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Security Watch: December 18, 2000

18 December 2000, Volume 1, Number 22
IS MOSCOW BEHIND UKRAINIAN POLITICAL SCANDAL? The scandal swirling around Ukrainian President Leonid Kuchma, who has been accused of being involved in the disappearance and death of journalist Heorhiy Gongadze, may have originated in Moscow, "Komsomolskaya pravda" reported on 13 December. The paper noted that the timing of the scandal works to Moscow's advantage since it comes precisely when Moscow is trying to become the pre-eminent energy supplier to Western Europe. Moscow can achieve that goal via pipelines through Ukraine or around it, although the second option is preferrable as it can force Kyiv to return to the Russian fold, the newspaper suggests. To do that, the paper continues, Moscow must first force Kuchma from office and then prevent pro-Western Ukrainian Prime Minister Viktor Yushchenko from succeeding him. The Kremlin has its own candidate: Ukrainian Security Service chief and KGB veteran Leonid Derkach. Meanwhile, "Zavtra," no. 50, reported that the destabilization of Kuchma began almost immediately after Kyiv signed military-technical accords with Turkey.

PUTIN SAYS U.S. MUST ACCEPT EXISTING INTERNATIONAL SYSTEM... Prior to his departure for Havana and Ottawa, President Vladimir Putin told representatives of the Russian and Cuban television networks that the United States must accept the "existing system of international security" in its dealings with Moscow. He added that Russia continues to oppose any modification of the 1972 ABM treaty. And he warned against "a priori suspicions" by our American partners about Russian intentions. Such suspicions, he said, could "lead to a breakdown of the current international security order."

...AND WANTS CLOSER LATIN AMERICAN TIES 'IN A HURRY.' Putin also said that Moscow wants to restore its ties in Latin America "in a hurry," thereby reversing the downward trend of the last decade. He said that such a restoration corresponds to Russia's national interests. And while Russian-Cuban relations no longer are based on ideological unity, Putin said, he and Cuban leader Fidel Castro share a common position on globalization. "To ignore the impoverishment of some countries and the enrichment of others during globalization," Putin said, "will lead to global instability."

RUSSIA WANTS OWNERSHIP SHARE IN CUBAN ENTERPRISES... The government website said on 12 December that Putin's visit to Cuba must show that Moscow no longer views Havana as the outpost of world revolution but as a profitable market. The site added that Moscow must seek the restructuring and repayment of Cuba's $20 billion Soviet-era debt by extending the term of part of the debt and accepting part ownership in some Cuban firms as payment for another portion. Defense Minister Igor Sergeev, who is accompanying Putin, is to negotiate the renewal of the Russian-Cuban military cooperation as well as regularize the status of the Russian electronic espionage center at Lourdes.

...AND ROLE IN EXPORTING CUBAN NICKEL. "Norilsk Nickel" owner Vladimir Potanin told on 12 December that he had asked Putin to raise the question of the construction of a Russian nickel processing plant in Cuba. Potanin said that his company is ready to invest $300 million in the development of a project that was halted after the fall of the Soviet Union. Cuba is where nickel deposits were first discovered, while "Norilsk Nickel" controls about 20 percent of worldwide nickel production.

RUSSIA URGES NEW CONVENTIONS ON TERRORISM, CRIME. Speaking at a UN conference on organized crime in Palermo, Russian Security Council Secretary Sergei Ivanov said Moscow would support international conventions on illegal production and trafficking of arms as well as accords to combat corruption and nuclear terrorism, ITAR-TASS reported on 14 December. He said that Russia also would adhere to the UN convention against organized crime that restricts bank confidentiality for criminals and allows for the confiscation of illegal revenues.

MOSCOW SAYS EUROPE MUST STOP FOCUSING ON CHECHNYA. Unless its mandate in the Parliamentary Assembly of the Council of Europe (PACE) is restored, Russia will not cooperate with the Council, Dmitrii Rogozin, the head of the Duma Commission for International Relations, told RIA-novosti on 12 December. He said that since last January when Russia's membership was suspended for human rights violations in Chechnya, there had been "considerable improvement of Russian policy in the republic." He concluded that those PACE members who continue to criticize Moscow's approach in Chechnya are "suffering from the spirit of the Cold War."

