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Security Watch: February 4, 2003

4 February 2003, Volume 4, Number 5
ISS PROGRAM NOT IN DANGER FOLLOWING SHUTTLE DISASTER... Russia will be able to provide adequate support to the International Space Station (ISS) for at least one year without the U.S. space shuttle, Russian news agencies reported on 3 February, citing the press office of the Russian Space Agency (Rosaviakosmos). Space Agency spokesman Sergei Gorbunov said that Russia expects the space shuttles to be grounded for at least one year following the 1 February explosion of the space shuttle "Columbia," which killed seven crewmembers. "Work in orbit will be cut to a minimum," Gorbunov said, according to ITAR-TASS. Russian Mission Control Center Director Vladimir Solovev said that the "Columbia" disaster will certainly "affect both the dates of manned flights to the International Space Station and the membership of the crews," ITAR-TASS reported. A previously scheduled, unmanned Progress supply ship successfully reached the ISS on 3 February, ferrying sufficient supplies to meet the station's needs for at least three months, ITAR-TASS and other news agencies reported. Energiya Deputy General Director Valerii Ryumin was quoted as saying his company is capable of producing a sufficient number of Soyuz and Progress spacecraft to maintain the ISS program for several years, "given sufficient financial resources." An unidentified NASA spokesman stressed that the current ISS crew is in no danger, and a Russian Soyuz spaceship is ready to bring them back to Earth at any moment.

...ALTHOUGH 'TUGBOAT' PROBLEM REMAINS TO BE SOLVED. An unidentified spokesman for the Russian Space Agency told RIA-Novosti on 3 February that in addition to bringing crews to the space station, the U.S. space shuttle performed the function of "a tugboat," periodically correcting the ISS's orbit. "Without these operations to boost the station to a higher orbit, the ISS, under the influence of the Earth's gravity, will more rapidly move into lower orbits," the spokesman was quoted as saying. He said that Russia believes the unmanned Progress supply ship is capable of performing this function and has proposed its doing so in the past, but NASA has rejected the idea for unspecified reasons. The spokesman added that the program of adding new modules and other additions to the space station is under serious threat because of the "Columbia" disaster.

PUTIN URGES COLLECTIVE, PEACEFUL RESOLUTION TO IRAQ CRISIS... President Vladimir Putin met on 3 February with Italian Prime Minister Silvio Berlusconi, who arrived in Moscow directly from talks in Washington with U.S. President George W. Bush, ITAR-TASS and other Russian news agencies reported. Speaking to reporters following the meeting, Putin said that Moscow prefers to transform "the Iraq issue from a political matter into a technical one." Putin insisted that the United Nations weapons inspections should continue and noted that so far they "have found nothing." Following the completion of the inspections, the UN Security Council should decide what comes next, Putin said. He added that "he and most Russians" continue to believe that a peaceful solution to the Iraq crisis can be found. He said that military force should be used only "in the most extreme case."

...AS LDPR LEADER SAYS RUSSIA SHOULD GET PAID FOR SUPPORTING STRIKE ON IRAQ. Deputy State Duma Speaker and leader of the Liberal Democratic Party of Russia (LDPR) Vladimir Zhirinovskii has said that Moscow should support a U.S. military strike against Iraqi President Saddam Hussein if Washington promises to give Russia financial and political benefits in exchange, and other Russian news agencies reported on 3 February. Zhirinovskii, who is known for his long-standing close personal contacts with Hussein's regime, said Moscow should demand the right "to pump at least $30 billion worth of Iraqi oil" and completely free transit access between the Kaliningrad exclave and the rest of Russia. He added that Russia should participate in a post-Hussein "peacekeeping operation" in Iraq and insist upon joint military administration on the model of post-World War II Berlin.

KREMLIN SAYS NO NEW IRAQ RESOLUTION NEEDED... Deputy Foreign Minister Yurii Fedotov said in Moscow on 27 January following a briefing of the UN Security Council in New York by UNMOVIC Executive Chairman Hans Blix and International Atomic Energy Agency Director-General Mohammad el-Baradei that "no new resolution on Iraq is required," Russian news agencies reported. Foreign Ministry spokesman Aleksandr Yakovenko told journalists that no violations of existing resolutions have been uncovered in the course of more than 400 inspections.

