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Security Watch: November 26, 2002

26 November 2002, Volume 3, Number 42
SOLID AGENDA FOR BUSH, PUTIN SUMMIT... Although U.S. President George W. Bush spent only a few hours in Russia before departing for Lithuania on 22 November, an intensive agenda had been proposed for his talks with President Vladimir Putin, ORT reported on 21 November. Bush was expected to inform Putin about the decisions of the Prague NATO summit and to ask Putin to explain Russia's position on a possible military intervention against Iraq if the current mission of UN weapons inspectors there fails. Moreover, the presidents were expected discuss international terrorism, North Korea's nuclear program, the Middle East, and bilateral relations. The meeting was scheduled to replace a planned meeting between the two leaders at the Asia-Pacific Economic Cooperation Summit in Mexico, which was canceled because of the 23-26 October hostage crisis in Moscow, noted. Presidential foreign policy aide Sergei Prikhodko stressed the global importance of relations between the two countries. The high level of confidence and mutual understanding that has been achieved allows the two presidents to talk openly about the issues dividing them without provoking unduly strong reactions, Prikhodko noted, according to on 22 November.

...AS PUTIN, BUSH SATISFIED WITH SUMMIT RESULTS... Speaking to journalists following his 22 November summit meeting with U.S. President Bush near St. Petersburg, President Putin described the talks as productive and useful, Russian and Western news agencies reported. The two presidents discussed "many matters," including NATO expansion, bilateral relations, Iraq, and combating international terrorism. Bush and Putin also issued a joint written statement on Iraq, warning that Iraqi President Saddam Hussein will face serious consequences if he does not comply completely with UN Security Council Resolution 1441 and cooperate unconditionally with UN weapons inspectors. Putin also said that the United States and Russia will work together to identify those who support and finance international terrorism. "We must not forget that 16 of the 19 people who carried out the 11 September [2001] terrorist attacks in the United States were Saudi citizens," Putin said. Putin also expressed Russia's displeasure with NATO expansion. "However, as a pragmatist who realizes that it is pointless to argue against the inevitable, Putin is seeking to gain maximum benefits from the situation," "Izvestiya" commented on 22 November.

...AND ACCORD ON ENERGY DIALOGUE SIGNED. A two-page statement on the U.S.-Russian energy dialogue was the only written economic document produced by the 22 November summit, "Izvestiya" reported. In the statement, the two presidents said they will energetically support the efforts of Russian and U.S. oil companies to develop Russia's energy sector and energy-transportation system. President Bush also reportedly told Putin that the United States would respect Russia's economic interests in a post-Hussein Iraq, the daily continued. The U.S. administration wants to maintain global oil prices above $21 a barrel, which is in the interests of both U.S. and Russian oil companies, "Izvestiya" added.

BUSH TO PRESS FOR SETTLEMENT IN CHECHNYA... In an exclusive interview broadcast on NTV on 21 November, U.S. President Bush said that Chechnya is Russia's domestic problem but that it should be resolved by peaceful means. Bush said that in his 90-minute meeting with President Putin near St. Petersburg on 22 November, he will encourage Putin to find a peaceful settlement. Bush stressed that the United States and Russia are now cooperating to combat the common threat of international terrorism and that never has cooperation between the two countries' intelligence services been so productive.

...IN AN ATMOSPHERE OF TSARIST SPLENDOR. The two presidents met in the 18th-century Catherine Palace in the St. Petersburg suburb of Pushkin, RIA-Novosti reported. The palace was the summer residence of Russia's imperial family and is considered one of the country's cultural treasures. While the presidents met, it was expected that first lady Lyudmila Putina would give her counterpart Laura Bush a tour of the palace, including the world-famous Amber Room, which is in the process of being fully restored after it was looted by the German Army during World War II.

