Security Watch: August 6, 2002

PUTIN CALLS ON GEORGIA TO EXTRADITE CHECHEN MILITANTS TO RUSSIA... Following several armed incidents in late July between Russian troops and Chechen fighters at the mountainous border dividing Chechnya from Georgia, Russian President Vladimir Putin and senior Russian officials sharply criticized Georgia's tolerance of Chechen militants and "international terrorists" on its territory. The also bemoaned Tbilisi's failure to prevent those fighters from crossing the border. Speaking to journalists after a meeting on 5 August with Prosecutor-General Vladimir Ustinov, Putin said he instructed Ustinov to demand the extradition of Chechen fighters to Russia, Russian news agencies reported. "We will judge Georgia's determination to fight terrorism based on how quickly these bandits are in Lefortovo [prison] and facing Russia justice," Putin said. But Georgian Prosecutor-General Nuzgar Gabrichidze told Ustinov on 6 August during the latter's that his country will not extradite the detained fighters unless Russia provides documentary evidence that they are guilty of terrorist activities in Russia.

...AS RUSSIAN OFFICIALS THREATEN MILITARY ACTION IN PANKISI GORGE... Meeting in Brunei on 31 July with U.S. Secretary of State Colin Powell, Russian Foreign Minister Igor Ivanov characterized Georgia's passivity as aggression and hinted that Moscow might ask the international community to help Tbilisi neutralize the threat posed by the presence of militants in the Pankisi Gorge. Three days later, Ivanov again said Moscow is willing to help Georgia tackle the Chechen threat, Reuters reported. He expressed regret that Tbilisi responds to Russian complaints with unconvincing excuses and promises of future action, according to Interfax. Touring the Russian Far East, Russian Federation Council Chairman Sergei Mironov said on 3 August that Russia does not rule out "preventive strikes" against Chechen bases in Georgia, and he added on 4 August that Moscow may request a UN mandate for such an operation, Interfax reported. Federation Council International Affairs Committee Chairman Mikhail Margelov said in Pskov on 1 August that President Putin might ask the council for approval to conduct a military operation against "terrorists" in Pankisi Gorge, ORT reported. Margelov added that such an operation could only be carried out after consultation with "Russia's partners in the international antiterrorism coalition and the United Nations Security Council."

...AMID INTENSIFYING WAR OF WORDS... The commander of the Russian Airborne Troops, Colonel General Georgii Shpak, told ORT on 2 August that his units are ready for such an operation "if they get the order." Kakha Imnadze, press secretary for Georgian President Eduard Shevardnadze, told RIA-Novosti on 2 August that Margelov's statement "is, in fact, a call for war." Imnadze said he hopes Putin will not make such a request of the Federation Council and added that Georgia has proposed creating a joint commission for investigating the alleged violations of Georgia's airspace by Russian aircraft.

...WHILE GEORGIA WARNS THAT SUCH ACTION WOULD BE ILLEGAL. Georgian Security Council Deputy Secretary Djemal Gakhokidze and Deputy Defense Minister Gela Bezhuashvili on 3 and 4 August, respectively, rejected Mironov's call for Russian strikes against Chechen bases in Georgia as unacceptable in light of international legal norms, Interfax reported. On 2 August, Georgian Defense Minister Lieutenant General David Tevzadze said Georgia will deal with the Chechen fighters on its own, without any assistance from Russia, Interfax reported. The previous day, Georgian Foreign Minister Irakli Menagharishvili similarly ruled out either Russian or joint Russian-Georgian military action in Pankisi. Meanwhile, Georgian Security Council Secretary Tedo Djaparidze suggested on 2 August that Russia's new rhetorical offensive against Georgia may be intended to sabotage the ongoing U.S. "Train and Equip" program for the Georgian armed forces, Reuters reported.

RUSSIA BEGINS CASPIAN MILITARY EXERCISES. Russian armed forces on 1 August began their biggest military exercises on the Caspian Sea since the fall of the Soviet Union, Russian news agencies reported. The exercises involve more than 60 combat ships and 10,000 marines, as well as border-guard and railroad units and detachments of the Emergency Situations Ministry, the Interior Ministry, and the Federal Security Service (FSB). According to Foreign Ministry spokesman Aleksandr Yakovenko, the purpose of the exercises is to enhance regional stability and security in the face of possible terrorist attacks. However, some independent observers believe the exercises are intended to demonstrate Russia's presence and ambitions in the oil-rich region, the BBC's Russian Service commented on 2 August. President Putin authorized the drills in April following a summit at which the leaders of Russia, Kazakhstan, Turkmenistan, Iran, and Azerbaijan failed to resolve problems related to the division of Caspian Sea resources. RTR reported on 2 August that Russian military strength in the region far exceeds that of the other four littoral states.

