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Security Watch: July 31, 2001

31 July 2001, Volume 2, Number 29
RUSSIANS BELIEVE 'G-8' IMPORTANT BUT THAT RUSSIA IS NOT A FULL-FLEDGED MEMBER. According to a poll conducted by the Public Opinion Foundation and reported by RIA-Novosti on 19 July, 71 percent of Russians attach great importance to President Vladimir Putin's participation in the G-7 plus Russia meetings in Genoa, but 62 percent said that Russia is not yet a full-fledged member of the association.

RUSSIAN BUSINESS SAID PLAYING EXPANDED FOREIGN POLICY ROLE. An article in "Izvestiya" on 24 July said that Russian businesses are playing an ever-greater role in supporting and advancing Russia's foreign policy. The article noted that this is a dramatic change from the Soviet era when CPSU officials made all the decisions. Now, the paper said, business and government work together to promote Russia's national interests.

DELYAGIN PREDICTS CAPITAL FLIGHT WILL ACCELERATE. Mikhail Delyagin, the director of the Moscow Institute on Globalization, argued in articles published in "Rossiiskaya gazeta" and "Vremya novostei" on 20 July that liberalized currency exchange rules will lead to more capital flight. Such flight, Delyagin continued, is not dangerous in itself but it will make it more likely that the government will have to devalue the currency. Moreover, such increased capital flight also could trigger a stock market collapse in Russia.

PUTIN SAID TO BACK PLAN TO ATTRACT ETHNIC RUSSIAN IMMIGRANTS. Aleksandr Blokhin, the minister for federation affairs, nationality, and migration, said on 24 July that President Putin has given formal approval to the ministry's plan to attract ethnic Russians from neighboring countries back to Russia to help solve the country's demographic crisis, Interfax reported. Blokhin said that at present only about 4 million ethnic Russians in the former Soviet republics have expressed interest in emigrating to Russia but that perhaps as many as 20 million could be encouraged to do so in the future.

PUTIN SIGNS NEW NAVY DOCTRINE. While in Sevastopol on 29 July, President Putin signed Russia's new naval doctrine, which calls for the Russian fleet to be present in all the world's oceans and creates a new maritime collegium within the government to oversee the fleet's operations, reported. Navy commander in chief, Admiral Vladimir Kuroedov, stressed that the doctrine is destined to become a cornerstone of Russia's geopolitical strategy.

PUTIN WANTS ALL GOVERNMENT AGENCIES TO BE ONLINE. President Putin has ordered all government agencies to launch websites on the Internet and update them on a daily basis, "Vedomosti" and "Vremya novostei" reported on 27 July. Deputy presidential administration head Aleksei Volin said that those agencies which fail to update their sites on a daily basis will be considered as having "done nothing or nothing useful" that day.

PUTIN APPROVES TRANS-SIBERIAN EXTENSION TO SAKHALIN. Putin told Railways Minister Nikolai Aksenenko on 24 July that he favors the extension of the Trans-Siberian railroad to Sakhalin via a tunnel under the Tatar Straits, RIA-Novosti reported. Aksenenko, for his part, told journalists after the meeting that he is also prepared to move forward with the Trans-Korean project, which envisages linking the railroads of the two Koreas with the Trans-Siberian. Meanwhile, Prime Minister Mikhail Kasyanov announced that Trans-Siberian railroad will also be extended westward -- to Poland and the Czech Republic -- that may bring Russian revenues comparable with its export of oil, reported on 29 July.

RUSSIA, CHINA TO COOPERATE IN NUCLEAR PROJECTS IN SPACE. Russia and China plan to pool their scientific talents to develop nuclear propulsion systems for spacecraft, ITAR-TASS reported on 20 July. Meanwhile, on the same day, "Novye Izvestiya" reported that China will purchase advanced fighter aircraft from Russia worth up to $2 billion.

LUKOIL SEEKS WESTERN PARTNERS FOR CHINA PIPELINE. "Handelsblatt" reported on 23 July that LUKoil is actively seeking foreign partners, including Ruhrgas AG, to help it construct a new pipeline to China, dpa reported. The paper said that the Russian company has also approached Gaz de France and Italy's ENI.

LUKOIL, ITERA SIGN OIL ACCORD WITH UZBEKISTAN. LUKoil and Gazprom's holding company Itera have signed an agreement with the Uzbek state oil company calling for joint development of oil and gas fields in that country, RIA-Novosti reported on 23 July. Each of the Russian firms will have a 45 percent share in the project while the national company, Uzbekneftegaz, will have only 10 percent.

