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RFE/RL Newsline, Vol. 4, No. 144, 00-07-28

Radio Free Europe/Radio Liberty: Newsline Directory - Previous Article - Next Article

From: Radio Free Europe/Radio Liberty <http://www.rferl.org>

RFE/RL NEWSLINE

Vol. 4, No. 144, 28 July 2000


CONTENTS

[A] TRANSCAUCASUS AND CENTRAL ASIA

  • [01] SENIOR NATO OFFICIAL VISITS ARMENIA
  • [02] PROMINENT ARMENIAN WAR VETERAN UNDER INVESTIGATION
  • [03] ARMENIANS IN SOUTH RUSSIA APPEAL TO PUTIN FOR PROTECTION
  • [04] FORMER KARABAKH DEFENSE MINISTER ENDS HUNGER STRIKE
  • [05] AZERBAIJAN, GEORGIA DISCUSS GAS EXPORT PLANS
  • [06] GEORGIAN GOVERNMENT APPROVES 2001 DRAFT BUDGET
  • [07] KAZAKHSTAN'S PRESIDENT MEETS WITH POLITICAL PARTIES
  • [08] JAPAN TO DEVELOP INFRASTRUCTURE OF NEW KAZAKH CAPITAL
  • [09] KYRGYZ, RUSSIAN PRESIDENTS SIGN ETERNAL FRIENDSHIP
  • [10] UN WARNS TAJIKISTAN'S POPULATION THREATENED BY DROUGHT

  • [B] SOUTHEASTERN EUROPE

  • [11] MONTENEGRIN PRIME MINISTER SAYS 'NO' TO MILOSEVIC'S
  • [12] SERBIAN OPPOSITION LEADER STRESSES REFUSAL TO TAKE PART IN
  • [13] U.S. 'CHALLENGES' MILOSEVIC
  • [14] MILOSEVIC'S MINISTER BLASTS OPPONENTS
  • [15] MILOSEVIC PLANNING TO REORGANIZE MILITARY?
  • [16] MONTENEGRO SET TO TAKE CONTROL OF FINANCES
  • [17] CLINTON, SCHROEDER TAKE STOCK OF THE BALKANS
  • [18] MACEDONIAN GOVERNMENT REORGANIZED
  • [19] TURKEY SOURING OVER KOSOVA ROLE
  • [20] BOSNIA, CROATIA SIGN AGREEMENTS
  • [21] CROATIAN LEADERS TO U.S.
  • [22] ROMANIAN LIBERALS TO BE OUSTED FROM CDR?
  • [23] HUNGARIAN OFFICIAL SAYS MINORITY FATE IS KEY TO RELATIONS
  • [24] MOLDOVAN PRESIDENT PROMULGATES PARLIAMENTARY REPUBLIC LAW
  • [25] OSCE TO SEND PEACEKEEPING FORCE TO TRANSDNIESTER?
  • [26] BULGARIAN PARLIAMENT SACKS DEPUTY SPEAKER

  • [C] END NOTE

  • [27] PUTIN TO MEET OLIGARCHS

  • [A] TRANSCAUCASUS AND CENTRAL ASIA

    [01] SENIOR NATO OFFICIAL VISITS ARMENIA

    On a working visit to

    Yerevan on 26-27 July, NATO Deputy Secretary-General for

    Political Issues Klaus Peter Kleiber discussed with Armenian

    Foreign Minister Vartan Oskanian the ongoing efforts to

    resolve the Karabakh conflict and the relevance to that

    process of conflict resolution in the Balkans, Armenpress and

    Noyan Tapan reported. The two men also discussed Armenia's

    relations with Russia and Turkey, NATO-Russian relations, the

    proposed South Caucasus Security Pact, and preparations for

    NATO Secretary-General Lord Robertson's planned visit to

    Armenia in September. LF

    [02] PROMINENT ARMENIAN WAR VETERAN UNDER INVESTIGATION

    Armenian

    police have opened a criminal investigation against Ruben

    Gevorgian, a parliamentary deputy and prominent member of the

    Yerkrapah Union of Veterans of the Karabakh war, RFE/RL's

    Yerevan bureau reported on 27 July. Gevorgian is suspected of

    having coerced two men to admit to an armed robbery which

    police believe was committed by Gevorgian's nephew. In a

    program broadcast last week by Armenian state television, the

    two men said Gevorgian had promised them a large sum of money

    for admitting to the crime and serving a short jail sentence.

