Izvestia, May 30, 2002, pp. 1, 6

Interview with Alexander Alekseyev, deputy head of the Central Bank in Moscow.

Izvestia: Were you pressured during the investigation?

Alexander Alekseyev: I was asked to take a number of steps I would never agree to. A few times in the presence of lawyers, I was told literally the following: why, we understand that you are not guilty of anything, but you must say there was a deal between the Central Bank and Smolensky. I was supposed to give evidence that the deal involved the Bank of Russia chairperson of that time, Viktor Gerashchenko, his senior deputy Arnold Voilukov, and my direct superior, Konstantin Shor. For this, they hinted to me that the case might be gradually dropped, or an amnesty applied.

Question: Tell us how SBS-AGRO managed to gain about 6 billion rubles.

Alekseyev: The issue of lending to backbone banks, i.e. those which had a great number of accounts of legal entities, a considerable amount of the population’s deposits, and a developed branch networks, arose right after the default of 1998. On 02 September, the State Duma adopted a resolution that called on the Central Bank to take measures to liquidate the crisis, in particular by way of providing such banks with loans for their financial recovery.

The first thing necessary to do in that situation concerning the banking system was the immediate rescue of the settlement system, liquidation of the nonpayment crisis, and restore the circulation of money. This task could only be solved by providing backbone banks with loans.

There was not any other option to settle the situation, and there could have not been. If there is no money, it ought to be given. Which was done by the Central Bank, though it risked losing. But at the same time, it performed its legal function – the regulation of monetary circulation.

Question: How banks were chosen?

Alekseyev: By those criteria I spoke about: an established branch network, a large number of settlement accounts and population deposits. It was necessary to extinguish the possible anger of the people, perhaps even a social outburst.

Question: Could it be that the Central Bank did not study banking activities except for these criteria?

Alekseyev: Of course, it took accounts into consideration. Loans were provided only after such study. By and large, more loans might have been given or to other banks, but those banks were selected that had to be given.


Moskovsky Komsomolets, May 30, 2002, p. 2

Despite numerous forecasts and expectations, the Naro-Fominsk garrison military court finally launched the default trial of ex lieutenant colonel of the Federal Security Service Aleksandr Litvinenko who had fled to England. The trial is taking place in a closed mode.

The judge defeated every petition of the lawyer, quickly read out the indictment, and is presently interrogating the victims who gathered to the process speedily and hand in hand. So the sentence may well be pronounced by 01 June which is the day when the new Criminal Procedure Code comes in force that bans default trials. The court considers two episodes – that of the beating in 1997 of Podolsk residents Odinkov and Sergeyev and Litvinenko’s buying explosives which later on he stealthily put on the son of an internal troops regiment commander, Vyacheslav Babkin when the latter was detained, and beaten into the bargain. Be the way, the case of the operation in Podolsk has already been heard at this court. Then, Litvinenko’s commander Aleksandr Gusak received a suspended sentence for power abuse when beating the suspects.

In all, 35 people, witnesses and victims, are planned for interrogation. Himself, the ex KGB person denies every charge – from abroad. His lawyer is determined to attain summoning another 20 witnesses and holding extra examinations.


Moskovsky Komsomolets, May 30, 2002, p. 2

The other day, the details became known about the death of one of the most influential guerrillas from Maskhadov’s group – the internal affairs minister of the Chechen Republic of Ichkeria, “brigade general” Aidamir Abalayev. Foreign media had previously reported that Abalayev and his people died in a conflict with a federal unit. However, these data aroused doubt even then, as federals do not base in the region near Nozhai-Yurt, controlled by bandit units of Maskhadov.

In fact, Aidamir Abalayev and his guard were ambushed by Maskhadov himself. The matter is that serious contradictions in relations between the “president” and his “general” had started back in December last year.

Give-up guerillas say that Abalayev did not pay attention to his choice of words and in private conversations with his commanders asserted that “Aslan betrayed all of us, sold for dollars to alien Arabs and their local henchmen”.

By the way, Abalayev was quite aware of what this frankness and rebelliousness might threaten him. He waited for the response of Maskhadov and constantly moved about his district only accompanied by enforced guard. But this did not save him either. This week, Abalayev’s relatives had to identify his body. The “brigade general” had been urgently summoned to an “operative meeting” with Maskhadov. They conferred until late. At the exit from the Sayasan settlement of the Nozhi-Yurt district where Maskhadov is based, a white Niva car in which Abalayev and his guard were moving came under fire from large-caliber machineguns and grenade launchers. The passengers had no chance to survive. Only Maskhadov had known about the route of their return.