KREMLIN CHANGES TONE ON NATO EXPANSION... Defense Minister Sergei Ivanov told journalists in Moscow on 21 November that Russia is "absolutely calm" about NATO's membership invitation to seven former Soviet-bloc countries earlier that day, ORT reported. "We are not a member of NATO or a candidate for membership, and so this is none of our business," Ivanov said. He repeated, however, that the Kremlin hopes the Baltic states will sign the Treaty on Conventional Armed Forces in Europe (CFE) before they join the alliance. In Prague, Foreign Minister Igor Ivanov told reporters following a meeting with Czech Foreign Minister Cyril Svoboda that Russia will intensify its cooperation with a reformed NATO, reported on 21 November. "We have noted the statements by the U.S. president and other NATO-member leaders that the alliance should be transformed to face new realities and challenges," Ivanov said. He also mentioned the CFE treaty, ITAR-TASS reported. He said that if the alliance's transformation improves security globally and in the Euro-Atlantic region, Russia will intensify its partnership with NATO. On 22 November, Ivanov participated in a session of the Russia-NATO Council that discussed a cooperation plan for 2003. Afterward, he joined U.S. President Bush on Air Force One for the flight to St. Petersburg, where Bush was to meet with President Putin.

...AS BUSH SAYS NATO, RUSSIA FACE COMMON THREAT. U.S. President Bush will seek to assuage Russia's concerns about NATO's eastward expansion during his 22 November summit meeting with President Putin, "Izvestiya" and other Russian news agencies reported on 20 November. The daily published Bush's responses to questions posed by its correspondent at a 19 November press conference in Washington on the eve of the president's departure for Prague. Bush said he will tell Putin that NATO expansion is a positive thing for Russia and that the alliance's mission has changed since the end of the Cold War. NATO no longer views Russia as a threat and the Warsaw Pact no longer exists, Bush said. He emphasized that the alliance and Russia now must face the common threat of international terrorism together. He said he appreciates Russia's support of UN Security Council Resolution 1441 against Iraq. The goal of the resolution is the disarmament of the Iraqi regime and the United States will consider military action if necessary to achieve this goal, Bush said.

FOREIGN MINISTER ON HAND FOR NATO EXPANSION. Igor Ivanov was in Prague on 21 November when NATO formally invited seven former Soviet-bloc countries -- including the three Baltic states -- to join the trans-Atlantic alliance, Russian and Western news agencies reported. Foreign Ministry spokesman Aleksandr Yakovenko said that Ivanov will participate in a session of the Russia-NATO Council on the sidelines of the NATO summit. He added that Russia recognizes NATO's contribution to the processes currently taking place in the Euro-Atlantic region. However, he said, Western leaders also recognize that the alliance cannot meet the challenges of the new century without Russia. In Prague, Czech President Vaclav Havel said he will meet with Ivanov to discuss the new configuration of the world and the new challenges facing the international community. Havel, however, said he believes Russia will never join NATO. "Russia obviously represents a Euro-Asian power of such singular character that its membership in NATO would make no sense," Havel said on 19 November, according to UPI.

PUTIN TO VISIT CHINA IN DECEMBER. After meeting in the Kremlin with Chinese Foreign Minister Tang Jiaxuan on 23 November, President Putin said that Moscow is attentively following developments in Beijing after a Communist Party congress there elected Vice President Hu Jintao as the party's new general secretary recently, Russian news agencies reported. Putin said he is looking forward to meeting Hu and other Chinese leaders during his scheduled 1-3 December trip to Beijing. Tang also met in Moscow with Foreign Minister Ivanov, who briefed him about the recent NATO summit in Prague. "China has taken note of the results of the alliance's summit," Tang said, "and hopes NATO will concentrate more on combating international terrorism."

PUBLIC COMMISSION BLAMES 'NEGLIGENT' OFFICIALS FOR DEATHS OF HOSTAGES... A public commission organized by the Union of Rightist Forces (SPS) to look into the 26 October storming of a Moscow theater in which Chechen fighters were holding more than 700 hostages released its findings on 19 November, and other Russian news agencies reported. The commission charges that the large number of civilian casualties in the operation -- more than 120 hostages died, mostly from the effects of the sleeping gas used by special forces -- was caused by the disorganization and "negligence" of responsible officials. The commission found evidence of poor coordination among the special forces, medical personnel, and rescue teams that contributed to the deaths of hostages following their release. Commission head and Duma Deputy Major General Eduard Vorobiev (SPS) said the commission found no evidence of wrongdoing on the part of special-forces officers or doctors. SPS leader Boris Nemtsov told journalists President Putin had authorized him to publicize the commission's findings.

