagestan must also be considered in the light of the upcoming parliamentary and presidential elections in Russia. It is conceivable that Prime Minister Putin's statements were intended to shore up support for President Yeltsin's supporters, such as Putin himself, who seem destined to lose the elections. That the war in Dagestan would in the end draw in Chechnya was perhaps inevitable. The Dagestan conflict as such may have been only an extension of Chechen domestic politics. Shamil Basayev, the field commander who led troops on two raids into Dagestan in August and September 1999, is an avid opponent of Chechen President Aslan Maskhadov. Basayev lost to Maskhadov in the 1997 presidential elections. Although Basayev and Maskhadov fought together in the 1994-96 war, their views of Chechnya's external relations have diverged during the post-war years. As the president of the country, Maskhadov is charged with finalizing Chechnya's status vis-a-vis Russia. The 1996 Russo-Chechen accords signed in Khasavyurt, Dagestan, left Chechnya's political status open while calling for a final arrangement to be agreed on by 2001. Like all current Chechen leaders, Maskhadov is a firm advocate of independence. "Chechnya is an independent state....Only this remains -- that the rest of the world, including Russia, recognize this independence," Maskhadov declared shortly after his election. However, political reality dictates otherwise. The Chechen government has been unable to guarantee order or provide reasonable living standards for its citizens. Most of the Chechen population is unemployed or involved in criminal enterprises, and the civilian authority has almost completely collapsed. Moscow has offered help -- trade, subsidies -- but only if Chechnya rejoins the Russian Federation. Maskhadov was due to meet with Boris Yeltsin shortly after the invasion of Dagestan began. The timing indicates that Basayev may have launched the operation in order to foil the planned meeting and prevent any compromises with Russia. The Dagestani conflict has put Maskhadov in an impossible situation. Siding with Russia against maverick Chechen commanders, as Moscow repeatedly urged him to do, would expose the president to the wrath of his former comrades in arms. Already Maskhadov has ceded most of his real power to field commanders who run sections of Chechnya as their personal fiefdoms. If the president allied himself with Basayev he would almost certainly provoke a Russian military response against Chechnya -- which is appearing increasingly likely anyway. Faced with these hard choices, Maskhadov has chosen the implausible path of not only denying official Chechen involvement, but also denying that any Chechens were involved in the Dagestan fighting. Maskhadov stated through his spokesman that the Chechen people "have nothing to do with what is going on" in the neighboring republic. He later revised his position to admit Basayev's role in the fighting but it came too late to appease Russia. Following the bomb explosions in Russian in August - September 1999, official Moscow has essentially stopped differentiating between maverick Chechen commanders and Grozny authorities, and apparently broke off talks with Maskhadov altogether. While Russia is preparing for a possible war, fellow leaders of North Caucasus states threw Maskhadov a lifeline. The presidents of North Ossetia and Ingushetia met with Maskhadov behind Moscow's back and called on Russian President Yeltsin to meet with the Chechen leader and solve the dispute peacefully.
