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Russia Report: July 30, 2001

30 July 2001, Volume 1, Number 20
KREMLIN/WHITE HOUSE SQUEEZE NEW VICTORIES OUT OF DUMA. By any number of different indicators, the Putin administration and the government headed by Prime Minister Mikhail Kasyanov scored an impressive string of victories during the latter part of the State Duma's spring session. The success is particularly impressive when compared with the previous fall session. During that session, the government's chief accomplishment was getting the 2001 budget passed; a version of the Land Code sponsored by the Union of the Rightist Forces (SPS) and the government version of the Labor Code were both scuttled (see "RFE/RL Russian Political Weekly," 22 January 2001). This time round, deputies passed not only a government-sponsored version of the Land Code in two readings and a compromise version of the Labor Code, but also long-awaited legislation reforming the pension and judicial systems (all in their first readings). The number of major laws passed in third and final readings was also significantly higher than in the fall session (see table below).

At least a third of the total number of the major laws passed in final form are designed to improve the business environment: Businesses will have to sell a smaller share of their foreign currency earnings, will have more legal rights when being audited, and will have to pay lower rate of tax on their profits. And anecdotal evidence suggests foreign investors are showing tentative stirrings of renewed interest. But tax rates have a way of changing, and therefore the bill passed of most long-term significance is likely to be the law on political parties -- which has already been passed by the Federation Council and signed into law by President Vladimir Putin (see "RFE/RL Russian Political Weekly," 23 July 2001). That bill should alter Russia's political landscape by trimming the number of smaller parties and political organizations.

But with a cooperative State Duma and a compliant Federation Council, many observers would argue that President Putin and his administration have already transformed Moscow's political environment from the one that existed under Russian President Boris Yeltsin. Passage of either the Land Code or the law on martial law would have been unimaginable during Yeltsin's time.

One key to Putin's success has been the willingness of both the government and the presidential administration to compromise. The Labor Code finally approved in first reading was one hammered out by a number of different parties including the government. The profit tax finally adopted resulted from a compromise between the government and the Budget Committee. Critics have pointed out that the government and administration have at times compromised so much that it was difficult to discern what their original goal had been. The Kremlin's reversals on third terms for regional governors is one example (see "RFE/RL Russian Political Weekly," 11 July 2001).

Also compromised in the rush to push through legislation during the Duma's final weeks may have been quality, according to some of the Kremlin's liberal "allies" on the economic reform legislation. In a comment to "Vremya novostei" on 18 July, deputy Sergei Mitrokhin of Yabloko acknowledges that many important pieces of legislation were passed, but "on the other hand, the speed with which many of these were passed raises [concerns] about the quality of the laws."

Likewise, deputy Viktor Pokhmelkin of SPS also acknowledged that there was "clear movement along the path of liberal reform." But at the same time, according to Pokhmelkin, the Duma became "servile in its attitude toward the president," and one got the sense that a new type of bureaucratic regime -- not the Soviet one -- is becoming stronger. This bureaucracy, according to Pokhmelkin is "absolutely apolitical: It moves easily into an alliance with the left (on importing spent nuclear fuel), and with the right (on the Land Code and pension reform) and always it [achieves] a victory." Come September Pokhmelkin and his colleagues will see whether this "new bureaucratic regime" can sustain its run through the fall. (Julie A. Corwin)

DUMA: SESSION BY SESSION _________________Spring _Fall__Spring__Fall__Spring__Fall

Number of laws
examined by Duma___701__312___475___370____622__289

Number of laws
approved only in first

Number of laws
approved only in
second reading________10___7____2_____9_____9____10

Number of laws
approved in third
and final reading______158__74___94___158___225___120

Number of laws signed by
president of those approved
during given period____95____50___81___44___157___36

Source: State Duma via website as of 24 July.

