PRESIDENTIAL LOCOMOTIVE

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PRESIDENTIAL LOCOMOTIVE

Izvestia, August 5, 2000, p. 5

A reform plan for the railroad system has been approved by the president, as Railroads Minister Nikolai Aksenenko reported on August 4. He also noted that the Railroads Ministry’s plans for the Baikal-Amur railroad were discussed at his meeting with the president.

After this reform plan is passed by a board meeting of the Railroad Ministry, it will be submitted to the Cabinet.

One of the main problems that should be dealt with in the course of the reforms is the gradual reduction of cross-subsidizing – the system of using freight routes to compensate for losses on passenger routes.

The results of Aksenenko’s meeting with Vladimir Putin show that the Railroads Ministry retains strong leverage and is still able to stand its ground. It is also worth noting that Aksenenko mentioned the Russian Far East not only in an economic context, but in a political one.

LUZHKOV’S MOVEMENT ASPIRES TO BE PART OF THE SYSTEM

Segodnya, August 5, 2000, p. 2

The Fatherland movement intends to make up for its unsuccessful parliamentary campaign by taking part in regional elections. We were told by Andrei Isaev, one of the leaders of Fatherland, that this movement should be included in the system, i.e. be divided into seven branches, so that it will be easier for it to cooperate with the federal authorities. Instructing regional representatives of the movement, Isaev said: “The new Federation Council must include as many Fatherland supporters as possible.” And this is just the beginning. As soon as the Duma passes the law on parties, Fatherland will become a party. However, Fatherland members do not want to be too hasty, since Fatherland will have to forego collective affiliation once it becomes a party.

The cost of the Internet-based digest “Vestnik Otechestva” (The Messenger of the Fatherland) may be considered as a membership fee for the future party. And to make the party popular again, it intends to arrange a nationwide referendum on the question: “Should we set minimum pensions and wage levels at no lower than the poverty line?”

STAVROPOL REINFORCES SECURITY ALONG BORDER WITH KARACHAEVO-CHERKESSIA

Segodnya, August 5, 2000, p. 4

Deputies of the People’s Assembly of Karachaevo-Cherkessia have appealed to the Stavropol Territorial Duma to cancel the special regime on the border with the republic. Deputies were particularly concerned by the announcement of Alexander Volkodav, Director of the Main Interior Affairs Department of the Stavropol Territory, that the border with Karachaevo-Cherkessia should be reinforced like the border with Chechnya. Deputies of the Republic of Karachaevo-Cherkessia have highlighted the fact that the rights of residents of this republic who cross the border of the Stavropol Territory are often violated. As a response to these reproaches, Volkodav confirmed that he will do his best to make the border with Karachaevo-Cherkessia equal to the state border. In his opinion, this will help reduce crime in the territory.

MOSCOW TURNS TO KEMEROVO REGION

Segodnya, August 5, 2000, p. 5

Moscow Mayor Yury Luzhkov and Kemerovo Governor Aman Tuleev agreed on August 4 that by the end of 2000 the Moscow government will allocate 50 million rubles for development of the Fedorovskoe-1 gold deposit in the south of the Kemerovo Region. Yury Luzhkov puts the value of this deposit at $9-10 million, since it is planned to extract 450 kilograms of gold there by the end of 2005. According to the mayor, Moscow is interested in implementation of the project. Moscow intends to extend economic relations with the Kemerovo Region, within the agreement on cooperation signed in 1998. In particular, Moscow is ready to build a coal mine in the region, which will provide Mosenergo with up to 1.5 million tons of coal a year. It is also possible that Moscow will invest money in development of infrastructure at the Kuznetsk Coal Field.

MASKHADOV LEAVES A BLACK CHEVROLET BEHIND

Kommersant-daily, August 5, 2000, p. 1

A black armored Chevrolet jeep was found on August 4 during a special operation in the Chechen settlement of Shali. According to preliminary reports, this jeep belongs to Chechen President Aslan Maskhadov.