KASYANOV URGES FINLAND TO SUPPORT GAS PIPELINE TO EUROPE. Prime Minister Kasyanov is in Finland this week to try to persuade Finnish Prime Minister Paavo Lipponen to support the construction of a gas line from Russia through Finland to Western Europe, Russian agencies reported on 24 July. The paper noted that the $3 billion project would allow Russia to export its gas bypassing both Ukraine and the Baltic countries. Kasyanov told Lipponen that if Helsinki supports the measure, Moscow will supply Finland's energy needs on a long-term basis.

PUTIN SAYS 'NO BREAKTHROUGH' IN TALKS WITH BUSH... President Vladimir Putin on 23 July told the Russian cabinet that "of course there was no principal breakthrough" in talks with U.S. President George W. Bush on questions of defensive arms, Russian and Western agencies reported. He said that he "confirmed" Moscow's adherence to the 1972 ABM Treaty. But Putin portrayed the talks as a positive step forward because of the agreement to have negotiations on both offensive and defensive strategic weapons and also because of Bush's push for greater economic cooperation with Russia.

...BUT RUSSIAN MEDIA DIVIDED IN ASSESSMENTS. On 23 July, most pro-Kremlin media, including ORT and RTR, described the Putin-Bush agreement as an American "retreat" that reflected Putin's demands for respect for the 1972 ABM Treaty. "Izvestiya" the same day described it as a "win-win" outcome in which both sides came out ahead. But "Kommersant-Daily" headlined its story on the talks "Russia Gives Up," arguing that Putin was forced to accept everything he had earlier refused. Political scientist Vyacheslav Nikonov, however, told that the "Kommersant-Daily" argument was "an incompetent conclusion" based on "illiterate opinion." What Putin and Bush agreed to, he said, was that the two countries will explore how to maintain stability if the U.S. deploys a missile defense.

NORTH KOREAN LEADER BEGINS RAIL TRIP TO MOSCOW. Kim Jong-Il, the leader of North Korea, is traveling from his country to the Russian capital by train, ORT television reported on 26 July. On that day, Konstantin Pulikovskii, the presidential envoy to the Far East federal district, met Kim at the border. Kim took the occasion to say that "the American fuss over the 'missile threat' from our country is completely groundless," ITAR-TASS reported. The North Korean leader will travel all the way to Moscow on the Trans-Siberian. Kim said he is doing so not because of any personal fears about air travel, as some agencies have reported, but because he wants to "be the first passenger of the future Southeast Asia-Europe transportation corridor" that Putin has proposed, reported on 26 July.

PUTIN SAID TO WANT 'PROFESSIONALS' TO RUN PARDONS COMMISSION. "Vremya novostei" reported on 21 July that according to Union of Rightist Forces (SPS) leader Boris Nemtsov, President Putin plans to replace current members of the Presidential Pardons Commission with prosecutors and investigators. Meanwhile, on 19 July, "Obshchaya gazeta" published an open letter to Putin from current commission member Igor Naidenov noting that prison officials and staffs of prosecutors' offices are blocking applications for pardons even though this violates the constitution. He noted that not all capital crimes are the same, and that some of them are "provoked" by the system itself, such as murders in the army by those who are victims of abuse. Such "legal nihilism" in ignoring constitutional arrangements and legal distinctions, Naidenov said, inevitably raises the question: "If today it is possible to ignore this provision of the constitution, then why would it be impossible to do the same with another tomorrow?"

GOVERNMENT PREPARES AGRICULTURAL REFORMS. Deputy Prime Minister and Agriculture Minister Aleksei Gordeev said on 23 July that the government's Council for Agricultural Policy has prepared a package of some 30 bills to facilitate the implementation of the Land Code and other agricultural reforms, RIA-Novosti reported. The most important of these measures, Gordeev said, is one that will give regional administrations complete freedom to regulate land ownership.

WITNESSES UNDERCUT CHARGES AGAINST PASKO. NTV reported on 23 July that witnesses in the closed military trial of journalist Grigorii Pasko have failed to prove that he is guilty of the treason charges against him. Pasko's lawyer, Anatolii Pushkov, said that one of the witnesses, the deputy commander of the Pacific Fleet, Vice Admiral Aleksandr Konev, told the court that he personally gave Pasko permission to visit secret sites and make video films there. Anther defense witness, Anatolii Fomin, who worked for the same military newspaper as Pasko, testified that he and Pasko secured FSB permission for all their activities.

