Nezavisimaya Gazeta, June 30, 2001, p. 1

The personnel revolution in Gazprom continues. The shareholders’ meeting on June 29 resulted in a brilliant victory for the state. For the first time in the past few years, government representatives have the majority on the board of directors of Gazprom: they occupy six seats out of 11.

And the Kremlin kept its “promise”: former Gazprom chief executive Rem Vyakhirev was unanimously elected chairman of the board.


Nezavisimaya Gazeta, June 30, 2001, p. 3

On June 29, members of the Security Council discussed the issue of distribution of powers between the federal government and the regions.

Reporters noted that over the past ten months the Justice Ministry, the General Prosecutor’s Office, and the Constitutional Court considered over 41,000 regional laws and concluded that over 5,000 of them did not comply with the Constitution. Justice Minister Yury Chaika noted that currently about 6% of regional laws contravene federal law.

According to Deputy Secretary of the Security Council Valentin Sobolev, the federal government and the regions have made 42 treaties on distribution of powers, and there are over 260 agreements based on these treaties. However, most of these treaties and agreements do not comply with federal law. Sobolev noted that the process of making agreements should be reformed: it is necessary to improve either agreement relations or the law. It is clear that regional authorities will insist on the former option, and the Kremlin will have to make some concessions. Agreements between the federal government and the regions are allowed by the Constitution as long as they do not contravene the Constitution.


Trud, June 30, 2001, p. 1

The Dutch company Mammoeth has refused to comment on the financial aspects of the Kursk submarine salvage effort. However, it has provided detailed information about the five stages of raising the submarine.

Franz van Seimerin, President of Mammoet, has reported that at the first stage a special pontoon 140 meters long and 36 meters wide will be equipped with 26 elevators with a capacity of 900 tons each. This operation will be done in the Dutch port of Rotterdam. Then this pontoon will be transported to the Barents Sea. Simultaneously divers will begin separating the seriously damaged front section of the submarine and drilling holes in the hull. The exact places for the holes will be indicated by representatives of the Russian Navy and the Rubin central design bureau. The holes will be made by jets of water with abrasives under high pressure. Divers will start work on July 9-10.

The main problem is the first compartment, the condition of which is not known exactly so far. According to the president of Mammoet, this section of the Kursk will be cut off and left on the seabed, so that it will be possible to raise the remaining part of the submarine as a compact load.

At the third stage, lines will be attached to the holes in the hull by means of steel grips equipped with levers. These levers will unfold inside the submarine in order to make the lines more secure.

At the fourth stage the Kursk will be raised to slightly below the pontoon. These operations can only be carried out in good weather. They will be controlled centimeter by centimeter. After the submarine is raised, it will be transported to Murmansk. There it will be lifted by backup pontoons and towed to a dry dock.


Trud, June 30, 2001, p. 2

Bad weather hinders crews of Russia’s helicopters monitoring Chechen guerrillas in the Sharo-Argun gorge. However, the guerrillas are surrounded. Reconnaissance groups of border guards are watching the paths guerrillas may take. Combat groups of border guards and special detachments of the Army are searching the area. The operation is supervised by Lieutenant General Gennady Loginov, Deputy Director of the Main Staff of the Federal Border Guard Service. Overall, 26 mercenaries have been killed, and there is no doubt that foreign mercenaries are active in the Sharo-Argun gorge. Therefore, this operation cannot be called a local one: federal servicemen are combating international terrorism.

Among those killed was a certain Merdjari Eric Dandeni, a French citizen of Arab origin, born 1965. He was carrying an Interpol information card, which means that he was wanted by the Interpol.

Judging from the ID papers of the guerrillas killed there, two were Turkish citizens, three were residents of Chechnya, one was a citizen of Azerbaijan, and one a resident of Ingushetia.

The guerrillas apparently aimed to break through into Chechnya, not only to help their brothers-in-arms carry out terrorist acts, but also to engage in drug trafficking there: some of the dead guerrillas were carrying two kilograms of heroin. The rest of the drugs are apparently with the guerrillas who are still hiding in the forest.


Novye Izvestia, June 30, 2001, p. 1

So far, European law enforcement agencies have not brought to trial a single Russian citizen or company operating in Russia without the Russian law enforcement agencies giving them all the necessary materials. However, there are simply no such materials in the case of Pavel Borodin. The General Prosecutor’s Office conducted its own investigations for several years, but it had to close Borodin’s case eventually.

The State Auditing Commission also inspected the use of state funds allocated to Borodin for renovations at the Kremlin, but found no infractions either.

For the past year Switzerland has done its best to make as much trouble for Russia as possible. After the lawsuits filed by the Swiss company Noga, accounts of Russian diplomatic offices abroad were seized, the unique sailing ship Sedov was detained, and Russian aircraft were ousted from an international air show. Swiss law enforcement agencies also took part in the scandal surrounding the Bank of New York, which seriously undermined the international reputation of Russian business.

Observers say that yet another scandal may be launched in the near future. This time the French firm Buig Batiment may be involved. This firm won the multi-million tender for construction of the Kremlevsky trading house.

The Borodin case is of the same nature. On his arrival in Geneva, the Swiss newspaper Tan said: “He keeps silent because he is observing the law of silence in a system where corruption has become the norm.”


