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Russia Report: July 19, 2000

19 July 2000, Volume 2, Number 26
State Duma deputies voted on 19 July to approve the compromise bill amending the law on forming the Federation Council. The new amendments had been agreed upon by a conciliatory commission composed of members of both houses (see "RFE/RL Newsline," 18 July 2000). The bill will now return to the Federation Council for its final approval before being passed onto President Putin. "Nezavisimaya gazeta," which is controlled by Boris Berezovskii, reported on 19 July that the Kremlin is expecting senators to reject the bill again when the council convenes on 26 July. Russian Regions faction leader Oleg Morozov told "Kommersant-Daily" the same day that if the upper house again rejects the bill, the Duma will override the veto at an extraordinary session in August or in the fall. Also on 19 July, deputies overrode a 7 July veto by the upper house of the bill allowing the Russian president to dismiss regional leaders and disband local parliaments (see "RFE/RL Newsline," 10 July 2000). Before voting, deputies rejected a motion by the Fatherland-All Russia faction to form another conciliatory commission to find a version of the bill more acceptable to the senators. Under the legislation, which amends the law on the principles for legislative and executive government bodies, Russia's president can dismiss regional leaders, such as governors of oblasts or presidents of republics, for violating federal laws, Interfax reported. A court ruling and a note from the prosecutor-general is required to confirm that a regional leader is facing criminal charges. In order to dissolve a local legislature, the president must first submit a corresponding bill to the federal State Duma. Since the deputies overrode the upper house's veto, the bill now only needs to be signed by President Vladimir Putin to become law. JAC

"Kommersant-Daily," a newspaper in which Boris Berezovskii owns a controlling interest, reported on 15 July that Sverdlovsk Governor Eduard Rossel has decided to join the opposition to President Vladimir Putin. But in his remarks to the publication, Rossel spoke only about his opposition to the three laws proposed by Putin reforming the Russian Federation; he did not comment more broadly on his attitude toward Putin's administration. Rossel said that he opposes Putin's legislation reforming the federation because the reforms will have the opposite of their desired effect of strengthening state power. In particular, he objects to the law reforming the Federation Council because the upper legislative chamber "as a state agency is efficient only when it consists of the governors and chairs of legislative assemblies." According to Rossel, these officials are the most knowledgeable about the regional situation. He also complained that it will be dangerous for governors to be deprived of immunity from criminal prosecution, because regional leaders "make entrepreneurs manage their enterprises efficiently and dismiss those who refuse to do that." He added that "those people who lost their property and their enterprises will use the money they have stolen to gather spurious material, write spurious articles and bribe journalists in order to have governors dismissed." Berezovskii revealed earlier that he had consulted with Rossel along with a number of other regional leaders regarding the new political party that he hopes to establish (see "RFE/RL Newsline," 10 July 2000). Around the same time, Rossel's name appeared on a list of likely members of the proposed State Council (see "RFE/RL Russian Federation Report," 12 July 2000). JAC

Krasnoyarsk Krai Governor Aleksandr Lebed reportedly believes that after the planned reform of the system of tax payments, Russia will no longer have any donor-regions--that is, regions that contribute more to the federal budget than they receive in return, "Vremya novostei" reported on 13 July. According to Lebed, the federal center's plan to retain 65 percent of all revenues is a "serious step backwards toward socialist distribution." Lebed added that he does not believe in the "good and wise" federal bureaucrat who will comprehend that the roads in Krasnoyarsk Krai are longer than in Orel Oblast and that more resources for geological prospecting are needed in Krasnoyarsk than in Moscow. Meanwhile, the Council of the Association for Economic Cooperation of oblasts and republics in the Urals federal district published an appeal to President Putin in "Parlamentskaya gazeta" on 18 July. In it, council members raise several objections to the draft 2001 federal budget as well as to federal fiscal policy over the past few years. According to the appeal, the federal government's decision to redirect all proceeds of the value-added tax to the federal government is "irrational" and will lead to the insufficient funding of regional budgets. The appeal suggests further that the suggested changes to existing tax legislation will add 31.9 billion rubles to the federal budget, while regional budgets will lose 55.8 billion rubles. JAC

The Russian government is considering an amendment to the law on property taxes of enterprises that would require Gazprom to pay its property taxes not to the central government but to the regions where its property is located, ITAR-TASS reported on 13 July. Currently, Gazprom is directing all of its property taxes to federal coffers because the law on gas deliveries required that Gazprom's pipeline system be transferred from the balance sheets of Gazprom's regional subsidiaries to its Gazprom headquarters in Moscow. As a result, Gazprom had to pay the property taxes where it is located, Moscow, and regional treasuries have been denied a hefty portion of taxes without any compensating higher transfer from Moscow, according to the agency. JAC

An article in "Novaya Gazeta" (no. 29) argues that Russia's regional leaders are the true oligarchs of the Russian economy. According to the weekly, the families of regional leaders control the country's best pieces of property and head leading firms and banks. The weekly cites the fact that as the son of Samara Governor Konstantin Titov occupies a prestigious position at a local bank of Gazprom and in St. Petersburg, "the majority of economic issues there can be decided through the governor's wife, Irina Yakovleva and in Krasnoyarsk, through the governor's son." JAC