A FRUSTRATED MOISEEV DEMANDS TRIAL BY SUPREME COURT. Valentin Moiseev, a former senior Russian diplomat who has been accused of spying for South Korea, on 24 July demanded that his case be heard by the Russian Supreme Court, AP reported. Moiseev's lawyers said he did so because his trial has been shifted four times to different judges and each time the trial has had to begin again. Moiseev was convicted by a Moscow city court in December 1999, but his conviction was thrown out by the Supreme Court in June 2000.

RUSHAILO SAYS DRUGS, TERRORISM MAIN THREATS TO RUSSIA. In an interview published in "Izvestiya" on 21 July, Russian Security Council Secretary Vladimir Rushailo said that drug trafficking and international terrorism are the most serious threats to Russia's national security today. He said that other countries face these problems as well and that that should be the basis for developing cooperation and a common approach.

TERRORISM IN RUSSIA SAID TO HAVE DOMESTIC, FOREIGN ROOTS. Lieutenant General Vladimir Kozlov, the deputy chief of the Federal Security Service (FSB), said in an interview published in "Vek," No. 28, that terrorism in Russia has "social roots " inside the country and "powerful support from abroad." Among the domestic roots, he said, are "the criminalization of our life" and the greater availability of weapons. Externally, terrorism in Russia is supported by those who oppose a strong Russia and who are exporting "Wahhabism" to it.

GERMAN ARRESTED BY RUSSIA CONVICTED OF SPYING FOR U.S. BY BELARUS COURT. The Belarus Military Court sentenced a German citizen and professor of an American military educational institution, Christopher Letz, to seven years in prison for espionage, Russian and Western news service reported on 21 July. Letz, who worked for the Marshall Center in Germany, was arrested by the FSB in September 2000 in Moscow and handed over to the Belarus KGB. "Kommersant-Daily" suggested that Belarusian President Alyaksandr Lukashenka is using Letz to try to blackmail the West, as he has hinted he might pardon Letz, providing the West "stop interfering in the Belarus elections."

AMERICAN EXCHANGE STUDENT MAY BE RELEASED EARLY. A Russian Justice Ministry spokesman said on 26 July that if the courts agree, John Tobin, an American exchange student who was convicted of drug possession in late April, may be released in early August after serving half of his sentence, Interfax reported. The spokesman said that the grounds for such a release might be Tobin's "good behavior" behind bars. Meanwhile, his lawyers continued to press for his transfer to a less strict facility.

'X-FILES' PRODUCER PLANS TO DO SERIES ON 'HEROIC' KGB OPERATIONS. Bob van Ronkel, a producer of the popular U.S. television program "The X-Files," has opened talks with the Russian Federal Security Service (FSB) about the possibility of creating a Russian television series on some of the most spectacular KGB operations, "Komsomolskaya pravda" reported on 27 July. The paper said that the FSB is enthusiastic about this plan because it could help to improve the image of the KGB in the minds of Russians and others.

GRYZLOV CRITICIZES MOSCOW POLICE FOR FAILING TO COUNTER ORGANIZED CRIME... Interior Minister Boris Gryzlov said on 26 July that the Moscow police who are subordinate to his agency have been doing "a very bad job" combating crime and organized criminal groups, Interfax reported on 26 July. He said that 40 percent of the victims of crime do not turn to the police in that city because they do not trust them. Gryzlov also said that there are at least 21 criminal groups in Moscow whose leaders remain at large, which is the fault of the Moscow police.

...AS JOURNALIST POINTS TO LINKS BETWEEN MOSCOW POLICE AND UNDERWORLD. In an article published in "Versiya" on 23 July, journalist Aleksandr Khinshtein said that Vasilii Kuptsov, the first deputy chief of the Moscow section of the Interior Ministry, has had direct involvement with the Golyanov organized crime group. That gang is thought to be responsible for some 40 murders. Khinshtein added that senior police officials have worked to cover up both Kuptsov's connections with this gang and the gang's activities. Moreover, the journalist said, when the leader of the gang was finally arrested, those police officials arranged for him to escape from custody.

FAPSI GENERAL CLEARED OF CORRUPTION CHARGES. A Moscow military court has cleared Major General Valerii Monastyretskii, who until his arrest served as a senior official in the government's FAPSI communications agency, of corruption charges, "Vremya novostei" reported on 20 July. He was accused of embezzlement and misuse of office in 1994-95, but the court failed to find sufficient evidence of corruption and noted that the statute of limitations for abuse of office is five years. Monastyretskii attracted international attention in the early 1990s when he was detained on the French border with $300,000 and three different foreign passports.