#8 Christian Science Monitor September 24, 1999 Through red-colored glasses 'Red Files' explores Soviet views of atomic secrets, sports, space race By Gloria Goodale, Arts and culture correspondent of The Christian Science Monitor Cold war secrets are hot all over again. Witness the hoopla over recent revelations that a British great-grandmother was a career spy for the Soviet Union. Most students of the cold-war era know the story of Julius and Ethel Rosenberg, the New York couple who were put to death in 1953 for passing secrets to the Soviets. But most Americans still don't know about the other United States citizens who were guilty of far more overt and egregious espionage for the Russians and were never punished. Lona Cohen carried American A-bomb secrets in a Kleenex box in 1945, which she displayed openly as she journeyed across the country from the Los Alamos, N.M., laboratory. Of potentially greater meaning to contemporary audiences is the ease with which Mrs. Cohen and her husband, Morris, penetrated the most secret scientific laboratories of the time. As recent scandals involving the same facility suggest, little appears to have changed. In a compelling four-part series, Red Files (airing Mondays in one-hour segments, Sept. 27-Oct. 18), PBS explores the Russian view of recent history through interviews with key Soviet participants, newly released archival film, and declassified dossiers. The first night examines the group of Americans who helped the Soviet Union obtain US atomic secrets. In the second evening, former gymnast Olga Korbut tells of the toll the Soviet sports machine took on young athletes. The space race is the theme of the third episode, and the final segment looks at Soviet propaganda. "It's soon that you're not going to find people with any real kind of political ideals in Russia" because of the effects of years of propaganda, says Russian journalist Vladimir Pozner, who narrates in the final show. "They've been lied to so terribly that they no longer have the desire to believe in anything." Beyond that is a "very strong anti-American feeling" in Russia today, says the son of former Soviet leader Nikita Khrushchev, Sergei Khrushchev. "The last polls show that 78 percent of Russians all over the country, not only in Moscow, have more or less anti-American feelings," the younger Khrushchev says. That hard truth may be the most compelling reason to tune in to this deconstruction of recent history. In order to understand just how far events have come since the fall of communism in Russia, it is enormously revealing to grasp how they progressed to that point in the mid-1980s. In the sports segment, the now middle-aged gymnast Ms. Korbut, who wowed the world as a petite 17-year-old wonder in 1972, says she paid the price for her uniqueness. "I destroyed everything by trying to think, trying to do new," she says. "And of course, the government didn't like that." She was banned from travel after the 1976 Olympics, where she was overshadowed by the even younger 14-year-old Nadia Comaneci. Many of her colleagues also share a sense of the political price they paid for their prowess. But they also demonstrate a sense of pride about how far Russia has come since the fall of communism. Perhaps the most curious presence in the series is the younger Khrushchev. He says that he was extremely close to his father in later life and is able to share many anecdotes about life behind the scenes during momentous historic events. He explains why his father banged his shoe on the table during his address to the United Nations in 1961. Look at the American fly-over of Soviet territory the previous year, he says. "It was part of the cold war behavior, when both sides tried to show that they're equal," the younger Khrushchev says. "America was much stronger, so it was much more difficult [for] my father to show that he's equal." He also includes a warning note about what he calls the deterioration of his native country. "The situation there structurally and maybe psychologically is very close to what happened in Russia in 1907 to 1917" prior to the Communist Revolution, he says, "just the selfish rule of one group of people to control the state through ... the Mafia....I'm very pessimistic about the future."
#9 American Chamber of Commerce in Russia http://www.amcham.ru/ AmCham Newsletter Foreign Policy by Sound Bite September-October 1999 Chairman's Report by Bruce W. Bean High political season has come both to Russia and the U.S. The media in both countries bring us sensational stories about presidential elections and the hopeful candidates. While Russia's elections are important for AmCham members, they are the business of Russians. As far removed in time and geography as it may sometimes seem, however, the American presidential election is very important for AmCham members. American political campaigns are seldom the source of thoughtful, considered analysis of public policy positions. Such campaigns are much more likely to be characterized by the briefest of sound bites, which must reduce each complex issue to a 15 second punch line. In this context, the temptation for candidates from any U.S. political party to make a few points at the expense of Russia and U.S.-Russian policy is obvious. After all, much of the American electorate is accustomed to hearing bad things about Russia and whatever happens here is not expected to have an immediate effect on local voters in the U.S. The mainstream media encourage policy by sound bite by routinely presenting items about Russia which feature such phrases as "privatization giveaway," "criminalization," and "mafia." Disturbingly, the historically more staid academic community has also weighed in recently. This spring brought us a new book on U.S. government aid entitled Collision and Collusion. The summer edition of the Wilson Quarterly 1999 has the conclusory title: Why Did Reform In Russia Fail? The Jamestown Foundation recently hosted a conference with a similar title: What Went Wrong with Russia Since 1991 and Why? Finally, Who Lost Russia? is a convenient, if meaningless, topic that has recently filled pages in our Congressional Record. AmCham does not take political positions here or in the U.S. but I would like to present some ground rules regarding