DEATH TOLL IS HIGH AND RISING IN CHECHNYA. The command of Russia's Combined Federal Forces in Chechnya announced that the Russian armed forces have lost 4,280 dead and 12,368 wounded since the beginning of the "antiterrorist" operation in Chechnya on 1 October 1999, Ekho Moskvy reported on 5 August. An estimated 13,000 Chechen fighters have been killed during the same period, the military command asserted. The report included no figures on casualties within the civilian population, but independent sources say that both military and civilian casualties may be several times higher than official figures indicate. Meanwhile, gazeta.ru reported on 5 August that 17 Russian servicemen were killed and another 52 wounded in Chechnya in the week of 28 July to 3 August in Chechnya, citing figures from the Combined Federal Forces.

NEW RUSSIAN MILITARY COMMANDER TAKES OVER IN CHECHNYA. Lieutenant General Sergei Makarov was named commander of the Joint Federal Forces in Chechnya last week, succeeding Lieutenant General Vladimir Moltenskoi, who is reportedly on a leave of absence, "Novye izvestiya" reported on 2 August. The paper quoted unnamed sources suggesting that Moltenskoi has been made the scapegoat for the recent fighting in Itum-Kale between Russian troops and border guards and Chechen militants believed to have entered Chechnya from Georgian territory (see above and "RFE/RL Newsline," 29 and 30 July 2002). Makarov's appointment could conceivably herald an incursion into Georgia, the paper suggested. He has reportedly expressed his readiness to shift hostilities onto the territory of another state "when ordered to."

REPORT: RUSSIA TO SELL ADVANCED FIGHTERS TO CHINA. Russia has inked a deal to sell 40 top-of-the-line Su-30MK fighters to China, "Vedomosti" reported on 30 July. State arms exporter Rosoboroneksport declined to comment on reports of the deal, which is said to be worth $1.8 billion, Reuters reported the same day. According to "Vedomosti," a deal of that amount "would be the largest aircraft deal struck by Rosoboroneksport this year." Reuters speculated that the transaction might be part of China's effort to improve its capability to invade Taiwan, which Beijing considers a renegade province. "Vedomosti" suggested that, in response, the United States might offer to sell advanced air-to-air missiles to Taiwan, which boasts an air force made up primarily of U.S.-made F-16s.

PRIVATIZATION OF OIL-MAJOR STAKE POSTPONED... The government has decided to postpone the privatization of a 5.9 percent stake in LUKoil, the country's largest oil producer, ntvru.com and other Russian media reported on 1 August. According to a company press release, the decision was made because "the price on the markets today is not acceptable to the government." According to Bloomberg, the company's stock has fallen by 22 percent since the beginning of June, closing on 31 July at $14.22 a share. The government hopes to get $15-16 per share for the stake, reaping approximately $800 million to $900 million. The government initially sought to privatize the stake in 2001 but was unable to get a bid of more than $13 a share, and the privatization was postponed. Export duties on crude oil, gasoline, and diesel fuel were to be increased on 1 August, strana.ru reported, in accord with a government order issued at the beginning of June.

...AS LUKOIL HEAD SAYS HE'S HAPPY TO SEE STATE REMAIN... In an interview published in "Vedomosti" on 5 August, LUKoil head Vagit Alekperov said he approves of the government's decision to postpone the sale. "We are proud that the state is the biggest shareholder in our company and do not want it to leave," Alekperov said. He also said he does not see any reason to create state reserves of hydrocarbons. The goal of such a reserve is to provide oil in case of a critical shortage. However, Alekperov argued, Russia has more oil than it needs and excess production capacity.