MONEY-LAUNDERING CASE IN LIECHTENSTEIN POINTS TO PUTIN. Liechtenstein prosecutors have indicted two men for laundering money from a Colombian drug cartel and then investing it in a St. Petersburg real estate company linked to Putin and Economic Development and Trade Minister German Gref, "Kommersant-Daily" reported on 23 July. The prosecutors said that one of the accused, Rudolf Ritter, said that he set up a company in St. Petersburg in 1992 and used both Putin and Gref as consultants. But so far, the prosecutors said, there is no proof that he actually paid them.

SMALL FIRM SUES RUSSIAN GOVERNMENT IN EUROPEAN HUMAN RIGHTS COURT. Rusatometa has filed suit with the European Human Rights Court in Strasbourg against the Russian Finance Ministry for that agency's failure to redeem state bonds following the August 1998 default, RBK reported on 26 July. The ministry earlier attempted to force Rusatometa and other firms holding such paper to accept new bonds with longer maturities.

AEROFLOT INVESTIGATION TO CONTINUE. Russian prosecutors have assembled more than 127 volumes of materials on the so-called Aeroflot case, and officials on 20 July said that the investigation phase of the case has been closed, Interfax reported. But "Kommersant-Daily" on 21 July reported that investigation into possible links between that case and embattled magnate Boris Berezovsky is continuing.

EIGHT GENERAL OFFICERS NOW UNDER INVESTIGATION. Military prosecutors said on 26 July that they are currently conducting criminal investigations against eight generals and admirals, Interfax reported. Two of the cases have already been forwarded to the courts, and two more will be sent forward in the near future, the prosecutors added. The news service reported that during 2000, 24 senior officers were charged with crimes.

PUTIN SIGNS LAW FREEING SURVIVING SONS, BROTHERS FROM MILITARY SERVICE. President Putin on 21 July signed into law amendments to the compulsory military service law that provides relief for the sons and brothers of soldiers who died, were wounded, or became ill during military service even in noncombat situations, Russian agencies reported. Under the terms of the new amendments, the survivors will not have to perform military service, nor will those with advanced academic degrees.

PUTIN PROMOTES AUTHOR OF NAVY DOCTRINE. President Putin on 21 July named Admiral Mikhail Zakharenko, who had been serving as commander of the Pacific Fleet, to be deputy commander in chief of the Russian navy, Interfax reported. Zakharenko is a career submarine officer and the author of the recently approved Russian naval doctrine that calls for the Russian navy to expand its geopolitical role on the world oceans.

FUSION OF VOLGA AND URALS MILITARY DISTRICTS TO ENHANCE DEFENSE CAPABILITY. Colonel General Aleksandr Baranov, the commander of the newly merged Volga-Urals Military District, said on 23 July that the merger of the two districts has strengthened Russian control of its southern border regions, the Military News Agency reported on 23 July. He said that his officers and soldiers are seeking to meet "the tasks set by the president concerning the formation of a rapid deployment force in the Central Asian direction."

PAVLOVSKII URGES PUTIN TO MOVE AGAINST BEREZOVSKY. Gleb Pavlovskii, the Kremlin's adviser on information policy, said that President Putin should now move against mass media outlets controlled by self-exiled magnate Boris Berezovsky because those outlets are openly attacking the president and his policies, reported on 20 July. Among such media outlets the website listed "Zhizn,", and provincial papers like "Prizyv" in Vladimir. Pavlovskii said that the Berezovsky-controlled organs are seeking to split the Russian Orthodox Church, undermine Russian allies in Belarus and Ukraine, and compromise Putin personally. Pavlovskii said that in such a campaign, Putin should rely on his own cadres and on "new centers of faith, influence, and business."

COMMUNICATIONS MINISTER PLEDGES TO INCREASE INTERNET USE TENFOLD BY 2010. In an interview published in "Komsomolskaya pravda" on 26 July, Communications Minister Leonid Reiman said that the government's "Electronic Russia" program will seek to increase the number of Russians online from 2.5 million today to more than 25 million by 2010. Meanwhile, an article in "Izvestiya" the same day noted that up to 60 percent of Russian websurfers go on line for news and political information. The article noted that there are dozens of useful news sites in the Russian language, including about 180 representing the country's political parties and movements.