...AS CONTROVERSY OVER NUMBER OF HOSTAGE-CRISIS VICTIMS CONTINUES. One more former hostage from the 23-26 October hostage crisis in Moscow died on 24 November, bringing the official death toll to 129, Russian news agencies reported. Almost all of the victims died from the effects of the sleeping gas used by special-forces units during the storming of the theater where more than 700 people were being held hostage by Chechen fighters. Gennadii Raikov, head of the People's Deputy faction in the Duma, said on ORT that the actual number of victims is 190. However, ORT host Nikolai Svanidze commented that it remains unclear whether Raikov has additional information or whether the remark was just a slip of the tongue. Law enforcement agencies on 24 November released the names of three people who have been arrested as "accomplices" of the hostage takers. They were identified as Khampash SobrAliyev of Chechnya, Arman Menkeev of Kazakhstan, and Yurii Yankovskii of Moscow Oblast.

INTERIOR MINISTRY TO BE DISSOLVED IN SWEEPING REFORM. Deputy chief of the presidential staff Dmitrii Kozak announced on 19 November that the Interior Ministry will be abolished under a major Kremlin reform proposal, reported. Kozak told the website that under a draft bill prepared by the commission on delineating responsibilities among federal, regional, and local authorities that he heads, the current functions of the Interior Ministry will be divided into two components -- the federal and the municipal. Local law enforcement agencies will be responsible for maintaining public order and safety, while the federal level will oversee national domestic security and criminal investigations. Consequently, the police (militsiya) will be divided into federal and municipal components, with the federal part including a national-investigations service and a National Guard, which will be formed from the estimated 200,000 current Interior Ministry internal troops (see "RFE/RL Newsline," 30 October 2002).

INTERIOR MINISTRY CREATES ANTI-MONEY-LAUNDERING UNIT. The Interior Ministry's economic-crimes department has created a special operative unit to combat money laundering, reported on 19 November. The new unit will be subordinated to the Financial Monitoring Committee, which was created last year (see "RFE/RL Newsline," 2 November 2001). It will focus on the most criminalized sectors of the economy, including the sale of alcohol and tobacco, the fuel and energy infrastructure, and the distribution of consumer goods. The creation of this unit was one of the conditions for removing Russia from the blacklist of the Financial Action Task Force in October (see "RFE/RL Newsline," 11 October 2002).

FSB GOES AFTER ENVIRONMENTALISTS. Federal Security Service (FSB) agents on 22 November searched the Irkutsk offices of an environmental group called Baikal Ecological Wave, seizing documents and computers, Russian and Western news agencies reported. The group, which works closely with Greenpeace, monitors radioactive contamination in and around Lake Baikal. According to initial FSB statements, at least five secret documents were found in the office and a criminal investigation was launched over the weekend, RosBalt reported. However, on 25 November reported that no charges will be filed against the activists, although the FSB will continue trying to identify those who gave the allegedly secret documents to the group. The allegedly secret information concerns maps of environmental contamination surrounding a chemical plant in Angarsk, reported. AP cited a Greenpeace spokesman in Moscow as saying that the likely reason for the search was Baikal Ecological Wave's opposition to plans by oil giant Yukos to build a pipeline through a national park along the shore of the lake.

PUTIN VISITS MISSILE PLANT. President Putin on 19 November visited a secret missile-production complex in the Moscow Oblast town of Reutov, RTR and other Russian news agencies reported. The president pledged that the state will invest only in military-industrial enterprises that are working on defense-related issues and only in those that are producing efficiently. At present, only about 15 percent of the country's defense plants would qualify for such investment, as 85 percent are producing dual-use goods or commercial products. Putin said that those plants should organize and manage themselves, including the development of international contacts. Gerbert Yefremov, director of the Reutov complex, showed Putin the plant's Strela light missile booster and the Yakhont antiship missile, which the plant produces for the Russian Navy and for sale to India. Putin expressed his satisfaction with the Reutov plant. "Russia is a country rich in mineral resources, but that is only for the short term. The future lies in high-technology production such as is happening here," Putin said.

