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Russia Report: February 2, 2000

2 February 2000, Volume 2, Number 5
"Kommersant-Vlast" declared in its 18 January issue that the Kremlin's victories in December's gubernatorial elections are no less important than its success in State Duma elections. The weekly concludes that the Kremlin "won" six of the eight races, lost one, and one was a draw. In Yaroslavl, incumbent Governor Anatolii Lisitsyn, a founding member of Moscow Mayor Yurii Luzhkov's Fatherland, won; but just before the elections, Lisitsyn, sensing the political winds were blowing in a different direction, declared the necessity of joining Fatherland with the pro-Kremlin bloc Unity. He also criticized Fatherland-All Russia (OVR) head Yevgenii Primakov for his "hesitancy," after having called him the best presidential candidate some months before. In Vologda and Primorskii Krai, where two more incumbents won, the first deputy head of the presidential administration, Igor Shabdurasulov, paid a special visit before elections to express his support. In Tver, Unity leader Sergei Shoigu paid a visit, and just before the elections posters and leaflets were distributed which said "support Putin, vote for [incumbent Governor] Vladimir Platov," who eventually won. In Novosibirsk and Tambov, challengers backed by Unity defeated two incumbents. According to the weekly, Putin personally backed Tambov's new governor, Oleg Vetin, meeting with him personally twice before the elections. JAC

In Orenburg Oblast, where former State Duma deputy (Communist) Aleksei Chernyshev displaced incumbent Vladimir Elagin (Our Home is Russia), Putin declared at a meeting of the Greater Volga interregional association that his position was "neutral" on the race and that the "strongest candidate" should win. In Moscow Oblast, OVR candidate Boris Gromov defeated another OVR member, incumbent Governor Anatolii Tyazhlov. The weekly considers this race the Kremlin's single loss in the December gubernatorial elections because the Kremlin had to withdraw its support during the second round for the candidate it backed in the first round, State Duma Chairman (Communist) Gennadii Seleznev. JAC

Addressing members of the Commission for Operational Issues on 26 January, First Deputy Tax Minister Aleksandr Smirnov announced that a decision on whether to limit the exports of two companies, Bashneft and Tatneft, will be discussed at the commission's meeting on 20 February. Interfax-AFI reported that day that according to the federal Tax Ministry, neither Bashneft nor Udmurtneft have fulfilled their obligations to the federal budget. However, Bashkortostan's Prime Minister Rafael Baidavletov told reporters in Ufa that Bashneft had wiped out its remaining debt to the federal budget, paying 190 million rubles ($6.6 million) for 1999 and 95 milllion rubles for 2000 on 26 January. Following the completion of State Duma elections, Tax Minister Aleksandr Pochinok threatened to cut off access to Russia's export pipeline to Bashneft and Tatneft (see "RFE/RL Russian Federation Report," 19 January 2000). JAC

"The St. Petersburg Times" on 28 January reported that the credit rating agency Moody's Investors Services revised its currency ratings for eight Russian regions. The agency changed its outlook from negative to stable for St. Petersburg and Samara, which both rated Caa1. Four regions--Sverdlovsk, Komi, Tatarstan, and Moscow Oblast--rated Caa3, while Sakha (Yakutia) and Nizhnii Novgorod Oblast received a rating of Ca. Moscow City, Yamal-Nenets, and Krasnoyarsk all retained their Caa1 rating with a negative outlook. JC

Federation Council Chairman and Orel Governor Yegor Stroev has expressed confidence that the Parliamentary Assembly of the Council of Europe will not expel Russia from the council over that country's campaign in Chechnya, Interfax reported on 1 February. "Neither PACE nor the Council of Europe will ever take such a step," he commented to the news agency, adding that "Russia is a great power which cannot be disregarded." Late last month, PACE decided to allow Russia to retain its seat in that body following heated debates over the war in Chechnya (see "RFE/RL Newsline," 26 January 2000). JC

Anatolii Lisitsyn has urged his fellow regional heads to provide economic aid to Daghestan, ITAR-TASS reported on 31 January. Lisitsyn and the governors of Vologda and Kostroma recently visited Daghestan at the behest of acting President Putin. The three governors have already committed themselves to providing direct assistance to the North Caucasus republic. PG

