The ISCIP Analyst
Behind the Breaking News
Putin's campaign finance reform
Boris Berezovsky does not appear to be a desperate man just yet, but he has turned up the rhetorical heat considerably, and the result may be the burning of some very important bridges. The prosecutor general's office has set two appointments to question Berezovsky in connection with the financial arrangements at Aeroflot. Thus far, Boris Abramovich has missed one meeting and seems intent to remain abroad for the second. In a radical departure from his recent "quiet exile" approach, Berezovsky has decided to address some of the issues arising from the prosecutor's inquiries.
In a live interview with the Hero of the Day Program, Berezovsky, who was in New York, denied that there was "criminal activity" associated with the Aeroflot case, but also claimed that a diversion of funds did occur. (TRANSCRIPT, OFFICIAL KREMLIN INTERNATIONAL BROADCAST, 16 Nov 00; Federal News Service, via lexis-nexis) Specifically, Berezovsky asserted that money from a profitable company (presumably Andava), which was used to make Aeroflot a "normal company," was used also to finance both the Unity party's parliamentary race and President Putin's presidential campaign. In both the interview and an earlier published statement, Berezovsky implies that Putin was aware of the origin of his campaign funds.
According to Boris Abramovich, his change of tack in relation to the president came after remarks Putin made to a French newspaper concerning his determination to use a "cudgel" to deal with Berezovsky and his ilk. After months of denial, it seems Boris Abramovich's eyes have been opened to the possibility that his candidate did not remain grateful. The Putin government doesn't just want to control his media holdings, it wants what Putin always said it wanted: to pry loose the oligarchs' hold on the government and Kremlin -- well, at least the grip of those oligarchs with a propensity for independent political initiative.
Berezovsky, as yet, has offered no proof of Putin's complicity in illegal campaign financing (would it make the papers if he did?), so it is still possible that a deal may be struck that would allow him to return to Russia with no further threat of prosecution. For that to occur, however, Berezovsky would have to prove his loyalty to the Putin regime anew and maintain a much lower profile.
In the meantime, the Putin government, together with the prosecutor's office and the tax police, will continue to target key media and financial interests that could serve potentially as outlets for political challenges. Vladimir Gusinsky and Berezovsky are, thus far, the most well-known targets. The reintegration of the arms export companies and the removal and replacement of the Yel'tsin Family friend Aleksei Ogarev indicated another. The utilities and oil companies appear likely to be next.
From all reports, Putin is methodical and detail-oriented. In order to maintain his strong central control and enforce his "dictatorship of laws," there can be no popular, vocal opposition. First, control the means of communication. Next, in Putin's Russia? Why, deny access to the capital that could finance dissent.
Kremlin politics as usual or a challenge to the president?
Two interesting events suggest personnel changes loom in the Kremlin or the government or both. In the first incident, a general was transformed into a civilian. In the second, a presidential confidant and government minister was summoned for questioning by the St. Petersburg prosecutor's office.
On 9 November, President Putin discharged Sergei Ivanov, secretary of the Security Council (SC), from his military service as a general in foreign intelligence. Ivanov explained his request for the discharge by describing the various conflicts he found between his military status and his duties as SC secretary. He also proclaimed himself to be a "civilian" official now. (INTERFAX, 1615 GMT, 9 Nov 00; FBIS-SOV-2000-1109, via World News Connection) The only position for which there has been any clamor for a civilian appointment has been at the defense ministry, and it is, of course, possible that Ivanov will supplant Igor Sergeev there. Persistent rumors, suggest nonetheless, that Ivanov actually may be in line to replace Mikhail Kasyanov as prime minister. Ivanov's conjectured main rival for the post is viewed to be Putin's friend from the St. Petersburg administration and the current finance minister, Aleksei Kudrin.
Isn't it fascinating then, that less than two weeks after Ivanov's civilian facelift, the St. Petersburg prosecutor summoned Kudrin for interrogation about the city's financial dealings from 1992 to 1996? During those years, both the president and Kudrin served as deputy mayors. Will, then, the president be interrogated also?