DEFENSE MINISTRY SEEKS SOURCE OF CHECHEN ANTIAIRCRAFT MISSILES... Addressing a meeting of CIS defense ministers in Moscow on 20 November, Defense Minister Sergei Ivanov said Russia will audit all producers of shoulder-launched antiaircraft missiles and all stockpiles of these weapons in an effort to find out how Chechen fighters acquired them, "Izvestiya" and RTR reported. In recent months, several Russian military helicopters have been shot down in Chechnya by fighters using Strela shoulder-launched missiles; the worst incident came on 19 August when more than 100 soldiers were killed in a single downing (see "RFE/RL Newsline," 20 August 2002). Russia is asking the former Soviet republics also to inventory stocks of the weapon left on their territories by Soviet forces. "Through the Foreign Ministry, Russia has asked the former Soviet republics -- beginning with the Baltic states -- to submit an account of these weapons," Ivanov said. Russia intends to check the serial numbers of the weapons used in Chechnya against the lists submitted, "Izvestiya" added. Military attaches from all three Baltic countries in Moscow have said their countries possess no Strela missiles, "Izvestiya" reported.

...AND PROPOSES THREE-STAGE MILITARY REFORM. Ivanov on 20 November presented to the cabinet a Defense Ministry plan for a three-stage military reform to be carried out over the next 15 years, Prime-TASS and other Russian news agencies reported. The first stage will be completed by the end of the year and will result in the Pskov Airborne Division being entirely converted to a contract basis and a report on that experiment. At the same time, the ministry will develop a national concept for its force structure following the complete transition to contract service. The reform's second stage, from 2003-11, will see the percentage of contract soldiers rise to 60 and the duration of the term of service reduced to 18 months. During the final stage, from 2011-17, the military will complete the transition to contract service, and the term of service will be reduced to six months. Prime Minister Mikhail Kasyanov said he is not satisfied with the pace of the reform and urged the ministry to complete it by 2007.

EIGHT YEARS ON, DUMA PASSES ANTICORRUPTION BILL... The State Duma on 20 November passed in its first reading a draft law on combating corruption, Russian news agencies reported. The legislation was submitted by members of the Duma Security Committee, including former security-service director Nikolai Kovalev (Fatherland-All Russia), former Interior Minister Anatolii Kulikov (Fatherland-All Russia), and Interior Ministry Colonel General Arkadii Baskaev (People's Deputy). For the first time in post-Soviet Russia, the new law provides definitions of terms such as "corrupt act," "corrupt relations," and "bribery" and extends criminal liability beyond civil servants to leaders of political parties and public organizations, financial executives, and candidates for executive-branch and legislative offices. Baskaev told journalists that versions of the bill have been stuck in the Duma since 1994 because of the strong resistance of corrupt bureaucrats. He said one of the bill's merits is that it imposes strict constraints on candidates for public office, particularly on those coming from the business sector. Baskaev said the bill includes the creation of a national anticorruption council under the president that will comprise representatives of all branches of government and law enforcement agencies.

...AS DEPUTY CHARGES COUNTRY 'IS RULED BY THE MAFIA'... Duma Deputy Sergei Shashurin (People's Deputy), a member of the Duma's Commission on Corruption, gave a long interview to on 21 November in which he leveled serious corruption charges against almost every prominent Russian politician of the post-Soviet period, including against some of those who sponsored the anticorruption bill. "We are ruled by the mafia," Shashurin said. He described a machination in which then-Duma Deputies Grigorii Yavlinskii, Galina Starovoitova, and Sergei Shakhrai allegedly received "several tens of thousands of tons of oil" from Tatarstan President Mintimer Shaimiev in 1992 during the negotiation of the power-sharing treaty between Tatarstan and Russia. He said that he has presented to the Prosecutor-General's Office incriminating evidence against Moscow Mayor Yurii Luzhkov, former Prime Minister Viktor Chernomyrdin, former acting Prime Minister Yegor Gaidar, and former Central Bank Chairman Viktor Gerashchenko, but no action has been taken. Shashurin alleged that he met earlier this year with Prosecutor-General Vladimir Ustinov to discuss corruption involving $14 billion and that Ustinov asked Shashurin to pay him "his share" for keeping the affair quiet. He said the Prosecutor-General's Office and the Interior Ministry are "infected" with corruption. Finally, Shashurin noted that none of the people about whom he has made such claims has sued him for defamation. "They prefer to wait and be silent," Shashurin said. During the Soviet period, Shashurin served three prison terms on convictions for economic crimes.