Before the operation, the Chechen Department for Combating Organized Crime, headed by Bislan Gantamirov, received intelligence reports that Maskhadov was in Shali. A police team was immediately dispatched there. Gantamirov’s police officers did not warn the Russian military about the operation, since Russian generals have been speaking too often about the possibility of negotiations with Maskhadov.

The search of the house in which Maskhadov may have stayed had no result. After that there were some reports that he had stayed in Shali for a couple of days, and subsequently left for Ingushetia. However, the police found a Chevrolet jeep covered with hay in one of the village barns. The owner of the house immediately announced that knew nothing about the vehicle, but he was still detained as a precautionary measure.

The possibility that the Ichkerian president owns this car is being investigated. Maskhadov has actually shown a preference for Chevrolets, considering them to be lucky.

OLIGARCHS TEASING THE KREMLIN

Moskovsky Komsomolets, August 5, 2000, p. 2

Berezovsky the indefatigable seems to have made up his mind to play seriously with Putin and Co. No sooner had the Kremlin announced the establishment of its full control over ORT, than Berezovsky changed his mind and decided not to part with his shares in the first channel. We were told by people close to Berezovsky that the state is likely to consent to ORT being included in Berezovsky’s media holding. If this does not happen, Berezovsky is promising there will be a serious fight, without mercy.

Over the past few weeks all Berezovsky’s friends have been urging him to stop his political intrigues and return to business. It is an open secret that Berezovsky’s bustling activity once led to his replacement by Roman Abramovich as the Kremlin’s “eminence grise”. And now the affair is even more risky, since Putin does not like to joke.

The simplest explanation of this impertinence is that Berezovsky is just trying to bargain with the Kremlin for the best deal for himself. However, as the example of Media-Most shows, the present regime has the resources and strength to suppress those who try to put pressure on it.

Politicians believe that Berezovsky’s heightened activity is due to his desire to shift his criminal problems to the level of politics.

Berezovsky may also be willing to provoke a conflict with Putin and unite those who are dissatisfied with the current government.

CHUBAIS LOSES

Kommersant, August 5, 2000, p. 1

Anatoly Chubais did not emerge victorious from his conflict with the shareholders of Russian Joint Energy Systems (RJES). He did everything in his power to convene an extraordinary shareholders’ meeting, at which the state would have voted against all of the investors’ proposals and emphasized its full plenary powers. However, the board of directors decided yesterday not to convene the meeting. The state representatives themselves were those who spoke out against the meeting.

At yesterday’s meeting of the RJES board, a quorum of eight members was present. There were five representatives of the state – Aleksei Kudrin, Ilya Yuzhanov, Herman Gref, Andrei Zaderniuk; and three RJES representatives – Anatoli Chubais, Valentin Zavadnikov, and Leonid Melamed. They unanimously decided not to call an extraordinary meeting of the shareholders. (About 8% of the small shareholders had demanded the meeting). Even though high-level RJES employees told a Kommersant correspondent yesterday that the company’s executives would insist on the meeting (by law the board can call the meeting even if fewer than 10% of the shareholders are interested). In the course of events, the managers obviously sensed that they were in the minority and decided to show a united front. In other words, they didn’t take their fight outside. Senior Deputy Prime Minister Aleksei Kudrin reciprocated, announcing in an interview with ITAR-TASS that he considers it futile to “waste money and time on an extraordinary meeting of the shareholders. Since the government is in the majority, it would support the current direction of the company.”

It is interesting that only state officials and RJES managers ended up at the board meeting. Yesterday’s participants attributed this to the holiday season. However, Kommersant was able to find other reasons for the absence. For example, the head of the Naufor movement only received an invitation to the meeting yesterday afternoon. He could not make it back from Petersburg in time. Chubais desperately wanted the board to call a shareholders’ meeting. But even the absence of the minority shareholders, who would have voted against his motion, didn’t help him in the end.