In an interview with "Parlamentskaya gazeta" on 18 July, Bryansk Governor Yurii Lodkin came out strongly in favor of strengthening executive power in the federation. Such strengthening, Lodkin argued, can be achieved only if governors are appointed, rather than elected, on the recommendation of the legislative organs of the federation subjects. In this way, he argued, the vertical structure of power is guaranteed and its democratic principles preserved. The governor also called for greater control over self-governing bodies, suggesting that these should be subordinated to regional administrations. With regard to the Federation Council, Lodkin expressed his opinion that "sooner or later, it will be elected nationally," adding that the "American system...will come to us." Lodkin himself was elected governor in December 1996 with the backing of the Communist Party of the Russian Federation. Earlier, in fall 1993, he had been removed from that office--despite having been popularly elected--for opposing former President Boris Yeltsin in the latter's conflict with the Russian Supreme Soviet. Last May, Kursk Governor Aleksandr Rutskoi argued that all of Russia's regional leaders should resign and then President Putin should appoint their successors (see "RFE/RL Newsline," 26 May 2000). JC

Justice Minister Yurii Chaika announced on 14 July that a new federal department for the Justice Ministry has been established in Rostov-na-Donu, the capital for the Southern federal district, Russian newspapers reported on 15 July. According to Chaika, such a department will be formed in the remaining six federal districts. Part of the mandate of these new departments will be to ensure the compliance of regional laws with federal. JAC

The Collegium of the Defense Ministry decided on 12 July to merge two military districts, the Ural and Privolzhskii districts, "Nezavisimaya gazeta" reported on 15 July. The new headquarters for the merged district will be Yekaterinburg, which is also the capital of the newly formed Ural federal district. "Izvestiya" reported on 18 July that according to the Defense Ministry's press service, after the merger of the two, there will be a total of six military districts in Russia, the other five being Moscow, Leningrad, Caucasus, Siberia, and the Far East. JAC

Addressing a press conference on 17 July, Governor Leonid Gorbenko confirmed that he will seek re-election in the ballot scheduled for 5 November, Interfax reported. Gorbenko also dismissed rumors that the federal center had suggested to him that he withdraw his candidacy in favor of commander of the Baltic Fleet Admiral Vladimir Yegorov, saying "no one has put pressure on me and there will be no such pressure in the future, either." Opinion polls earlier this year suggested that Gorbenko's prospects for re-election are slim. He also has little backing from the exclave's media (see "RFE/RL Russian Federation Report," 19 April 2000). JC

In April 2000, unknown persons ordered the killing of Kemerovo Governor Aman Tuleev, "Novaya gazeta" reported in its issue no. 29 on 13 July. According to the weekly, a professional contract killer was paid a $300,000 advance with the prospect of another $400,000 after Tuleev was murdered. The would-be assassin was arrested by authorities in Novosibirsk and remains in jail there. He is refusing to say who hired him, claiming that those who ordered the killing have promised to find him in any prison where he might be incarcerated and silence him permanently if he reveals who paid him to kill Tuleev. The newspaper concludes that the "all-powerful Tuleev" has many enemies, including local businessmen and political figures, and so far no single theory of who likely hired the contract killer has proven persuasive. Last year, Russian media reported that a group of Muslim clerics from Chechnya and Dagestan had sentenced Tuleev to death for his alleged conversion from Islam to Christianity (see "RFE/RL Russian Federation Report," 14 and 21 July 1999). Tuleev has denied that he converted. JAC

"Obshchaya gazeta" reported in its issue no. 28 on 13 July that Nenets Autonomous Okrug Governor Vladimir Butov is leading a lifestyle at odds with the annual income he has declared to tax authorities and has met socially with Boris Berezovskii on at least one occasion. According to the weekly, Butov attended a black-tie gala on New Year's Eve at Moscow's Bolshoi Theater, where he was photographed socializing with Berezovskii (to view the photo, see A ticket for the event cost $2,000, and at one point during the evening, an auction was held in which Butov bid $30,000 for a painting but was later outbid by Berezovskii. The weekly also reported that while running for the governor's office, Butov claimed that he has a diploma from the Moscow Higher Institute for Management; however, the institute said that no one by Butov's name has ever attended the school. According to the newspaper, Butov has previously been charged with swindling and poaching. JAC

Earlier this year, journalists from the Penza State Television and Radio Company (PGTRK, the regional branch of Russian Television and Radio) sent a letter to Governor Vasilii Bochkarev complaining that PGTRK head Igor Lebedev is using federal resources to ensure that a private local television channel, Ekspress, flourishes at the expense of its federal counterpart, "Izvestiya" reported on 4 July. Local officials assured the journalists that their complaints would be dealt with, but by the beginning of this month, according to the Moscow daily, the only development was that the letter's authors began to be fired. Those former PGTRK employees told "Izvestiya" that among other things, Levov's deputy, Dmitrii Kulikov, who heads both the advertising department of PGTRK and the private advertising agency Avtograf, regulated advertising contracts so that "the coffers of the state channel emptied in a flash, while Ekspress began to flourish." Moreover, both Levov and Kulikov have regularly used materials produced by PGTRK journalists for broadcasting on Ekspress--"without receiving the authors' permission [and] without paying any honorarium." Levov refused to comment on the assertion that he has used federal resources to create a private, gubernatorial television company, saying only that the information exchange between PGTRK and Ekspress is "mutual" and that the authors of the letter to Bochkarev left PGTRK of their own accord. JC