German Oskarovich Gref: The Will To Power During the Duma's stormy discussion of the Land Code in its first reading earlier this month, a group of leftist deputies managed to block Economic Development and Trade Minister German Gref from reaching the podium, forcing him to present the Land Code from the government box, according to the website But just a week later, Gref was back in charge, issuing commands by silent gestures as the Duma considered changes to the code during its second reading (see "RFE/RL Russian Political Weekly," 16 July 2001). Gref has often attracted the ire of the left-wing political groups for what they perceive as his excessively liberal views -- as did his mentor, former First Deputy Prime Minister and current Unified Energy Systems head Anatolii Chubais. But unlike Chubais, Gref has managed to avoid both being ensnared in huge public scandals or being transformed into a symbol of the overzealous economic reformer insensitive to social costs.

Gref's career, in many ways, has followed a similar path to that of another Chubais protege and ethnic German, Gazprom-Media head Alfred Kokh. Both were born in Kazakhstan in the early sixties to ethnic German parents who were sent there during World War II. (Gref is 37, Kokh 40.) Both attended Leningrad State University, both worked in St. Petersburg city government in the area of privatization, both came under the wing of Anatolii Chubais, who summoned them to work at the federal level in Moscow. While Kokh's career as a public servant derailed in part because of a too close association with Chubais, Gref managed to find a more powerful patron, President Vladimir Putin, whom he worked with in the St. Petersburg government. Gref, in fact, has always been careful to diversify the sources of his political support. In 1997, when he became chair of St. Petersburg property committee, he was asked at a press conference "whose person he was?" He responded that he was a person of Chubais, St. Petersburg Governor Vladimir Yakovlev, and then-Deputy Prime Minister Boris Nemtsov, "Profil" reported on 10 April 2000. His allegiance to Yakovlev was in fact rather fresh, having followed the latter's victory in the mayoral campaign in 1996.

And also unlike Kokh, Gref trained as a lawyer rather than an economist. After serving in the Soviet army, he attended Omsk State University and graduated from its law school in 1990. He then went on to study law at the graduate level at Leningrad State University (LGU). The law school of LGU is, of course, the alma mater of President Putin and deputy presidential administration head Dmitrii Kozak, among others.

Gref landed his first professional position in 1991 at the age of 24, working with the city council in Petrodvorets -- outside St. Petersburg/Leningrad. That proved to be the right place at the right time, because in the following year he was named head of the raion's agency for the administration of state property in Petrodvorets. As "Nezavisimaya gazeta-FiL" noted on 16 March 2000, this was not the position of some low-level flunky -- "in fact it was one of the most powerful, because radical reformers were trying to quickly throw off former state property from the government's shoulders." According to the publication, it was in this position that Gref became "one of the most fanatical followers" of Chubais's economic nostrums. And he was rewarded with more and more responsibility, becoming in 1994 deputy chair of the committee for the administration of state property and at the same time director of the city's department for real estate. In that position, Gref again was responsible for putting on lease or selling hundreds of thousands of cubic meters of potentially valuable real estate.

And like other key figures managing privatizations at that time, Gref attracted some attention from law enforcement officials. According to the "St. Petersburg Times" on 2 June 2000, a few criminal cases were opened against Gref connected with some of the privatizations that he oversaw, but these cases "simply evaporated after Gref was tapped by Chubais to be deputy minister of state property in [September] 1997." A spokeswoman for the City Prosecutor's Office, Tatyana Vishnyakova, told the daily that the office "was made to understand that [these cases] just weren't to be pursued anymore."

In 1998, Gref was called to Moscow to serve as first deputy minister for state property. Chubais, who had headed that ministry when it was still a committee, was then serving as first deputy prime minister. It was following this appointment that Gref began serving on a variety of boards of Russia's major companies, such as Svyazinvest, Rosgosstrakh, Aeroflot, and Gazprom. But he gained his first major exposure in the national media for his role overseeing the drafting of an economic development plan for Russia as head of the Center for Strategic Research during the first months of President Putin's administration (see "RFE/RL Newsline," 23 May 2000). Then in May 2000, Gref was tapped to head the newly created Ministry for Economic Development and Trade.

