Russia Report: March 26, 2001

THE KREMLIN VERSUS THE COMMUNISTS, ACT II. Following in the wake of the Communists' failed vote of no confidence in the government on 14 March, threats to strip the Communists of some of their committee assignments are becoming more concrete. People's Deputy leader Gennadii Raikov announced publicly on 20 March that he favors a reduction in overall number of committees in the Duma from 28 to 16-17. Russian Public Television reported that Raikov is "still analyzing the situation" and will prepare an official report on the subject by 20 April. Raikov added that his group does not want to make any changes in the leadership of the Duma, which suggests that the Kremlin is still satisfied with the leadership of Chairman Gennadii Seleznev (Communist).

Thomas Remington, a professor of political science at Emory University and an expert on the Russian Duma, believes that both Unity and People's Deputy have come to regret the control they seeded to the Communists when the package agreement dividing up committees in the Duma was concluded in January last year (see "RFE/RL Newsline," 20 January 2000). Under that agreement, the Communists won eight committees, Unity seven, People's Deputy five, the Liberal Democratic Party one, and the Agro-Industrial group one. Later, the Union of Rightist Forces, Fatherland-All Russia, and Russian Regions each were given one committee.

Already, Unity members, such as Duma Deputy Chair Lyubov Sliska, have expressed their support for Raikov's reforms. Unity faction member Aleksandr Chuev told Radio Rossii on 20 March that a reconsideration of the package agreement in the future would be "appropriate" because the Communists "hamper" the process of reform." Presidential envoy to the Duma Aleksandr Kotenkov, who had earlier threatened to strip the Communists of some committees, echoed Raikov and Sliska's sentiments, saying on 13 March that a redistribution of committee chairmanships at the "expense" of the Communists could only benefit the lower legislative chamber (see "RFE/RL Newsline," 23 February 2001). Their "activity has become so destructive that the need to change something is obvious," he said.

But why not just strip the Communists of some committees rather than reduce their overall number? Remington concludes that People's Deputy is aiming to get a "bigger piece of a smaller pie." He suggests that over the next several weeks the Duma's various factions will engage in behind-the-scenes deal-making to come up with some kind of new agreement dividing up committees in the lower legislative house. The committees themselves are so important because they function as a kind of gatekeeper with regard to legislation, and they provide important patronage opportunities, according to Remington. The chairmen earn more money than their regular committee members, and more importantly, they control the committee budgets, the formation of working groups to draft legislation, and the hiring of consultants to work for these groups.

When these negotiations conclude, it is possible that a new Duma majority will emerge with a right-centrist orientation, that is, Unity and People's Deputy, will ally with the Union of Rightist Forces (SPS), Yabloko, Russian Regions, and Fatherland-All Russia (OVR). However, in an interview with "Radio Rossii" on 20 March, Igor Bunin, general director of the Center for Political Technologies, argued that the Kremlin will want to preserve its independence. It will be reluctant to rely on "so many 'right wing' politicians" or to "have to constantly take into account the interests of lobbyist groups such as People's Deputy, Russian Region and OVR."

Instead, Bunin thinks it is more likely that the Kremlin will favor dividing up committee assignments proportionately as was done under the previous Dumas -- with the number of committees being proportional to the number of deputies. That way, the Kremlin can continue to rely on a core group within the Duma consisting of Unity, People's Deputy and Liberal Democratic Party. These groups then form an alliance with the right or the left depending on the issue at hand.

Bunin sees the renegotiation of the package agreement as merely the second act of the no-confidence drama started two weeks ago. The Kremlin is seeking to weaken the Communists. The option of holding new elections was discarded when Unity decided not to support the Communists' no-confidence bid. And, now a new tactic to achieve the same goal is being tried. In the end, he thinks the most likely outcome will be that the Communists will be deprived of their control over the committees with the most significant effect on economic reform, such as the one on economic policy, led by Sergei Glaziev, and the one on labor and social policy led by Valerii Saikin. Communist leader Gennadii Zyuganov so far appears nonchalant about the prospect of revising the Duma package agreement. He said "we are not too worried about the posts in this case. Anyway, a deputy in whatever post in the Duma, including the chairman of the chamber, only has one vote."