RUSSIAN GOVERNMENT AT WAR WITH FRENCH BANK. Agents of the MVD Main Directorate on Combatting Economic Crime raided the Moscow offices of the Credit Agricole Indosuez, one of France's biggest banks, ITAR-TASS reported on 8 December. A spokesman for the agency said that the Interior Ministry suspects the bank was involved in some $350 million of capital flight from the now-bankrupt Russian National Reserve Bank. The Interior Ministry has seized all of the bank's accounts and suspended its activities in Russia. Meanwhile, a bank spokesman told the "International Herald Tribune" on 12 December that the bank has brought suit in New York, Brussels, and Moscow against Gazprom concerning futures contracts worth $100 million.

ARRESTS MADE IN 'AEROFLOT' CASE. The Russian procuracy has arrested the former deputy director of "Aeroflot," Nikolai Glushkov, and indicted him and three other former senior officials, "Kommersant" reported on 8 December. Aleksandr Filin, the lead prosecutor, said that the four "comprised a criminal group" which siphoned tens of millions of dollars in public funds. Filin added that Boris Berezovsky was the organizer behind the group and that an indictment against him is being prepared. "Kommersant" added that Glushkov has been confined in the FSB's Lefortovo prison.

FSB "WINS" SUIT AGAINST MOST-MEDIA. A Moscow court has ordered Media-MOST holdings and its "Segodnya" newspaper to publish retractions of their statements that the FSB put pressure on the justice system concerning holdings of owner Vladimir Gusinsky. The verdict came in an FSB suit claiming that "Segodnya" was "undermining the professional reputation" of the Russian intelligence service and demanded that "Segodnya" acknowledge that this claim is "false."

PROCURACY CLOSES 'MABETEX' CASE. Senior investigator Ruslan Tamayev said in Moscow on 13 December that he has closed the so-called Mabetex affair because of a lack of evidence. Tamayev added that he could find no confirmation of charges against former Kremlin property chief Pavel Borodin. And he said that bribery accusations against Boris Yeltsin, his wife, and daughters have also been dropped for the same reason. "Ekho Moskvy" noted that Tamayev clearly understands the role he is supposed to play, noting that his closing down of this case coincided with his promotion to head one of the most prestigious procuracy departments.

CHIEF MILITARY FINANCIAL OFFICER INVESTIGATED. Chief Military Prosecutor Mikhail Kislitsyn announced on 13 December that he has opened a criminal case against Colonel-General Georgi Oleinik, the head of the Defense Ministry's Main Administration for Military Budget and Finances, ORT television reported. Kislitsyn said that he has asked the defense minister, Igor Sergeev, to dismiss Oleinik for "abuse of office." Oleinik and his colleagues are suspected of misappropriating $450 million of military funds in their dealings with Ukrainian officials. Among these partners, prosecutors said, is Ukrainian Vice Prime Minister Yulia Timoshenko, who also heads UES of Ukraine.

ILLEGAL OIL BUSINESS IS DIFFICULT TO DETECT. "Moskovskie novosti," no. 48, noted that the illegal recovery of oil is causing serious losses to the Russian budget because it remains largely beyhond the reach of tax inspectors who use "personal oil pumps" for extra income. One such "personal" but well-camouflaged oil pump belongs to the governor of Nenetskii Autonomous District, Vladimir Butov. The paper said that he has used his office to set control over an oil pump that was formally registered for a company. Nominally, the company dealt with geological intelligence of oil, but in reality it produced and sold output abroad. The unreported income went to Butov.

FINANCIAL INTELLIGENCE TO COMBAT CAPITAL FLIGHT. Vyacheslav Soltaganov, the chief of the Federal Tax Police Service (FSNP), said on 13 December that President Vladimir Putin has approved the creation of a special "financial intelligence service" to combat money-laundering crimes, Interfax and RIA-Novosti reported. One of its tasks, he said, will be the examination of all suspicious transactions exceeding $10,000 (see "RFE/RL Security Watch," 31 July and 30 October 2000). added that Putin also plans to use the service for recovering "illegally transferred capital" now held abroad. Putin has already used Soltaganov's agency in Gusinsky and Berezovsky cases.