    Gevorgian has denied those accusations, which he termed

    persecution by the Armenian government because of his

    political views. Gevorgian had hinted at the complicity of

    President Robert Kocharian in the 27 October Armenian

    parliamentary shootings. LF

    [03] ARMENIANS IN SOUTH RUSSIA APPEAL TO PUTIN FOR PROTECTION

    The

    Armenian community of the Apsheron and Tuapse Raions of

    Russia's Krasnodar Kari have addressed an appeal to Russian

    President Vladimir Putin expressing "profound concern" at

    efforts by local media to incite tensions between Russians

    and non-Russians, Noyan Tapan reported on 25 July. The

    Armenians affirm support for Russia's war in Chechnya and

    call on Putin "as the president of a great power" to promote

    "a balanced ethnic policy" and to strengthen friendly

    relations between all peoples of the Russian Federation. LF

    [04] FORMER KARABAKH DEFENSE MINISTER ENDS HUNGER STRIKE

    Samvel

    Babayan has abandoned the hunger strike he began on 17 July

    to demand that his trial be held not in the unrecognized

    Nagorno-Karabakh Republic but in Armenia. However, he has not

    retracted that demand, Armenpress reported on 27 July (see

    "RFE/RL Newsline," 20 July 2000). Babayan faces charges,

    which he denies, of masterminding the 22 March assassination

    attempt on Karabakh President Arkadii Ghukasian. Meanwhile

    the office of the Nagorno-Karabakh Prosecutor-General has

    agreed to Babayan's request that three lawyers from Armenia

    be allowed to defend him, Groong quoted Snark as reporting on

    25 July. Meanwhile Babayan's sister Anush has appealed for

    political asylum in a number of Western countries, saying

    that she is subject to political persecution and has been

    threatened with eviction from her Stepanakert apartment,

    Snark reported. LF

    [05] AZERBAIJAN, GEORGIA DISCUSS GAS EXPORT PLANS

    Georgian

    International Gas Corporation President Aleksei Gotsiridze

    told journalists in Tbilisi on 27 July that Azerbaijan plans

    to begin construction before the end of this year of a

    pipeline across Georgia to export to Turkey gas from

    Azerbaijan's Shah Deniz deposit, Interfax reported. That 250

    kilometer pipeline will link up with an existing pipeline in

    Azerbaijan, and have an initial throughput capacity of 5

    billion cubic meters per year, rising to 16-24 billion cubic

    meters. Gotsiridze said that a group of companies operating

    in Azerbaijan, including BP/Amoco, has agreed to provide

    $500-700 million toward the estimated total $1.5 billion

    construction costs. Caucasus Press reported on 24 July that

    Valekh Alesqerov, who heads the Foreign Investments Division

    at Azerbaijan's state oil company SOCAR, would travel to

    Turkey on 26 July to discuss Turkish purchases of Azerbaijani

    gas. The decision to begin work on the Azerbaijan-Georgia

    pipeline casts further doubts on the prospects for

    construction of a Trans-Caspian pipeline to export Turkmen

    gas to Turkey. LF

    [06] GEORGIAN GOVERNMENT APPROVES 2001 DRAFT BUDGET

    Georgian

    Finance Minister Zurab Nogaideli told journalists in Tbilisi

    on 26 July that the draft budget for 2001 approved by the

    government the previous day envisages revenues of 1.049

    billion lari ($503 million) and expenditures of 1.45 billion,

    Caucasus Press reported. The resulting 440 million lari

    deficit is equal to 6.5 percent of projected GDP. Speaking at

    the 25 July government session that approved the draft,

    President Eduard Shevardnadze said that it demonstrates that

    the economic crisis is over. Three weeks ago, a budget

    sequester had been introduced (see "RFE/RL Newsline," 10 July

    2000). LF

    [07] KAZAKHSTAN'S PRESIDENT MEETS WITH POLITICAL PARTIES

    Nursultan Nazarbaev held talks at his Almaty residence on 27

    July with representatives of several political parties and

