Izvestia, September 9, 2000, p. 1

No sooner had Vladimir Putin left Japan than something uprecedented in the past 20 years took place: a Russian spy was caught in Japan. Lieutenant Commander Shigehiro Hagisaki, a humble employee at a defense research institute, was caught red-handed passing secret documents to an employee of the Russian embassy.

Nothing specific has been revealed to the public, neither secret documents not special espionage equipment. Meanwhile, some strange things started to happen. For instance, Hirotoshi Yoshikawa, deputy director of the defense research institute, has said that the arrested man did not have access to secret materials and was engaged in analyzing publications about the policy of Russia and other CIS countries. He had not served on military vessels, and his career developed in quiet offices. Hagisaki was reputed to be a strange, quiet person, who was crazy about Russia and diligently studied the Russian language. According to our sources, contrary to Japanese practice, the Foreign Ministry was informed about the upcoming operation only a few hours before it went ahead. Since a foreign diplomat is involved in this scandal (Hagisaki was detained after his meeting with the Russian naval attache), the Foreign Ministry ought to have been informed beforehand.

What can the spy be charged with? According to Japanese sources, Hagisaki may be imprisoned for less than a year or fined about $400.

All this seems to be a PR campaign launched by some high-ranking Japanese politicians who did not like the outcome of the recent meeting between the Russian president and the Japanese prime minister. Thus, it is clear why the scandal surrounding the hapless employee of a defense institute was launched right after Putin’s departure.


Novye Izvestia, September 9, 2000, p. 2

Deputy Prime Minister Ilya Klebanov has announced that the materials related to the cause of the Kursk submarine accident, received by the secretary of the Russian Security Council from the US president’s national defense adviser, contain nothing new.

Klebanov said that three probable causes of the accident are being considered: an emergency in the first compartment, a floating mine, or a collision with an underwater object.

Klebanov reported that two Russian divers and one Norwegian diver will take part in retrieving the bodies of the Russian sailors. Russia has received a draft contract for this operation from Norway. According to Klebanov, Norway has offered a larger ship than that used during the rescue effort. Klebanov also noted that Norway has requested an unexpectedly high fee.

The deputy prime minister denied reports that right after the Kursk accident a submarine of the Main Intelligence Agency arrived on the scene. Klebanov stressed that this was just a rumor.


Novye Izvestia, September 9, 2000, p. 2

Alexander Zhukov, Chairman of the Duma Budget Committee, has stated: “The Central Bank’s hard currency reserves could rise to $30 billion by the end of the year.”

According to Zhukov, the reason for this growth is the rise in energy prices, which leads to a positive foreign trade balance. Zhukov has reported that extra federal budget revenues at present total 160-170 billion rubles, and if the global economic situation does not change, this figure will be 250-300 billion rubles by the end of the year. Alexander Zhukov has noted that unfortunately nothing fundamental has changed in Russian economic policy, so the economic situation in Russia wholly depends on the global economy. Although the amount of investment in the Russian economy has grown, this money is targeted mainly toward exports. Such a fundamental sphere as bank lending is unaffected, and banks cannot give substantial loans to the real sector of the economy.


Novye Izvestia, September 9, 2000, p. 2

Vladimir Kalamanov, presidential envoy for human rights in Chechnya, has stated that about 1,200 Chechens have passed through detention cells in the North Caucasus. He also noted that rumors about tens of thousands of people being arrested are unfounded. According to him, all “purges” are now conducted in the presence of representatives of the General Prosecutor’s Office and employees of his bureau. Kalamanov also stated that over 200 people have been amnestied by means of his bureau.


Segodnya, September 9, 2000, p. 1

The Interior Ministry’s Main Department for Combating Organized Crime has detained Kharon Yunusov, chief of staff to Arbi Baraev, a Chechen separatist commander. Yunusov came to Moscow to tend to his sick nephew in a Moscow hospital. He was aware of his hazardous position, and, according to some sources, always carries a grenade with him. Therefore, Yunusov was detained on leaving the hospital, so that the staff and patients would not be injured. The operation was performed so quickly that he did not even have time to take the grenade from his pocket.


Segodnya, September 9, 2000, p. 2

President Putin has commented on Berezovsky’s decision to hand over his block of ORT network shares to journalists and members of the intelligentsia: “He can only be applauded for this. However, it is important that these people shouldn’t be controlled by him. Otherwise, it would be just transferring money from one pocket into another.”

It is not ruled out that after the president attentively reads the tycoon’s letter, he will amend his position.

As for the Duma, it has not determined its tactics in the current situation as yet. According to Duma Speaker Gennady Seleznev, in connection with Berezovsky’s latest decision the Duma has started studying materials on “gross violations of distribution of ORT shares.” Their detailed analysis is planned to be completed in October at a Duma meeting.

Some deputies have decided not to wait until October. Alexander Gurov (Unity), Vyacheslav Volodin (Fatherland-All Russia), and Alexei Alexandrov (Fatherland-All Russia) have appealed to Boris Berezovsky in an open letter. The reason for this letter was Berezovsky’s address to the president, in which he criticized the freedom of speech situation in Russia. The deputies were scathing about this action: “You are reproaching the president for his attempts to strengthen the state and set up public supervision over the media in order to slacken tycoons’ current comprehensive control over them.”


