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Security Watch: July 22, 2003

22 July 2003, Volume 4, Number 29
RUSSIA BRACING FOR THE WORST IN KOREA? Deputy Foreign Minister Aleksandr Losyukov has said that Russia is concerned about the recent escalation of tensions on the Korean Peninsula and that Moscow has undertaken several precautionary measures to cope with any possible military conflict in the region, including a conflict involving the use of nuclear weapons, "Izvestiya" reported on 18 July. He said that it is natural that the possibility of such a conflict should concern bordering countries, including Russia and China, which is also implementing precautionary measures. Losyukov did not specify exactly what measures Russia has taken, but said that they are being taken in the Far East and throughout the country. The issue has been discussed at the interbranch level of government and the necessary instructions have been issued to the proper governmental agencies, Losyukov said. However, the daily was unable to confirm these statements with the Defense Ministry, the Health Ministry, or the Emergency Situations Ministry. A spokesman from the latter told the daily that ordinary civil-defense precautions against nuclear radiation are being implemented in the Far East.

ANALYSTS SUM UP LESSONS OF IRAQ CAMPAIGN. "Krasnaya zvezda," the official organ of the Defense Ministry, published a three-part series (28 June and 7 and 18 July 2003) containing an unusually frank discussion by leading military strategists about the lessons of the recent U.S.-led military action against the regime of deposed Iraqi President Saddam Hussein. Discussion participants agreed that the overthrow of the Hussein regime was not just a victory for the U.S. military, but also a remarkable success for U.S. intelligence. Participants concluded that nonmilitary factors are playing an increasing role in modern warfare. Duma Defense Committee Chairman and army General Andrei Nikolaev said that the United States has taught the whole world a lesson in conducting a modern war. He added that one look at the state of the Russian economy, the army, the attitude of the public toward military service, and the public's shaky willingness to defend Russia is enough to understand how unprepared Russia is to wage a modern war.

DEFENSE MINISTER AGAIN RULES OUT PEACE TALKS WITH CHECHEN PRESIDENT. Speaking to reporters following a meeting in Khankala with commanders from the North Caucasus Military District on 16 July, Sergei Ivanov said that any further large-scale fighting with Chechen fighters "is practically excluded," RIA-Novosti and RTR reported. He said, however, that he expects more explosions, ambushes, and suicide bombings. Ivanov added that there are about 1,200-1,300 Chechen fighters active in Chechnya "with whom it is impossible to negotiate and who must be liquidated." Ivanov again ruled out the possibility of peace talks with Chechen President Aslan Maskhadov (see "RFE/RL Newsline," 10 February 2003), commenting that Maskhadov is no more acceptable as a negotiating partner than Taliban spiritual leader Mullah Mohammad Omar. Finally, Ivanov announced that all Russian servicemen attached to the federal forces in Chechnya will be contract volunteers by 2005.

MILITARY, FSB INVESTIGATING NAVY MUNITIONS EXPLOSION... Military and Federal Security Service (FSB) investigators are looking into the causes of a powerful explosion that occurred on 14 July in the town of Taezhnyi, about 50 kilometers from Vladivostok, Russian media reported on 15 July. The explosion occurred at a navy munitions dump that contains about 70 railroad cars of munitions, leading police to evacuate local residents from an area of many square kilometers. The initial blast triggered additional explosions of artillery shells and mines that continued for about 48 hours. RTR reported that 70 people were given medical treatment and seven were hospitalized. On 15 July, the command of the Pacific Fleet officially apologized to locals and said it will accept claims for property damages. However, the fleet claimed that the explosion was set off by an errant firework launched by local residents. FSB investigators noted that the nearest residences are some distance from the munitions dump, making the firework theory seem unlikely. Investigators are reportedly looking into the possibility that the incident was caused by negligence. "Kommersant-Daily" on 15 July noted that similar incidents involving the Pacific Fleet occurred in 1992, 1996, and 2002.

...AS MILITARY PROSECUTORS LOOK INTO MISSING SHOULDER-LAUNCHED MISSILES. Leningrad Military District Prosecutor Igor Lebed said his office is investigating eight Strela shoulder-launched antiaircraft missiles that are reportedly missing from the Kronstadt naval base, reported on 15 July. Chechen fighters are eager to purchase Strela missiles, which have been used to shoot down many of the 15 helicopters that the Russian military has lost in Chechnya in the last 18 months. A single unit can fetch as much as $100,000 on the black market. Meanwhile, air force spokesman Colonel Aleksandr Drobyshevskii said that an errant missile launched from an aircraft on 15 July exploded in a village in Leningrad Oblast, wounding one person. An investigation into that incident is being conducted.