Russia that responsible U.S. presidential candidates and their advisors should accept during the coming political year. The U.S. government will not and should not pretend to be able to solve the problem of economic development in Russia. The American government does not have the solution. Indeed, there is no answer capable of being reduced to or expressed in a sound bite worthy of prime time news. Development of a competitive market economy in Russia is a process that began in the 1980s, continues today, however slowly, and will extend over the next generation. Russia will develop its own route to an efficient market economy and such development will take decades. The U.S. can assist in important ways, but Russian economic development is not on hold pending implementation of the correct policy from Washington. Despite what we read and hear, Russia is not "lost" and while reform has not yet succeeded, it is incredibly simple minded to conclude that it has already failed. Future U.S. foreign policy toward Russia must not be driven by the headlines and evening TV reports generated by the popular press. In a sound bite our candidates can understand, Russia is at bat in the bottom of the first. The game is not over; it has just begun. As those of us who live here know, Russia contains an enormous reservoir of goodwill toward America and Americans, which even Kosovo did not exhaust. Thus, a cornerstone of U.S.-Russia policy should be continuation and expansion of broad-based engagement with Russia and its people. Training and education programs such as the Muskie program for graduate level education and the recent proposal to educate 10,000 Russians in graduate level accounting and business administration in the U.S. should have the support of every presidential hopeful. One on one contact with Russian citizens is the great advantage AmCham members in Moscow have over U.S. presidential candidates, their advisors and the American electorate at large. Expanding opportunities for such engagement in the U.S., for example by creating a program to have Russian students in high schools in America, would be a worthwhile initiative for both parties. Russia is too important for U.S.-Russian foreign policy to become a political football in the upcoming U.S. election campaign.
#10 Albright Seen Promoting U.S.-Russian Cooperation Rossiyskaya Gazeta September 18, 1999 [for personal use only] Rossiyskaya Gazeta/ITAR-TASS "Direct Speech" report: "Russia Cannot Be Lost Like a Watch or a Bunch of Keys. United States Must Now Expand, Not Reduce, Cooperation With Russia, Madeleine Albright Says" This thought [reference to headline] was the leitmotiv of U.S. Secretary of State Madeleine Albright's policy speech at one of Washington's most influential research organizations -- the Carnegie Endowment for International Peace. The speech confirmed that the U.S. Government intends to counter the recent spate of attacks on its policy toward Russia. Albright could not, of course, avoid expressing concern at the reports about corruption in Russia. According to her, the U.S. Administration is currently studying them carefully. "The problem is real and must be taken seriously," she said, adding that the Russian Government "needs, at last, to make fighting corruption a priority." She described the Russian authorities' previous approach to this problem as "inadequate." The U.S. secretary of state repeated previous assurances that Washington "will not support further multilateral aid to Russia until adequate safeguards are in place." "We have always closely monitored our bilateral aid too," she added. "I hope we will bear in mind that Russia cannot be lost like a watch or a bunch of keys. It is a country with a population of almost 150 million which has ranked among the major world powers for over three centuries. The claim made by some that Russia is ours to 'lose' is arrogant. The claim that Russia is already 'lost' is simply wrong." Both the main aims of Washington's policy toward Moscow -- to strengthen security on the basis of disarmament and to assist Russia's democratic and market transformation -- remain valid; they have not been fully achieved, but they have not been removed from the agenda either. "Russia's future course is uncertain. There has been a liberation of forces many of which are opposed to each other. The currents of free enterprise and initiative are colliding with those of corruption and crime. Impulses toward integration and openness are in conflict with trends toward isolation and enmity. Time will tell which of these forces prevail. What we can be sure of now is that the result will be thoroughly Russian. And that it will depend far less on edicts issued from Moscow or on foreigners' advice than on decisions made and opinions formed in Russian school classrooms, farms, plants, and families. "It is inspiring that the Russians take every opportunity to display their rejection of both the Soviet past and a dictatorial future, despite the gloomy present. They have not yet tasted the fruits of democracy, but they have not lost faith in it. U.S. policy toward Russia is based on the fact that it is in our own interests that these expectations should be fulfilled." Albright believes that one of the most eloquent signs of the "revolutionary changes" that have taken place in the Russian state and Russian society in recent years is the very fact that questions of "corruption, incompetence, and other shortcomings" at even the highest echelons of power are openly raised and discussed in today's Russia.. Albright regards this as grounds for "making greater efforts to cooperate with Russia, rather than for halting aid and abandoning Russia, as some people suggest." To all appearances, this reproach is aimed mainly at the incumbent U.S. Administration's main opponents on Capitol Hill. "Unfortunately, Congress is proposing to reduce by 25-30 percent the sums that President Clinton requested for programs in Russia and the other newly independent states next year," Albright said. "This would require us to make unacceptable and defeatist compromises." The secretary of state is convinced that the programs of cooperation with Russia "promote important U.S. interests and values," and she accused the opposition of "ignoring this fact."
