There is always one moment in childhood when the door opens and lets the future in. - Graham Greene
OMRI DAILY DIGEST

No. 222, Part I, 15 November 1996

This is Part I of the Open Media Research Institute's Daily Digest.
Part I is a compilation of news concerning Russia, Transcaucasia and
Central Asia. Part II, covering Central, Eastern, and Southeastern
Europe is distributed simultaneously as a second document. Back issues
of the Daily Digest, and other information about OMRI, are available
through OMRI's WWW pages: http://www.omri.cz/Index.html

RUSSIA

EVIDENCE OF CAMPAIGN COVER-UP LEAKED. Moskovskii komsomolets on 15
November published what it claimed is a transcript of a 22 June meeting
between then Yeltsin campaign chief Anatolii Chubais, senior aide Viktor
Ilyushin, and presidential aide Sergei Krasavchenko in which they
discussed attempts to cover up the use of money in the campaign. While
the source of the tape is not identified, it most likely comes from
former Presidential Security Service chief Aleksandr Korzhakov and his
allies. The conversation took place after the arrest of Chubais's aides,
Sergei Lisovskii and Arkadii Yevstafev, as they were walking out of the
White House with more than $500,000 on 19 June. In the transcript,
Ilyushin is quoted as saying that he told President Yeltsin that they
could catch 15-20 men leaving the President Hotel (Yeltsin's campaign
headquarters) with sports bags full of money. Chubais at one point noted
that "we will pay for this with our heads." -- Robert Orttung

U.S. RELEASES FORMER RUSSIAN AGENT. A Massachusetts federal judge has
approved a motion by the U.S. Justice Department to dismiss espionage
charges against former Russian intelligence agent Vladimir Galkin,
Russian and Western agencies reported on 14 November. A Justice
Department spokesman said consultations with the CIA and the State
Department had led to the conclusion that Galkin's release would be "in
the national interest." Russia had reacted angrily to the ex-agent's 29
October arrest (see OMRI Daily Digest, 5 and 13 November 1996), and had
threatened retaliation against U.S. operatives if he was not freed.
Prime Minister Viktor Chernomyrdin had earlier that day pressed for
Galkin's release in a phone conversation with U.S. Vice President Al
Gore. Galkin plans to return to Russia in a few days. -- Scott Parrish

STATE DUMA UNCOVERS EMBEZZLEMENT OF PENSION FUND'S MONEY. The Audit
Chamber of the State Duma has found that in the last quarter of 1995 and
the first half of 1996, the amount of money misappropriated from the
Pension Fund totaled 667 billion rubles ($122 million), ITAR-TASS
reported on 14 November. Inspectors found that some 163 billion rubles
were invested in commercial banks and another 87.5 billion rubles were
used to buy real estate. In some regions, pensions have not been paid
for three months. The government's 14 trillion ruble debt to the fund
has worsened its financial situation. In the first 10 months of 1996,
the misused money of all non-budgetary funds reached almost 1.8 trillion
rubles. Meanwhile, wage arrears increased by 2.8 trillion rubles between
23 September and 28 October, reaching 43.1 trillion rubles. -- Ritsuko
Sasaki

PRIMAKOV PROPOSES JOINT ECONOMIC DEVELOPMENT OF KURILS. Meeting in Tokyo
with his Japanese counterpart, Yukihiko Ikeda, Russian Foreign Minister
Yevgenii Primakov proposed that Russia and Japan develop a joint program
of economic development for the disputed southern Kuril Islands, Russian
and Western agencies reported on 15 November. According to ITAR-TASS,
Moscow hopes to reduce tension over the islands through "pragmatic
cooperation," while postponing a final resolution of the territorial
dispute. The agency said Ikeda promised to study the proposal, hinting
at a possible change in the Japanese policy, as Tokyo has previously
made such projects contingent on settling the territorial issue. --
Scott Parrish

CONTROVERSY OVER BEREZOVSKII CITIZENSHIP CONTINUES. Izvestiya on 15
November charged that Security Council Deputy Secretary Boris
Berezovskii has not been entirely accurate in answering questions about
his dual citizenship with Israel (see OMRI Daily Digest, 14 November
1996). The paper noted that Berezovskii's statements on the subject have
changed several times and have not always been confirmed by official
sources, such as the Russian or Israeli Foreign Ministry. It suggested
that Berezovskii does not like "unpleasant details" and simply wanted to
close the matter. Meanwhile, the 14 November issue of Segodnya quoted
Berezovskii as objecting to what he called anti-Semitic insinuations
made about his citizenship by Communist Party leader Gennadii Zyuganov,
Duma Speaker Gennadii Seleznev, and Izvestiya. -- Laura Belin