PART OF BLACK SEA FLEET TO BE REMOVED FROM SEVASTOPOL. Defense Minister Sergei Ivanov, who is conducting an inspection tour of the North Caucasus Military District, said on 17 July that Russia is speeding up the pace of construction of a new naval base at Novorossiisk for some elements of the Black Sea Fleet, RTR reported. The entire Black Sea Fleet is currently based at the Ukrainian port of Sevastopol, and Ivanov noted that it is always better to have several bases. He said that following completion of the Novorossiisk base, Russia will be able to save part of the $100 million a year that it currently pays Ukraine to lease the Sevastopol base. However, he emphasized that Russia will not be leaving Sevastopol completely, even after the Novorossiisk base is finished.

RUSSIAN MILITARY INTELLIGENCE ACTIVE AROUND THE WORLD. In a rare interview, army General Valentin Korabelnikov, who is the head of Russian Military Intelligence (GRU), told "Izvestiya" on 16 July that his agency continues to operate in even the most remote corners of the world and, "when necessary," in Russia as well. Asked about his agency's use of open sources of information compared to its special operations, Korabelnikov implied that he relies largely upon the latter. "If working with open sources were enough, the state would maintain research institutes, but not special services," he said. He also noted that his agency has suffered extremely high casualties during the current campaign in Chechnya, having lost about 300 men. He refused to comment on his agency's activities before and during the recent U.S.-led military operation to depose former Iraqi President Saddam Hussein, saying that those events are too fresh to be discussed. However, he noted that in a recent interview, President Vladimir Putin praised the work of the country's intelligence agencies. Korabelnikov also said that he does not share the opinion of some in Russia's political elite that the country is "overrun by foreign spies." However, he noted that as long as state secrets exist, there will be interest in acquiring them.

PRIME MINISTER SAYS PRIVATIZATION RESULTS 'UNCHANGEABLE'... During a cabinet session on 17 July devoted to the topic of privatization, Mikhail Kasyanov said that "the results of privatization remain unchangeable and privatization will remain one of the basic elements of government policy," Russian media reported. Kasyanov did not mention the recent investigations into Yukos or any other major companies, but "Argumenty i fakty," No. 29, reported that former President Boris Yeltsin has "very persistently" lobbied the prime minister to defend the privatization process. According to the weekly, Yeltsin feels that any review of old privatizations could negatively affect the so-called Family of insiders that developed during his administration. Russian Union of Industrialists and Entrepreneurs (RSPP) President Arkadii Volskii said that during his most recent meeting with President Putin, Putin said he had nothing to do with the Yukos investigations, "as I do not put people into prison," and "Vedomosti" reported on 17 July. He also does not get them out of prison, "Vedomosti" commented. Volskii repeated his concerns that the Yukos affair could harm the business climate in Russia, and proposed that a statute of limitation of three years be imposed on privatization cases.

...BUT DEPUTY MINISTER SAYS SOME CASES WILL STILL BE INVESTIGATED... First Deputy Property Relations Minister Aleksandr Braverman, who oversees privatization policy, said following the cabinet meeting that Prime Minister Kasyanov's statement means that there will be no political decision to revise privatization as a process, and RTR reported on 17 July. He said that both Kasyanov and President Putin have repeatedly affirmed their commitment to privatization. However, this commitment does not mean that the government surrenders its right to look into and, if necessary, revise particular cases of privatization, Braverman added. At the same time, he emphasized that the government will only do so by methods that do not cause panic on the markets.

...AND OUTLINES PRIVATIZATION PROCESS THROUGH 2008. First Deputy Minister Braverman also said that the government will continue its privatization process until its scheduled completion in 2008, Russian media reported. According to the cabinet's plan, next year the government will sell its stakes in companies of which it currently owns 25 percent or less. There are 1,679 such companies, and the government is not able effectively to affect the way they are managed, Braverman said. Selling off these stakes will be an important anticorruption measure, he emphasized. In 2005, the government will sell its stakes in companies of which it owns 25 percent-50 percent. For the most part, these companies are in energy, machine building, and construction. The following year, the government will privatize its holding in civil aviation, the petrochemical industry, and the agriculture sector. In 2007-08, the government will divest itself of its remaining commercial properties, Braverman said.