It is difficult to imagine that Kudrin would have information relevant to the investigation, and Putin would not. Therefore, Kudrin's summons to the prosecutor's office would be seen naturally as an attack on Putin as well. On the day Kudrin was called in, however, he was unable to attend as he was traveling with the president in Novosibirsk. On the trip, Putin apparently threatened to dissolve the government when he learned of thefts at a nuclear institute. He also charged Kudrin with improving the situation. (THE MOSCOW TIMES, 21 Nov 00; via lexis-nexis) This incident, along with a later rebuke from Putin over the slow payment of servicemen's benefits, are now cast as evidence that the president has lost confidence in his former colleague and current finance minister.
According to the director of the Center for Strategic Studies Director, Andrei Piontkovsky, "The war is on between Putin's old KGB clan and their St. Petersburg rivals." (AGENCE FRANCE PRESSE, 1120 PST, 23 Nov 00; via email@example.com) The sought-after prize is the prime minister's seat. It may make sense that the current finance minister would seek greater control over the economic situation as a whole through the prime ministerial post, but what is to be gained for a security services general (pardon me, former general), in this scramble for the premiership?
Questions abound. What could Ivanov accomplish that the trusted Kudrin could not? Would Kudrin balk at an ever-widening re-nationalization of industries? Is the issue the degree of state inspection of all industry? Or are the security services simply prepared to direct as many facets of Russian life as they can swallow?
One fact re-emerges from this renewed Kremlin/government struggle: The Security Council continues to exist as a personality-driven organ of power. Without a strong and trusted leader, it appears as little more than a redundant state organ. If Ivanov does move to a new post, it will likely recede into the Kremlin shadows until Putin finds a need to revive it.
by Susan J. Cavan
In the spirit of Thanksgiving
Edmund Pope's trial was adjourned early on 23 November so that he could return to his cell for some turkey, courtesy of the US Moscow Embassy. (AGENCE FRANCE PRESSE, 23 Nov 00; via lexis-nexis) And there is some cause for him to be thankful. On Monday, 27 November, new evidence finally was accepted by the Moscow City Court, including copies of his medical history and an authorization of the Bauman University's permanent commission for a report by Professor Babkin to be sent abroad. According to Pope's attorney, the authorization should exonerate his client by proving that no secret data were to be transferred. (INTERFAX, 27 Nov 00; via lexis-nexis) Earlier, the prosecution's position was undermined by the discovery that Yuri Plotnikov, a member of the Federal Security Service (FSB) investigation team that worked on Pope's case, is the son of state prosecutor Oleg Plotnikov. The defense's request that the elder Plotnikov be dismissed "because all the evidence received in court might be non-objective" was denied, but on Monday, 20 November, he was replaced by Yuri Volgin... for medical reasons. A letter from Deputy Prosecutor General Vasily Kolmogorov, explaining that Plotnikov had suffered a stroke and might be hospitalized, was read in court. (ITAR-TASS, 20 Nov 00; via lexis-nexis) Yuri Plotnikov sometimes is referred to as one of the chief investigators -- this sheds an interesting light on the statement attributed to Putin that the job of the "chief investigator" depends on winning the case. (See THE NIS OBSERVED, 11 Nov 00) But it is too early to rejoice: If this case is dismissed, or if Edmund Pope is acquitted, he may have another ordeal to face. A civil suit demanding $252 million in damages, filed by the Russian Navy and dismissed by the current judge, may be filed again after the trial ends. (AGENCE FRANCE PRESSE, 24 Nov 00; via lexis-nexis) Another victim of an espionage charge, Grigori Pasko, after being acquited by a court, is being tried once more.