    movements, RFE/RL's bureau in the former capital reported. LF

    [08] JAPAN TO DEVELOP INFRASTRUCTURE OF NEW KAZAKH CAPITAL

    Kazakh

    and Japanese government representatives signed a protocol in

    Astana on 26 July whereby Japan's International Cooperation

    Agency will draft plans for the water -supply and sewage

    systems in the new capital, Interfax reported. The

    corporation will also design a road system that will take

    into account the anticipated increase in the city's

    population from the present 320,000 to 490,000 in 2010 and to

    690,000 in 2020. LF

    [09] KYRGYZ, RUSSIAN PRESIDENTS SIGN ETERNAL FRIENDSHIP

    DECLARATION

    Askar Akaev and Vladimir Putin signed a

    declaration on Eternal Friendship between their two countries

    and a 10-year economic cooperation program in Moscow on 27

    July. Speaking later at a joint press conference, Akaev

    stressed that Kyrgyzstan has always regarded its "strategic

    partnership" with Russia as a foreign-policy priority. He

    expressed gratitude for Russia's military assistance last

    year in expelling Islamic militants from Kyrgyzstan. Putin,

    for his part, again expressed appreciation for the Kyrgyz

    parliament's decision to raise Russian to the status of an

    official language (see "RFE/RL Newsline," 26 and 29 May

    2000). He also noted Kyrgyzstan's unfailing support for

    integration processes within the CIS. Putin stressed that

    military, military-technical and humanitarian cooperation

    will figure prominently in future bilateral relations,

    according to Asia Plus--Blitz. Akaev also met the same day

    with Russian Prime Minister Mikhail Kasyanov, who affirmed

    Russia's readiness to "stabilize the economic situation,

    fight poverty and create conditions for economic growth" in

    Kyrgyzstan, ITAR-TASS reported. Russia is Kyrgyzstan's main

    trade partner. LF

    [10] UN WARNS TAJIKISTAN'S POPULATION THREATENED BY DROUGHT

    The

    UN-funded World Food Program and Food and Agriculture

    Organization warned on 27 July that half of Tajikistan's 6

    million population faces hunger and under-nourishment and

    possibly even death from starvation as a result of the

    ongoing drought, Reuters and AP reported (see "RFE/RL

    Newsline," 6 June 2000). They note that cereal production has

    plummeted because of a shortage of quality seed and the

    breakdown of agricultural and irrigation equipment. The two

    agencies appealed to the international community for

    assistance. LF


    [B] SOUTHEASTERN EUROPE

    [11] MONTENEGRIN PRIME MINISTER SAYS 'NO' TO MILOSEVIC'S

    ELECTIONS

    Filip Vujanovic said in Niksic on 27 July that the

    governing coalition stands by its previous decision not to

    participate in any federal legislative or presidential

    elections held under Yugoslav President Slobodan Milosevic's

    new constitutional amendments and electoral legislation (see

    "RFE/RL Newsline," 27 July 2000). "The governing coalition in

    Montenegro has no reason to participate in these elections

    since participation would strengthen Milosevic and help keep

    him in power," "Pobjeda" reported. Vujanovic added that he

    "expects" the army to do its constitutional duty and stay out

    of politics. Elsewhere, President Milo Djukanovic's adviser

    Miodrag Vukovic stressed that the Montenegrin authorities

    will not let Milosevic use the elections to provoke domestic

    unrest in Montenegro, Reuters reported. In Belgrade, Serbian

    Deputy Prime Minister Vojislav Seselj said that the federal

    elections will go ahead in Montenegro whether Djukanovic

    chooses to participate or not. PM

    [12] SERBIAN OPPOSITION LEADER STRESSES REFUSAL TO TAKE PART IN

    VOTE

    Serbian Renewal Movement leader Vuk Draskovic told the

    BBC's Serbian Service from Budva on 27 July that the federal

    elections are meaningless without Montenegro. He added that

    elections without the participation of "official Montenegro"