...AND NEWSPAPER DETAILS HOW DUMA CORRUPTION WORKS. A deputy's salary makes up less than 10 percent of his or her likely income, "Komsomolskaya pravda" reported on 21 November. The newspaper claims deputies can be paid, for instance, from $1,000-$1,500 to write an official inquiry to the prosecutor demanding an audit of a commercial structure. Well-timed parliamentary inquiries -- to which state officials are required to respond -- can seriously delay criminal and civil proceedings or initiate investigations. Deputies also allegedly regularly accept payments for arranging meetings between managers of state enterprises and businessmen seeking commercial contacts. They also allegedly sell appointments as "deputy's assistants" for about $2,000 each. The daily asserts there are now more than 20,000 assistants "helping" the country's 450 deputies. Deputies are also able to sell automobile stickers allowing special access and parking privileges for $500-$1,000. Finally, the paper wrote, deputies are allegedly paid to vote correctly or to join certain factions. Former Deputy Vladimir Semago alleged in an interview that he was paid $5,000 in 1998 to vote for Chernomyrdin as prime minister, the paper wrote.

OFFICIAL: AMNESTY WON'T BRING CAPITAL BACK. Maksim Kulikov, a senior Finance Ministry official, has said most Russian experts doubt that a tax amnesty for capital illegally transferred out of Russia will significantly increase repatriation, RosBalt reported on 22 November. Participating in a roundtable discussion of the issue, Kulikov noted that about half of all capital leaving the country was acquired illegally in the first place and that no one is going to attempt to return it to Russia after it has already been invested in real estate and businesses in the West. He cited the example of Kazakhstan, which declared an amnesty in 2001 and managed to return only 8 percent of the capital that had been taken out of that country. Deputy Duma Speaker Georgii Boos (Fatherland-All Russia) told the panel that an estimated $200 billion-$300 billion has been transferred out of Russia over the last decade.

BUSINESS DISPUTE ON THE HIGH SEAS. A Russian fishing trawler in the Sea of Japan was the subject of an apparent takeover attempt on the high seas on 20 November, Russian news agencies reported. According to, the "Tulun" was approached by another trawler, the "Korf," aboard which was a man who claimed to be the owner of the "Tulun" and others reportedly armed with nightsticks. There were conflicting reports as to whether shots were fired during the incident, but no injuries were reported. Russian, Japanese, and Korean authorities all denied early reports that the incident was either piracy or terrorism. Ownership of the "Tulun" is currently the subject of court cases in Primore and on Sakhalin, State Fisheries Committee Chairman Yevgenii Nazdratenko was quoted by as saying. The two trawlers are being escorted to Vladivostok by Russian Coast Guard vessels and are expected to arrive on 21 November.

RUSSIAN MANAGERS LOOKING FOR U.S. TRAINING. Russian Union of Industrialists and Entrepreneurs (RSPP) Executive Director Igor Yugens said on 20 November that his organization wants to organize a large-scale training program for Russian management specialists in the United States, reported. He said Russia is not yet fully exploiting the benefits of Western training for local managers. Yugens also said the RSPP has nearly finished drafting a national Charter of Business Ethics, which it considers necessary as Russia integrates into the global economy.

OLIGARCH TIED TO SPANISH OIL DISASTER. Ownership of the 77,000 tons (20.6 million gallons) of fuel oil aboard the "Prestige," which sank off the coast of Spain on 19 November and now threatens the coast with a major ecological disaster, can be traced back to Russia's Alfa Group, which is controlled by oligarch Mikhail Fridman, "The Times" of London reported on 21 November. The daily reported that the "Prestige" was chartered by an oil-trading company called Crown Resources AG, which is owned by commodities trader Alfa-Eco. Reuters reported on 22 November that oil traders such as Crown typically insure such shipments for 110 percent of their value, meaning that the accident could result in a $1 million profit for Fridman's company. The news agency also cited Joe Nichols, deputy director of the International Oil Pollution Compensation Funds, as saying the Switzerland-based Crown Resources AG will not be liable for any of the damage caused by the accident unless evidence emerges that the company was negligent. Spanish officials have estimated that the spill has caused $42 million in damages already, CNN reported on 22 November, and most of the oil remains within the tanks of sunken vessel. By comparison, the "Exxon Valdez" spilled 11 million gallons in Alaska's Prince William Sound in 1989.