Above the law
Among the 49 passengers on a flight from Makhachkala, the capital of the Dagestan region, to Moscow were Dagestani Finance Minister Abdusamad Gamidov, his six bodyguards, members of a soccer club and two FSB officers. Shortly after takeoff, a man wearing a device he claimed to be a bomb demanded that the flight be redirected to Israel. He then locked himself in the cockpit, appropriating the guns handed over by the bodyguards, as per flight regulations. Meanwhile, a thrilling scene took place in the passenger area. The soccer fans, bodyguards and secret service men were all equally suspicious of each others' thuggish appearance. Shikhabuddin Mikhailov, the soccer club manager, and a few club members searched agitated FSB officer Oleg Lutsenko, finding a military knife, but missing a pistol that dropped from under his arm to his seat, and a short-barreled Kalashnikov rifle in his bag. When the plane stopped to refuel, Lutsenko, who declined to explain how he got his weapons through security, pulled out the gun, shouted that he was a member of an anti-terrorist squad, ordered his colleague to take the Kalashnikov, and proceeded to search the passengers. Mikhailov explained who he and his companions were, and together the men searched the rest of the passengers. The story had a happy ending: The airplane landed in Israel, the mentally unstable hijacker, identified as Akhmed Amirkhanov, was persuaded to give up, and was handed over to Russia by the Israeli authorities on condition that he would not be sentenced to death. (Israel does not apply the death sentence except for Nazi war criminals like Adolf Eichmann.) No passengers were harmed, but questions about security need to be answered. (LOS ANGELES TIMES, 15 Nov 00; via lexis-nexis, and THE ASSOCIATED PRESS, 17 Nov 00; via lexis-nexis)
by Luba Schwartzman
Russia's Iran policy: reneging on past promises to the US
In the midst of the US election turmoil, Russian President Vladimir Putin has steered his country into the diplomatic limelight. Whether it is the resumption of Russian involvement in the Middle East peace talks (See THE NIS OBSERVED, 11 Nov 00) or a new nuclear initiative, Putin appears to be taking advantage of the diplomatic opportunity afforded him to pursue several Russian policies with renewed vigor. One area that has continually complicated US-Russian relations -- Russian arms sales to Iran -- particularly demonstrates Putin's attempt to take advantage of the US government's apparent preoccupation.
On 24 November, the Russian government announced that, as of 1 December, it would renege on its secret 1995 deal with the US not to supply Iran with conventional arms beyond the year 1999. The agreement, signed under the auspices of the Gore-Chernomyrdin Commission, allowed Russia to sell certain weapons to Iran in exchange for Moscow's pledge that it would end all deliveries of sophisticated conventional arms to Tehran by 31 December 1999. Moscow's latest decision came on the heels of the US election season, during which the contents of the 1995 deal emerged. Citing the supposed leak as well as the supposedly improving domestic situation in Iran, Moscow, in a letter to Madeleine Albright which arrived days before the election, announced its intention to withdraw from the agreement and resume arms sales to Iran. The timing of the letter and the flimsy Russian argument that the US effectively had broken the agreement first by leaking its contents suggest that Russia is simply using the current state of affairs as a pretext for continuing potentially lucrative sales to Iran. (DEUTSCHE PRESSE AGENTUR, 23 Nov 00; via lexis-nexis)
For Russia, arms sales constitute a prime means of bolstering its failing economy. Already the Iranian government has announced its intention to purchase aircraft and anti-aircraft systems with a price tag estimated at $2 billion. Russia claims that the agreement has cost it several billion dollars in lost sales to Iran over the past decade. (DEUTSCHE PRESSE AGENTUR, 23 Nov 00; via lexis-nexis)
The US government assesses Russian arms sales to Iran as a potentially destabilizing force in the Middle East, contending that Tehran is a major supplier of the terrorist Islamic Hizbollah group that opposed the direction of the current Middle East talks. As such, the US government has threatened to impose sanctions against Russia if Moscow allows the transfers to take place. (REUTERS, 28 Nov 00; via RussiaToday.com) The sides, which have already discussed the issue at the APEC summit in Brunei and the OSCE meeting, will meet in Moscow next week to discuss the issue. (AGENCE FRANCE PRESSE, 29 Nov 00; via lexis-nexis)
by Sarah K. Miller
DOMESTIC ISSUES & LEGISLATIVE BRANCH
Volgograd gears up for elections
On 24 December 2000, the residents of Volgograd will go to the polls to cast ballots for the region's governor and mayor of the city of Volgograd.