...AND FOREIGN MINISTER SAYS RUSSIA HAS NO INFORMATION ON IRAQ'S ALLEGED LINKS TO AL-QAEDA. Foreign Minister Igor Ivanov said after meeting with his Bulgarian counterpart Solomon Pasi in Sofia on 30 January that Russia has no information to support U.S. and British claims that Iraq has ties to Al-Qaeda, BTA reported. Ivanov added that the large-scale information exchange within the international antiterrorism coalition has not confirmed such links. "The common goal of the international community is to dispossess Iraq of its weapons of mass destruction and not to change the regime in Baghdad," bnn quoted Ivanov as saying. "Some states relate the problem of Iraq's disarmament to a replacement of the government there. This contradicts Resolution 1441 of the UN Security Council."

RUSSIA TAKES THE INITIATIVE AT PACE... Federation Council Foreign Affairs Committee Chairman Mikhail Margelov has been elected a deputy chairman of the Parliamentary Assembly of the Council of Europe (PACE), ORT and other Russian news agencies reported on 27 January. As such, Margelov will make decisions on the assembly's agenda and budget and will chair some of its sessions. Margelov immediately used his new post to call for a PACE discussion of Iraq to be presided over by Russia, RIA-Novosti reported. Past Russian PACE deputy chairmen rarely participated in assembly sessions because they did not speak English, as Margelov does.

...AS RUSSIAN CO-CHAIRMAN QUITS DUMA-PACE COMMITTEE ON CHECHNYA. Duma Deputy Dmitrii Rogozin (People's Deputy) announced on 31 January his resignation as co-chairman of the Russian State Duma-PACE working group on Chechnya, Russian news agencies reported. Rogozin had said the previous day that Lord Frank Judd's resignation as PACE rapporteur for Chechnya and co-chairman of the group could lead to the group's collapse (see "RFE/RL Newsline," 31 January 2003). But Margelov said the same day that Rogozin's resignation does not signal the end of cooperation between the Duma and the PACE on Chechnya, Interfax reported.

EXCLAVE LAWMAKERS CALL FOR CHANGES TO TREATY ON LITHUANIAN BORDER... The Kaliningrad Oblast legislature on 31 January passed a nonbinding resolution asking the State Duma to postpone consideration of the border treaty between Russia and Lithuania, ITAR-TASS reported. Deputies argued that the treaty does not take into account the needs of oblast residents after Lithuania's almost-certain accession to the European Union. The resolution states that the oblast legislature will submit its recommended modifications to the treaty to the Duma by 5 April. Deputies rejected a harsher resolution sponsored by the Communists and the LDPR that would have called upon the Duma to reject the treaty altogether. The lack of a treaty could delay Lithuania's entry into the EU.

...AS ENVOY REPORTS PROGRESS ON TRANSIT ISSUES. President Putin's envoy for Kaliningrad issues Dmitrii Rogozin reported that his recent talks with Lithuanian representatives regarding transit issues have met with some success, ITAR-TASS reported (see "RFE/RL Newsline," 23 January 2003). According to Rogozin, Lithuania has agreed that its border-control personnel will not stamp Russian domestic passports used as transit documents. Lithuania also agreed to allow minors to use their birth certificates as transit documents when they are accompanied by a parent. However, Vilnius did not agree to accept Russian military identification cards as transit documents, and Russian service personnel transiting the country between Kaliningrad Oblast and the rest of Russia will have to present either internal or foreign passports. "The talks were difficult," Rogozin said, "and their successful outcome became possible due to the constructive personal involvement of Lithuanian Prime Minister Algirdas Brazauskas in the negotiations."