Addressing a military unit that had just returned from Chechnya, Saratov Governor Dmitrii Ayatskov pledged that every soldier from the oblast who has served in the war will have the right to study at any institute of higher education in the region without having to compete against other aspiring scholars, ITAR-TASS reported on 14 January. JC

Some 400 first-grade classes have been closed at state schools in the oblast as the number of children there has dwindled following the drastic decline in the region's birthrate in the early 1990s. That state of affairs has left many first-grade teachers without employment, RFE/RL Russian Service's "Korrespondentskii chas" reported on 15 January. Some 150 such educators are currently undergoing retraining for posts for which there are still insufficient numbers of qualified applicants in the oblast: teachers of mentally handicapped children, social workers within schools, and instructors of drawing and foreign languages. Some specialists predict that over the next five years the number of children of school age will fall by 40-45 percent, meaning that soon teachers of higher grades will also be affected by the demographic decline. JC

Two officials in the republic's tax inspectorate have been arrested, "Kommersant-Daily" reported on 27 January. The two men cooperated in a sophisticated scheme by which they bilked the republic of tax revenue by making certain companies' tax debts disappear. The daily reported that the criminals' misdeeds were only uncovered because of their greed and shortsightedness, since one of the "criminals" altered computer records and the other covered over the paper trail. The newspaper concludes that discovery of the crime ring raises doubts about the effectiveness of Russia's entire tax system: "since there is a single computer system for all tax organizations in Russia, it therefore cannot be excluded that criminals in other regions are stealing from the budget without being detected." JAC

Republican head Aleksei Lebed has declined an offer to head the regional campaign office backing acting President Putin's candidacy for the presidency, "Izvestiya" reported on 20 January. While commenting that he sees nothing wrong in regional authorities supporting Putin, Lebed argued that regional heads would be violating the law on presidential elections if they participated in the ballot in this way. Meanwhile, Lebed's brother, Krasnoyarsk Krai Governor Aleksandr Lebed, has still not confirmed whether he will be running for the presidency. JC

State sector employees in the oblast are to receive all back pay by 15 March, Governor Ivan Sklyarov announced on 26 January, according to Interfax. According to the oblast head, the total wage debt to such employees now totals some 384 million rubles ($13.4 million), while doctors and teachers in some raions are receiving their pay with a delay of up to four months. Sklyarov also prohibited the payment of wages in any other form than cash. JC

The former speaker of the krai's legislative assembly, Sergei Dudnik, registered on 31 January as a candidate for State Duma elections in a district in which elections must be held for second time because the19 December results showed that the majority of voters selected none of the candidates on the ballot, Interfax-Eurasia reported on 31 January. According to the agency, Dudnik is the first candidate to officially register for the second round of elections in that district, which will be held on 26 March. The agency reported earlier that eight candidates had already declared their intention to run in that district as of 19 January. Dudnik earlier declared his removal from the office of speaker "a continuation of attempts by [Primorskii Krai] Governor Yevgenii Nazdratenko to seize power in the krai." On 27 January, 20 deputies in the krai voted to remove Dudnik. They elected Sergei Zhekov the new speaker on the same day. Meanwhile, mayoral elections in Vladivostok which had been scheduled for 26 March were cancelled on 20 January. JAC

Former Vladivostok Mayor Viktor Cherepkov announced on 17 January that he has created a social-political organization called "Citizens of Primorskii Krai in Support of [Acting President] Putin." Two days later, the formation of a krai branch of the movement Unity was announced. Its leader is Yurii Selyutin, chief doctor of a local clinical hospital. Mayak Radio reported on 26 January that the European Court of Human Rights declined to hear Cherepkov's complaint that election laws had been seriously violated in the Krai. JAC

The Legislative Assembly has voted to hold gubernatorial elections on 14 May, following a protracted dispute that began last fall over the ballot's timing (see "RFE/RL Russian Federation Report," 13 October 1999), "Segodnya" reported on 27 January. Thirty-four deputies voted in favor of that date, while the remainder abstained. However, Governor Vladimir Yakovlev, who was expected to benefit from an early vote, has admitted he is not "completely happy" about the new date because the ballot will now coincide with the final of the World Hockey Championships, according to "The St. Petersburg Times" on 1 February. His administration had argued that one of the main reasons for bringing forward the election was to avoid detracting attention from those championships. JC