...AND HINTS AT EXPANSION IN EUROPE. Alekperov said his company participated in a tender for an oil refinery in Gdansk, one of the biggest in Poland, gzt.ru and "Vedomosti" reported on 5 August. Alekperov added that Polish authorities are "without reason" suspicious of LUKoil's bid and might ignore it. He added that LUKoil does not intend to purchase any other refineries in Europe and is concentrating on its program of buying gasoline stations throughout Central and Eastern Europe. "Vedomosti," citing Bloomberg, reported that LUKoil is seeking to expand its presence on the Spanish market and wants to purchase Austria's Avanti International, which owns 329 gas stations in Austria, the Czech Republic, Slovakia, Romania, Bulgaria, and Hungary.

YUKOS HEAD COMMENTS ON WORK OF KOZAK COMMISSION. Yukos head Mikhail Khodorkovskii told Interfax on 31 July that the new concept for administering the exploitation of natural resources devised by the commission headed by deputy presidential administration head Dmitrii Kozak does not call for a revision of existing agreements on natural resources. According to Khodorkovskii, the Kozak commission does not intend to propose revising existing license agreements, although changes might be made in procedures for issuing licenses for prospecting and developing new mineral deposits. The same day, however, Ekho Moskvy reported that President Putin asked the government to draft a federal law that would overhaul the entire system of property relations in the extraction industries. According to the station, the amendments to the law on mineral resources already drafted by the Kozak commission reportedly stipulate that the state will own mineral resources in the ground as well as the extracted minerals, which would require the cancellation of licenses currently held by developers of mineral deposits, who will then have to work according to new concession agreements, according to the station.

ANALYST: RUSSIA IS DIVIDED BETWEEN 'DOLLAR ELITE' AND 'RUBLE MASSES.' The main result of the last decade for Russia has been the economic division of the nation into a small, dollar-earning elite and the ruble-earning masses, respected foreign-affairs observer and former "Izvestiya" Washington correspondent Stanislav Kondrashov wrote in "Vremya MN" on 3 August. During this time, the income gap in Russia reached levels of disparity characteristic of many African countries, while life expectancy fell so precipitously that Russia now ranks 60th in the world, according to UN statistics. Kondrashov continued that the state has been beggared, as shown by the miserable levels of pensions and salaries to state-sector workers. He asserts that President Putin speaks to the masses using the language of the cheap ruble, while saving the language of dollars for the business elite. He noted that some economists warn that the budget might be broken by privileges and benefits that the state is creating for business interests, whose capital continues to go abroad rather than returning to the state treasury

ALLEGED AMERICAN-SOVIET DOUBLE AGENT DIES IN MOSCOW. Security authorities confirmed the death in Moscow on 22 July of former CIA agent Edward Lee Howard, who allegedly worked for the KGB and defected to the Soviet Union in 1985 (see "RFE/RL Newsline," 23 July 2002), "Moskovskii komsomolets" reported on 5 August. Leonid Sheba, former chief of the KGB's foreign-intelligence unit, told the daily that he has no reason to doubt the death of Howard, who reportedly fell down a set of stairs at his house outside of Moscow and broke his neck, or to suspect that someone "helped" his fall. "[Howard] posed no threat anymore to the national interests of either Russia or the United States," Sheba said. U.S. authorities believe that information provided to the KGB by Howard led to the unmasking of one of the CIA's most valuable agents inside the USSR, Alfred Tolkashev, who was executed in 1988. Howard steadfastly denied working for the KGB.

ESPIONAGE CONVICTION, SENTENCE UPHELD IN KALYADIN CASE. The Supreme Court has upheld the conviction and 14-year sentence handed down to businessman Viktor Kalyadin in October 2001 (see "RFE/RL Newsline," 30 May and 10 July 2002), RIA-Novosti reported on 1 August. Kalyadin was arrested in 1999 on charges of handing over classified information to U.S. agents and has already served more than 3 1/2 years in jail. During this time, he has suffered three heart attacks and undergone heart surgery. His lawyers said they will appeal the latest ruling to the presidium of the Supreme Court.

OFFICE OF PROSECUTOR-GENERAL EXTENDS TERM FOR INVESTIGATING BEREZOVSKII. The Prosecutor-General's Office has extended the term for investigating the case against self-exiled oligarch Boris Berezovskii until 5 October, strana.ru and other Russian news agencies reported on 31 July. Prosecutors are looking into allegations that Berezovskii financed illegal armed formations in Chechnya based on information provided by the Federal Security Service (FSB). They extended the term of the investigation "because of the necessity of carrying out an additional amount of work," the website quoted an unidentified official as saying. Meanwhile, speaking to journalists in St. Petersburg on 30 July, FSB Director Nikolai Patrushev alleged that Berezovskii committed numerous crimes in Russia. "We have received information about the financing of illegal armed formations -- even a bit more information than we expected," Patrushev said, according to strana.ru. "I think that Berezovskii will have to answer for what he's done."

