Security Watch: August 13, 2001

1991 COUP PLOTTERS TRY TO PIN BLAME ON GORBACHEV. Valerii Boldin, one of the leaders of the August 1991 coup and former chief of staff for former Soviet President Mikhail Gorbachev, has stated that Gorbachev himself ordered the creation of the State Committee for Emergency Situations (GKChP), which engineered the coup, "Kommersant-Vlast" No. 31 reported. However, Gorbachev told RIA-Novosti on 5 August that he learned from materials from an investigation of the GKChP that the plotters agreed amongst themselves to blame Gorbachev for the August putsch. He also said that during the 10th anniversary of the events later this month, he will talk for the first time in detail about the coup.

VOLGOGRAD CONTEMPLATES NAME CHANGE BACK TO STALINGRAD. Volgograd Oblast Governor Nikolai Maksyuta announced on 10 August that the city of Volgograd may return to its former name of Stalingrad to commemorate the 60th anniversary of the Battle of Stalingrad in 2003, Russian agencies reported. Maksyuta claimed that he is getting "a lot of letters from the people asking him to rename the city for the 60th anniversary." According to Maksyuta, the oblast's legislative assembly is likely to adopt a decision to hold a referendum on the name change. Volgograd started out as Tsaritsyn in 1589, and became Stalingrad in April 1925, in honor of defense of that city in 1919 by Soviet leader Josef Stalin. In 1961, its named changed to Volgograd. "Kommersant-Daily" suggested on 11 August that Maksyuta may succeed in his quest if he gets support from President Vladimir Putin, whose grandfather served in Stalin's entourage and who has already showed his inclination for revival of Soviet traditions.

CHINA ASKS RUSSIA FOR HELP IN PERSECUTING FALUN GONG. The Chinese government has asked Moscow to suspend the activity of Russian followers of the Chinese religious sect Falun Gong, which has been banned by Beijing, ITAR-TASS reported on 10 August. The Chinese government also asked that the Russian government prevent Falun Gong's members from holding a press conference in Moscow. In a letter handed over by the Chinese military attache in Moscow to the Russian Interior Ministry, the Chinese side expressed their appreciation for the persistent efforts of the MVD to combat "religious sects of extremist nature."

PUTIN TO CAST NEW MAN IN LEADING ROLE ON PARDONS COMMISSION. RIA-Novosti reported on 9 August that President Putin is mulling over at least two candidates to replace Anatolii Pristavkin, the current head of the Presidential Pardons Commission -- Nikita Mikhalkov, the prominent filmmaker and actor, or Yurii Solomin, an actor who during the Soviet era often played the role of KGB officers. Putin has decided to reorganize the commission and to oust Pristavkin following an investigation undertaken by the deputy chief of his administration, Viktor Ivanov. In his report to Putin, former FSB officer Ivanov wrote that the commission indiscriminately "granted amnesty to hard-core criminals." In an interview with Interfax on 9 August, Pristavkin acknowledged that he expects to be dismissed soon.

CASPIAN PIPELINE CONSORTIUM READY TO INAUGURATE TENGIZ-NOVOROSSIISK ROUTE. The Caspian Pipeline Consortium (CPC) announced on 4 August that a meeting of its shareholders endorsed an oil transportation treaty removing the last obstacles to inaugurating the 1,700-kilometer pipeline "Tengiz-Novorossiisk," RIA-Novosti reported on 4 August. The CPC's initial capacity through that route will be 28 million tons and will gradually grow to 67 million tons over the next 10 to 15 years. The capacity of all Russian pipelines currently in operation is about 130-140 million tons. According to the website strana.ru on 5 August, the pipeline is seen by the Kremlin as a resolution of the dispute between the "southern" (via the Transcaucasus) and "northern" routes for Caspian oil in favor of Russia.