RUSSIAN GIANT MOVES TO CONTROL PALLADIUM MARKET. Norilsk Nikel, which is owned by Vladimir Potanin's Interros group, is attempting to purchase a 51 percent stake in U.S. palladium producer Stillwater Mining Company for a reported $341 million, and other Russian news agencies reported on 22 November. Stillwater, which produces about 640,000 ounces of palladium per year, is the only producer in the United States and is the largest in the world outside of South Africa and Russia, reported on 22 November. "Now Norilsk Nikel is becoming on the palladium market something like DeBeers is on the diamond market," commented, "and it will be able to cushion itself from the effects of the drawn-out crisis in the [palladium] market."

OLIGARCH, COMMUNISTS FLIRTING. Self-exiled tycoon Boris Berezovskii on 20 November published an article in "Nezavisimaya gazeta" calling for the Communist Party to cooperate with him during the December 2003 State Duma elections. Recent developments prove that only the Communist Party represents any real, vital opposition to the Kremlin, Berezovskii wrote. He proposed joining forces with the party in order to prevent a pro-Kremlin majority from forming in the Duma. Berezovskii said that a genuine opposition must gain at least 150 seats in the Duma and should try for a majority of 226 seats. On 21 November, "Nezavisimaya gazeta," which is controlled by Berezovskii, published a response by Communist leader Gennadii Zyuganov, who wrote that the party will not bargain with those "who betrayed the Motherland" and who for many years led it into disaster. He added, however, that when considering alliances, one should count the resources that both sides have to offer.

DEFENSE MINISTER GAVE APPROVAL TO REBURY STALIN'S SON... Sergei Ivanov gave permission to Tatyana Dshugashvili, granddaughter of Soviet dictator Josef Stalin, to rebury her father, Vasilii Stalin, in Moscow's Troekurovskoe Cemetery, "Komsomolskaya pravda" reported on 25 November. Vasilii Stalin was a pilot and a high-ranking air force commander until Nikita Khrushchev came to power following Stalin's death in 1953. During that campaign, Vasilii Stalin was imprisoned and exiled, and he died in poverty in Kazan in 1962. Since that time, Vasilii's late sister Svetlana; his wife Maria, who died in 2001; and other relatives have applied for permission to re-inter Vasilii in Moscow near the place where his mother is buried. Moscow, however, consistently refused these requests. "Komsomolskaya pravda" also published over several issues (4, 5, 12, 13, 16, 19, 20, and 21 November) a long interview with historian Yurii Zhukov, who argued that the Communist Party apparatus -- not Josef Stalin -- initiated the mass repressions of the 1930s and 1940s and that Stalin tried to end them.

...REVITALIZING THEORIES ABOUT KHRUSHCHEV AND STALIN. The reburial of Vasilii Stalin has given a new lease of life to speculation that Khrushchev persecuted him in revenge for the role that Josef Stalin and his inner circle played in the death of his own son, Leonid Khrushchev. This theory was most completely presented in a 17 February 1998 "Nezavisimaya gazeta" article by KGB General Vadim Udilov. According to Udilov, Leonid Khrushchev committed a murder before World War II and was imprisoned after Stalin heeded Nikita Khrushchev's pleas to spare his life. When the war began, Leonid -- who, like Vasilii Stalin, was a pilot -- asked to be sent to the front and on his first mission he reportedly flew over to the German side. Stalin ordered security chief Lavrentii Beria and military counterintelligence chief Viktor Abadkumov to handle the matter personally. They soon learned that a partisan detachment had managed to kidnap Leonid Khrushchev away from the Germans before they were able to send him back to Germany. After Leonid was returned to the Soviet authorities, Stalin reportedly summoned his inner circle to decide what to do. Soviet leaders Vyacheslav Molotov, Georgii Malenkov, Lazar Kaganovich, and Stalin all voted to execute him. After Khrushchev came to power, he reportedly told associates that he would take revenge on Stalin's associates, just as Soviet leader Vladimir Lenin took revenge on Tsar Nicholas II for the execution of his elder brother, Aleksandr. All the people reportedly associated with Leonid Khrushchev's case were repressed under Khrushchev, who also reportedly ordered the KGB to destroy all Soviet and German documents related to the case, Udilov wrote. In a subsequent issue of the daily, Aleksandr Shcherbakov, the son of one of Stalin's close associates, denied Udilov's claims that Leonid Khrushchev was a traitor.