CHANGES AT GAZPROM

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CHANGES AT GAZPROM

Moskovsky Komsomolets, July 3, 2000, p. 1

Gazprom is still in a fever. The unexpected retirement of Victor Chernomyrdin as chair of the board on the eve of the annual general meeting of shareholders made Vyakhirev’s situation more unstable. On July 2, under pressure from the Kremlin, a new chair of the board was elected: Dmitry Medvedev, Senior Deputy Secretary of the Presidential Administration. Another new member joined the board – Herman Gref, Economic Development and Trade Minister, who is pushing for the break-up of the gas company.

These developments at Russia’s biggest monopoly, which contributes the major part of budget revenue, changes the issue from economic to political. It is clear that after the replacement of the board of the head company, the same thing will happen in its subsidiaries. These posts will be taken by people promoted by the Presidential Administration. They will be carrying out the main policy of the state: to turn the main revenue streams in the direction of the Presidential Administration. This is the main task of Dmitry Medvedev.

There are other tasks. For instance, the state will try to control the finances of Media-Most, which has already begun to repay its debts to Gazprom. Gazprom lent the media holding a tidy sum with two large parcels of shares as security. If Media-Most repays its debts, the government’s financial weapon for exerting pressure on the holding will disappear. It is clear that this situation does not suit some people.

GUROV ON THE STATE OF THE RUSSIAN MAFIA

Komsomolskaya Pravda, July 3, 2000, p. 3

Alexander Gurov: Twelve years have passed since I first spoke of the existence of organized crime in Russia. What has changed in all these years? According to the Interior Ministry there are 95 major criminal groups, which consist of about 10,000 smaller groups. The total number of criminals in these groups is about 8,500.

The criminal groups have redistributed spheres of influence, each group has its specialization. For instance, in the Volga region criminal groups control the car market, in the northern regions they control the oil and aluminum business.

Unfortunately, the criminal groups have established close relations with political leaders, and have expanded internationally. According to Interpol, Russian organized crime transports prostitutes to Israel, Italy, China, and Singapore. Criminals smuggle weapons from Germany, China and Afghanistan to Russia. Germany and Spain are famous for illicit deals in investment and real estate. Turkey and Columbia are the sources of drugs.

Currently the interests of the Russian organized crime have changed. Criminals have turned to the finance and banking sector. There are about 700,000 small companies in Russia, which move capital abroad and then disappear. Last year capital flight reached $25 billion.

GUSINSKY EXPECTS TO BE ARRESTED AGAIN

Nezavisimaya Gazeta, July 3, 2000, p. 2

Vladimir Gusinsky, head of the Media-Most group and Secretary of the Russian Jewish Congress, said recently in an interview with Israeli newspaper “The Jerusalem Post” that he is prepared for another arrest. According to Gusinsky, he always keeps in his car a bag with necessary things in case he is arrested again: from a packed meal to shaving equipment. Gusinsky also noted that his arrest is revenge by President Vladimir Putin. He said it is possible that his arrest was prompted by the “Kukly” puppet satire program on the NTV network.

According to some Russian information agencies, this interview is “being actively discussed”. We asked Israel Shamir, a well known Israeli journalist, to comment on the situation. According to him, Gusinsky’s arrest cannot cause any significant stir – at least not in Israel, which is accustomed to such situations. Currently the matter concerns Ofer Nemrovi, the owner of “Maarif”, a third of which belongs to Vladimir Gusinsky. It should be noted that Israeli law enforcement agencies arrested Grigory Lerner, a Jewish businessman who came to Israel with $63 million which he stole in Russia.

That is why despite Gusinsky’s active participation in the Israeli economy, residents of that country will take his arrest calmly. In addition, Shamir thinks that Gusinsky’s relations with Edgar Brontman, the owner of Seagram International, will rescue him from his troubles. Even if Gusinsky is imprisoned again, which is hardly likely, the Brontman clan will use its influence in the White House. At the same time, Israel Shamir noted that despite huge differences between Jewish communities, they can unite in order to help one of their own.

VYAKHIREV TO BE DISMISSED?

Vremya MN, July 30, 2000, p. 1

The results of yesterday’s annual general meeting at Gazprom were predicted by analysts beforehand. Rem Vyakhirev has retained his post, and as expected Victor Chernomyrdin has failed to become a member of the new board of directors.