    will serve to undermine the unity of Yugoslavia, including

    Kosova as well as Serbia and Montenegro. Vojislav Kostunica

    of the Democratic Party of Serbia said in Belgrade that he

    hopes that the Montenegrin leaders and Draskovic will change

    their minds, Reuters reported. A spokesman for the Otpor

    (Resistance) student movement argued that "with a boycott,

    everything will be lost" to Milosevic. Democratic Party

    leader Zoran Djindjic said that he is "optimistic" that the

    opposition can "forge an agreement on a joint electoral

    appearance," AP reported. PM

    [13] U.S. 'CHALLENGES' MILOSEVIC

    State Department spokesman

    Philip Reeker said in Washington on 27 July that "with the

    announcement of a September 24th date, we challenge Milosevic

    to hold free and fair elections and to allow independent

    media to operate freely and to permit outside international

    and domestic observers to monitor the election process....

    [In this way] this election process will give the people of

    Serbia the opportunity to determine their leader through a

    free and fair contest at the ballot box," an RFE/RL

    correspondent reported. PM

    [14] MILOSEVIC'S MINISTER BLASTS OPPONENTS

    Yugoslav Information

    Minister Goran Matic said in Belgrade on 28 July that

    Milosevic' opponents are "a frustrated bunch unable to rally

    the rest of the world behind a policy of pressure. There is

    no higher expression of democracy than a popular vote, the

    democratic ideal. What [Milosevic's opponents] don't like is

    the fact the people of Yugoslavia will choose freely in the

    elections and that...Slobodan Milosevic has a tremendous

    advantage [in popularity that] no opposition candidate could

    ever match." Matic added that "Djukanovic is a classic stooge

    who goes around and badmouths his own country to Western

    leaders. Djukanovic and his policies will collapse at the

    elections, [and] his behavior [sic] will be defeated and

    punished by the people," AP reported. Matic concluded by

    arguing that "the will of our people is peace, freedom and

    prosperity...and Milosevic is the symbol of all these. The

    West has to come to terms with that." PM

    [15] MILOSEVIC PLANNING TO REORGANIZE MILITARY?

    Milosevic plans to

    streamline the military command structure before the end of

    2000 by eliminating the air force, anti-aircraft defense, and

    navy as separate commands, "Vesti" reported on 28 July. The

    entire Yugoslav military will be grouped together in one

    general staff under the command of army General Nebojsa

    Pavkovic, who regards the changes as a rationalization

    measure, the daily added. Observers note that Milosevic has

    never fully trusted the military and long built up the

    paramilitary police as his own Praetorian guard. The navy and

    air force are relatively small organizations designed for

    reconnaissance against and harassment of any invader. PM

    [16] MONTENEGRO SET TO TAKE CONTROL OF FINANCES

    The government

    has drafted a bill to establish a new Central Bank of

    Montenegro independent of the Yugoslav National Bank, dpa

    reported on 27 July. The Podgorica authorities view the

    National Bank as a destabilizing influence and fear a new

    round of hyperinflation after the elections. The German mark

    is already legal tender in Montenegro alongside the Yugoslav

    dinar. PM

    [17] CLINTON, SCHROEDER TAKE STOCK OF THE BALKANS

    In a joint

    article in the "International Herald Tribune" on 28 July,

    U.S. President Bill Clinton and German Chancellor Gerhard

    Schroeder summed up the achievements of the international

    community in the Balkans in the past 12 months. They

    concluded that "we will continue to work with the democratic

    opposition in Serbia, to help it unite around a common

    platform, to support nongovernmental organizations and the

    independent media, and to back President Milo

    Djukanovic...until all those who have suffered under Mr.

    Milosevic's rule can take their place in Europe. We have no

    illusions about the hard work that remains, but the progress

    made thus far gives us confidence that it can be completed.