SELEZNEV, STROEV: YELTSIN SHOULD ATTEND MEETINGS OF "PERMANENT FOUR."
Duma Speaker Gennadii Seleznev confirmed that he will not participate in
the newly formed Consultative Council until President Boris Yeltsin is
well enough to attend meetings in person, Russian media reported on 14
November. The council was to include Presidential Chief of Staff
Anatolii Chubais (representing Yeltsin), Prime Minister Viktor
Chernomyrdin, Seleznev, and Federation Council Speaker Yegor Stroev.
However, following the appointment of Boris Berezovskii as Security
Council deputy secretary, Seleznev threatened to boycott all meetings of
the "permanent four" if Chubais was present (see OMRI Daily Digest, 30
and 31 October 1996). Stroev, who had not previously objected to
Chubais's membership on the Consultative Council, on 14 November backed
Seleznev, saying the council should only meet when Yeltsin can attend,
Russian Public TV (ORT) reported. -- Laura Belin

FIFTH ANNIVERSARY OF CONSTITUTIONAL COURT. The Constitutional Court
marked the fifth anniversary of its creation with a conference attended
by Prime Minister Chernomyrdin and presidential Chief of Staff Chubais,
Russian media reported on 14 November. In September 1993, led by
Chairman Valerii Zorkin, the court declared Yeltsin's decree no. 1400,
which dissolved parliament, unconstitutional. The court did not meet
between October 1993 and March 1995 after Yeltsin ordered it not to hold
a session until a new constitution had been adopted. When it met again
in March 1995, a new constitution and a new law on the court had been
passed and several new judges had been appointed. The new court elected
Yeltsin ally Vladimir Tumanov to be its chairman. Under the law on the
Constitutional Court, Tumanov was required to step down by the end of
October 1996, having turned 70 years old, but he remains in office
pending the appointment of his replacement. -- Laura Belin

FEDERATION COUNCIL REFUSES TO LIFT MEMBER'S IMMUNITY. The Federation
Council refused to lift St. Petersburg Assembly Speaker Yurii Kravtsov's
parliamentary immunity from criminal prosecution, Radio Rossii reported
on 14 November. The procurator general is seeking to prosecute Kravtsov
on charges that he spent 350 million rubles ($65,000) of city budget
money to renovate his apartment. Federation Council member Vladimir
Platonov said they found no basis for letting Kravtsov stand trial. --
Robert Orttung

CENTRAL ELECTORAL COMMISSION ELECTS NEW CHAIRMAN. The Central Electoral
Commission elected Aleksandr Ivanchenko to be its chairman on 14
November, ITAR-TASS reported. Ivanchenko has been a deputy chairman of
the commission since 1993 and succeeded Nikolai Ryabov, who was
appointed Russia's ambassador to the Czech Republic on 12 November. --
Nikolai Iakoubovski

RUSSIA, ITALY SIGN DEFENSE COOPERATION AGREEMENTS. Russian Defense
Minister Igor Rodionov signed two bilateral agreements on military and
defense industry cooperation with his Italian counterpart, Beniamino
Andretta, in Rome, Russian and Western agencies reported on 14 November.
The defense industry agreement provides for the joint development of
radar planes, helicopters and other systems, while the military
cooperation agreement calls for joint work on security and arms control
concepts, as well as planning for peacekeeping operations. Rodionov said
the agreements were the first of their kind with a NATO country, showing
that Russia can cooperate with alliance members. He added that Moscow
remains opposed to NATO's plans to expand eastward. -- Scott Parrish

INDIA TO PURCHASE SU-30S. The Indian cabinet has approved a long-
anticipated deal to purchase 20 SU-30 fighters from Russia with an
option to purchase 20 more planes later, AFP reported on 14 November.
The previous cabinet had approved the estimated $1.8 billion purchase,
but the change of governments in New Delhi earlier this year had
necessitated its reconsideration. -- Scott Parrish

YAKUBOVSKII SENTENCED. The city court of St. Petersburg has sentenced
lawyer and businessman Dmitrii Yakubosvkii to five years in prison for
participating in the theft of manuscripts worth $139 million from the
Russian National Library in 1994, ITAR-TASS reported on 14 November. The
court further ordered that Yakubovskii's property be confiscated. He was
also found guilty of conducting illegal operations with foreign currency
and will soon be charged with allegedly injuring his cell-mate in the
Kresty prison. In 1992, Yakubovskii acted as a governmental advisor. He
played a prominent role in the 1993 power struggle in Russia and was
involved in a corruption scandal around former Vice President Aleksandr
Rutskoi. Yakubovskii was arrested in December 1994. -- Natalia Gurushina

CHERNOMYRDIN PROMISES TO REPAY BUDGETARY DEBT TO LOCAL TV COMPANIES.
Prime Minister Chernomyrdin has promised to repay part of the federal
budget's 840 billion rubles ($153 million) debt to regional television
companies, ITAR-TASS reported on 14 November. The remaining debt will be
included in the 1997 budget. Chernomyrdin also said that the government
intends to abolish the VAT on vital telecommunications and radio
equipment imported from abroad. He noted that the heads of local TV
companies may soon be classified as civil servants, which should make
them more independent from local authorities. -- Natalia Gurushina