RUSSIA HOPES TO REPAY SOME OF ITS DEBT TO SOUTH KOREA WITH INVESTMENTS IN NORTH KOREA. As North Korean leader Kim Jong-Il visited St. Petersburg on 7 August, ITAR-TASS reported the same day that the Russia government has suggested to South Korea that it could invest money in North Korea's energy infrastructure instead of repaying a $1.5 billion Soviet-era debt it owes Seoul. The Russian investments in North Korea's energy infrastructure would enable the two countries to advance joint projects (see "RFE/RL Newsline," 7 August 2001). According to this proposal, Russia would restore about 70 of North Korea's Soviet-era thermoelectric power plants. These power stations could in turn be utilized for North Korean "technoparks" that several South Korean business groups are seeking to establish.

KASYANOV APPROVES ELECTRICITY REFORM. Prime Minister Mikhail Kasyanov stated on 6 August that he has approved and signed a document detailing the reform of Russia's electric power sector and the dismantling of the country's electricity monopoly, Unified Energy Systems (EES), NTV reported. During the reform's first stage, which will start in September 2001, the government will adopt regulations banning hikes in electricity rates. In the next phase, which will continue through the end of the year, EES will be broken up into separate energy producing and distribution companies. A federal electricity network operator will also be created before the end of the year.

RUSSIAN GOVERNMENT PLANS TO PRESERVE STATE CONTROL OVER GAS EXPORTS. Deputy Prime Minister Viktor Khristenko told journalists on 6 August that the reform of Gazprom scheduled for next year will preserve the state's supervision of natural gas exports, RIA-Novosti reported. However, before the reform is undertaken, the government intends to form a liberalized domestic gas market that will shape Gazprom's future structure, Khristenko said.

RUSSIA, U.S. HOLD TALKS ON STRATEGIC STABILITY... A delegation of Russian military experts headed by the first deputy chief of the armed forces General Staff, Colonel General Yurii Baluyevskii, began talks on 7 August in Washington with their U.S. Defense Department counterparts. High on the agenda was the topic of linkage between U.S. plans to deploy a national missile defense system and the reduction of the two countries' nuclear arsenals. The negotiations are the first in a series of three rounds of talks intended to implement an agreement Presidents George W. Bush and Vladimir Putin reached on 22 July in Genoa to merge military offense and defense issues into a joint agenda. Before beginning his discussions with U.S. Undersecretary of Defense for Policy Douglas Feith, Baluyevskii told Interfax that he came to Washington "to determine what the American side means [when it speaks] about a limited but effective missile defense."

...AGAINST A BACKGROUND OF MIXED ATTITUDES IN MOSCOW. The chief designer of the Russian combat aircraft company Sukhoi, Vladimir Babak, told reporters on 7 August that if the U.S. deploys a missile defense system, Russia will respond by creating new air defense and antiballistic missile systems, RIA-Novosti reported. These systems will be so sophisticated that "their foreign competitors have never even dreamt of them," he added. However, the website polit.ru argued on 7 August that the U.S. deployment of a missile defense system should not be seen as a threat to Russia, but as an effort by the United States to initiate a new military strategy for the new historical epoch.

PUTIN AND KIM JONG-IL TALKS END WITH JOINT DECLARATION... President Putin and North Korean leader Kim completed their talks in the Kremlin on 4 August by signing a joint declaration in which they outlined their positions on various international issues and areas of bilateral cooperation, Russian and Western news services reported. As expected, both countries expressed their opposition to the deployment of the United States's missile defense system, declaring "the U.S. uses 'the Korean factor' to justify its plans to withdraw from the 1972 ABM Treaty." At Russia's insistence, Kim also pledged to observe the moratorium on missile testing, which he had previously agreed to with the administration of then-U.S. President Bill Clinton.

...AS KOREAN LEADER VIEWS POTENTIAL MERCHANDISE IN ST. PETERSBURG. During a trip to St. Petersburg on 6 August, North Korean leader Kim met with that city's governor, Vladimir Yakovlev, and the presidential envoy to the Northwest federal district, Viktor Cherkesov, Western and Russian news agencies reported. He visited several industrial enterprises, including a plant that produces turbines for nuclear power stations. The deputy director of the plant, Valerii Kondratev, told ITAR-TASS that his enterprise is glad to have attracted the interest of Kim and is ready to supply Pyongyang with turbines, which it is already selling to China and Iran.