In an interview with "Nezavisimaya gazeta" on 26 January, Sakha Republic President Mikhail Nikolaev suggested creating a federal ministry for the affairs of Eastern territories, Interfax-Eurasia reported on 26 January. The new ministry's mission would be to ensure the realization of federal programs devoted to strengthening and developing Eastern territories. It would also make recommendations for economic policies, coordinating the work of regional and city organs. JAC

Newly-elected Governor Oleg Betin is offering his administration officials a one-year contract only, ITAR-TASS reported on 24 January, citing the press service of the oblast administration. According to that source, Betin wants to downsize the adminstration apparatus in order to conserve budget funds, improve discipline, and increase the effectiveness of the executive branch. He also wants to ensure that officials' wages do not exceed the average wage in the oblast. Supported by Unity, Betin defeated the former incumbent, Aleksandr Ryabov, in a run-off election last month. Prior to assuming the governor's post, he was former President Boris Yeltsin's representative to the region (see "RFE/RL Russian Federation Report," 5 January 2000). JC

Tatarstan's Finance Minister Robert Musin told reporters on 26 January that the republic's government has reached agreement with ING-Barings to restructure $100 million debt without having to pay fines for late payments. Under the agreement, the republic must pay the debt off over the next seven years with an annual interest rate of 8.5 percent, RFE/RL's Kazan bureau reported. Moody's Investor Services reported earlier that the republic has accumulated a substantial debt of at least 140 percent of its main budget revenues. JAC

Tatarstan President Mintimer Shaimiev announced on 28 January that his republic's security council is to meet for the first time, ITAR-TASS reported. He added that the council will be responsible for "ensuring the republic's internal and external security." Chaired by the president, the council has eight interdepartmental commissions as well as a new think tank to guide its work. PG

"Izvestiya" reported on 21 January that more than 70,000 residents of the oblast are currently without passports--and therefore deprived of basic legal rights--owing to the "catastrophic shortfall" of application forms for such documents. An official from the local passport and visa department told the daily that the forms began running out in June of last year. While those without valid passports are issued with temporary documents, the latter are frequently not recognized by the local authorities, employers, or institutions such as hospitals and registry offices. Officials from the oblast police force blame this state of affairs on the local administration, which, they say, failed to transfer the necessary sum of around 3 million rubles ($105,000) to the federal budget. JC

Members of the local parliament have voted to amend the regional charter to revoke deputies' immunity. "Vremya MN" reported on 19 January that the main aim of this move is to prevent criminal figures from running in the 26 March ballot to the local legislature. JC

END NOTE: Revving Up The Machine
By Christian Caryl

Yekaterinburg, August 1999 -- In Russia's heartland, the post-Yeltsin era ended long before Russian President Boris Yeltsin had even resigned.

Not too long ago, Russia's political fate was decided in a few square acres of Moscow real estate--the corridors of the Kremlin. But that no longer holds true, and Sergei Tushin, plugging away in his cramped office in the provincial capital of Yekaterinburg last August, demonstrated why. Tushin was a campaign manager, and his candidate in the 29 August 1999 gubernatorial elections was Yekaterinburg's Mayor Arkadii Chernetskii, a local power baron who was aiming to ascend the next rung in the regional hierarchy. Chernetskii was angling to become governor of Sverdlovsk Oblast, a region about the size of Nebraska situated squarely in the heart of the Ural Mountains.

The energetic Tushin did his best to make it happen. His office, which he shared with several helpers, was a Urals version of Bill Clinton's famous War Room. Stacks of freshly printed brochures clogged the corners, and colorful election posters adorned the walls. Tushin, deep in a discussion of the virtues of canvassers and focus groups, was suddenly distracted by one of three TV sets permanently tuned to the most important local channels. The opponent, incumbent Governor Eduard Rossel, was appearing on a news show. Tushin reached for the remote: "Sorry, I've got to watch this." The race hadn't been on for long, but the dirt was already flying. Tushin's colleagues had just parried an anti-Semitic attack on their candidate by accusing Rossel, an ethnic German, of Nazi sympathies. In late August things were calmer. It was back to the usual mutual incriminations of sleaze, incompetence, and coziness with organized crime--the same allegations that were already flying, as election season heated up, among bigger-time politicians back in Moscow.