A chance has just opened up for investors who are unhappy with the current RJES political leadership. As the chair of Unifond, Florian Fenner, told Kommersant yesterday, there are more than 10% of shareholders are ready to initiate another call for a meeting. But they would first like to run their summons by Alexander Voloshin, head of the presidential administration.

ZHIRINOVSKY IN HIS HOME TOWN: I HATE THIS CITY!

Kommersant, August 5, 2000, p. 2

Official visits bore Vladimir Zhirinovksy to death. During yesterday’s visit to his home city Ulyanovsk, he fought boredom in his inimitable manner.

Zhirinovsky spent all of two hours in Ulyanovsk. He managed to speak to journalists and meet with his supporters.

First he shocked city residents: “Ulyanovsk is my home town and I hate everything about it!” When he was asked about the reasons for his visit, he felt the question was a provocation by the regional powers and the Communists: “I hate your city!” he screamed, “because this is where the greatest terrorist of the twentieth century was born! A more terrible bandit never lived.” According to Zhirinovsky, Russia was the mightiest and most beautiful, the most cultured and most blooming country of the world in 1913. Ten years later, when Vladimir Lenin died, the country was already in ruins. “That was all his doing, your Simbirian extremist,” yelled the deputy speaker of the Duma.

He said that it was high time to give back to Ulyanovsk its true name: Simbirsk. However, Vladimr Volfovich Zhirinovsky literally stigmatized anyone who might be against renaming the city: “You have to admit that Lenin was a bandit. You need to rename Ulyanovsk to Simbirsk, and move the Lenin museum from his apartment to the Butyrskii prison. That’s where all the revolutionaries should be.”

THE CENTRAL ELECTION COMMISSION IS WRITING LETTERS

Kommersant, August 5, 2000, p. 2

Yesterday the Central Election Commission (CEC) sent letters to the election commissions of the Federation’s subjects with a meek plea to please uphold electoral laws. This is Moscow’s first step in preparing for a series of regional elections. Moscow feels very uncomfortable.

By the end of the year, there will be gubernatorial elections, elections of legislatures, and mayoral elections in 38 Russian regions. The Kremlin has taken into account that today’s governors in the Federation Council will do anything to postpone the president’s government reforms. The Kremlin is getting ready to take revenge.

According to our sources, the first victims have already been found: governors Leonid Gorbenko from Kaliningrad and Alexander Rutskoi from Kursk. But the list will probably grow. The governors will obviously be stubborn. They will do anything to arrange for the election of mayors and legislatures that they can control. This should at least partially compensate for their loss of status as federal politicians after the current Federation Council is restructured. The country might yet be lashed by brutal election campaigns.

However, even the CEC acknowledges that the letters they sent out are not one of the commission’s tougher measures. “You’ve got to understand that elections are starting. The letters are just preventative maintenance,” CEC member Vladimir Butaev told Kommersant. Butaev is responsible for election security and for relations with the federal security agencies.

PUTIN PURSUES A PRO-AMERICAN POLICY

Zavtra, No. 31, August, 2000, p. 1

According to experts of the Den security service, Vladimir Putin has gained total victory on all fronts. This statement is supported by the Federation Council’s self-sacrifice, Yury Luzhkov’s having given up resistance, and the support for the Kremlin displayed by the Fatherland-All Russia and Yabloko Duma factions. The Union of Right Forces controlled by Chubais is also displaying its loyalty to Putin. Along with these events the “worship of oligarchs” has taken place, and Berezovsky and Gusinsky have hastily left the country. The list of Putin’s victories also includes the absence of intensive actions of Chechen separatists on the eve of and during the Okinawa summit. All these facts are giving the Kremlin carte blanche to freely choose its policy. However, Russia’s dependence on the West has not lessened. This is proven by the super-monetarist economic program issued by the government and docilely accepted by Parliament. Putin’s patriotic rhetoric helps him promote the pro-American policy aimed at strengthening Russia’s position as “America’s regional ally.”