In that position, Gref's reputed love of orderliness has no doubt been taxed. Gref, according to "Nezavisimaya gazeta-FiL," does not suffer fools gladly. "Karera" on 5 February noted that Gref is a fierce debater, and an unprepared person confronted with a verbal assault from Gref could feel that he has unwittingly stepped into the "jaws of an alligator." According to the journal, he dubbed a Mr. Cutler, one of the owners of the U.S. company Ward-Howell, the "Malicious Cutlet" because he mispronounced Gref's patronymic Oskarovich, putting the stress on the second syllable. As head of one of the government's largest ministries, Gref is likely subjected to a wide variety of slights, as his confrontation on the floor of the Duma showed. However, if present circumstances continue, he may continue to have the last laugh. (Julie A. Corwin)

HAVE MANDATE, WILL TRAVEL. An article in "Obshchaya gazeta" on 19 July sheds new light on the members of the 3rd convocation of the State Duma, using a new report from the Public Expertise Institute. The institute amassed statistics on individual Duma deputies' performance, using such indicators as attendance, number of speeches on Duma floor, submissions of legislation, and number of days spent on business trips for the time period 1 January to 31 May 2001. The data shows that "the most interesting Duma personalities are not necessarily those who can be glimpsed on the television screen." According to the weekly, the lower legislative house can be divided up into roughly four groups, the Unseen, the Talkers, the Writers, and the Tourists.

THE UNSEEN: The statistics for this group are misleading because deputies unaffiliated with a faction or group are disproportionately represented among the "Unseen." This is because the coordinators of factions use their faction colleagues' cards for voting and registration. So the unaffiliated deputies appear to be present much less often than their comrades in factions. For example, after leaving the Unity faction, deputy Konstantin Severnard's attendance suddenly fell by 75 percent.

THE TALKERS: These deputies feel it their duty to speak whenever they're present regardless of what issues are on the agenda that day, according to the weekly. Surprisingly, these are not just the leaders of faction and parties; there are a number of deputies who give speech after speech no less often than Liberal Democratic Party leader Vladimir Zhirinovskii or Agro-Industrial group head Nikolai Kharitonov. Among the most talkative members is deputy (Agro-Industrial group) Pavel Burdukov, a deputy chair of the Security Committee, who spoke at more than half of the Duma sessions and more frequently than the head of that committee, Viktor Ilyukhin (Communist). Also speaking at half of the sessions is deputy (People's Deputy) Adrian Puzanovskii, a former university lecturer.

THE PEN-PUSHERS: These are the deputies who prepare a large number of bills. The unsung hero in this category, according to the weekly, is deputy (Agro-Industrial) Vladimir Pashuto, who authored 22 bills in the six-month period -- more than even his better-known colleagues, Budget Committee Chairman (Russian Regions) Aleksandr Zhukov and Legislation Committee Chairman (Union of Rightist Forces) Pavel Krasheninnikov. Zhukov presented 16 bills, and Krasheninnikov, 18.

THE TOURISTS: These are those deputies who see their mandate as "a free ticket for round-the-world travel." The weekly notes with mock shock that trips to CIS countries are the least popular despite the fact that "the majority of deputies constantly argue for tighter contacts between the brother republics." Trips to the "far abroad" and within Russia are the most popular. The record-holder in trips taken is Vyacheslav Boiko (Communist), who spent 133 of 181 days in his home district of Kaluga Oblast. Miraculously, Boiko somehow managed to attend practically all the Duma sessions, according to the registration records. Still, Boiko spoke at only one session and presented zero legislation. Giving Boiko some competition is Flyura Ziyatdinova (Russian Regions), who in addition to serving as Duma deputy from a single-mandate district in Tatarstan also works in the department of external relations of Tatarstan President Mintimer Shaimiev. She spent 106 days traveling -- much of the time to developing countries. (JAC)

Percentage of Duma sessions attended by deputy from single-mandate district in Ingushetia Alikhan Amirkhanov*______________0%