YUKOS PROBES CONTINUE... The Prosecutor-General's Office has received a new request from the office of Duma Deputy Vladimir Yudin (Russian Regions), asking for an investigation into the privatization of a company called Rospan International, which is currently co-owned by Yukos and the Tyumen Oil Company (TNK), and other Russian media reported on 17 July. According to the request, Rospan was owned by the state-controlled natural-gas giant Gazprom until 1999. In that year, however, the company entered the bankruptcy process and in 2002 it was purchased by Yukos and TNK. Yudin has asked prosecutors to check the legality of the documentation connected with this deal. Meanwhile, Colonel General Valerii Manilov, who is deputy chairman of the Federation Council's Security Committee, has appealed to Interior Minister Boris Gryzlov to intervene in the Yukos affair and "to defend effectively the national interests and security of Russia," "Nezavisimaya gazeta" reported on 17 July. Ella Pamfilova, chairwoman of the presidential Human Rights Commission, announced that her office and two small-business associations have formed a special crisis group to protect the interests of businesspeople, RIA-Novosti reported on 17 July. Pamfilova also said that she met earlier on 17 July with Prosecutor-General Vladimir Ustinov to discuss ways of resolving the Yukos investigations.

...AS PUBLIC SUPPORTS EFFORTS AGAINST THE OLIGARCHS. Seventy-seven percent of Russians believe that the results of the country's privatization process should be fully or partially revised, according to a survey by the ROMIR polling agency that was conducted on 6-14 July and reported in "Vedomosti" on 18 July. Just 18 percent of respondents are categorically opposed to such a step. The survey of 1,500 people found that 77 percent of businesspeople support such a revision, as do 88 percent of executives, and 87 percent of respondents with higher education. Seventy-seven percent of respondents also said that the oligarchs have played a negative role in Russian history. Fifty-three percent agree that the state would be justified in using force to deal with the oligarchs, while 31 percent said the state should do so only in "extreme situations."

SEVEN CASES NOW OPEN IN YUKOS AFFAIR. The Prosecutor-General's Office has announced that it currently has seven criminal cases pending against oil giant Yukos and its employees, Russian media reported on 18 July. The cases include charges of embezzlement in connection with the 1994 privatization of chemical company Apapit, charges of tax evasion against Yukos branches, double-murder charges against senior Yukos security officer Aleksei Pichugin, and four other cases reportedly involving contract murders. Yukos's legal department on 19 July released a statement saying that prosecutors have been unable to come up with evidence of crimes committed by the company and therefore they are trying to smear the firm's reputation in the media. This why investigators have sought to connect Yukos with crimes allegedly committed several years ago, the statement said. "Everybody, including the Prosecutor-General's Office, knows that none of these cases will reach the courts, because they have no legal basis," the Yukos statement declared.

COURT DENIES BAIL FOR YUKOS SECURITY OFFICIAL. The Moscow Municipal Court on 15 July rejected a request by the lawyers of senior Yukos security official Aleksei Pichugin asking that he be released from jail on bond, Russian media reported. Pichugin is accused of organizing the murders of Tambov residents Olga and Sergei Gorin (see "RFE/RL Newsline," 3 July 2003). The court ruled that Pichugin, a former KGB officer, is a flight risk and that he might attempt to intimidate witnesses. Pichugin maintains that he is innocent. His lawyer, Georgii Kaganer, said the case against Pichugin is a provocation aimed at getting him to reveal information about Yukos. Kaganer said the fate of the Gorins remains unknown because no bodies have been found in the case. He said he will appeal the municipal court's ruling to the Supreme Court.

YUKOS HEAD SAYS PROBE IS HARMING ECONOMY... Yukos CEO Mikhail Khodorkovskii said on 16 July following his arrival in Moscow after a short trip to the United States that "shallow political intrigues" have caused enormous damage to the Russian economy, Russian media reported. By the end of the year, those damages could total tens of billions of dollars, Khodorkovskii said. He said that he returned to Russia in order to strive to see that "investor confidence in Russia is not totally undermined," and he expressed the hope that the government's actions against his company "are not irreversible."