RUSSIAN ECONOMY STILL SHRINKING. In the first 10 months of 1996,
Russia's GDP and industrial output fell by 6% and 5%, respectively,
compared with the same period a year earlier, ITAR-TASS reported on 14
November. In October, both indicators dropped by 4% compared with the
same month in 1995. From January through October, the volume of
investment totaled 247 trillion rubles, 18% down from the same period in
1995. The number of unemployed increased by 11% and is now at 6.6
million, of which 2.6 million are officially registered as unemployed.
ITAR-TASS also reported that Russia's population declined by 300,000 in
1996. -- Natalia Gurushina

PRIVATIZATION REVENUE UPDATE. State Property Committee head Alfred Kokh
has asked the government to reduce the 1996 privatization revenue target
from 12.3 trillion rubles ($2.2 billion) to 7.7 trillion rubles, ITAR-
TASS reported on 14 November. He said that the budget has received only
735 billion rubles from privatization so far this year, or 6% of the
expected annual figure. Kokh suggested that the collection of 1996
privatization revenue be extended into the first half of 1997, since a
massive sale of companies' shares at this point would dampen their
prices and reduce potential receipts. Foreign Economic Relations
Minister Oleg Davydov supported Kokh's proposal to sell part of the
government's stakes in companies that have completed successful
international floatations of their shares. Kokh also said that the
government could raise $1-2 billion by merging the national telephone
company Rostelekom with the telecommunications holding Svyazinvest and
selling it to an institutional investor. -- Natalia Gurushina

TRANSCAUCASIA AND CENTRAL ASIA

U.S., RUSSIAN DELEGATIONS IN ARMENIA. James Collins, special advisor to
the U.S. secretary of state on the newly independent states, arrived on
14 November in Yerevan from Baku where he held talks with the
Azerbaijani leadership (see OMRI Daily Digest, 14 November 1996),
Armenian and Russian media reported. Collins and Armenian Foreign
Minister Aleksandr Arzumanyan agreed that the Caucasus region needs a
security system to settle conflicts. Meanwhile, Russian Deputy Security
Council Secretary Boris Berezovskii, who is also visiting the
Transcaucasus, met the same day with President Levon Ter-Petrossyan, AFP
reported. -- Emil Danielyan

BEREZOVSKII VISITS TBILISI . . . Russian Deputy Security Council
Secretary Boris Berezovskii, on his second visit to Georgia in less than
a week, met for two hours behind closed doors with Georgian President
Eduard Shevardnadze on 14 November to discuss the situation in Abkhazia,
Chechnya, and the North Caucasus in general, Russian media reported. --
Liz Fuller

. . . AND BAKU. Berezovskii then flew to Baku where he discussed
Russian-Azerbaijani relations, the Nagorno-Karabakh conflict, and the
situation in Chechnya with Azerbaijani President Heidar Aliev, noting
that the "urgent" problems of the region are linked and should be
tackled jointly. Berezovskii also tried to persuade Aliev of the
advantages of exporting Azerbaijan's Caspian Sea oil via the "northern"
pipeline that runs through Dagestan and Chechnya, according to Turan.
Aliev told TRT on 14 November, however, that he would prefer that
Azerbaijan's "strategic" (as opposed to "early") oil be exported through
the proposed Baku-Ceyhan pipeline, but that unnamed members of the
consortium engaged in exploiting the deposits in question oppose that
option. -- Liz Fuller

INDEPENDENT TV, RADIO FACE NEW RULE IN KAZAKSTAN. The Kazakstani State
Property Committee has notified independent TV and radio stations in
Kazakstan that their contracts with the transmission center are not
valid and will have to be redrawn, Ekho Moskvy reported on 10 November.
Kazakstani officials claim the stations are broadcasting on frequencies
that interfere with airline traffic control, and the government shut
down three independent radio stations and two television stations on 4
November. Yevgenii Zhovtis of the Kazak-American Bureau told Ekho Moskvy
that many of the stations alleged to be interfering with air traffic
have been using those frequencies for four years. Zhovtis said the
government is holding a public tender for frequencies at the beginning
of next year and it appears that many independent stations will not have
the means to buy a frequency. -- Bruce Pannier

NIYAZOV IN TURKEY FOR MEDICAL CHECK-UP. Turkmen President Saparmurat
Niyazov arrived in Turkey on 14 November for a medical check-up,
according to Reuters and RFE/RL. Although he is also there to meet with
Turkish officials, Niyazov said he will be in the Istanbul branch of the
Houston clinic for four days of post-operative treatment. In 1994,
Niyazov had a blood clot removed from his leg at a hospital in Houston,
Texas. -- Bruce Pannier

[As of 12:00 CET]

Compiled by Victor Gomez

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            Copyright (c) 1996 Open Media Research Institute, Inc.
                      All rights reserved. ISSN 1211-1570
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