#11 The Guardian (UK) 23 September 1999 [for personal use only] White House under fire for 'covering up' Russian corruption Julian Borger in Washington A Washington consultant told congress yesterday that the Clinton administration had covered up a failed CIA attempt to infiltrate a money laundering venture run by KGB agents including a former close aide of the Russian president, Boris Yeltsin. Testifying to a house of representatives committee investigating Russian money laundering in the United States, Karon von Gerhke-Thompson said the CIA and the White House were well aware of the role played by top Russian politicians and intelligence officials in the flow of embezzled funds through US banks. Her evidence provided fuel for critics who argue that the Clinton administration, in its unquestioning support for the Yeltsin regime, turned a blind eye to blatant corruption in the Kremlin, and thus helped encourage the growth of Russian organised crime and money laundering. Ms Von Gerhke-Thompson, the vice-president of a political consulting firm called First Columbia Co Ltd, told the house banking committee she had been approached in 1993 by Alexandre Konanykhine, a young Russian tycoon, Yeltsin fundraiser and member of the Russian president's entourage on his visit to Washington the previous year. He presented himself as the US vice-president of Menatep Bank, owned by one of Russia's most powerful financial oligarchs, Mikhail Khodorkovsky. "Konanykhine alleged that Menatep Bank controlled $1.7bn [Ł1bn] in assets and investment portfolios of Russia's most prominent political and social elite," she recalled. She said he wanted to move the bank's assets off shore and asked her to help buy foreign passports for its "very, very special clients". In her testimony to the committee Ms Von Gerhke-Thompson said she informed the CIA of the deal, and the agency told her that it believed Mr Konanykhine and Mr Khodorkovsky "were engaged in an elaborate money laundering scheme to launder billions of dollars stolen by members of the KGB and high-level government officials". She said she agreed to go along with the passport buying scheme and report back to the CIA, a claim confirmed by intelligence officials interviewed by the Washington Post newspaper. It quoted them as saying Mr Konanykhine was one of an elite group of rich young former communists, known as the "miracle boys", who helped the KGB move large quantities of embezzled money abroad. Mr Konanykhine, now 33 and living in New York, denies any links to the KGB or claims he was involved in large-scale money laundering. He told a US journalist it was normal for Russian businesses to offer clients foreign passports in return for big investments. He was granted political asylum after saying he would be killed by the Russian mafia. Ms Von Gerhke-Thompson's attempt to infiltrate the Menatep Bank was cut short in September 1993, when Mr Konanykhine and his colleagues broke off contacts. She said she was told by CIA officials that her role had been compromised by Aldrich Ames, a Russian mole uncovered in the CIA in 1994. She said Mr Konanykhine had broken off links during a trip to Turkey which coincided with a visit there by Mr Ames. However, Ms Von Gerhke-Thompson told the committee neither the operation nor its failure were reported to congress, as stipulated by the national security act. The silence, she argued, was to avoid embarrassing US policymakers. "It seemed to me that it was a 'policy' versus 'intelligence' failure," she said. "Konanykhine's money laundering trail led directly to Boris Yeltsin. It was a politically unpalatable situation for the Clinton administration, the Yeltsin administration and the CIA."
