We are all apt to believe what the world believes about us. - George Eliot
RFE/RL NEWSLINE

Vol 1, No. 32, Part I, 16 May 1997


Vol 1, No. 32, Part I, 16 May 1997

This is Part I of Radio Free Europe/Radio Liberty's Newsline.
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 RFE/RL NewsLine are available through RFE/RL's WWW
pages: http://www.rferl.org/newsline/search/

Back  issues of the OMRI Daily Digest are available through OMRI's
WWW pages: http://www.omri.cz/

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Headlines, Part I

* REACTION TO RUSSIA-NATO ACCORD MIXED

* YELTSIN ISSUES ANOTHER ANTI-CORRUPTION DECREE

* NEW DEAL SIGNED ON CASPIAN PIPELINE CONSORTIUM

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RUSSIA

REACTION TO RUSSIA-NATO ACCORD MIXED. Russian
politicians are divided in their assessment of the NATO-
Russia Founding Act. Speaking in Hawaii yesterday, Defense
Minister Igor Rodionov cautiously noted that the accord
has not eliminated all problems in Russia's relations with
the alliance, Interfax reported. Duma Security Committee
Chairman and Communist Viktor Ilyukhin denounced the
agreement as "another example of the betrayal of Russia's
interests." But Duma Speaker Gennadii Seleznev welcomed
the accord, saying it showed NATO was taking Russia's
concerns into account. Duma Foreign Affairs Committee
Chairman Vladimir Lukin of Yabloko praised it for
something it does not contain: an absolute ban on the
stationing of nuclear weapons on the territory of new
members. Meanwhile, the U.S. government continued to play
down President Boris Yeltsin's assertion that Moscow has
gained a veto over NATO decisions. The White House press
secretary said Yeltsin's comments were directed at the
Russian people.

YELTSIN ISSUES ANOTHER ANTI-CORRUPTION DECREE.
Vowing to "put an end to the situation in which civil service
becomes a source of enrichment," Yeltsin has signed a
decree to force cabinet members, parliamentary deputies,
and other federal and regional officials to release income
and property declarations. In a nationwide radio address
today, Yeltsin promised that both the public and the media
would have access to the financial declarations and said he
would begin by releasing information on his own assets. The
decree encourages, but does not require, family members
of state officials to declare their incomes and assets.
Russian media commentaries about the measure have been
skeptical. Izvestiya noted yesterday that corrupt officials
have had plenty of time to transfer their ill-gotten assets
to family members or foreign bank accounts.

CABINET CONFIRMS LIMITS ON FOREIGN INVESTMENT
IN GAZPROM. The government has confirmed that foreign
investors will be allowed to purchase no more than 9% of
the shares in the gas monopoly Gazprom, RFE/RL's Moscow
bureau reported yesterday. Gazprom head Rem Vyakhirev
presented a restructuring plan at the cabinet meeting. He
said the company will save 2.2 trillion rubles ($380 million)
by removing about 100,000 people from its payroll. It was
unclear how many workers would be fired and how many
would continue to work for enterprises that will no longer
be run by Gazprom. Vyakhirev indicated that the gas
monopoly will spin off some of the company's social
infrastructure and branches that are involved in
construction, research, and agriculture.

DUMA BUDGET COMMITTEE RECOMMENDS REJECTING
SEQUESTER. The Duma Budget Committee has made a
preliminary recommendation to reject the government's
proposed sequester of 108 trillion rubles ($19 billion) from
the 1997 budget, Interfax reported yesterday. The
committee vote was nearly unanimous. Only Deputy Budget
Committee Chairman Aleksei Golovkov of the pro-
government Our Home Is Russia faction advocated
supporting the budget cuts. However, First Deputy Finance
Minister Aleksei Kudrin, who attended the committee
meeting, argued that the budget cuts could be ordered by
the prime minister if the Duma did not approve the draft
law on the sequester.

FEDERATION COUNCIL CONCERNED ABOUT FUNDING OF
AGRICULTURE. The Federation Council has passed a
resolution urging the government to improve financing of
the agricultural sector, ITAR-TASS reported yesterday.
State spending on agriculture during the first quarter of
1997 was only 11% of budgeted targets, and the
government's proposed sequester would reduce spending
on agriculture to 45% of budgeted levels for the rest of the
year. Meanwhile, Yeltsin yesterday vetoed amendments to
the law on agricultural cooperatives, passed by parliament
last month. In a statement, the president said the
amendments would have deprived farmers wanting to leave
a cooperative of the right to receive land and other
property.

NEW CHIEF MILITARY PROCURATOR CONFIRMED. The
Federation Council on 14 May confirmed Lt. Gen. Yurii Demin
as Russia's new chief military procurator, RFE/RL's Moscow
bureau reported. Ingush President Ruslan Aushev had
argued that appointing a civilian to the post would ensure
the military procurator greater independence from the
Defense Ministry. But Russia's Procurator-General Yurii
Skuratov dismissed that argument. In an interview with
RFE/RL, Skuratov noted that the military procurator
reports to the procurator-general, not to the Defense
Ministry. Today's Izvestiya quotes Demin as saying he will
be "merciless" in fighting corrupt generals who "disgrace"
the title of Russian officer. Meanwhile, today's edition of
Trud reports that investigators from the Military
Procurator's Office have searched the home of Deputy
Defense Minister and Army Gen. Konstantin Kobets, whom
press reports have beeen linked to corruption.