    Together we can do for Southeast Europe what was done for

    Western Europe after World War II and Central Europe after

    the collapse of communism: integrate it into a democratic,

    undivided Europe in which the prospect of yet another

    terrible war is unthinkable." The two leaders stressed that

    the international community must remain firm and united. PM

    [18] MACEDONIAN GOVERNMENT REORGANIZED

    The parliament on 27 July

    approved measures to cut the size of the cabinet from 27 to

    17 seats in keeping with recommendations from the EU and

    World Bank, the private MIC news agency reported (see "RFE/RL

    Newsline," 19 July 2000). Prime Minister Ljubco Georgievski

    announced the new cabinet line-up, the fourth since he was

    elected in 1998. Among the changes is that Ljuben Paunovski

    moves from the culture portfolio to defense, where he

    replaces Nikola Kljusev. Georgievski stressed that his

    government's priorities remain the same, namely to press for

    integration into NATO and the EU. The breakdown of the new

    cabinet is: Internal Macedonian Revolutionary Organization:

    prime minister plus seven seats; Democratic Alternative:

    Deputy Prime Minister Vasil Tupurkovski and four seats; and

    Democratic Party of the Albanians: Deputy Prime Minister

    Ernat Fejzulahu and three seats. Opposition Social Democratic

    deputy Georgi Spasov said that Georgievski missed an

    opportunity to rid himself of unnamed ineffective ministers

    and bring in new faces. PM

    [19] TURKEY SOURING OVER KOSOVA ROLE

    Foreign Minister Ismail Cem

    said in Ankara on 27 July that his government will take

    unspecified steps to show its disapproval if the UN's

    civilian administration does not act to make the Turkish

    language equal to Serbo-Croatian and Albanian in Kosova, AP

    reported. The UN has been willing to use Turkish as an

    official language in areas where the 15,000-strong Turkish

    minority is strong, but Ankara wants Turkish to be official

    throughout the province, the news agency added. Turkey

    provides both an aid program and 1,000 peacekeepers to

    Kosova. PM

    [20] BOSNIA, CROATIA SIGN AGREEMENTS

    Croatian Prime Minister

    Ivica Racan and his Bosnian counterpart, Spasoje Tusevljak,

    signed agreements on repatriation and on customs arrangements

    in Sarajevo on 27 July (see "RFE/RL Newsline," 25 July 2000).

    They also agreed that citizens of the two countries may cross

    their common border by showing only their internal identity

    card rather than a passport, RFE/RL's South Slavic Service

    reported. Racan said that he was "unpleasantly surprised" by

    criticism from Muslim leader Alija Izetbegovic of Racan's

    decision to meet separately with representatives of the

    ethnic Croatian community. Racan stressed that "a stable

    Croatia can only exist along with a stable, single, and

    sovereign Bosnia-Herzegovina. Croatia is determined to

    strengthen its relations with Bosnia," Reuters reported. PM

    [21] CROATIAN LEADERS TO U.S.

    U.S. Ambassador to Croatia William

    Montgomery said in Zagreb that Racan and President Stipe

    Mesic will visit Washington from 8-10 August, "Jutarnji list"

    reported on 28 July. Among the leaders they will meet with

    are President Clinton and Secretary of State Madeleine

    Albright. The exact itinerary of the trip has not yet been

    completed. PM

    [22] ROMANIAN LIBERALS TO BE OUSTED FROM CDR?