But, as Tushin explained, that was not the only reason why political insiders in the capital were keeping a close watch as voters scheduled to head for the polls in Sverdlovsk. "Everyone is interested because Chernetskii has joined up with Fatherland," the political party of Moscow's powerful Mayor Yuri Luzhkov, who was then shaping up as a leading candidate in the run-up to the 2000 presidential election. Rossel, meanwhile, had received backing from the Kremlin of then President Yeltsin. Though Yeltsin hadn't yet then declared his preference for a successor, his camp was eager to see one of their own maintain power. And in today's unevenly democratic Russia, both sides know that neither can win without allies in the regions. "Today all political institutions are extremely weak," says Oleg Morozov, a deputy in the Russian parliament. "The government is weak, the president is weak, the political parties are weak. The only political resource is with the regional leaders--either governors or powerful mayors. They can have a real influence on the voting."

And the governor's race in Sverdlovsk was one of the first where new alliances are being put to the test. The contest was especially intriguing because both of the local candidates, Rossel and Chernetskii, had to get the vote out with tightly-run organizations that recall the machine politics of 19th-century America. As a visitor to Yekaterinburg can usually tell just by switching on the TV or opening a newspaper, both organizations held--and still hold--controlling interests in most of the local media. And in such a place where provincial or city governments still hold large shares in many big companies, businessmen also have to know which side their bread is buttered on. "A change in power can mean a change in ownership," as one of Rossel's TV channels ominously noted in the course of a news broadcast. Every one in Yekaterinburg, it seems, could tell a story of woe about local businessmen who backed losing sides in previous elections and suddenly found themselves beset by bureaucratic headaches. Meanwhile, Chernetskii's network ran endless repeats of a Fatherland ad showing him and Luzhkov fussing around construction sites and helping ordinary folk. "These are the first elections where there's a direct confrontation between candidates of Luzhkov and the Kremlin," said Yuri Butchenko, a Moscow analyst. "This is the Russian equivalent of the American presidential primaries."

The U.S., in short, is not the only place where campaigning for the top office has started months in advance. Russians, too, started gearing up for a seemingly endless bout of electioneering, running through December parliamentary polls, and culminating in the choice of the country's next president on 26 March 2000 And much of the politicking last summer focused on the elaborate mating dances between presidential contenders and the political movements led by regional bosses. Then Luzhkov concluded a much-ballyhooed alliance with the grouping led by Tatarstan President Mintimer Shamiev, one of a handful of key regional power brokers. The Kremlin countered by hitting Luzhkov confederates with corruption charges and pressuring media outlets favorable to the mayor. National TV stations allied with the two camps engaged in open warfare, accusing each other of everything from bad management to political prostitution.

All the mudslinging had the desired effect. Support for Luzhkov's alliance, Fatherland-All Russia (OVR), fell so much that OVR finished a distant third in the 19 December State Duma elections after the Communist Party and the pro-Kremlin Unity.

Before gubernatorial elections were held, well-wishers in Sverdlovsk collected 200,000 signatures on a petition asking OVR leader Yevgenii Primakov to run for the governorship. At the time, Primakov politely declined--a sign, said observers at the time, that he had bigger fish to fry. In hindsight, that refusal may have been ill-advised. With his popularity soaring, Primakov, unlike Chernetskii, might actually have defeated Rossel. He would have been the head of a large important region and likely the head of an influential interregional association, rather than the leader of the smallish opposition faction in the State Duma which continues to lose members and influence. Meanwhile, the newly re-elected Rossel, sensing the political winds have shifted most decisively in the direction of acting President Vladimir Putin, recently volunteered to head a presidential campaign effort in his oblast for Putin. Apparently, he believes the Putin era has begun.

Christian Caryl is the Moscow bureau chief for "U.S. News & World Report." He submitted this piece to the "RFE/RL Russian Federation Report."