According to unofficial reports, it is possible that Gazprom will hold an unscheduled meeting of shareholders in August or September. The pretext will be a formal one – it is necessary to make amendments to item 22 of the company by-laws. In addition, the shareholders will discuss Vyakhirev’s early dismissal.

If this happens, those who want to split Gazprom will be able to do it.

VYAKHIREV HAS LOST THE BATTLE

Kommersant-daily, July 3, 2000, pp. 1, 4

On July 2 Rem Vyakhirev came to grief at the Gazprom annual general meeting. Dimitri Medvedev, Deputy Secretary of the Presidential Administration, has been elected as the new chair of the board of the gas monopoly. The amendment that Vyakhirev needed was rejected. At the same time, the share price of Gazprom rose by 10% on July 2.

It is not out of the question that this meeting is the last annual general meeting to be attended by Vyakhirev as head of Gazprom. Medvedev said that first thing he wants to do in his new post is to familiarize himself with the papers of Gazprom-Media. Media-Most said that it is prepared to look for another investor instead of Gazprom.

VOLOSHIN HAS APPOINTED TWO NEW DEPUTY PRESIDENTIAL ENVOYS

Kommersant-daily, July 3, 2000, p. 3

Alexander Voloshin has signed an order to appoint another two deputy presidential envoys for the Trans-Volga federal district. These people are: Herman Petrov, Chief of the Tver Department of the Ministry of Taxes and Duties; and former General Prosecutor Valentin Stepankov.

FEDERAL FORCES ARE PURGING CHECHNYA

Kommersant-daily, July 3, 2000, p. 3

Federal forces have started mopping-up operations across a large sector of the mountain areas of Chechnya.

Defense Minister Igor Sergeev commented on the destruction of Khattab’s detachment near Serzhen-Yurt: “It was a very difficult task, but the results are excellent.” About 50 Chechen guerrillas were killed. The majority of them were mercenaries.

CLUBS VERSUS COMPUTERS

Argumenty i Fakty, No. 26, June, 2000, p. 5

The only relatively new sample of military hardware demonstrated by the Russian defense industry at the Paris Eurosatori 2000 international arms expo was the prototype Iskander-E operative tactical missile system. This system has not yet been added to the arsenals of the Russian Armed Forces. So far, only 11 test launches have been performed at the Kapustin Yar military training ground. The system’s missiles hit targets at a distance of 280 kilometers with a planned error margin of no more than ten meters!

All the other displays of the Russian defense industry at Eurosatori 2000 date back to the 1970s or 1980s. These are upgrades of the Grad, Uragan, and Smerch rocket launchers, and also of the Osa, Pechora, and S-300 anti-aircraft missile systems.

In this connection we recalled the Russian-made KA-50 “Black Shark” attack helicopter. At the Paris expo, specialists asserted that as yet this pride of the Russian military-industrial complex is not sufficiently developed. It is no coincidence, then, that Russia is fighting an Israeli avionics firm for a $4 billion contract to supply 450 helicopters of this type to Turkey. The Israeli party wants to receive nearly $1.5 billion of the contract’s total value for equipping Ka-50s with its own avionics.

RUSSIAN WARSHIPS FOR CHINA

Rossia, No. 47, June, 2000, p. 2

The St. Petersburg-based Severnaya Verf (Northern Shipyard) shipbuilding enterprise has completed construction of a destroyer for the Chinese Navy. Under the provisions of an intergovernment agreement, this is already the second destroyer the enterprise has built for the Chinese Navy. The first ship was delivered to the client in December 1999. By the end of this year the Russian side is planning to deliver the second vessel to China. The Project 956E 7,000 ton destroyers are equipped with efficient anti-ship and anti-aircraft weaponry systems and are also capable of destroying surface and land targets.

VOLOSHIN TO NOMINATE PAVLOVSKY FOR CHIEF OF PROPAGANDA?

Agrumenty i Fakty, No. 26, June, 2000, p. 2

There are rumors that Alexander Voloshin, presidential chief of staff, was not entirely satisfied with the new information security doctrine recently adopted by the Security Council. Voloshin is reported to believe that it will be completely impossible to force all Russian media to adopt the same line. At any rate, Voloshin obviously does not intend to farm out state propaganda to the security ministries; and, if nothing else, will at least attempt to nominate one of his loyal subordinates for the post of propaganda chief. In this connection our sources in the Kremlin mention the name of Gleb Pavlovsky, a well-known political consultant.

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