Kommersant, June 30, 2001, p. 1

President Vladimir Putin has dismissed Colonel-General Valery Manilov as senior deputy chief of the General Staff. Manilov had become famous for his comments on the second war in Chechnya. Now he has even been refused a job with the staff of presidential aide Sergei Yastrzhembsky.

Manilov started his career as the spokesman of the Defense Minister of the USSR.

Over his four years with the General Staff, he has done a great deal. He was not entrusted with commanding a military unit, since he does not have a special command education. Therefore, he had to write concepts for military reforms, receive foreign delegations, etc.

When the second campaign in Chechnya started, he was entrusted with propaganda cover for the actions of the federal forces. He conscientiously held press conferences, at which he spoke of “the bandits in their death throes, foreseeing their doom.” However, the general was always confused when the talk turned to specific facts.

Finally, not only journalists got tired of Manilov. According to our sources, he will be replaced by Colonel-General Yury Baluevsky, Director of the Main Operative Department of the General Staff.


Kommersant, June 30, 2001, p. 3

On June 29, the military hardware of the Russian base in Vaziani was handed over to the Georgian Defense Ministry. According to the Istanbul agreements of 1999, the base will belong to Georgia from July 1.

As for claims by the Georgian government that the Russian military have stripped the base and destroyed its infrastructure, Russia considers these accusations unfounded.

In the near future the 11th brigade of the Georgian Armed Forces will be stationed in Vaziani. Russia has also left a military airfield in Vaziani for Georgia. However, this airfield will accept 48 flights a year free of charge until the rest of Russian military bases withdraw from Georgia.

But Georgia will meet this requirement only if Russia observes another item of the Istanbul agreements: it should leave the military base in Gudauta (Abkhazia) by July 1. Meanwhile, the Russian military authorities say it is not easy to shut down the Russian base in Gudauta on time. The local residents are hindering the process of withdrawal of Russian troops from Abkhazia and blockading roads from Gudauta to Russia.


Kommersant, June 30, 2001, p. 2

On June 29, the Federation Council approved the “budget-forming” bill permitting nuclear waste imports into Russia. This law will earn Russia up to $1 billion a year. It will be approved by the president within a month.

Nuclear Energy Minister Alexander Rumyantsev has explained that Russia will accept and reprocess nuclear waste at $800-1,500 per kilo and does not intend to reduce this price.

In July the fate of the three nuclear bills will be decided. All the president’s amendments (about 70) have been taken into account, so he is likely to sign the bills into law. Deputy President of the Russian Academy of Sciences Nikolai Ulaverov says: “If these bills are not approved by the president, Russia will lose its nuclear technologies. All three bills have been approved by the Ministry of Natural Resources.”


Komsomolskaya Pravda, June 30, 2001, p. 2

Presidential economic adviser Andrei Illarionov has repeatedly criticized the Cabinet. However, President Vladimir Putin made it clear on June 29 that he is pleased with the Cabinet’s performance. Summing up the results of the first six months of 2001, he said, “On the whole, I think the Cabinet has been working intensively and effectively, since the results are even better than expected.” The president noted that Russia’s GDP has grown by over 5% this year, although only 4% growth was planned. Industrial output and real incomes have also increased by more than expected.

The president advised the Cabinet not to relax its efforts.


Moskovsky Komsomolets, June 30, 2001, p. 2

The annual general meeting of the ORT television network was held on June 29. The main objective of this meeting was to register the results of the “velvet revolution” that took place at ORT a few months ago.

As a result of this redistribution of assets, Boris Berezovsky ceased to participate in managing ORT. His shares were given to his more successful colleague, Roman Abramovich – or, to be exact, they passed into state control. Thus, the state has demonstrated its attitude toward the private property accumulated by Russian tycoons over the past decade. The state made it clear to Berezovsky that he had better leave the country, or he could be harassed just like Vladimir Gusinsky. Therefore, he is fighting for democracy and freedom of speech from abroad.

However, a year ago the situation at ORT was different. At that time seven of its 11 board members were representatives of LogoVAZ. All of them represented Berezovsky’s point of view. Berezovsky even placed his daughter Ekaterina on the ORT board.

However, the state blackmailed ORT through its huge debt to Vneshekonombank: whenever the state disliked the network’s coverage, it demanded debt repayments. Right now everything is all right at ORT, so the loan has been rescheduled. The new board of directors consists entirely of representatives of the state: Deputy Property Minister Alexander Braverman, presidential spokesman Alexei Gromov, General Director of the ITAR-TASS news agency Vitaly Ignatenko, Media Minister Mikhail Lesin, Deputy Media Minister Mikhail Seslavinsky, Deputy Prime Minister Valentina Matvienko, Deputy Property Minister Zumrud Rustamova, Deputy Director of the Presidential Administration Vladislav Surkov, Culture Minister Mikhail Shvydkoi, Cabinet chief-of-staff Igor Shuvalov, and ORT chief executive Konstantin Ernst.

Alexander Fifeman, a former employee of the VID television company, was recently appointed as general producer at ORT. It is also rumored that Konstantin Ernst may soon be ousted from ORT. The main candidates for his position are Mikhail Lesin and VID chief executive Alexander Lyubimov.