As the Duma deputies fight over their portfolios, a recent survey of Russia's "leading political analysts" suggests that the results may not mean that much in terms of who --at the end of the day -- really rules Russia. Writing in "Segodnya" on 20 March, Andrei Ryabov of the Carnegie Moscow Center reports on the survey's findings, concluding that there are only two Duma deputies, Chairman Seleznev and OVR leader Primakov, in the upper half of a ranking of the most influential figures in the Russian government overall. The top five are located in the Kremlin and the White House: President Vladimir Putin, presidential administration head Aleksandr Voloshin, Prime Minister Mikhail Kasyanov, and deputy presidential administration head Vladislav Surkov, and Russian Security Council Secretary Sergei Ivanov. JAC

DEPUTIES GIVE OKAY TO LAND LEGISLATION... Last week, the Kremlin experienced mixed success with the Duma. On the one hand, amendments to chapter 17 of the Civil Code were passed in the third and second readings. These amendments allow trade in non-agricultural land (see "RFE/RL Russian Political Weekly," 26 January 2001). On the other hand, deputies passed over the Kremlin's objections to amendments to the law on foreign currency regulation and control, which provides for liberalizing foreign currency legislation. Deputies also delayed consideration of another bill that the Kremlin supports. Presidential envoy to the Duma Aleksandr Kotenkov said that within the government, there are serious differences over the bill on foreign currency regulation. In the morning of 21 March, the government supported the bill but by afternoon it had reversed its position and opposed it, according to Interfax-AFI. The Ministry of Finance and Central Bank are opposed to the bill, which representatives of big business support, "Kommersant-Daily" reported. Also on 21 March, deputies approved in its first reading amendments to the law on the bankruptcy (insolvency) of credit organizations. According to the Banking Committee's Deputy Chairman Pavel Medvedev (OVR), the legislation is aimed at improving the current situation in which bankrupt banks may take as long as 2-2 1/2 years to return their depositors' money, Interfax-AFI reported. Deputies also finally passed the law on fisheries and the protection of aquatic resources. According to the daily, that law passed in its first reading in 1996, and in the summer of 2000 it was finally passed in its third and final reading but was then rejected by the Federation Council. The law provides for the distribution of fishing quotas through auctions and tenders. JAC

...GIVE FEDERAL AUTHORITIES MORE CONTROL OVER LOCAL POLICE... Also on 21 March, deputies approved a bill amending the law on the police, which will allow the Interior Ministry to hire and fire regional police heads without the approval of regional governments. The bill was sponsored by People's Deputy head Raikov, and presidential envoy to the Duma Aleksandr Kotenkov reported that the president supports the legislation, although the Kremlin would like a number of changes to be made before the second reading. Moscow Mayor Yurii Luzhkov and the Moscow City Duma Chairman Vladimir Platonov both spoke out against the legislation, saying that it is unconstitutional. Platonov, who is also deputy chairman of the Federation Council, promised that that body would not pass the bill. However, support for the bill was strong enough at least in the first reading to overcome a Federation Council rejection with some 324 deputies voting in favor. JAC

...AND PUT OFF CONTROVERSIAL BILL ON NUCLEAR WASTE. On 22 March, deputies voted overwhelmingly to delay consideration in its second reading of the bill allowing imports of spent nuclear fuel. The vote supporting a delay was 339 votes in favor. Presidential envoy to the Duma Kotenkov condemned the postponement, saying that it "plays into the hands of our competitors" on the world market for storing and processing nuclear waste. In an interview with "Izvestiya" last month, former Kemerovo Governor Aman Tuleev insisted otherwise. He said that Russia likely has the market sewn up: "Apparently, the market for nuclear waste is the only market" which in the near future will be completely ours: "we will face no competition." He continued that the "civilized West" no longer has the headache of what to do with its nuclear waste, "since there is Russia, which is volunteering to take foreign poison" (see "RFE/RL Newsline," 22 February 2001). Responding to Tuleev's remarks, an Atomic Energy spokesperson stated that the ministry may sue Tuleev (see "RFE/RL Newsline," 27 February 2001). Also on 22 March, deputies approved changes and additions to the Civil Legal Code, article 208, giving citizens up to 15 days before an election to challenge any court decision that violates their electoral rights, according to Interfax. JAC

LEGISLATION Law_______________________Date Approved_____# of reading

Amendments to the Civil Code______21 March________2nd
(article 17)_____________________21 March________3rd

On fisheries and protection of_______21 March_______Overcame
Aquatic Resources_______________________________veto

On the bankruptcy of credit_________21 March________1st
organizations

On the police_____________________21 March_______1st


On foreign currency regulation________21 March_______2nd
and control

Changes and additions to Civil________22 March________1st
Legal Code (Article 208)

