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Security Watch: September 11, 2000

11 September 2000, Volume 1, Number 8
PUTIN SEEKS TO 'KILL' CHEKIST IMAGE. "Izvestiya" reported on 6 September that Russian President Vladimir Putin's main goal during his visit to the United States is to kill the image many have of the re-emergence of Chekist Russia. To that end, the paper said, he scheduled the 8 September appearance on CNN's Larry King talkshow. In recent weeks, Putin has told aides that improving Russia's image is a top priority, the paper added, and now he wants to show just how to do it.

PRO-KREMLIN PARTY SEES PROBLEMS AHEAD. Boris Gryzlov, the leader of the pro-government "Unity" faction, has urged the Duma to create a special group consisting of representatives from all factions to give rapid consideration to bills related to the so-called "2003 problem," "Izvestiya" reported on 6 September. According to Gryzlov, this step is necessary because in 2003 Russia will face multiple crises: payments on Russian indebtedness will rise to $17 billion, depreciation of industrial infrastructure will peak, and current demographic trends will mean that the number of dependents and pensioners will exceed the working-age population for the first time. Together, these three problems could destabilize the country, Gryzlov said, all the more so because presidential elections will take place in that year.

THE KREMLIN'S TOP SECRET BUDGET FOR INFO WAR. Russian political figures have sharply criticized the classification of portions of the state budget concerning the government's media activities. According to "Kommersant" on 6 September, this classified section includes rubrics such as "information countering" and outlines expenditures of 200 million rubles ($7 million). These budgetary arrangements reflect decisions codified in the National Information Security Concept that President Vladimir Putin approved in June. That document, drafted by former KGB officers, identifies both external and internal media enemies and thus recalls the work of the Soviet-era KGB Fifth Directorate which worked against "ideological diversions." (See "RFE/RL Security Watch," no. 3, 7 August 2000.)

SECURITY COUNCIL REORGANIZED; NEW FOCUS ON CIS. President Vladimir Putin has ordered the creation of a new interagency Commission for CIS Issues to be attached to the president's Security Council, according to "Krasnaya zvezda" on 6 September. In the same decree, Putin renamed and restructured several other security council commissions. The Security Council will now include a Commission for Military Security, a Commission for Public Security, a Commission for Defense Industry Security, a Commission for Constitutional Security, a Commission for Economic Security, and a Commission for Combatting Crime and Corruption.

KREMLIN TO END POWER-SHARING ACCORDS WITH REGIONS. FSB General Viktor Cherkesov, the presidential envoy to the Northwestern super district, said on Radio Rossii on 5 September that the system of treaties delimiting power between Moscow and the country's regions had exhausted itself and should be scrapped. The FSB general, a close Putin confidant, also noted that the Russian president views some of the sovereignty declarations contained in the republican constitutions to be "a time bomb" and that "this bomb must be extracted and destroyed." Cherkesov said that Moscow will not agree to prolong much longer the treaties it now has with 68 of Russia's constituent units.

RUSSIAN MILITARY CONTINUE TO BLAME 'KURSK' DISASTER ON 'FOREIGN SUBMARINE'... Colonel-General Valerii Manilov, the first deputy chief of the Russian General Staff, told RIA-Novosti on 5 September that the Russian navy has located on the seabed near the "Kursk" an "object which looks like the railing of a British or American submarine." Because of its size, the Russian navy has not been able to recover all of it, but Manilov said that Russian sailors had recovered part of it and have also saw "near the place of the incident a life preserver belonging to NATO but that has subsequently disappeared." Manilov told Russian journalists that this confirmed the conclusion that the "Kursk" had collided with a foreign submarine.

...BUT SERGEI IVANOV SAYS NO CONCLUSION YET. Sergei Ivanov, the secretary of the Russian Security Council, told U.S. National Security Adviser Sandy Berger that "the reasons for the explosions [on the "Kursk"] were unknown, but that according to their technical characteristics, the explosions happened underwater," Interfax reported on 6 September. Ivanov's remarks came after Berger handed over data collected by U.S. submarines in the Barents Sea concerning the "Kursk" incident.

RUSSIA HOPES ITS DEBTORS WILL PAY UP. Even as Moscow and Tokyo agreed to reschedule Russian repayment of Japan's share of Soviet-era debts within the framework of the Paris Club of creditors, Russian officials said they hoped to recover more than $1.1 billion loaned out by Moscow to other countries, reported on 6 September. According to this source, Russia's largest debtors include India, Cuba, Vietnam, Uzbekistan, Georgia, and Armenia. Historically, Russia has had a very bad record in recovering such debts. In the mid-1990s, then Deputy Finance Minister Andrei Vavilov was put in charge of recovery efforts. What he did was to allow several favored Russian banks to convert these uncollected debts into their own revenues. Later, these Russian bankers tried to swap this paper for their own indebtedness to the Paris Club, though that effort failed. There is little reason to think that Moscow will be any more successful now.