Izvestia, May 30, 2002, p. 2

The Moscow Independent Broadcasting Corporation TV-6 Moscow received an executive form yesterday. The Khimki city court of the Moscow region resolved that broadcasting on the sixth channel must be resumed within three months and declared the suspension of the broadcasting illegal. Thus, the broadcasting rights of the Media-Socium noncommercial partnership and the Sixth Channel CJSC are called into question.


Izvestia, May 30, 2002, p. 3

Yesterday, director general of the GUTA-Strakhovanie (GUTA-Insurance) company Sergei Fedorov stated that his company had drawn an insurance agreement for the frame of the Ostankino television tower with the federal unitary enterprise Russians Television and Radio Broadcasting Network, ITAR-TASS informs. The construction block of the tower was insured against the full package of risks, including terror acts, man-caused disasters, and unlawful acts of third parties. The insurance sum exceeded $114 million. Sergei Fedorov pointed out that similar insurance had been carried out by a company that had won the tender, which is the first time in Russia.


Izvestia, May 30, 2002, p. 3

Yesterday, Chechen administration head Akhmad Kadyrov demanded that every checkpoint of the joint group of federal forces in the North Caucasus should be closed down. Speaking to journalists, Kadyrov said: “By the end of this year, all checkpoints in Grozny must be gone; but at the same time every entrance and exit will be secure.”

“Checkpoints only impede the movement of civilians. Meanwhile, I think the Chechen police will be able to undertake the provision of security for the public,” noted Kadyrov.

In support of his position Kadyrov said he was sure guerillas were powerless and unable to conduct large-scale operations in Grozny.

The headquarters of the joint group of federal forces in the North Caucasus has not yet responded to the innovative proposal of Kadyrov.


Moskovsky Komsomolets, May 30, 2002, p. 2

Army people in charge of recruitment are in despair: over 15,000 young officers under 30 have resigned within the last two-and-a-half years. Within the same period, a third of lieutenants and about 30% cadets also left the military.

The General Staff is working on the option of doubling the period of the primary officer contract – at present, a graduate cadet signs up for five years of service; in the near future his time as an officer may be prolonged to at least ten years.

“Such a decision will not be made in haste,” recruiters from the Defense Ministry say. The possible rise in the period of the primary officer contract has been considered before. But even a year ago it seemed unrealistic – salaries of lieutenants were too low. After military wages are raised, there will be extra incentives to serve.

“Sooner or later, we would come to this all the same,” says General Valery Astanin from the main organization-mobilization administration of the General Staff. “Look what a mess there is in the armed forces – a dozen lieutenants stay on, out of a hundred graduates. There is no one to command platoons and companies in units. Let people at least repay what the state spent on their training. By the way, as far back as 1998, when the law on military service was passed, we suggested that those who quit military service ought to pay the state compensation for their training costs. Duma deputies did not listen to our arguments then…”

Be as it may, the outflux of career military will not be solved instantly. Therefore, the General Staff is considering another idea: it is not ruled out that the service time for graduates from military faculties of civilian higher education institutions will rise from two to five years.


Izvestia, May 30, 2002, p. 6

On Friday, in connection with the meeting of the representative working delegations of the Russian and Chinese transport ministries the two countries may sign agreements on joint transport projects, the Interfax agency reports. So far, the matter has been about assistance in shipments of Chinese transit cargo through the territory of the Russian Far East, projects for the development of Russian ports, and the creation of favorable conditions to attract Chinese transit cargoes. Perhaps the session will also consider the issue of building a highway providing direct communication between western Siberia and China. The session will also look into issues of ensuring security along the Sino-Russian border.


Izvestia, May 30, 2002, p. 6

The Interfax-AFI agency reports that Deputy Finance Minister Viktor Zubkov, head of the financial monitoring committee, is sure that Russia will be accepted into the Egmont Group, which unites financial monitoring agencies for the battle against illicit gains. This ought to happen at the session of the Egmont member states, which starts on June 7 in Monaco. “I believe we will be accepted into this international organization,” Zubkov said at the annual meeting of the Russia association of regional banks. Russia has submitted all necessary documents for joining the Egmont Group, Zubkov noted.

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