PUTIN GIVES HIMSELF A GLOWING REVIEW. In an interview with four newspapers on 22 March, President Vladimir Putin outlined the achievements of his administration during his first year in office. According to Putin, his main accomplishments have been in the areas of regional and economic policy. Over the last year, Putin concluded that Russia "has made significant progress toward strengthening the Russian state," and achieved economic growth of such high levels that "haven't been seen in 15 years." Putin listed six main accomplishments. The number of regional laws that contradict federal legislation has been reduced by two-thirds. Two, the control of the central treasury and finance officials over regional financial flows has been tightened. Three, economic growth has been "impressive." Four, "state debts to citizens have been successfully reduced to a considerable extent." And, five, living standards and real incomes have risen. Putin also pointed out that tax and customs duty collections by the government has improved, in part because of tax and customs duty reforms. Putin didn't really admit to any failures but acknowledged that the problem of "fighting bureaucracy" remains. The problems of military reform, stemming the "brain drain," and reinvigorating basic scientific research were characterized as requiring longer term solutions.

The interviewers did not raise any questions about two of the more controversial and dramatic incidents during Putin's first year, the sinking of the Kursk submarine and the arrests of Media-MOST head Vladimir Gusinskii and various raids on its holdings such as NTV. No paper owned or controlled by Gusinskii or Boris Berezovskii was included in the interview, and political analyst Andrei Pointkovskii told RFE/RL on 22 March that he imagines the range of questions was pre-determined.

Putin will again take up the themes of economic and regional reforms in his state of the nation address on 3 April, according to Russian media. An unidentified Kremlin source told Interfax on 21 March that "social and economic problems" will dominate the president's message and much of his speech will deal with Russia's system of governance. According to the source, the president may propose a "certain enlargement" of Russian regions and a reduction in their number. But, according to the source, this would be a "very cautious" process that "would not, of course, lead to the creation of seven self-sufficient districts instead of "the present 89 federation subjects. The previous day, the website, strana.ru, reported that according to its sources the president's message will focus on economic reform with a slant towards the "liberal" suggestions of Economic Development and Trade Minister German Gref. Two reforms in particular will be highlighted, pension reform and judicial reform. According to the site, "this explains the recent energetic reform measures taken by Pension Fund head Mikhail Zurabov and Putin's frequent with high level judicial officials."

What Putin does and doesn't mention in his speech will also studied with great attention. "Izvestiya" suggested on 20 March that the leaders of Russia's political parties are waiting to see whether Putin mentions the law on political parties in his speech. That law had been scheduled for a second reading on 7 March but an avalanche of proposed amendments caused the Duma Council to postpone its consideration. According to the daily, rumors have been circulating that Putin will "forget" to mention the party reforms in his address. And such an omission "will be taken as a signal that the president has changed his mind." JAC

UNITY, PEOPLE'S DEPUTY CLEAN HOUSE. At the same time that the leaders of the pro-presidential groups, People's Deputy and Unity, initiated changes in the structure of the Duma itself, they have been cleansing their ranks of rebellious members. For People's Deputy, at least, the two actions may not be unconnected, since they have lost two members with important committee assignments. Under Duma rules, factions can expel deputies from their ranks, but they cannot deprive them of their chairmanships or deputy chairmanships or memberships on committees. This can only be decided through a majority vote of the Duma itself.

At the end of last week, Unity had lost one member with a deputy chairmanship but gained two members with deputy chairmanships. Unity faction leader Boris Gryzlov announced on 20 March that it was expelling one of its members, Konstantin Sevenard of St. Petersburg, while another, Abdul Vahed Niyazov, who heads the Refakh movement, was leaving of his accord. Last October, Unity party leader Sergei Shoigu said that he was planning to raise the question of expelling Niyazov because of his support for radical opposition groups in Turkey (see "RFE/RL Newsline," 30 October 2000). Last week, Gryzlov accused Niyazov, who is deputy chairman of the Regulations Committee, of making unauthorized statements on Unity's behalf and "pursuing his own political and commercial goals." According to "Kommersant-Daily" on 21 March, the "last straw" leading to Niyazov's departure was Refakh's decision to form a party called Prosperity (Blagodenstvie), so that its members can participate in elections. Previously, Refakh, which is considered a Moslem group, had been in an alliance with Unity. Refakh's press service told the daily that Niyazov's expulsion may lead to the departure of six more deputies from Unity who are also members of Refakh.

Sevenard, who is a member of the Property Committee, was expelled for supporting policy positions of the Duma's left-wing minority rather than that of Unity. (Sevenard's father, Yuri, had served as a deputy in the Communist faction in the first two Dumas, according to "Kommersant".) Sevenard typically voted against the Kremlin's positions on economic and social questions or he didn't vote at all. On 22 March, Unity admitted two new deputies, Igor Lisinenko (Fatherland-All Russia) and Vladimir Semenkov (independent) to replace Sevenard and Niyazov. Lisinenko is deputy chairman of the Property Committee and chairman of the interfactional group, Business Russia. Semenkov is deputy chair of the Fitness and Sports Committee.