ARE NEW 1000-RUBLE BANKNOTES A SIGN OF INFLATION? The Central Bank has announced that it will introduce a new 1,000-ruble banknote on 1 January, "Sovetskaya Rossiya" reported on 9 December. The paper said that an earlier 1,000-ruble note had been withdrawn three years ago when the government decided to remove "three extra zeros" from the Russian currecny. Its restoration now, the paper suggested, likely means that inflation will exceed official predictions of 21 percent for next year. More to the point, for some 50 million Russians whose monthly income is below 1,000 rubles ($35.70), such a note will be totally unnecessary.

NEW SUBMARINE LAUNCHED. Admiral Vladimir Kuoedov, the commander in chief of the Russian Navy, has announced the introduction of a new Russian nuclear submarine, the "Gepard," "Izvestiya" reported on 8 December. The new ship will be attached to the Northern Fleet and is intended to fill part of the role that was to have been performed by the sunken "Kursk." The new sub displaces 12,770 tons, has a crew of 63, and is armed with 24 missiles, all much smaller figures than the "Kursk" had.

KVASHNIN, RUSHAILO DISAGREE ON CHECHEN CAMPAIGN. Anatoly Kvashnin, the chief of the Russian general staff, said the Russian forces would use the new tactics against Chechen fighters, Interfax reported on 7 December. He said that the military intends to deploy some 10,000 soldiers in mini-garrisons in 203 of the 237 Chechen population centers. These small posts will include Interior Ministry and FSB officers as well as soldiers. The army's main force, the 42nd division, will remain based in Shali. But Interior Minister Vladimir Rushailo demurred, saying that Kvashnin's statement reflects his personal ideas and that the Interior Ministry has its own.

'NEZAVISIMAYA' URGES RUSSIAN-IRANIAN MILITARY TIES. Moscow's "Nezavisimaya gazeta" on 8 December argued that Vladimir Putin has corrected the mistakes made by Boris Yeltsin when the latter dropped previous military cooperation agreements with India and Iran. The paper noted that "one can get more from America if he takes a hard line," and that is why Moscow politicians have been searching for a pretext to drop the Gore-Chernomyrdin restrictions on Russian sales to Iran. Moreover, such ties with Iran strengthen Moscow's hand elsewhere, the paper said.

U.S., RUSSIA EXTEND MILITARY COOPERATION. General Anatolii Kvashnin, head of Russia's General Staff, met on 12 December with visiting General Henry Shelton, chairman of the U.S. military's Joint Chiefs of Staff, and signed several accords intended to increase contacts between the two militaries. The agreements call for military exchanges, joint exercises, and the establishment of a working group to help combat international terrorism, RIA-novosti reported. Kvashnin told Shelton that Russian technology transfers to Iran "will violate no international agreements," but Shelton suggested that such sales could destabilize the situation, Interfax reported.

...AS DOES ENGLAND. The Russian and British defense ministers, Igor Sergeev and Jeff Hoon, on 9 December signed agreements calling for 25 joint programs of military cooperation, "Krasnaya zvezda" reported. Marshal Sergeev said that the two had discussed an international convention for saving the crews of nuclear submarines. At the same time, Sergeev repeated Russian objections to U.S. plans to deploy a National Missile Defense by saying that if Britain takes part in the U.S. program it will be an accomplice to the destruction of the system of international treaties and agreements

U.S. LAW ENFORCEMENT NOT A MODEL FOR RUSSIA. Colonel-General Arkadi Baskakov, the former chief of Moscow's Interior Ministry troops, told "Vek," no. 49, that his forces cannot follow the procedures and organization of U.S. police forces. Baskakov, who currently is a member of the Duma security committee, said that trying to draw up a Russian system on the basis of the FBI procedures "will not work." Any dividing up of interior troops between the center and the regions will weaken both. And he added that he opposes reducing the number of internal troops or transforming them into some kind of "national guard" because he cannot exclude that more will be needed in Chechnya.

NEW SYMBOLS SAID TO SHOW KREMLIN NOT ANTI-SOVIET. Kremlin ideological leader Gleb Pavlovsky wrote in the 9 December "Nezavisimaya gazeta" that the adoption of Soviet and tsarist-era symbols shows that Russia has finally said farewell to those who signed the Belovezhskaya accords. Russia does not want to be either an anti-Soviet or a post-Soviet state anymore, he said. In other comments, he said that the communist party may remain as a permanent opposition as long as it accepts the constitution.