PUTIN PROTECTING CHUBAIS

Zavtra, No. 31, August, 2000, p. 1

According to our sources in the Kremlin, Vladimir Putin has personally canceled a strategy for dismissing Anatoly Chubais that had been developed by the Presidential Administration. According to the same sources, Alexander Voloshin has not given up hope of gaining control of Russian Joint Energy Systems (RJES) by promoting Chubais and replacing him with a “reliable figure” like Fedorov. It is planned to appoint Chubais either to the post of prime minister or the chairman of some new presidential structure. This model of action is connected with the fact that the undercover intrigues of the director of the presidential administration were disclosed by Chubais, who told Putin about them right after his return from Japan.

CLINTON MADE PUTIN RELEASE GUSINSKY

Zavtra, No. 31, August, 2000, p. 1

According to our sources in Tokyo, during the meeting between Putin and Clinton, the American president supported the actions of the master of the Kremlin, but demanded that Putin release Vladimir Gusinsky from detention within three days, which Putin obediently did. Furthermore, Clinton persuaded Putin “not to take drastic steps” in order not to play into the hands of George W. Bush.

FREEDOM COST GUSINSKY $350 MILLION

Zavtra, No. 31, August, 2000, p. 1

According to our source in a private security service, right before leaving Russia, Gusinsky signed documents transferring the ownership of the controlling interest in NTV to Gazprom and other creditors of Gusinsky’s firms. Freedom cost Gusinsky approximately $350 million. According to the same agreements, Malashenko and Kiselev will retain their positions.

RUSSIAN TYCOONS’S PROPERTY TO BE GIVEN OVER TO U.S. TRANSNATIONAL CORPORATIONS

Zavtra, No. 31, August, 2000, p. 1

According to our source in Kremlin circles, the agenda for the meeting with tycoons was developed mostly by Vladimir Putin himself. His main aim was to make the rich financially support the current power hierarchy. Vladimir Putin made in clear at the meeting that it is necessary for tycoons to be on good terms with him and share their money voluntarily; otherwise they may be deprived of everything. This is connected not only with the necessity to pay a lot of foreign debts but also with Putin’s promise given in Okinawa that all the property of Russian tycoons will be given over to American transnational corporations.

RUSSIAGATE TO START

Zavtra, No. 31, August, 2000, p. 1

According to our sources in London, the financial situation on world markets will not considerably change until the middle of October. Prices of raw materials and energy will tend to grow. This should lower the competitive potential of Europe and Japan compared to American goods, and the high prices of gasoline at the American market will be called a consequence of the policy of the Democrats. Moreover, in the middle of September the Republicans will spread rumors about the connection of the Clinton-Gore Administration with Chubais’ group, which will cause a Russiagate scandal. This scandal will guarantee the victory of George W. Bush in the presidential election.

NEW CONSTITUTION TO BE ADOPTED

Zavtra, No. 31, August, 2000, p. 1

According to our sources in the Presidential Administration, a meeting of Putin’s confidants has been conducted in the Kremlin. The meeting was devoted to changing the government system in the Russian Federation. In particular, participants of the meeting discussed the terms of convocation and work and the staff of the Constitutional Assembly for approval of the new Constitution and a referendum on it “no later than March 2001.” The draft Constitution stipulates a radical boost in presidential power, implying abolition of the Duma and all the current political parties.

NUMBER OF AIRBORNE TROOPS TO INCREASE

Nezavisimoe Voennoe Obozrenie, No. 28, August, 2000, p. 1

On the eve of the celebration of the 70th anniversary of the Airborne Troops (AT) they were pleased by the news that by the end of 2001, the number of the AT will increase up to 44,000-45,000 people. Currently, about 40,000 servicemen are servicing in the AT. The AT need additional 5,000 people for performance of peacekeeping operations. Today, every third AT serviceman is serving either in a peacekeeping contingent or in a hot spot. For instance, about 4,100 AT servicemen are in Chechnya now.