Vremya MN, September 9, 2000, p. 1

According to the August 31 edition of “Die Berliner Zeitung”, a report of a special commission led by the director of the Federal Security Service (FSB) has been presented to Putin, which states that the Kursk could have been sunk by a Russian missile.

The newspaper says that according to the report, on August 12, the cruiser Peter the Great launched a new Granit missile with an auto-targeting warhead for underwater targets. This launching was made within naval exercises. The missile entered the water 20 kilometers from the cruiser, and right after that the Peter the Great registered two underwater explosions. The second explosion was viewed by the crew as one planned within the exercises, and only later it was learned that the Granit entered the water 400 meters from the Kursk.

“Die Berliner Zeitung” notes that the report of the FSB investigation group drastically contradicts all the previous assertions by the Russian military. Defense Minister Igor Sergeev and other senior military officials still insist that the Kursk collided with a foreign submarine.

The FSB press service reported on Thursday that it does not know anything about such a report.

Second Rank Captain Igor Dygalo, an assistant to the Navy Commander-in-Chief, who had given inaccurate reports about the fate of the crew of the submarine during the first days of the tragedy, has denied the publication in the “Die Berliner Zeitung.” He stressed: “Such cases are absolutely ruled out, since during exercises combat vessels and submarines act in strictly determined zones.” Dygalo also stressed that only dummy missiles and torpedoes are used in naval exercises.


Vremya MN, September 9, 2000, p. 2

A “Development of the Banking System in Russia” conference is being held in Sochi. Representatives of over 150 commercial banks and the Central Bank are taking part in it.

Bankers intend to propose to the Cabinet to develop a proposal for federal loans to the public; these loans could help fund most profitable projects against the government’s guarantees. Bankers’ interest in the real sector of the economy is accounted for by the fact that this is the only way of surviving, since restructuring of the banking system is coming to a dead end.

Most participants in the conference view the government as the main source of funding for the banking sector. According to Alexander Shokhin, Chairman of the Duma Committee for Crediting Organizations, the state should become independent of foreign banks’ capital.

The Agency for Restructuring Crediting Organizations (ARCO) may be sold. Deputy President of the Central Bank G. Luntovsky has confirmed that the state is losing its interest in ARCO.


Moskovsky Komsomolets, September 9, 2000, p. 3

On September 8, we contacted those who have been offered ORT network shares by Boris Berezovsky. It turned out that none of them know what they will be entitled to do with the shares. However, the idea seems flattering to almost everyone.

Igor Golembiovsky, Editor-in-Chief of “Izvestia”: On Wednesday I learned that Berezovsky intended to give me some of his shares. I don’t yet know how I will handle them. I have not met with other shareholders yet, and we have not discussed this issue. Why I immediately agreed is none of your business. I’m running my newspaper, you’re running yours. Goodbye!

Otto Latsis, Deputy Editor-in-Chief of “Novye Izvestia”: I received Berezovsky’s proposal three or four days ago, and accepted it. This is absolutely the right idea. Of course, it would have been better to give all shares to ORT staff, but as far as I know, this was impossible. I believe that state control of television is the worst alternative.

Alexei Venediktov, programming director of the Echo of Moscow radio station: I have not made a final decision yet. I will give a positive response only when I know all the legal conditions of the trust agreement. I will give my assent if I have the right to vote freely on personnel policy and changing the regulations. In this case, I will represent not Berezovsky, but 100 million viewers. The government wants to make ORT into another state channel, but I am against it, since one state channel is enough. Nobody is pressuring me. I have consulted with Gusinsky as my employer, and he told me I have the right to make my own decision. Now I will listen only to my family and the staff of Echo of Moscow. I would also advise Vladimir Putin to do the same about the remaining 51% of ORT shares.

Vladislav Flyarkovsky, a TV Center anchorman: I have not given my assent yet, I will reply in a few days. I think Berezovsky has thus acknowledged that I am an independent journalist. I’d like to stress that I am not going over to ORT, and therefore all talk about me having been bought is irrelevant. However paradoxical it may sound, I hope that by becoming an ORT shareholder I will be able to uphold the interests of TV Center.


Finansovaya Rossia, No. 35, September, 2000, p. 3

The intention to deprive Ukraine of free gas has become a point of honor for Gazprom. The Russian gas holding’s analysts have calculated that Ukraine already owes Russia $3.1 billion for “unauthorized use of gas”.

However, the plan to build a gas pipeline to Western Europe bypassing Ukraine, i.e. via Belarus, Poland, and Slovakia, has suddenly been hampered by Poland’s categorical refusal to participate in Russia’s initiative (according to the plan, 400 of the 600 kilometers of the new pipeline would pass across Polish territory); by refusing to take part in the project, Warsaw allegedly eliminates the risks of “harming its relations with Kiev”.

It is quite possible that Russia will get help in talking Poland into agreeing with the project from the joint efforts of the major European gas concerns – Gaz de France, Ruhrgas AG and Wintershall AG, and ENI. Their representatives met last week with Gazprom officials in Paris.

If Gazprom really manages to attract these companies to building a bypass gas pipeline at a cost of $1 billion, Warsaw will most likely be forced to reconsider its pro-Kiev position.

Meanwhile, once the planned bypass is built (its expected gas throughput will be 25-30 billion cubic meters per year), the amount of gas transit via Ukraine will drop to 85 billion cubic meters per year – hardly enough gas for the Ukrainian side to continue its “unauthorized use”.