Unified Energy Systems (EES) head Anatolii Chubais declared on 13 July that the Primorskii Krai, which has been experiencing significant reductions in the electricity supplied to its consumers, is facing the most critical situation in Russia's entire electricity system. According to Chubais, EES has serious grievances against the leadership of the region, which two years ago could have taken the necessary measures to resolve its fuel problem. JAC

Four days later, Dalenergo announced that it would be supplying electricity to Vladivostok's buses and trams only during the morning and evening rush hours, ITAR-TASS reported. According to the agency, the utility is trying to pressure the city to pay its electricity bill for the past 34 months of some 38 million rubles ($1.4 million). Before mayoral elections in that city last month, Dalenergo had made a similar threat and had managed to extract a promise from the city administration to pay its bill (see "RFE/RL Russian Federation Report," 31 May 2000). Apparently, the city administration is not adhering to its agreement. Since 1993, passage on city buses and trams has been free. According to "The Moscow Times" on 8 July, Vladivostok city authorities say that they have already settled their debts with Dalenergo through various barter deals. These officials also criticize the company for not repairing its shabby equipment. JAC

At a press conference last week, St. Petersburg Prosecutor-General Ivan Sydoruk announced a 34 percent success rate in solving contract murders, according to "Delovoi Petersburg" cited by "The St. Petersburg Times" on 18 July. Other local publications reported that Sydoruk claimed the rate of solving such crimes was up 6 percent in the first half of this year compared with the same period in 1999. However, crime experts quoted by "The St. Petersburg Times" cast doubt on Sydoruk's claims, suggesting that he was likely using a very loose definition of the verb "to solve." Under Governor Vladimir Yakovlev's rule, St. Petersburg has witnessed a long series of contract killings, many of which have targeted prominent individuals and have remained unsolved. Two of the most notorious cases--those of State Duma Deputy Galina Starovoitova in November 1998 and local Property Committee Chairman Mikhail Manevich in August 1997--will not be solved in the immediate future, according to Sydoruk. JC

"Kommersant-Daily" reported on 12 July that newly re-elected Governor Konstantin Titov has appointed Viktor Kazakov, the former first vice president of the YUKOS oil company and the head of Titov's election team, as first deputy governor. According to the daily, YUKOS can now count on expanding its activities in the oblast, receiving permission to drill in new fields and special privileges for working older reserves. The company's engagement in the oblast currently account for up to 30 percent of its total activities. "Kommersant-Daily" also noted that there has been a change in the governor's preferences among the country's oligarchs, pointing to the presence of YUKOS Chairman Mikhail Khodorkovskii at Titov's re-inauguration ceremony. "The strengthening of Khodorkovskii's position," the newspaper argues, means that from now on, Titov should no longer be associated with the political group around Unified Energy Systems head Anatolii Chubais. Boris Berezovskii owns a controlling interest in "Kommersant-Daily." JC

The oblast prosecutor-general has launched a criminal investigation into the high-security Penal Colony No. 4, where officers are accused of exceeding their authority during a monthly training exercise staged earlier this month, Interfax reported on 13 July. The local non-governmental Human Rights Commission had recently revealed to the media that during the course of that exercise, special forces (spetsnazovtsy) brutally beat inmates, breaking ribs, hands, and jawbones and injuring internal organs. Following that incident, prisoners staged a mass hunger strike, and 14 are reported to have slit their wrists. The prison director, Aleksandr Budarev, told the news agency that some of the 80 prisoners who took part in the drill, staged to practice quelling mass disturbances within the colony, may have been injured when they were forced to run in the dark. He also claimed that only seven inmates were beaten with rubber truncheons and that this measure was used because they had refused to leave their cells. JC

"Nezavisimaya gazeta" reported on 12 July that it seems likely the head of the local branch of the Federal Security Service, Vladimir Kulakov, will run in the gubernatorial ballot slated to take place in the oblast in December. At the beginning of last month, 219 local entrepreneurs, managers, financiers, and members of the oblast legislature appealed to Kulakov to take part in that vote, and according to the Moscow daily, the local FSB chief gave to understand that he will announce his candidacy. More recently, the Regional Policy fund, which Kulakov founded, announced its readiness for open cooperation with him and mutual support. And Kulakov also has the backing of the pro-Kremlin Unity. Incumbent Governor Ivan Shabanov, who retains close ties to the Communists, has let it be known that he intends to run in the ballot, as has former Governor Aleksandr Kovalev, who was replaced in that post by Shabanov and is currently the Russian Federation trade representative in Ukraine. JC