...AND RUSSIAN MEDIA SHEDS LIGHT ON HIS KREMLIN TALKS, PAYMENT PRACTICES. Meanwhile, "Moskovskii komsomolets" on 6 August reported that Moscow offered to sell Pyongyang Russian weapons worth $500 million, including Su-27 and MiG-29 aircraft as well as naval ships and radar systems. In theory, Korea has no funds to pay for new military equipment, since it has an outstanding debt to the former Soviet Union. However, an official from Russia's Economic Development and Trade Ministry revealed that North Korea has been paying off its old Soviet debt by sending "indentured servants" to work in industrial and construction sites across Siberia, "The Moscow Times" reported on 6 August.

RUSSIA TO WITHDRAW ITS PARATROOPERS FROM BALKAN PEACEKEEPING FORCES. Defense Minister Sergei Ivanov announced on 5 August that Russian paratroopers serving as peacekeepers in Bosnia, Kosova, and Abkhazia will soon be replaced by their counterparts in the ground forces, ITAR-TASS reported. "Paratroopers are the most combat-ready armed service, and we need them in the most perilous areas, such as the North Caucasus," Ivanov noted. He also said that the paratroopers remain "the main reserve of Russia's High Command" and will be not reduced.

GOVERNMENT'S DEMOGRAPHIC POLICY CONCEPT EXPLAINED... The government has finished drafting a concept for its "Demographic Policy up to 2015," which postulates that the "depopulation" of Russia is exacerbated by the sharp imbalance between younger and older population groups, "Rossiiskaya gazeta" reported 4 August. The imbalance emerged in 1998, when the number of pensioners exceeded the number of children and teenagers for the first time. By 1 January 2000, the gap between these two groups already was over 1 million. The aging of the population will inevitably lead to a deficit of the labor force and growing financial burden for the working population. By 2016, Russia may face a situation in which it will not have enough people not only for all sectors of the economy to function, but also for defense of the country. In the 19th century, the Russian scientist Dmitrii Mendeleev calculated that to protect and develop its huge territory, Russia needs at least 500 million people.

...AND OUTLINES PROGRAM FOR ENCOURAGING PUBLIC TOLERANCE. The government has approved a program for "encouraging public tolerance and combating extremism" that seeks to educate Russian citizens to respect and tolerate each other even under conditions of rising social tension, "Izvestiya" and "Kommersant-Daily" reported on 4 August. According to the program, by 2005 the federal and regional governments should instruct citizens regarding the norms of "stable behavior in extreme situations." According to the deputy head of the Duma Committee for Defense, Pavel Burdyukov (Agro-Industrial), Russia needs such a program because it may face many crisis situations in the future, including food shortages. Burdyukov told "Vek" No. 31, "Today we depend on our food imports from our Western partners. If they decide to stop them, we will experience starvation."

RUSSIAN GOVERNMENT TRIES TO PROTECT DOMESTIC AUTO INDUSTRY. Deputy Prime Minister Ilya Klebanov announced on 6 August that as of the beginning of next year import duties on foreign-made automobiles that are more than seven years old will be scaled up to match the current level of taxes on new autos, RIA-Novosti reported. According to "Vremya novostei," the change is being made in order to support the market in domestic autos and spare parts, since, according to surveys, 73 percent of Russians prefer used foreign cars to new domestic cars. This imbalance could increase even more after 2006, when the EU plans to adopt regulations requiring automakers to "recycle" their old cars. This measure will encourage European countries to get rid of their old automobiles by any means necessary, and an armada of junk cars may overflow the Russian market, the newspaper explained.

TOP BANKER OFFERS HIS VIEWS ON BANKING REFORM. In an interview with "Vremya novostei" published on 6 August, Aleksandr Mamut, the head of the working group for banking reform and the president of Moskovskii Devovoi Mir, or MDM-bank, said that by decreasing the number of Russian banks he hopes not to kill competition in the financial sector, but to create conditions for it to flourish. He said that in today's Russia there is no banking system that can serve either as a source for mass domestic investment or as a mechanism for attracting foreign investment. In order to create a healthy banking system he estimated that the number of banks working on the federal level should be reduced to 100, while the remainder should be licensed to operate only at the municipal or oblast level. Another key ingredient to reforming the sector should be greater transparency, including more public control over banks' investment decisions and risk evaluation, according to Mamut.