Percentage of Duma sessions attended by former TV anchorman and deputy from single-mandate district in Leningrad Oblast Aleksander Nezvorov_______________________________________10%

Percentage of sessions attended by deputy Mikhail Kuznetsov from a single-mandate district in Pskov Oblast________________50%

Number of deputies who never addressed the floor of the Duma or wrote a single piece of legislation_____________more than 70

Highest number of bills prepared by a single deputy__________22

Percentage of days spent by deputy Vyacheslav Boiko in first half of 2000 on business trips to his home district________________73%

Percentage of days spent on foreign trips by deputy (OVR) Flura Ziyadinova________________________________________59%

*Amirkhanov won his seat in a by-election held in the middle of April.

Source: "Obshchaya gazeta," 19 July 2001 [all data shown for 1 January-30 May 2001].

POLITICAL CALENDAR 2-3 August: Voronezh court to consider possibility of early release from prison for U.S. Fulbright scholar John Tobin

4-5 August: North Korean leader Kim Il-Jong to visit Moscow, according to ITAR-TASS

7 August: Cabinet of Prime Minister Kasyanov will meet to discuss the country's preparations for winter, according to RIA-Novosti on 30 July

7-8 August: Russian Defense Minister Sergei Ivanov will lead a delegation to Washington, D.C.

12 August: First anniversary of the sinking of the "Kursk" submarine

13-14 August: U.S. Defense Secretary Donald Rumsfeld to visit Moscow

14 August: Moscow court will hold a hearing of suit of Media Minister Mikhail Lesin against NTV and top Media-MOST official Igor Malashenko, according to ITAR-TASS on 27 July

14 August: Finance Ministry will submit draft 2002 budget to the cabinet of ministers

15 August: Deadline by which the 2002 federal budget should be submitted to the State Duma, according to ITAR-TASS

19 August: Second round of gubernatorial elections in Irkutsk Oblast

27-30 August: Laotian Foreign Minister Somsavat Lengsavat to visit Russia

End of August: New U.S. Ambassador Alexander Vershbow will take office in Moscow, according to "Nezavisimaya gazeta" on 11 July

September: Malaysian Prime Minister Mahathir ibn Mohamad will visit Russia

4-6 September: Italian Foreign Minister Renato Ruggiero will visit Russia, according to ITAR-TASS on 30 July

6 September: Aeroflot shareholders meeting will be held

7 September: Russian Public Television (ORT) will hold a shareholders meeting at which a new board of directors will be selected, according to ORT General Director Konstantin Ernst on 29 June

19 September: State Duma will hold the first full plenary meeting of its fall session

23 September: Gubernatorial elections in Rostov Oblast

25 September: Deadline set by President Putin to finish all restoration work in Sakha (Yakutia) following severe flooding there in May of this year

29 September: People's Deputy will hold founding congress in Moscow to transform group into a party

Second half of September: Union of Rightist Forces will open the group's West European headquarters in London

End of September: The cabinet of ministers will examine the question of reform of the country's banking system, according to Prime Minister Kasyanov on 16 July

End of September: International conference on "Indigenous Peoples, Oil, and the Law" to be held in Khanty-Mansiisk, according to the website

2 October: EU-Russia summit to take place in Brussels

7 October: State Duma by-elections will be held for the single-mandate districts in Amur and Arkhangelsk oblasts. Two seats were vacated when former State Duma deputy Leonid Korotkov was elected governor of Amur and deputy Aleksandr Piskunov was named an auditor at the Audit Chamber

13 October: Fatherland will hold a congress to reorganize the movement into a party

20-21 October: President Putin will take part in the ninth informal summit meeting of the Asia Economic Cooperation forum in Shanghai, according to ITAR-TASS on 2 July

28 October: Gubernatorial elections in Orel Oblast

December: Presidential elections in Chuvash Republic

28 December: Duma's fall session will come to a close, according to ITAR-TASS on 13 July

January: Presidential elections in North Ossetia.