PUTIN, DUMA WANT LENIN TO STAY WHERE HE IS. "Edinstvo" Duma leader Boris Gryzlov said his party will not support a call by the Union of Rights Forces to bury Vladimir Lenin and transform his tomb in Red Square into a memorial to the victims of the repression, RIA-Novosti reported on 12 December. Gryzlov, who had said on 5 December that the "problem with Lenin must be solved soon," reversed himself after Vladimir Putin rejected this initiative by saying that he "cannot see logical connection between the introduction of new Russian symbols and the removal of Lenin's body." Supported by the majority of the Duma's factions, Gryzlov suggested that Lenin's remains could stay in place until 2024 -- the 100th anniversary of his death.

PUTIN'S TOP AIDES DEMAND GUSINSKY'S EXTRADITION. Security Council Secretary Sergei Ivanov said in Palermo that Russia will insist on the extradition of magnate Vladimir Gusinsky from Spain, ITAR-TASS reported on 13 December. Prosecutor-General Vladimir Ustinov, accompanying Ivanov, said that his office had sent to Madrid the materials required for initiation of extradition procedures. Ustinov said that he is "confident" Spain will soon hand over Gusinsky to Russia.


By Paul Goble

A Moscow court decided last week that the Salvation Army represents a security threat to the Russian government. That ruling may make it impossible for that international humanitarian assistance organization to reregister before the end of this month and thus force it to suspend operations in Moscow.

Kenneth Baillie, the head of the Army's Russian operations, said that the Moscow city court had reached this conclusion on November 28. "Since we have the word 'army' in our name," he said, the court said "we are a militarized organization bent on the violent overthrow of the Russian government."

The Salvation Army, of which Baillie is a colonel, was founded in the nineteenth century along military lines but without the usual military goals. Its members carry no weapons and have as their mission assistance rather than conquest.

This finding will make it impossible for the group to register as required by Russian law, and court officials said they would give its officers the official verdict only sometime within the next month -- a delay that might make it impossible for the Salvation Army to appeal to a higher court.

The Salvation Army has been present in Russia since the collapse of communism. In addition to Moscow, the group operates community centers in 13 other Russian cities which provide food, shelter, and clothing to the homeless, the elderly and other less fortunate people.

One 85-year-old participant in the Salvation Army's Russian program told a Moscow newspaper on Wednesday that "this is the only thing that saves us lonely people. Here we get everything we need, love and human contact." And the leader of the Moscow Salvation Army office added that "if we have to close it, [the people who have been using it] will lose everything. They'll have nothing but their four walls.

The Salvation Army's current legal travails began in 1997 when the Russian parliament passed a law requiring religious organizations with less than 15 years of work in Russia to register with the local authorities. The Army's Moscow office filed documents in February 1999. In August of that year, Moscow officials refused to register the group.

At that time, the Moscow city officials said that the group could not register because its headquarters were outside of the Russian Federation and that it could have only a representative office in Moscow. In response, the Army filed suit which in July 2000 upheld the city's position. The current finding against the Army was the result of the group's appeal of that decision.

These legal appeals, the Salvation Army said, had forced it to spend more than 20,000 dollars in legal fees, money that the group indicated it would have much preferred to spend on those in need.

Colonel Baillie told "The Moscow Times" this week that the Moscow court's latest action showed that the Salvation Army had been singled out, although he said that it was "unclear" as to why. But he acknowledged that there's a general wariness and suspicion of foreigners: "That's part of Russian culture and certainly part of the religious culture."

No court in any other region of Russia has taken such an action against the Salvation Army, but officials in this region are likely to be watching to see whether the finding against this group is upheld or overturned. If the court decision stands, many of them may also move against the group. If it is overturned, they are less likely to try to close the Army's operations.

But these regional courts are not the only ones who will be watching to see just what the Russian legal system does. The Salvation Army enjoys near universal support around the world for its longstanding efforts to help those in need regardless of nationality, religion, or political affiliation.

During this holiday season, when the Army's officers stand on the streets of major Western cities to collect money for its charitable activities, such a Russian move against the group will undoubtedly cause many people to draw new conclusions about the direction that Russian political life is taking.

But the Salvation Army has pledged to continue to work where it can because its officers have always insisted that they answer to a far higher court than any judicial assembly in any particular city or any particular country.