RUSSIA SELLS TRUCKS TO IRAQ... A shipment of 70 heavy trucks from automaker KamAZ has arrived in Iraq, ITAR-TASS reported on 27 January. The trucks are the first consignment of goods under a contract to supply 3,000 heavy vehicles to Baghdad this year. Under a different contract, KamAZ shipped 2,000 similar trucks to Iraq in 2002. Professor Yevgenii Leshin of the Academy of Military Sciences told ITAR-TASS that selling the trucks to Iraq is not a violation of UN Security Council resolutions or other international obligations. The vehicles do not change the balance of forces in the region and cannot be used as platforms for missiles or other modern weaponry, Leshin said.

...AND FIGHTERS TO CHINA. The state-owned weapons dealer Rosoboroneksport has announced the signing of a contract with China under which Russia will sell 24 Su-30 multi-role fighters for about $1 billion, Russian and Western news agencies reported. The Su-30 is produced at an aviation plant in the Siberian city of Komsomolsk-na-Amure. Between 1999 and 2002, Russia signed contracts with China to sell a total of 120 Su-30s for $5.4 billion.

GOVERNMENT CONCERNED ABOUT DEPENDENCE ON NATURAL-RESOURCES EXPORTS. At the first cabinet session of the new year, Prime Minister Mikhail Kasyanov on 28 January called on the government to prepare immediately its medium-term economic program for 2003-05, reported on 29 January. According to Economic Development and Trade Minister German Gref, who was tasked with overseeing preparation of the plan, a major goal of the program will be altering the character of Russian exports in order to reduce the economy's dependence on natural-resources sales. "Russia's orientation toward the export of nonrenewable natural resources, especially oil and natural gas, is causing the Russian economy serious harm," Gref was quoted as saying. A preliminary report prepared by Gref's ministry states that the government will use tax and customs policies to increase exports of processed and finished goods and to reduce the export of raw natural resources. These policies will be particularly shaped to create the most attractive conditions possible for the high-technology sector. The Finance Ministry is expected to support these proposals, reported.

ADVERTISING MARKET BOOMED IN 2002. Russia became one of Europe's 10 largest advertising markets in 2002, ITAR-TASS reported on 30 January, citing Russian Association of Advertising Agencies (RARA) President Vladimir Yevstavev. The Russian market totaled $2.7 billion, up by 51 percent from 2001. Television advertising represented the largest share, reaching $900 million. Non-Moscow-based television advertising was worth $190 million. According to RARA analysts, the market is expected to continue its growth this year, and prices of advertising services are expected to rise. RARA estimates the Russian advertising market will be worth $2.73 billion in 2003, $3.43 billion in 2004, and $3.8 billion in 2005.

MMM FOUNDER ARRESTED IN MOSCOW... Police in Moscow on 31 January arrested Sergei Mavrodi, former head of the MMM pyramid scheme that allegedly bilked millions of Russians out of more than $100 million in the early 1990s, Russian news agencies reported. Mavrodi was arrested in a rented apartment in the center of Moscow, and police spokesmen indicated that he had been living in the capital for at least several years. Mavrodi has been wanted since 1998, and there have been numerous media reports in recent years claiming that he has been living in Greece. "Kommersant-Daily" quoted an unidentified police source as saying that Mavrodi "used his money and connections to change Moscow apartments and suburban houses virtually monthly." The source told the daily that Mavrodi occasionally rented apartments using the documents of "secret-services veterans." According to ORT, Mavrodi was living under the name Yurii Zaitsev and was protected by "a formidable security apparatus, including former employees of the secret services."

...AFTER NEARLY A DECADE ON THE RUN... Mavrodi was first arrested in 1994 in connection with MMM but was quickly released, RTR reported on 31 January. While awaiting trial on fraud charges, he managed to win a seat in the State Duma. However, after less than one year, he was stripped of his mandate and his immunity from prosecution after he failed to show up at even a single Duma session. He remains the only Duma deputy to be stripped of his mandate in the post-Soviet period. In early 1996, Mavrodi disappeared without a trace, and an international arrest warrant was issued in 1998. MMM was declared bankrupt by a Moscow court in September 1997 with about $20 million in debts. Police first began to suspect that Mavrodi was in Russia more than a year ago when Mavrodi's younger brother and MMM co-founder, Vyacheslav Mavrodi, was arrested (see "RFE/RL Newsline," 12 January 2001). Police official Viktor Prokopov, who headed the operation to arrest Sergei Mavrodi, told RTR that "it appears [Sergei Mavrodi] never went anywhere but simply hid himself very well."