PUTIN OFFERS JAPAN ENERGY AND TRANSPORT DEALS. During his visit to Tokyo, President Vladimir Putin called for organizing an electrical supply bridge between Japan and Sakhalin, "Rossiiskaya gazeta" reported on 5-6 September. Such a project, which could cost $9.6 billion, would allow Russia to send 4 million kilowatts of power to Japan via underwater cables. UES Chairman Anatolii Chubais, who participated in these talks, said he and his colleagues will work with their Japanese colleagues to evaluate the possibility, Prime-TASS reported on 5 September. But Putin's most remarkable suggestion was his call for the construction of two 11 kilometer transport tunnels between Sakhalin and Japan. Sakhalin Governor Igor Farkhutdinov suggested that such a project faces many difficulties and is unlikely to be constructed anytime soon, Russian agencies reported on 5 September.

'NORILSK NIKEL' TO SELL PALLADIUM TO JAPAN. Norilsk Nikel Deputy CEO Dmitrii Zelenin told RBK on 6 September that his company has signed a contract to supply Japan with palladium. At present, Japan is one of the world's largest customers for this metal because it is used in the fabrication of catalytic converters in cars. Earlier this year, efforts to reach a deal had failed because Japan's largest platinum dealer, Mitsui, said that Russian prices were too high. Russia produces approximately 70 percent of the world's output.

RECENT DISASTERS CAST DOUBT ON MOSCOW'S PREPAREDNESS FOR EMERGENCIES. Yurii Kobaladze, the director of Rennaissance Capital investments, told "Segodnya" on 30 August that the "Kursk" and Ostankino tower disasters showed that the Russian government is not prepared to deal with future emergencies or press coverage of them. Kobaladze, who for many years was head of the public relations bureau of the SVR, said that in both regards, the Soviet regime was much better prepared. In other comments, Kobaladze urged the restoration of all Soviet-era "public relations institutions" abroad--but in what he said would be a new "democratic form."

PLUTONIUM WEAPONS TESTS AT NOVAYA ZEMLYA. Russia's Atomic Energy Ministry announced that it has carried out a series of explosions on Novaya Zemlya to test the state of its weapon-grade plutonium holdings, according to a 6 September report by RFE/RL's Russian Service. The underground tests involved 100 grams of plutonium and took place on 28 and 31 August and 3 September. The plutonium used had been taken from nuclear weapons of different production dates.

EVEN WEATHER WORKS AGAINST RUSSIAN SPYING. High winds in the Russian capital on 5 September damaged antennas belonging to the Russian Foreign Intelligence Service (SVR), "Nezavisimaya gazeta" reported the next day. These installations are used to maintain top secret communications with SVR residents and stations abroad. Until recently, these antennas had been controlled by FAPSI, the Russian agency for government communications. But after FAPSI was reorganized, the SVR assumed control, renting some of the antennas involved to commercial organizations.

SKURATOV CASE CLOSED. The office of the Russian Prosecutor-General has dropped the case against former Prosecutor-General Yurii Skuratov, "Tribuna" reported on 6 September. Skuratov, who was suspended from office in April 1999, told the paper that the case had been initiated against him in the first place in order to prevent his investigation of corruption cases involving senior Russian politicians and Kremlin officials. Skuratov told the paper that the most important cases concerned the misuse of IMF loans, machinations by senior officials over short term state bonds (GKOs), and the 1994 murder of ORT television Director-General Vladimir Listyev. None of these cases has been resolved because those investigating them have been forced from office, Skuratov said, while those responsible for these illegalities are still in office.

SWISS PROSECUTOR SAYS RUSSIAN JUDICIARY IS PARALYZED. Geneva Prosecutor Bernard Bertossa told "Tages Anzeiger" on 4 September that Russian prosecutors are not cooperating with Swiss investigators on sensitive issues because the Russian prosecutors are completely controlled by the country's political leadership. Bertossa said he was not surprised by the firing of Russian investigator Nikolai Volkov: "Every time a Russian investigator demonstrates competence in probing a major financial scandal," Bertossa said, "he finds himself out of a job." Bertossa added that the situation, already bad under President Boris Yeltsin, has not improved under his successor, Vladimir Putin.

RUSSIA HAS LOST 23 HELICOPTERS IN CHECHEN CAMPAIGN. Since the start of military operations against Chechnya in August 1999, Russian forces have lost 23 helicopters there, a Defense Ministry spokesman told Interfax on 5 September. Among those downed were 11 armored Mi-24 gunships and 12 Mi-8 multipurpose helicopters. The Chechens shot down half of those lost; the others crashed because of pilot error or technical problems, the spokesman said.