NEW 'EURASIAN' PARTY REGISTERED. The Justice Ministry has registered the Eurasian Party of Russia (EPR) led by Refakh leader and State Duma deputy Abdul-Vakhed Niyazov, "Moskovskii komsomolets" reported on 4 August. The new party has branches of no less than 5,000 members in 70 regions of Russia, according to the newspaper. However, for the EPR to become fully legal, it will have to reregister under the rules established by the newly adopted law on political parties, which comes into force in July 2003, under which it must have branches of no less than 10,000 members in more than half of Russia's 89 regions. Niyazov is confident that that his party will meet the barrier, because it unites "Russian Orthodoxy, Islam, and a devotion to the Fatherland."

RUSSIAN DEAL TO MODERNIZE MIGS FOR GERMANY. On an official visit to St. Petersburg on 7 August, German Defense Minister Rudolf Scharping met with his Russian counterpart Sergei Ivanov. According to dpa, Scharping told Ivanov that Berlin welcomes the Russia-U.S. dialogue because it is "in the interests of military security in the changing world with its new challenges." The two officials also discussed the problems of NATO's eastward expansion and the situation in the Balkans. On the topic of increasing Russian-German military cooperation, Ivanov and Scharping told journalists that Russia and Germany have over 50 joint defense industry projects, including weapon sales as well as the development and modernization of ships, submarines, and fighters. According to Ivanov, the two countries have signed a large-scale agreement on the joint modernization of MiG-29 jet fighters, bringing them up to NATO standards, ITAR-TASS reported 7 August. According to Ivanov, the upgraded fighters will then be sold to the armies of the East European countries.

RUSSIA READY TO SELL AFFORDABLE PLANES TO AFRICA. "Russia is ready to supply simple and reliable military planes to those African countries which need them," RIA-Novosti quoted Sukhoi aircraft company chief designer Vladimir Babak as saying on 7 August. Babak declared that as far as the African weapon market is concerned, U.S. companies are in a difficult situation because the cost of manufacturing aircraft in the United States, including new-generation planes, "makes them [too expensive and] noncompetitive." While a U.S. television-guided missile costs $400,000, a simple Russian high-explosive bomb of 250 or 500 kilograms costs only 300-400 rubles ($10-$14), Babak said.

GRYZLOV CONTINUES REORGANIZATION OF MVD. Speaking to police officers in the Northwest federal district on 8 August, Interior Minister Boris Gryzlov sharply criticized the work of regional departments for combating organized crime (RUBOP), RTR reported. Gryzlov stated that last year 3 million cases linked with organized crimes were registered, but many more cases were never reported. In fact, organized crime expanded, and in some port cities, such as St. Petersburg, Kaliningrad, Murmansk, and Arkhangelsk, organized crime groups control up to the 80 percent of total business. Since RUBOP and other specialized units have "failed to fulfill their task," Gryzlov announced that he has ordered them abolished. He also said he will severely punish any officers responsible for ignoring citizens' reports of crime or for concealing crimes.

NEW MVD CHIEF TAPPED FOR SOUTHERN FEDERAL DISTRICT. Interior Minister Gryzlov announced on 6 August that President Putin has appointed Lieutenant General Mikhail Rudchenko as senior Interior Ministry official for the Southern federal district, Interfax reported. Rudchenko is a professional police officer and until recently was the head of the MVD in Krasnoyarsk Krai. With this appointment, Putin has filled the last vacant position among the newly created MVD federal district offices.

NEW FINANCIAL INTELLIGENCE AGENCY IS CREATED. Deputy Finance Minister Yurii Lvov announced on 7 August that a unit for combating money laundering will be created within his ministry at the cost of $5 million, RIA-Novosti reported. The unit, named the "Center for Financial Monitoring," will be responsible for tracking any suspicious transactions exceeding 600,000 rubles ($20,000). Under current law, real estate transactions are excluded from such scrutiny, but in the future, an amendment will be considered to include them in deals that are monitored, Lvov said. He added that his ministry was selected as the base for financial intelligence since it is much better prepared for that task than "the power ministries." However, Lvov stressed that, according to the law adopted by the Duma in the spring session and signed by President Putin on 6 August, the financial intelligence agency will operate independently and will only be "functionally supervised" by the Finance Ministry.