FOUR PROBLEMS TO BE SOLVED BY PUTIN IN AUTUMN

Vek, No. 31, August, 2000, p. 1

Over the past one or two months the president has gained a lot of successes. He has strongly suppressed tycoons monopoly in media, restricted governors’ freedom, and surprised his foreign partners by the energy, with which he performed his foreign political debut in Okinawa. Such energy has not been seen since Gorbachev’s time. Of course, not everyone was pleased by the Kremlin’s triple success, but everyone was undoubtedly astonished. It is time for those dissatisfied with the Kremlin’s successes to start arrange retaliatory steps and prepare for the autumn political season.

The Russian president confronts new tasks. First and foremost this is the budget. The budget will be the main indicator of the Duma’s fidelity to the president and the successfulness of the Kremlin’s policy regarding the Duma.

Secondly, the “reform of freedom of speech” is to come. This reform is now being actively worked out. the takeover of Berezovsky’s 49% block of shares of ORT is only the beginning of this large-scale measure. The federal authorities have realized the danger of the informational and propagandist dependence on oligarchs and have decided to obtain at least one lever of direct influence over TV spectators.

The third problem is related to the “family” and its heritage. How long will the moratorium on criticizing the “family” last? And how should the government react to the almost regular reports from Geneva compromising (or disclosing) former and current high-ranking officials?

The fourth problem is connected with the current prime minister. This problem may be formulated as “the country without a prime minister.” It is not clear whether the colorful president is simply eclipsing the prime minister, or Kasyanov does not belong to Putin’s team. However, it is also possible to suppose that Kasyanov is just the chairman of the “committee for realization of Gref’s policy,” whereas German Gref is that very political prime minister Russian has grown accustomed to for the past eight years.

The fourth problem seems to be even worse taking into account the current reports from Geneva, in which the current prime minister is mentioned in connection with the gloomiest corruption plots of the newest Russian history.

Thus, although there will be no financial crisis in August 2000, there will be enough problems for the Russian government in autumn. However, it is not clear so far how the president will solve the fourth problem.

VIKTOR KAZANTSEV: JOURNALISTS MISREPRESENT FACTS

Obshchaya Gazeta, No. 31, August, 2000, p. 2

Viktor Kazantsev’s recent announcement that the Russian side is conducting negotiations with Aslan Maskhadov and Ruslan Gelaev has made Russian journalists prick up their ears and shocked Russian generals commissioned to Chechnya. The announcement was made at the meeting between the presidential envoy and commandants of camps of Chechen refugees. The desperate commandants were raising their voice talking to their guest. They stated that even Chechens themselves do not trust Ahmad Kadyrov. He allegedly needs the position of the chairman of the Chechen Administration in order to get even with his enemies both among the Wahhabi and among those who oppose separatists. The commandants were crying, “Nobody knows when you counter-terrorist operation will be over!”

It is after that outcry that Viktor Kazantsev made this announcement about upcoming peace and negotiations with leaders of bands. Right after the meeting, when the plenipotentiary came out to journalists, he understood that words once spoken you can never recall. Journalists were interested only in these negotiations. Kazantsev remembered that the best way to defend is to attack, and started to blame journalists for precipitating events and misrepresenting facts. He said, “Personally I am against negotiations with Maskhadov and Gelaev, but I think it necessary to hold negotiations with leaders of small detachments.”

In two hours Presidential aide Sergei Yastrzhembsky tried to help Kazantsev, who was awkwardly struggling to smooth the scandal caused by his announcement. The presidential aide announced that no negotiations with separatists were conducted. However, journalists incline to think that Maskhadov’s contacts with representatives of the federal authorities do take place. Among those who regularly communicate with Maskhadov are Ahmad Kadyrov, Ingushetian President Ruslan Aushev, and North Ossetian President Alexander Dzasokhov.

The phrase blurted out by Kazantsev is one more fact proving contacts between the federal center and separatists. The secrecy of these contacts is quite understandable, as understandable as indignation of people who have lost everything in this war.

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