    National Peasant

    Party Christian Democratic (PNTCD) Deputy Chairman Ioan

    Muresan said on 27 July that the National Liberal Party

    will "expel itself" from the Democratic Convention of

    Romania (CDR) if it fails to attend a meeting of CDR

    leaders scheduled for 1 August, RFE/RL's Bucharest bureau

    reported. The CDR statutes stipulate that if a formation

    fails to attend two consecutive CDR leadership meetings, it

    will be automatically excluded from the alliance. MS

    [23] HUNGARIAN OFFICIAL SAYS MINORITY FATE IS KEY TO RELATIONS

    WITH ROMANIA

    Addressing the annual Balvanyos Summer

    University in Baile Tusnad on 27 July, Zsolt Nemeth,

    political secretary in the Hungarian Foreign Ministry, said

    Hungarian-Romanian relations are primarily determined "by

    what happens in Romania itself," Mediafax reported. He said

    the participation of the Hungarian Democratic Federation of

    Romania (UDMR) in the government since 1996 has been a

    "turning point" in Budapest's relations with Bucharest and

    that the future of those relations depends on Bucharest's

    attitude toward the Hungarian minority in Romania. Peter

    Eckstein-Kovacs, who is minister in charge of minority

    affairs in the Bucharest cabinet, denied that in the UDMR

    leadership there are "pro-communist forces" ready to

    collaborate with the Party of Social Democracy in Romania,

    as claimed by UDMR "radical wing" member Tibor Torro on 24

    July at Balvanyos. MS

    [24] MOLDOVAN PRESIDENT PROMULGATES PARLIAMENTARY REPUBLIC LAW

    Petru Lucinschi on 27 July promulgated the law transforming

    Moldova into a presidential republic, RFE/RL's Chisinau

    bureau reported. Lucinschi said that "as of the moment the

    law becomes effective, responsibility for the over-all

    situation in Moldova falls on the parliament's shoulders."

    Lucinschi on 20 July vetoed the law but was overridden by

    the legislature the next day. He said he still "vehemently"

    opposes the bill but had no choice but to promulgate it,

    otherwise he would have violated the constitution. He once

    more called on the parliament to call a referendum on his

    proposal to increase the presidential powers. MS

    [25] OSCE TO SEND PEACEKEEPING FORCE TO TRANSDNIESTER?

    Chairman

    of the State Commission on the Transdniester Yevgenii

    Primakov and OSCE rotating chairwoman Benita Ferrero-

    Waldner have held "preliminary talks" on the possibility of

    deploying an OSCE peace-keeping force in the separatist

    region, OSCE Secretary-General Jan Kubis told an RFE/RL

    correspondent on 27 July. Primakov and Ferrero-Waldner met

    in Vienna earlier this week. Kubis confirmed that the

    Russians are again attempting to link the full withdrawal

    of their troops from the region to the conclusion of an

    agreement between Chisinau and Tiraspol on the future

    status of the Transdniester. He said the OSCE agrees that

    the region should have a special status but insists on the

    territorial sovereignty of Moldova as a whole. MS

    [26] BULGARIAN PARLIAMENT SACKS DEPUTY SPEAKER

    The parliament

    on 27 July approved a resolution proposed by the ruling

    Union of Democratic Forces on removing deputy speaker

    Blagovest Sedonov from that post. Sedonov recently co-

    signed a letter to the Israeli parliament praising the

    decision of the Jewish National Fund to replace a memorial

    to King Boris III with one that hails the role played "by

    Bulgarians" in saving Jews during World War II (see "RFE/RL

    Newsline," 18 and 21 July 2000). The vote was 130 in favor

    with 80 against and 16 abstentions. The resolution said

    Sedonov had "discredited Bulgaria's parliament and people

    and damaged Bulgaria's image abroad." Sedonov, an

    independent, was elected to the parliament on the lists of

    the opposition Socialist Party, which said the government

    is ignoring the country's history and "glorifying the

    wartime monarchist regime." MS


    [C] END NOTE

    [27] PUTIN TO MEET OLIGARCHS

    By Donald Jensen

    In recent weeks, Russian President Vladimir Putin has

    seemingly begun to carry out his election promise to reduce

    the influence of the notorious "oligarchs," who grew rich

    during the Boris Yeltsin era owing to their close ties to

    government officials and easy access to public funds. So far,

    however, he has largely settled scores with the Kremlin's

    political and business opponents, leaving magnates close to

    him untouched.

    His meeting with a group of leading oligarchs on 28 July

    may be a first step toward the creating a fairer economic

    playing field or toward reasserting the role of the state.

    But it is unlikely to address a more fundamental problem--

    namely, the relationship between property and political

    power. Putin's rhetoric notwithstanding, he does not have the

    power, nor has he so far revealed the intention, to seek to

    break the link between the two.

    Putin has moved against several leading business

    empires, including Media-MOST, LUKoil, and Norilsk Nickel,

    whose owners have been accused of crimes ranging from

    embezzlement to tax evasion. Media-MOST owner Vladimir

    Gusinskii has long been critical of the government,

    especially the war in Chechnya, and last year he supported

    the Fatherland movement of Yevgenii Primakov and Yurii

    Luzhkov, at the time both rivals of Putin. LUKoil's Vagit

    Alekperov is close to powerful Tatarstan President Mintimer

    Shamiev and also backed Fatherland, while Norilsk Nickel

    owner Vladimir Potanin has never been close to this Kremlin.