CONSPIRATOR IN TULEEV ASSASSINATION PLOT SENTENCED. The Novosibirsk Oblast Court on 2 August sentenced Viktor Tikhonov, the brother of four-time Olympic biathlon champion Aleksandr Tikhonov, to four years in prison for his involvement in an alleged plot to assassinate Kemerovo Oblast Governor Aman Tuleev (see "RFE/RL Newsline," 15 September 2000), Russian and Western news agencies reported. Investigators claimed that Tikhonov hired contract killers to assassinate Tuleev at the request of Mikhail Zhivilo, the head of Moscow-based metals company MIKOM who was reportedly angry at Tuleev's attempts to squeeze his company out of the region, ITAR-TASS reported. Aleksandr Tikhonov has also been charged in the case, but he is currently abroad and Russian officials have been unable to locate him, AP reported. Zhivilo was arrested last year in France, but was released after a French court refused to extradite him.

PROPERTY MINISTRY OFFICIAL ARRESTED FOR FRAUD. The FSB on 1 August announced the arrest of Linar Zinatullin, a former senior official of the Property Relations Ministry, on charges of fraud, ntvru.com reported. Zinatullin allegedly caused the state damages in the amount of $3 million. According to the investigators, Zinatullin intentionally lowered the value of the state's shares in a luxury hotel in the fashionable resort of Sochi, and, as a result, the hotel allegedly came under the control of an organized-crime group.

SIBUR OFFICIALS TO REMAIN IN CUSTODY. A municipal court in Moscow on 6 August refused to release from jail any of the defendants in the Sibur trial, despite the fact that the original plaintiff in the case, Gazprom, has dropped its complaint and stated that it has no claims against them, gazeta.ru reported. Former Sibur officials Yakov Goldovskii, Yevgenii Koshits, Larisa Abramenko, and Austrian citizen Boris Blagerman are accused of embezzlement, fraud, money laundering, and abuse of office (see "RFE/RL Newsline, 2 July 2002). Their lawyers had asked that they be released on bond pending their criminal trial in view of Gazprom's decision to drop its civil complaints. The website reported that a spokesman for Sibur, which is a Gazprom subsidiary, repeated earlier statements that the company suffered no losses as a result of the activities of the accused. The trial is scheduled to continue with witness testimony on 7 August.

RESULTS IN FROM OPERATION TABOR. The Interior Ministry announced the results of the 10-day Operation Tabor, a national program directed against Roma that began on 16 July (see "RFE/RL Newsline," 17 July 2002), Interfax reported on 30 July. "The purpose of the operation was to combat the exploitation of children, who are engaged in vagrancy, begging, and con games," Deputy Interior Minister Aleksandr Chekalin told reporters. Chekalin reported that during Operation Tabor, 2,143 children under the age of seven and 2,274 between the ages of seven and 16 were identified. Among them, police found 221 non-Romany children whose presence among the Roma could not be explained. In all, 592 crimes were "solved" during the operation. Officers found 116 people on police wanted lists and seized 56.5 kilograms of narcotics, 275 firearms, and 1,800 units of ammunition.

IDEOLOGUE OF GLASNOST COMMENTS ON SERVILITY OF RUSSIAN JOURNALISTS. Aleksandr Yakovlev, the ideologue of former Soviet leader Mikhail Gorbachev's policy of liberalizing the mass media and a former Politburo member, told "Nezavisimaya gazeta" on 5 August that freedom of speech in Russia is going through a difficult time because of both government policies and the behavior of journalists. "I am enraged by certain ursine actions of the government toward the mass media, but one should not expect anything else. It is much more unpleasant, however, to see how some journalists themselves are trying to serve the authorities, to line up with them. This is a real misfortune," said Yakovlev, who is now a member of the board of trustees of the TVS television company. Another powerful blow against freedom of the press came in the 1990s when the mass media were involved in a "war of kompromat" among financial clans, Yakovlev continued. "If journalists write and tell lies, freedom of speech is perceived as the freedom to lie," Yakovlev noted. "Aggressive cynicism murders freedom of speech."