#12 Stratfor Commentary www.stratfor.com Sepember 23, 1999 Russia Losing Trans-Caspian Race Citing the ongoing dispute over ownership of Caspian Sea oil, Russia’s Foreign Ministry announced on Sept. 20 that Moscow will not recognize Turkmenistan’s effort to extend its sovereignty over part of the inland sea. Russia’s protest, however, will not stall U.S.-backed efforts to build the Trans-Caspian pipeline, nor will it accelerate Russia’s own pipeline project in the Black Sea. The legal status of the Caspian and claims of ownership by Azerbaijan and Turkmenistan -- have stalled the Trans-Caspian pipeline project. As Gazprom, Russia’s oil monopoly, is trying to outpace the U.S. project and supply gas to Turkey’s growing market, this dispute has worked to Russia’s advantage. According to Gazprom chief executive Rem Vyakhirev, this is a race for control of supply that either Russia or Turkmenistan can win. On Sept. 21, Azerbaijani President Geidar Aliev explained to Russia’s Fuel and Energy Minister Viktor Kalyuzhny that the international status of the Caspian Sea would finally be settled, presumably in early October when the five Caspian states hold a meeting in Iran. After that meeting, Russia’s attempts to contest the construction of the U.S.-backed Trans-Caspian pipeline will become irrelevant. The governments of Turkmenistan and Azerbaijan will be able to reach a territorial agreement. Russia undoubtedly will protest, but will have no legal means to block the project further. The Trans-Caspian project has also gained financial strength over its Russian-backed competitor. Support from Royal Dutch Shell, made official in August, secures the Trans-Caspian funding requirement of $3 billion. This makes Shell a 50-50 partner in the pipeline with the joint venture of General Electric and Bechtel’s PSG International. Protest or no, Trans-Caspian will be on-line in 2002, and will likely outpace Russia’s ambitions to control gas export to Turkey. On the other hand, the Black Sea project is threatened by regional competition and internal politics. Fuel and Energy Ministry infighting and the conflict in Dagestan seriously hamper the schedule. If the Trans-Caspian goes through first, Turkmen state-run energy companies TurkmenGaz and Turkmenneft will pose a direct threat to Gazprom. They could even usurp Gazprom’s regional power. In a broader sense, the cultivation of Turkmenistan’s energy sector challenges Russia’s traditional role in Central Asia. So long as the Trans-Caspian project maintains its schedule, Russia’s energy policy will have little effect on Central Asia, and will not subvert U.S.-Turkmenistan’s monopoly over oil exports to Turkey and Southern Europe.
#13 Russia Needs New Approach to Armaments: View. MOSCOW, September 22 (Itar-Tass) - The president of Russia's League for Assistance to Defense Companies, Anatoly Dolgolaptev, has said the recent events in Daghestan call for new approaches to providing the army with weaponry. Speaking at a conference on Thursday which analyzed the actions by Russian troops in Daghestan, Dolgolaptev said the characteristics of weapons used against Islamic extremists were comparable to World War II models. Russian defense companies are ready and capable of providing the army with the most advanced weaponry, especially to the units that have to engage in guerrilla-style combat, he noted. "The scientists who had analyzed the actions by federal forces in Chechnya warned that new wars and conflicts will run in special conditions, where there is no clear line of contact with the enemy and where traditional weapons are ineffective," Dolgolaptev said. However, these views were ignored, and the budget allocates less than 16 percent of the approved funds for military science, and a mere 6 percent for designing and testing, he noted. A new system of armaments is needed, because no large-scale or drawn-out war are expected in the future, while possible local wars require a completely new approach. "One should not explain irreplaceable losses by a lack of modern equipment, because our industry has a high potential and unique technologies and can provide superior weapons to the army," he said. Such advanced technologies will also help pull other sectors and the whole economy out of the crisis, according to Dolgolaptev.