...AND BUSINESS LEADER URGES OLIGARCH TO OBEY 'THE RULES OF THE GAME.' Speaking to journalists in Moscow on 16 July following a meeting in the Kremlin with President Putin, RSPP President Volskii said that Yukos head Khodorkovskii must use patience to resolve his problems with the authorities, and other Russian media reported. The meeting with Putin was the second for Volskii in the last week. During their talks, the two discussed the relationship between the government and business in light of recent events concerning Yukos and other major companies. Volskii noted that the controversy goes beyond any one company or personality and is having an impact on whole sectors of the economy. Volskii said that Khodorkovskii's fate depends on "whether he has learned the rules of the game and whether he will comply with them."

AUDIT CHAMBER HEAD CALLS FOR REVISING ESTIMATES OF COUNTRY'S WEALTH. Sergei Stepashin on 16 July said in Moscow that Russia should increase official estimates of the value of the country's natural wealth, reported. Doing so, together with the noticeable growth of the capitalization of Russian companies would help Russia gain global economic influence and play a significant role in the processes of globalization, Stepashin said. It would also upgrade Russia's status within the Group of Eight leading industrialized countries and change attitudes about Russia among international investors and foreign governments.

INTELLECTUALS WARN AGAINST CREEPING CONSERVATISM IN THE SCHOOLS. A group of prominent cultural figures has written a letter to Education Minister Vladimir Filippov, in which they warn that a tradition of great Russian writers who opposed tyranny and totalitarianism is being consigned to oblivion and eliminated from the curriculum of Russian schools, and the BBC reported on 19 July. Over the last couple of years, antitotalitarian works by writers such as Boris Pasternak, Andrei Platonov, Anna Akhmatova, and Osip Mandelshtam have been removed from required-reading lists, while Soviet literary icons such as Mikhail Sholokhov continue to be taught. Recent pedagogical materials on literature show clear "conservative trends" toward undoing efforts over the last decade to condemn totalitarianism, the intellectuals' letter said. The letter was signed by writers Vladimir Voinovich, Fasil Iskander, Andrei Voznesenskii, and Rimma Kazakova, among others. Commenting on the changes to the school curriculum, rock star Andrei Makarevich told Ekho Moskvy that the authorities are working to restore the cult of Soviet dictator Josef Stalin and predicted that within five years Stalin will be viewed as a heroic figure by young Russians.

DETAILS EMERGE ABOUT CASE OF 'VERSIYA' EDITOR... "Versiya" Editor in Chief Rustam Arifjanov stepped down from his post on 14 July after the monthly lost a libel suit filed by Alfa Group co-owners Mikhail Fridman and Petr Aven, "Vremya novostei" and reported on 15 July (see "RFE/RL Newsline," 15 July 2003). Fridman and Aven filed suit against the paper and journalist Oleg Lure for two articles published in 1999 and 2000 that alleged that Alfa Group had links to international criminal networks. On 10 July, a Moscow appeals court ruled that the information in "Versiya" was unsubstantiated and ordered the paper to pay 3 million rubles ($99,000) in damages. The court also ordered the paper to pay 170,000 British pounds ($282,000) to the British investigative agency Kroll Associates, ruling that the firm's reputation was also damaged by Lure's articles. The president of Top Secret, the holding that owns "Versiya," Veronika Borovik-Khilchevskaya, said that she accepted Arifjanov's resignation and that Lure, who writes for other publications, left "Versiya" two weeks ago. "Versiya" was founded by investigative journalist Artem Borovik, who died in a mysterious plane crash in 2000 (see "RFE/RL Security Watch," 18 September and 20 November 2000). In 2001, the U.S. magazine "U.S. News and World Report," which is a partner in the "Versiya" project, and the American Foreign Press Club established the Atrem Borovik Award to honor courageous Russian journalists.

...AS PRO-KREMLIN JOURNALIST WINS CASE FILED BY LAWYER FOR HOSTAGE-CRISIS VICTIMS. A Moscow district court has rejected a defamation claim filed by Igor Trunov, a lawyer representing some of the victims of the October 2002 operation to rescue hostages being held by Chechen fighters in a Moscow theater, reported on 14 July. Trunov alleged that ORT commentator Mikhail Leontev defamed him by saying on the state-run channel that Trunov "is a marauder making a career on blood." Trunov's clients were suing the state for compensation following the hostage-rescue operation, in which 122 hostages died from the effects of a sleeping gas that security agents pumped into the theater to immobilize the hostage takers. In its verdict, the court said that Leontev was simply expressing his own opinion and that, according to the Russian Constitution, no one can be deprived of the right to their opinions. Leontev is well-known for his strongly anti-Western commentaries and is one of the coordinators of the pro-Kremlin Unified Russia party's campaign for the 7 December State Duma elections.