    By contrast, Kremlin "bankers" Roman Abramovich and

    Aleksandr Mamut, who financed Putin's election campaign, have

    been spared by the president. In fact, several of Putin's

    steps so far have benefited their business interests.

    Accusations of tax evasion against LUKoil, for example, may

    have been intended in part to eliminate it from the running

    for the state-controlled oil-company ONAKO, Russia's 12th

    largest oil producer, whose majority stake went on sale on 21

    July. Abramovich's Sibneft company and Transneft, controlled

    by Semyon Vainshtok, another pro-Putin oligarch, are said to

    be considering strong bids.

    While there has been much ado about Boris Berezovskii's

    public break with the president and his intention to create

    an opposition party, Berezovskii himself recently installed

    his daughter on the board of Russian Public Television, which

    remains in his control. The state-owned Vneshtorgbank, for

    its part, indicated it may lend Berezovskii $85 million to

    operate the channel.

    Putin's strong-arm tactics have relied on the Ministry

    of Internal Affairs, the Federal Security Service (FSB), the

    tax police, and the prosecutor-general--rather than the

    courts--to bring the oligarchs to heel. The "Family"--the

    Kremlin group that includes former Yeltsin speechwriter

    Valentin Yumashev, Yeltsin's daughter, Tatyana Dyachenko, and

    presidential administration chief Aleksandr Voloshin, as well

    as Mamut and Abramovich--reportedly favors maintaining a few

    large oligarchic empires that are independent but close to

    the Kremlin (Prosecutor-General Vladimir Ustinov is reported

    to be an ally of The Family).

    A second group, concentrated in the FSB and the newly

    empowered Security Council, would prefer to wipe out the

    oligarchs and transform Russia's large businesses into state

    companies headed by proteges of the president. Putin does not

    appear to have firmly committed to either option to date.

    Even if the most notorious oligarchs were removed,

    however, it would do little to untangle the interpenetration

    of business and politics that is a fundamental aspect of the

    Russian political scene. Alliances between governors and

    regional oligarchs--sometimes forged against the will of

    better known magnates from Moscow--are common. At the federal

    level, ministries routinely engage in commercial activities.

    And even presidential administration head Voloshin qualifies

    as an oligarch in his own right.

    Perhaps more significantly for Putin, the security

    services on which he relies have long been as much motivated

    by money as by serving the public interest. Many large firms

    employ former FSB intelligence officers, and ties undoubtedly

    remain strong between the latter and Lubyanka. Interior

    Minister Vladimir Rushailo, one of Russia's major law

    enforcement officers, was reported to have been extensively

    involved in entrepreneurial activity when he headed Moscow's

    organized crime directorate in the early 1990s. Among his

    alleged activities was providing protection to major Moscow

    firms in exchange for corporate contributions. In the

    regions, governors and the firms that support them often

    supplement the federal salaries of law enforcement officials

    out of their own pocket--a telling indicator of their lacking

    loyalty to the Kremlin.

    Among the 18 business officials invited to attend

    Putin's 28 July meeting with business leaders are Alekperov,

    Gazprom chief Rem Vyakhirev, and Yukos head Mikhail

    Khororkhovskii, as well as an executive from the

    telecommunication company Vympelcom. Berezovskii and

    Gusinskii reportedly have not been invited. Union of Rightist

    Forces faction leader Boris Nemtsov, who along with Voloshin

    pressed for the meeting, has predicted that business leaders

    will propose a three-point declaration in which the Kremlin

    agrees to stop investigations into past privatization deals

    and get rid of corrupt bureaucrats, "beginning with the

    Prosecutor-General's Office." In return, the oligarchs would

    agree to "play by the rules"--that is, pay all taxes and obey

    the law.

    Predictably, Kremlin sources have said it is unlikely

    that any agreement will be signed.

    The author is associate director of RFE/RL's Broadcasting

    Division.

    28-07-00


    Reprinted with permission of Radio Free Europe/Radio Liberty
    URL: http://www.rferl.org


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