Presently, only the incumbent governor, Nikolai Maksyuta, has registered for the election, but this is sure to change. It seems that his chances for re-election are good: The economy is moving forward and the grain harvest is twice as large as last year. It also helps that the regional media is in his back pocket.
Even so, Maksyuta is taking no chances. Recently, the governor had the regional Duma lower the percentage of turnout required to validate an election from 50 percent to 25 percent. This move is constitutional; however, critics see it as an attempt to ensure Maksyuta's re-election.
Volgograd Mayor Yuri Chekhov has become the loudest critic of this change, as well as of other moves by the governor. This is in keeping with the political competition between various regional governors and the mayors of their respective cities. And, as with the relationships between governors and mayors in others regions, Chekhov seems to be angling for support from Moscow. Indeed Moscow Mayor Yuri Luzhkov and former Prime Minister Yevgeny Primakov are said to be close friends. (ROSSIYSKAYA GAZETA, 27 Oct 00; FBIS-SOV-2000-1027, via World News Connection)
It is far from clear whether Chekhov's gamble will work, since Putin is courting the nation's governors through the creation of a State Council and the erection of federal districts. If Putin does manage to persuade the governors to cease opposition to his centralizing tendencies, the country's mayors may become a potentially important source for the defense of Russian federalism.
Parliamentary immunity used to hide from legal action
According to the nation's security services, there are virtually no regions left where the list of candidates for public office does not include the names of someone from the criminal underworld. For example, in Yekaterinburg, "crime bosses" from the Uralmash and Center groupings ran in elections to the oblast and city dumas and some won. In the Tyuman Oblast, one of the most powerful organized crime groups reportedly is in control of the city Duma. (ROSSIYSKAYA GAZETA, 1 Nov 00; FBIS-SOV-2000-1031, via World News Connection)
The idea of immunity against criminal prosecution for members of parliament is to protect them from legal action filed by political opponents. In Russia, this seems to have reversed itself: The Duma is there to protect illegal acts of its members. This should not be allowed to continue. President Putin has declared war on crime and corruption. Let us see if it includes criminals protected by parliamentary immunity.
by Michael DeMar Thurman
First real step towards reform underway
Recent decisions by Russia's Security Council constitute the first steps to real reform in the military and security services. Despite the rancorous and sometimes heated debate of the past year on the nature of restructuring, consensus and an impetus towards beginning to implement these initiatives are reflected in recent statements from various politicians and military leaders. What remains to be seen is how much reshuffling President Putin will need to make in the senior military leadership to ensure that bureaucratic resistance does not interfere with his initiatives. In fact, Putin's rather scathing comments to his senior military leadership at a recent staff conference seemed further to indicate the seriousness of his reform initiative and a probable shake-up of the leadership. While careful not to criticize the military as an institution, or even field-level personnel and common soldiers, Putin laid blame on the senior staff officers in Moscow for allowing the forces to atrophy. He stated that the armed forces today are "unequal" in morale, discipline, and equipment to the missions they are assigned. He repeated the recently heard theme of the need to ensuring that pay and living standards for the common soldier are elevated along with the material readiness of the conventional military forces. (Jamestown Foundation MONITOR, 21 Nov 00) Two of the critical steps in achieving this reform are reducing the number of excess personnel in uniform and re-aligning defense funds and priorities to vital needs, especially the rising relative importance of the conventional forces over the strategic missile forces.
Summary of reductions
With over 3 million personnel serving in the military and security services, and many in often-duplicative roles, the Russian political leadership has finally acted on reducing this burden. The following table summarizes the largest proposed reductions: