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Security Watch: September 3, 2001

3 September 2001, Volume 2, Number 34
MOSCOW PLANS TO TRY TO HOLD RUSSIAN POPULATION IN SIBERIA, FAR EAST. A concept paper for state policy on the development of Siberia and the Far East calls for Moscow to work to overcome current problems there by seeking to "hold" the Russian population there and promote its growth, ITAR-TASS reported on 28 August. A State Council working group under the chairmanship of Nikolai Volkov, the governor of the Jewish Autonomous Oblast, prepared the paper.

PAVLOVSKII PROMOTES RUSSIAN-UKRAINIAN TIES ON THE INTERNET. Gleb Pavlovskii, who serves as President Putin's media adviser, has launched a new Internet site,, to promote Russian-Ukrainian relations, reported on 23 August. On its opening page, Pavlovskii said that his main goal is to inform Russians about developments in Ukraine, where he said, "Putin is even more popular than in Russia." He added that Putin wants both countries to be part of a "united Europe" but not become "copies of the West." He said his site will also seek to overcome obstacles to this among many Ukrainians: the notion of some in the Ukrainian elite that Russia remains a threat and that Ukraine can join Europe without Russia.

RUSSIA FORMS A LINE FOR SPACE TOURISTS. Russia's national space agency Rosaviakosmos announced on 29 August that it will train on a regular basis "cosmic" tourists who want to fly to the International Space Station on board the Russian Soyuz spacecraft and who are prepared to pay for the experience, Interfax reported. Among such commercial travelers this year will be South Africa's Mark Shuttleworth, Italy's Roberto Vittori, and Belgium's Frank de Winne, the agency said.

PUTIN TAKES CHARGE OF EDUCATIONAL REFORM. Sergei Katanandov, the Karelian president who crafted some of Russia's educational reform proposals, told ITAR-TASS on 29 August that the most important result of the State Council's discussion of educational reform is that "from now on," all those programs will be under President Vladimir Putin's personal supervision. Putin for his part called for modernizing Russian schools, bringing them up to European standards, introducing new technology, and expanding local and regional involvement in the process. But discussions at the meeting, articles in the press, and polls of Russian attitudes suggest that he faces an uphill fight and one that may be complicated or reduced in scale by a shortage of funds.

EDUCATIONAL REFORM MAY REDUCE CORRUPTION, HELP REGIONS. Among the proposals made at the session of the Russian State Council on 28-29 August during the discussion of the reform of the Russian educational system were calls for replacing the current system of individual institutional entrance examinations with a single national exam, Russian agencies said. Such an exam would aim to reduce the level of corruption in a system that has not been fundamentally changed since 1960 and would give students from the provinces greater access to the universities of Moscow and St. Petersburg. It would also reduce the role of subjective evaluations of students by secondary-school teachers.

MOSCOW HOPES FOR DEBT RELIEF FOR CONTRIBUTION TO WORLD'S FRESH AIR AND WATER SUPPLIES. Mukhamed Tsykanov, the deputy economic development and trade minister, said on 24 August that Moscow will propose that the Paris Club of foreign creditors write off some of Russia's debts because "we are supplying oxygen to the whole of Europe and have in Lake Baikal the world's largest reservoir of fresh water," Interfax and "Moskovskie novosti" reported on 24 August. He noted that international creditors have already made similar concessions to other countries and thus should be willing to do so in Russia's case as well.

LUKOIL SAYS IT PLANS TO INVEST $1 BILLION IN BELARUS. LUKoil President Vagit Alekperov said on 27 August that his company is prepared to invest up to $1 billion to modernize refineries in Belarus, Interfax reported. Given the timing of this statement made in Minsk, Alekperov may have been trying to boost the presidential campaign of Belarusian leader Alyaksandr Lukashenka.

RUSSIA LACKS PORTS NEEDED FOR LARGE GRAIN EXPORTS. "Vedomosti" on 27 August noted that Russia today, unlike the Russian Empire and Soviet Union in the past, lacks the ports to handle the export of any sizeable amount of grain. This year, the paper said, Russia will have ample grain available for exports but is likely to be constrained by the size of the ports it controls.

GOVERNMENT SEEKS DE-DOLLARIZATION OF RUSSIAN ECONOMY. Russian financial institutions with the encouragement of the government are seeking to slowly move away from reliance on the dollar in domestic transactions, "Izvestiya" reported on 27 August. Ever more loans, the paper said, are denominated in rubles, with repayments being in dollars, a process that removes dollars from circulation. Over time, the paper said, Russian institutions and individual citizens will shift their orientation away from the dollar.

MOSCOW SUSPENDS EXPORT OF PRECIOUS METALS. Andrei Belov, the head of the State Assay Chamber, told Prime-TASS on 28 August that his agency has suspended the export of precious metals until the Finance Ministry adopts state inspection procedures. In June 2001, President Putin called for liberalizing such sales and the Finance Ministry has not yet devised the new rules, Belov said.

RESOURCES MINISTRY SCRUTINIZES ITS LICENSEES. The Natural Resources Ministry has compiled "a blacklist" of several hundred firms that operate under its licensing that are violating the conditions of those licenses, Prime-TASS reported on 28 August. A special interagency group from the Federal Security Service (FSB), the Interior Ministry, and the Economic Development and Trade Ministry are reviewing the list and deciding which licenses will be withdrawn.

PUTIN SAID SEEKING TO MAKE NATO ALLIANCE 'ABSURD.' An article in "Komsomolskaya pravda" on 28 August said that President Putin's talk about possible Russian membership in NATO is intended to convert that alliance into something "absurd." The paper suggested that the inclusion of the Baltic countries in the near future and Ukraine later on is now likely and that Russia has to do something to render their membership meaningless. The paper added that Putin's effort to retain the ABM Treaty is linked to his plan to restore Russia as a great power internationally: Russia is economically irrelevant now, the paper said, but its nuclear potential puts it in the same class as the United States.

MOSCOW VIEWS CYPRUS AS ITS GATE TO THE EU. Foreign Minister Igor Ivanov met with his visiting Cypriot counterpart Ioannis Cassoulides to discuss economic ties between the two and especially investment questions, Interfax reported. But the BBC pointed out that the talks are really part of a Russian effort not only to preserve Cyprus as an offshore zone for Russian capital but also as its gate to the European Union, which Cyprus is likely to join soon.

PUTIN TAKES PART IN UKRAINIAN INDEPENDENCE ANNIVERSARY. President Putin on 23 August flew to Kyiv to take part in celebrations marking the 10th anniversary of Ukrainian independence, Russian and Western agencies reported. He praised Ukraine's progress over the last decade and said much of it reflects Ukrainian-Russian ties. And he said that he hoped for expanded ties and more frequent summits in the future. He was accompanied by Defense Minister Sergei Ivanov and Russian Security Council Secretary Vladimir Rushailo, leading some commentators in Ukraine to conclude that he hopes to secure Ukrainian President Leonid Kuchma's agreement to the renewed production of strategic missiles at the rocket factory in Dnepropetrivsk that Kuchma led in Soviet times, the BBC reported.

IVANOV SAYS NO PROGRESS IN U.S. TALKS. Foreign Minister Igor Ivanov said on 24 August that his meeting with U.S. Undersecretary of State John Bolton had not led to any significant progress on the issue of the fate of the 1972 ABM Treaty or U.S. plans to withdraw from that accord, Russian and Western agencies reported. At the same time, Ivanov did not directly criticize President George W. Bush's assertion on 23 August that Washington will exercise its right to unilaterally withdraw from the 1972 agreement. Moreover, Ivanov stressed that "we did not expect a breakthrough" but said that "eventually an understanding will be reached."

PUTIN, KUCHMA AGREE KYIV WILL ACCELERATE PAYMENT OF GAS DEBT. President Putin on 24 August met briefly with his Ukrainian counterpart Leonid Kuchma, and the two agreed that Kyiv will move more rapidly to pay its debt for Russian gas, "Kommersant-Daily" reported on 24 August. The newspaper reported that Ukraine, under pressure from Gazprom, will pay all of its $1.34 billion debt in cash rather than by barter as the Ukrainians had hoped. Moreover, Kyiv has agreed to reduce the redemption of its gas debt from 10 years to an unspecified shorter term.

PUTIN COMMENTS ON NATO ROLE IN MACEDONIA. While in Kyiv, President Putin met with Macedonian President Boris Trajkovski and took the occasion to say that he hopes the NATO operation in that country will "bring positive results," but that he has "major doubts" as to whether that will be possible, Interfax reported on 23 August. Meanwhile, officials in both Moscow and Kyiv denied reports in Western media that Russian and Ukrainian planes have carried large quantities of arms to Macedonia in recent days, ITAR-TASS reported. And Russian Airborne commanders said in Moscow that they have received no instructions to prepare for participation in the NATO operation in Macedonia, the Russian news service said.

MOSCOW, TEHRAN DISCUSS STATUS OF CASPIAN. Viktor Kaluzhnii, the Russian presidential envoy for the Caspian region, met in Tehran on 29 August with his Iranian counterpart Ali Ahani for a final round of bilateral talks before the Astana meeting of the five littoral states, Russian and Western agencies reported. Kaluzhnii will seek to get Iran to agree to Moscow's recent shift in position concerning the legal status of the sea, a shift that moves Russia away from Tehran's past views and closer to those of Baku, the agencies said.

FSB BEHIND MOSCOW APARTMENT BLASTS IN 1999, NEW BOOK SAYS. In a new book, "The FSB Blows Up Russia," former Federal Security Service (FSB) officer Aleksandr Litvinenko and historian Yurii Felshtinskii say that terrorist explosions in Moscow apartment blocks in September 1999 were orchestrated by the FSB, according to excerpts of the book published by "Novaya gazeta" on 27 August. The authors report that the FSB is now "a secret syndicate that controls organized crime and orchestrates paid killings of journalists, businessmen, and politicians." The newspaper said it cannot vouch for the claims of the book, especially since Litvinenko left Russia last year and has asked for political asylum in Britain. But the paper did call on the Duma to investigate the allegations contained in the book. The same day, Interfax reported, several Duma deputies challenged the veracity of the book and said its authors and publishers are likely to be sued.

RUSSIA APPEARS TO BE LEAVING CUBAN ELINT SITE. Defense Minister Ivanov and Vice Prime Minister Ilya Klebanov have refused to confirm that Moscow is closing its electronic espionage site near Lourdes in Cuba, but "Novye izvestiya" reported on 23 August that the withdrawal of Russian equipment and personnel have already begun. The declining intelligence significance of the center, its high cost, and its impact on Russian-American relations played a role in the decision to phase the center out. But the last straw, the paper said, was the refusal of Cuban leader Fidel Castro to cancel rental charges on the site as partial payment on Cuban debts to Moscow. Castro reportedly said that "we owed money to the USSR, not to Russia." The paper said that President Putin may announce the closure of the electronic intelligence site when he visits the U.S. in November 2001 as part of his media blitz there.

SHANGHAI FORUM SECURITY EXPERTS DISCUSS CREATION OF ANTITERRORIST CENTER. Representatives from the security agencies of Russia, China, Kazakhstan, Uzbekistan, Kyrgyzstan, and Tajikistan met in Bishkek on 24 August to discuss the practical implementation of the agreement among those countries to create a combined antiterrorist center in Dushanbe, reported. The officials reportedly plan to extend their discussions to include the creation of a common front against "extremism and separatism," the website added.

INTELLIGENCE OFFICERS TO OVERSEE RESTITUTION EFFORTS. The Russian government has followed the Soviet-era practice and staffed its Committee for the Restitution of Cultural Artifacts Displaced During World War II with officials drawn from the Foreign Intelligence Service (SVR) and the Interior Ministry, NTV reported on 28 August.

MILITARY PROSECUTORS FORMALLY PROTEST 'SOFT' SENTENCE OF DIPLOMAT CONVICTED OF SPYING. The Office of the Main Military Prosecutor has formally appealed the sentence imposed on former diplomat Valentin Moiseev for spying for South Korea, RIA-Novosti reported on 28 August. Moiseev was sentenced to 4 1/2 years in prison on 14 August. The military prosecutors want him to be sentenced to 12 years in prison.

GRU DENIES REPORTS IT WILL MERGE WITH FOREIGN INTELLIGENCE SERVICE. Spokesmen for the military's intelligence arm, the GRU, told RIA-Novosti on 29 August that there is no truth to the report in "Nezavisimaya gazeta" on 28 August that the GRU will be subordinated or otherwise combined with the Foreign Intelligence Service (SVR). A spokesman for FAPSI, the government's information security agency, also denied the paper's suggestion that it too will be merged with the SVR. But neither agency denied the fact that in recent months six GRU directorate heads have been replaced by SVR generals, nor did either deny that SVR veteran Lieutenant General Oleg Chernov has been tipped by Defense Minister Sergei Ivanov as the leading candidate to replace current GRU chief Valentin Korabelnikov.

INTERIOR MINISTRY ASKS PARAPSYCHOLOGISTS TO HELP FIGHT CRIME. Interior Ministry officials have concluded that Russian law enforcement does not have sufficient resources to defeat crime by normal means, "Vek," No. 33, reported. As a result, the ministry has asked specialists in parapsychology and extra-sensory techniques to help out, Interior Ministry Colonel Aleksei Skrypnikov told the journal. He said that so far the results from this effort have been uneven: Occasionally, paranormal specialists are 100 percent correct, but sometimes they are totally wrong. One crime the parapyschologists might now be called upon to solve concerns the theft of the national flag of Tunisia from its embassy in Moscow on 24 August, ITAR-TASS reported.

RESOURCES MINISTRY SCRUTINIZES ITS LICENSEES. The Natural Resources Ministry has compiled "a blacklist" of several hundred firms that operate under its licensing that are violating the conditions of those licenses, Prime-TASS reported on 28 August. A special interagency group from the FSB, the Interior Ministry, and the Economic Development and Trade Ministry are reviewing the list and deciding which licenses will be withdrawn.

RUSSIA BEGINS PRODUCTION OF NEW CRUISE MISSILE. ITAR-TASS reported on 23 August that Russia has begun production of a new supersonic cruise missile, the X-22M, which has a range of 400 kilometers and a speed of 3,600 kilometers per hour. The agency said that no military in the world has any weapon to counter this new weapon. Also on 23 August, "Krasnaya zvezda" published the complete text of the new naval doctrine approved by President Putin on 27 June, which was much discussed at that time.

MOSCOW WANTS MORE TIME TO PHASE OUT PLUTONIUM REACTORS. Despite an agreement with the United States to phase out its two functioning plutonium-producing reactors by 2002 and 2003, the Russian government announced on 27 August that it lacks the resources to shut them down that soon, and will keep them in operation until the end of 2005 and 2006 respectively, RIA-Novosti reported. The Atomic Energy Ministry will seek to amend the bilateral accord with the U.S., the news service said.

LUKOIL, ROSOBORONEKSPORT TO ASSIST EACH OTHER. Andrei Belyaninov, the head of the Russian arms-exporting corporation Rosoboroneksport, said in an interview published in "Profil," No. 34, that LUKoil has signed an agreement with his company to help promote Russian arms sales in areas where the oil giant already has an established market presence. LUKoil will do so, Belyaninov said, by paying Rosoboroneksport for the weapons and then seeking concessions in the oil sector of the national governments involved.

FSB REPORTS ON CORRUPTION IN PORT FACILITIES. The FSB directorate that is responsible for transportation security has prepared and sent to President Putin a report on corruption in Russian ports, reported on 29 August. The report detailed the tax evasion schemes of organized crime groups and also the involvement of state-owned enterprises in these operations. The FSB reportedly called on Putin to restore state control over the management of the ports in order to end corruption in this "strategic sector."

RUSSIAN GERMANS SEEK FULL REHABILITATION. Vladimir Bauer, the head of the Congress of Russian Germans, opened a congress of that organization in Moscow on 27 August on the 60th anniversary of Stalin's deportation of Russian Germans to Siberia and Kazakhstan, Russian news agencies reported. Bauer announced that the congress has decided to decorate President Putin with its highest award, the Catherine the Great medal, and he said that Russian Germans seek full rehabilitation. But Aleksandr Blokhin, the federation affairs minister, told the group that the government does not see any need to provide "separate rehabilitation" of the Germans since it has already rehabilitated "all repressed peoples." He also said that Moscow does not plan to give German Russians any territorial autonomy but rather national cultural autonomy. And he said that such cultural autonomy is the most appropriate form of administration for groups like those in the North Caucasus that do not form a majority on any particular territory. Meanwhile, Duma deputy speaker and LDPR leader Vladimir Zhirinovsky told the group that the failure to restore German territorial autonomy inside Russia is "a grave mistake."

NEW PARTY SEEKS TO COMBINE COMMUNISM, MONARCHISM. Aleksandr Orlov, the leader of the Russian nationalist organization "White World," plans to form a United People's Party with an ideology combining the principles of communism and monarchism, RTR television reported on 27 August. Orlov, the television station said, plans to use the party to fight against liberalism and globalization. He is modeling his group on the Russian emigre Young Russia movement founded by Aleksandr Kasym-Bek in the 1920s in Paris.

NON-PARTIES TO BE ABLE TO NOMINATE PRESIDENTIAL CANDIDATES. Aleksandr Veshnyakov, the head of the Central Election Commission, said on 23 August that it is too soon to limit the right to nominate candidates for president to political parties alone and that he will introduce an amendment to the election law this fall to allow other groups to do so, RTR television reported on 23 August. In the future, parties should control the nomination process, Veshnyakov said, but he and others, including President Putin, believe that it is too soon for Russia to impose such limits.

MOSCOW TO RESUME FINANCIAL ROLE IN EDUCATION. Lyubov Kesina, a member of the State Council Working group on educational reform, told RIA-Novosti on 24 August that her group plans to insist that the state resume its dominant role in financing education "as required by the constitution." She said that the reforms will include the modernization of instruction at all levels, the revision of curricula throughout the system, and the introduction of universal education and graduation examinations at all levels.

ORT ANNOUNCES NEW PRO-KREMLIN PROGRAM. The Russian television network ORT plans to launch a special analytic program on 1 September, "Kommersant-Daily" reported on 23 August. The program, to be called "Curfew," will be hosted by a number of well-known journalists loyal to the Kremlin, including Mikhail Leontiev, Mikhail Sokolov, Aleksandr Nevzorov, and Vitalii Tretyakov. Meanwhile, Tretyakov, who earlier served as editor in chief of "Nezavisimaya gazeta" said in an interview published in "Vremya Novostei" the same day that he has launched a new publishing group that will issue at least nine new independent papers, following the rubrics of the paper he used to head. He stressed that the news operations of these publications will be completely under his control.

OSTANKINO TV TOWER TO BE WORLD'S TALLEST AFTER RECONSTRUCTION. Vladimir Kurochkin, the deputy general director of Russian state television, told Interfax on 24 August that reconstruction of the Ostankino television tower will increase its height to the point where it will be the world's tallest structure of its kind, Interfax reported.

GOVERNMENT WANTS TO END MEDIA TAX BREAKS. As of 2002, the government plans to do away with special tax exemptions and other benefits that the media have enjoyed, "Rossiiskaya gazeta" reported on 29 August. If the government succeeds in pushing this measure through the Duma, the paper said, it will lead to the collapse of many of the country's newspapers and journals.

30 PERCENT OF BANKRUPTCIES SAID FRAUDULENT. Tatiana Trefilov, the head of the federal office that supervises bankruptcy proceedings, said that approximately 30 percent of all cases of business bankruptcy are fraudulent, "Trud-7" reported on 19 August. Typically, she said, fraud is most often the result of the action of creditors who are interested not in recovering their investment but changing the ownership of a particular enterprise. She said that during the last year, her agency had identified 232 managers as having engaged in such fraud and suspended the licenses of 97 companies. She said that at present her Financial Service Recovery agency is reviewing 27,000 bankruptcy cases.

RUSSIAN POLICEMAN SAYS NO RUSSIAN MAFIA OUTSIDE RUSSIA. In an interview published in "Rossiiskaya gazeta" on 25 August, Vladimir Gordienko, the chief of the Interior Ministry's Criminal Investigation Department, said that "there is no 'Russian mafia' abroad. This is a myth that has political roots." He noted that Russians commit crimes abroad just as foreigners commit crimes in Russia, but he said that it is wrong to speak of an international division of the Russian mafia because there is no place where Russian criminals control some sphere of criminal economic activities abroad.

WITNESSES UNDERCUT CHARGES AT KHOLODOV MURDER TRIAL. Expert witnesses on 28 August told the trial of officers accused of killing journalist Dmitrii Kholodov in 1994 that the explosive device used in that case did not contain materials from military stores, Interfax reported. That assertion undercuts charges against defendant Colonel Pavel Popovskikh and five of his colleagues who stand accused of plotting to kill Kholodov because of the journalist's writings about corruption in the military.

DEFENSE MINISTRY SAID SELLING BLOOD DONATED FOR SOLDIERS. Blood collected by "Komsomolskaya pravda" for soldiers wounded in Chechnya has been diverted and sold by Defense Ministry officials, that newspaper reported on 28 August. One hospital director reportedly made 1 million rubles ($35,000) from such sales, the paper said.

RUSSIAN PROGRAMMER FACES U.S. TRIAL FOR INTELLECTUAL PROPERTY VIOLATIONS. Dmitrii Sklyarov, a Russian programmer arrested in Las Vegas on 18 June after he began to disseminate special software capable of breaking through the Adobe eBooks program, will go on trial for intellectual property theft in the United States, Interfax reported on 29 August. If convicted, he faces up to five years in prison and a $250,000 fine. Sklyarov, who is out on $50,000 bail, said he had made a contribution to Adobe by showing its officers how vulnerable its system is.