RUSSIA DROPPED FROM 'BLACKLIST' OF MONEY-LAUNDERING COUNTRIES. Russia's ambassador to the Council of Europe, Aleksandr Orlov, gave that organization on 4 August a certificate of ratification by Russia of the international convention on combating money laundering, ITAR-TASS reported. Orlov noted that, thanks to the Russian parliament's quick ratification of the convention, Russia was dropped from the list of the states involved in money laundering, which are subject to possible economic sanctions.

RUSSIAN BUSINESSMEN TURN TO U.S. COURT TO WAGE LEGAL BATTLE. A group of U.S.-based businessmen led by the president of the Russian company MIKOM, Mikhail Zhivilo, has filed suit in a New York court against Russian Aluminum, which is controlled by oligarchs Oleg Deripaska and Mikhail Chernoy and the Moscow-based MDM-bank headed by Aleksandr Mamut, according to RIA-Novosti and the "Financial Times" on 7 August. The plaintiffs accuse Russian Aluminum of unfair business practices and of having connections with organized crime, and are asking $3 billion as compensation. Among the evidence presented by Zhivilo and the others are documents accusing Kemerovo Oblast Governor Aman Tuleev of taking a bribe of $3 million and Sverdlovsk Oblast Governor Eduard Rossel of accepting a bribe of $800,000. Earlier this year, the Prosecutor-General's Office accused Zhivilo, who is seeking political asylum in France, of being involved in a plot to murder Tuleev and asked France to extradite him.

GOVERNMENT MOVES TO REVIVE GOSTELRADIO. The government has drafted a decree on the orders of President Putin that would renationalize all broadcasting centers, regrouping them into a unitary state company called Russian TeleRadio Systems, the website strana.ru reported on 9 August. Under the decree, those broadcasting facilities currently under the control of the Communications Ministry as well as the 86 regional radio and television centers incorporated into All Russian State Television and Radio (VGTRK), the state broadcasting company, would be consolidated into a single entity. The new entity would be responsible for signal distribution all over the country. Media Minister Mikhail Lesin has reportedly been lobbying the plan, and the new entity may fall under his supervision. Lesin has also proposed that after the consolidation, this newly formed national signal distributor would be gradually turned into a share-holding company, in which the state would control 51 percent. Last year, "Segodnya" reported that the remaining 49 percent of shares would be sold to foreign investors (see "RFE/RL Newsline," 8 December 2000).

MOSCOW TV STATION TO EXTEND BROADCASTS TO UKRAINE, BELARUS, AND MOLDOVA. Moscow Mayor Yurii Luzhkov announced on 8 August that the regional television channel TV Tsentr, which is controlled by the Moscow city government, is planning to extend its broadcasting to the territory of Belarus, Moldova, and some areas of Ukraine, Interfax reported. Luzhkov stated that TV Tsentr head Oleg Poptsov has managed to make the station's broadcasts politically unbiased. TV Tsentr's potential audience will be about 74 million, many of whom, according to Luzhkov, will be interested in how Moscow solves its economic and social problems. In addition, TV Tsentr also intends to target the large portion of the city of Moscow's population that consists of the people from these regions.

THE JOURNALIST VERSUS THE CENTRAL ELECTION COMMISSION. A Moscow city court on 6 August postponed proceedings in the slander suit of the Central Election Committee (TsIK) against journalist Aleksandr Minkin until 6 September due to Minkin's ill health, Interfax reported. Minkin is accused of defaming the reputation of the committee with an article he wrote last January for "Moskovskii komsomolets," in which he suggested that the TsIK has transformed itself into a power ministry that can issue anticonstitutional directives, prevent politicians from running for office, and decide how many and which parties should take part in elections. "TsIK is only pretending to serve the people, but, in fact, it is loyally working for authorities," Minkin continued. The suit was initiated by TsIK Chairman Aleksandr Veshnyakov, but Minkin's lawyer Geraldina Lyubarskaya said Minkin had in mind not Veshnyakov personally, but the defective electoral system as a whole.