Last week, People's Deputy announced the expulsion of three members from its group, Budget Committee Deputy Chair Oksana Dmitrieva, Property Committee Deputy Chairman Yevgenii Ishchenko, and Ivan Grachev, chairman of the Duma's Commission on the Development of Mortgage Credits. According to "Nezavisimaya gazeta" on 22 March, Ishchenko was ejected for his role in defeating the government's effort to conduct more privatizations in order to raise more revenue for the Paris Club (see "RFE/RL Russian Political Weekly," 26 February 2001). Dmitrieva said that she was being punished for "her active role" opposing the government on a number of positions.

Earlier in the month, "Novye Izvestiya" included Grachev and Dmitrieva among a number of the group's deputies who were facing expulsion for having voted against the amendments of the 2001 budget (see "RFE/RL Russian Political Weekly," 5 March 2001). On 21 March, another member of People's Deputy, Boris Reznik, announced that if the decision expelling the three deputies is not reconsidered, then he too will leave the group in a gesture of solidarity, according to Interfax. Reznik is deputy chairman of the Committee on Information Policy. If Reznik leaves, then the group will be down to 58 members in the Duma from 62. Newly-elected deputy Gennadii Gutkov (see item below) will likely join the group bringing its total back up to 59.

Meanwhile, the group had itself registered at the Justice Ministry on 20 March, and People's Deputy leader Gennadii Raikov said that his organization will be transformed into a party within a month or two, "Vremya novostei reported on 21 March. According to Raikov, People's Deputy already has branches in 54 regions across Russia. "Vremya novostei" suggested that according to its unidentified sources in the Kremlin, People's Deputy has an edge in its competition with Unity to become the preeminent pro-presidential party: Raikov reportedly has better access to senior Kremlin officials than Gryzlov. And, the daily claims that "the presidential administration prefers to use People's Deputy to lobby for legislation." JAC

COMINGS & GOINGS UP: Sergei Yastrzhembskii was tasked with setting up a presidential information division which he will head, according to a presidential decree signed on 19 March. Yastrzhembskii has been serving as a presidential aide with special responsibility for public relations on the military campaign in Chechnya. According to gazeta.ru and "Segodyna," Yastrzhembskii will have a staff of up to 15; however, "Kommersant-Daily" on 16 March that the department will be much bigger ranging from 20-25 people. His current staff is reportedly seven people. At his first press conference in his new capacity on 21 March, Yastrzhembskii explained that his new department was created in response to media complaints that the Kremlin was not informative enough on important events, RFE/RL's Moscow bureau reported.

IN: Gennadii Gutkov beat 10 other candidates to win the 18 March State Duma by-elections in the single-mandate Kolomenskoe election district in Moscow Oblast. That seat was left open after the death of former cosmonaut and State Duma deputy (Communist) German Titov last year. According to ITAR-TASS on 21 March, Gutkov, who is the vice president of the League for Entrepreneurs and Leaders of Security Firms, won 44 percent of the votes, Ekho Moskvy reported on 19 March. Working Russia leader Viktor Anpilov came in second with 13 percent of the vote. Gutkov's candidacy was supported by the People's Deputy group.

IN: Aleksandr Lyubimov has been appointed first deputy general director of Russian Public Television, replacing Badri Patarkatsishvili, Interfax reported on 19 March.

POLITICAL CALENDAR 2 or 3 April: Duma Council will meet, according to Deputy Speaker Sliska on 23 March.

3 April: President Putin will deliver his annual address to the Federal Assembly.

4 or 5 April: State Duma will consider a bill allowing imports of spent nuclear fuel in its second reading, according to "The Moscow Times."

Mid-April: Duma to consider the law on political parties in its second reading, "Izvestiya" reported on 20 March.

Mid-April: Duma will consider the law on emergency situations in its second reading.

19 April: Government to discuss economic scenarios for 2002.

20 April: People's Deputy to submit its proposals for restructuring the Duma's system of committees.

1 May: President Putin will present his concept for the law on guaranteeing the population's bank deposits.

24 May: Government to discuss main parameters for 2002 budget, according to spokesperson for Prime Minister Kasyanov Tatyana Razbash.

20-22 June: International Financial Action Task Force to hold a new meeting at which issue of Russian money-laundering is likely to be discussed, according to "Izvestiya" on 23 March.

1 July: Audit Chamber to deliver its report on the effectiveness of Russia's expenditures of foreign credits in 2000.

20-22 July: G7/G8 summit will convene in Genoa, Italy.