...AND CHARGES ARE FILED... The Interior Ministry's Investigations Department has filed an indictment on charges of massive fraud against Sergei Mavrodi, Russian news agencies reported on 4 February. Police have also asked all those who believe they were victims of MMM's operations to submit evidence supporting their allegations. Investigators believe that more than 100,000 such victims could ultimately be identified and that damages could amount to more than $100 million. The total number of deceived investors in the case is estimated at anywhere from 5 million to 15 million people. Business leader and Boris Yeltsin-era insider Konstantin Borovoi, who now heads an association of deceived investors, told TVS on 3 February that it would have been impossible for Mavrodi to build his investment pyramid without the tacit support of the state. Borovoi alleged that only 10 percent of the money that MMM took in went to Mavrodi, while the rest was distributed among a number of entities, including commercial companies and corrupt officials. He also claimed that some of the largest MMM investors were criminal groups using the pyramid scheme as a way of laundering illegally acquired money.

...AS HIS YOUNGER BROTHER'S VERDICT IS POSTPONED. A Moscow court on 27 January postponed issuing a verdict in the case of Vyacheslav Mavrodi, who faces charges of conducting illegal banking operations and illegally trading in precious metals and gems, RIA-Novosti and other Russian news agencies reported. Vyacheslav Mavrodi has maintained his innocence and said the case against him is "political" and "has been ordered." Prosecutors are seeking a seven-year term. According to the report, the verdict was postponed because "of the large volume [of materials] and the complexities of the criminal case." The court is expected to announce its verdict in the case on 10 February.

DEFENSE MINISTRY OFFICIAL ARRESTED IN BRIBERY CASE. An unidentified Defense Ministry official was arrested on 23 January in his office in Vladivostok on suspicion of accepting a large bribe, reported on 29 January, citing the press office of the military prosecutor. The arrested officer is a senior specialist in the ministry's resource-management department, and he was reportedly arrested in the act of accepting $5,000 in cash, an amount that was reportedly only a fraction of the total bribe that he is accused of accepting. The military prosecutor of the Pacific Fleet, Major General Valerii Suchkov, is overseeing the investigation.

NO RETURN TO STALINGRAD. Presidential adviser Sergei Yastrzhembskii has said that there are no plans to return the historical name Stalingrad to the southern city of Volgograd in honor of the 60th anniversary of the Battle of Stalingrad, the end of which was marked on 2 February, Kultura television reported on 27 January. The city, which was called Tsaritsyn during the tsarist era, was called Stalingrad from 1925 to 1961. Yastrzhembskii said that the anniversary of the battle, which is widely seen as the turning point of World War II, will not be used as a justification for renaming the city. He said he believes local residents do not favor restoring the old name. President Putin has said that he does not believe that restoring the name "would bring us any benefit" but has said that any decision on renaming cities must be made by local lawmakers and the State Duma. However, "Nezavisimaya gazeta" reported on 31 January that a recent initiative sponsored by Deputy Aleksei Mitrofanov (LDPR) to rename the city was rejected by the Duma Council because it did not have the required commentary from the government. The daily reported that in a recent survey, VTsIOM found that 51 percent of Volgograd residents oppose the idea, while 31 percent support it.

PRO-PUTIN YOUTH GROUP SETS SIGHTS ON CHURCH OF SCIENTOLOGY. The pro-Kremlin youth movement Walking Together announced on 27 January that it is launching "an action of protest" in St. Petersburg against the local branch of the Church of Scientology, and other Russian news agencies reported. Walking Together's St. Petersburg chapter has appealed to St. Petersburg Governor Vladimir Yakovlev to close down the sect's local office. Walking Together "opposes all totalitarian sects, but we have picked the Scientologists because they are especially big," said Bronislava Cherkashina, a spokeswoman for Walking Together's St. Petersburg branch. Last year, Walking Together launched high-profile campaigns against several avant-garde writers, accusing them of distributing pornography.