DUMA PASSES LAW ON WITNESS PROTECTION. The
Duma on 14 May passed the first witness protection law in
Russian history, Kommersant-Daily reported the next day.
If the law is approved by the Federation Council and the
president, crime victims, eyewitnesses, and experts who
testify against criminals could apply for protected status.
Protected individuals could be provided with bodyguards
or firearms and, in extreme cases, moved to another part
of the country and given new documents, financial aid, and
housing. If protected individuals were killed, their families
would receive special compensation benefits. Interior
Ministry officials quoted by Kommersant-Daily welcomed
the law. They pointed out it would end the practice of
releasing the names and addresses of all court witnesses in
criminal cases, which is said to have hindered criminal
investigations in the past.

IZVESTIYA ATTACKS LUKOIL FOR ALLEGED CRIMINAL
TIES, TAX EVASION. Izvestiya has again sharply attacked
its largest shareholder, the oil company LUKoil.
Yesterday's edition included an article, signed by the
newspaper's "analytic center," saying some influential
officials in the company have criminal ties. The article also
claimed that Prime Minister Viktor Chernomyrdin's
personal patronage has allowed LUKoil and its subsidiaries
to escape punishment for owing at least 1.2 trillion rubles
($208 million) to the federal budget. Confusion continues
over how large a stake LUKoil has in Izvestiya . Its
journalists deny the company's claims to hold 51% of the
shares. Meanwhile, ITAR-TASS reported earlier this week
that the Sidanko oil company, in cooperation with
Oneksimbank, has purchased a 20% stake in Izvestiya.

SOLDIERS' MOTHERS GROUP DENOUNCES WIDESPREAD
HAZING. The Committee of Soldiers' Mothers has received
some 6,000 complaints from soldiers or their families
about brutal hazing in the armed forces and another 1,900
requests for help, ITAR-TASS reported yesterday.
Committee representatives Lyubov Kuznetsova and
Valentina Melnikova said it is difficult to bring the
perpetrators to justice, in part because Russian criminal
law has no definition of torture. In addition, hazing victims
are reluctant to press charges, fearing reprisals. Instead,
they often desert the army. Partly as a result of the hazing
problem, various soldiers' mothers groups frequently hold
public meetings across Russia giving advice on how to
evade the draft or secure exemptions.

COURT REJECTS CHORNOBYL WORKERS'
COMPENSATION CLAIMS. The Moscow City Court has
rejected in part a lawsuit against the Finance Ministry filed
by 80 workers who helped clean up after the 1986
Chornobyl disaster, ITAR-TASS reported on 14 May. The
workers claim that the ministry is not paying
compensation for damage to their health, as stipulated by
a 1995 amendment to a law on benefits for Chornobyl
survivors. However, the court ruled that since the Finance
Ministry was not the workers' employer when they were
involved in the Chornobyl clean-up, it cannot be sued for
compensation. The workers have vowed to appeal the
ruling to the Supreme Court. At the same time, the Moscow
City Court upheld the Chornobyl workers' demand for
pension payments. The Finance Ministry says it lacks the
funds to pay the clean-up workers' pensions.

TRANSCAUCASUS AND CENTRAL ASIA

ARMENIAN PREMIER RAISES POSSIBILITY OF
ANNEXING NAGORNO-KARABAKH. Robert Kocharyan,
former president of the self-proclaimed Nagorno-
Karabakh Republic, told the Armenian parliament
yesterday that "serious discussion" could be given to the
possibility of the enclave's incorporation into Armenia if
the government of the NKR made a formal request to that
effect, according to Interfax. Foreign Minister Aleksandr
Arzoumanian, however, told the parliament that the
question of Nagorno-Karabakh's future status should be
resolved by the OSCE Minsk Group. Representatives of the
group met in Washington yesterday, RFE/RL reported.

NEW DEAL SIGNED ON CASPIAN PIPELINE CONSORTIUM.
Members of the Caspian Pipeline Consortium met in Moscow
today to sign a new agreement on dividing shares in the
project, Interfax reported. Representatives of the
governments of Russia, Kazakstan, and Oman as well the oil
companies involved in the project took part in the signing
ceremony. Russia owns 24% of the shares, Kazakstan 19%,
Oman 7%, Chevron Oil 15%, Mobil Oil 7.5%, Oryx 1.75%, the
LukArco joint venture 12.5%, Russian-British company
Rosneft-Shell 7.5%, British Gas and Agip 2% each, and
Kazakstan Pipeline 1.75%.

NAZARBAYEV WANTS RUSSIAN PRESS TO PROMOTE
RELATIONS WITH KAZAKSTAN. Kazak President
Nursultan Nazarbayev today told visiting Russian
journalists they should promote broadening cooperation
between Kazakstan and Russia, ITAR-TASS reported. He
said he wanted Russian media to help create a "mutually
advantageous atmosphere" for the development of
bilateral relations. He added they also should help "break
the resistance" of certain forces in Russia who oppose
Kazak-Russian cooperation on a new "equal" level. The
delegation of Russian journalists is led by Russian
presidential press secretary Sergei Yastrzhembskii.

KYRGYZSTAN ADOPTS ANTI-INFLATION MEASURES.
The government has approved measures designed to cut
inflation to 17% this year, according to Interfax. The prices
of goods and services are to be controlled and value-
added tax on utilities slashed. The government will "tightly
regulate" the money supply and float the rate of the
national currency. It also plans to ask Kazakstan,
Uzbekistan, and Russia not to increase the price of energy
supplies. In April, the EBRD predicted inflation in
Kyrgyzstan would exceed 20% by year's end.

END NOTE

Yeltsin and Parliament Continue to Battle over
Trophy Art

by Jan Cleave

        The duel between President Boris Yeltsin and the
parliament over trophy art peaked again earlier this week.
Overwhelmingly rejecting a presidential veto, the
Federation Council voted on 14 May to declare that cultural
valuables seized by Soviet troops from Germany at the end
of World War II are Russian property and "just
compensation" for the losses and injustices inflicted by the
Nazis. Yeltsin claims the trophy art law contravenes both
the constitution and international legislation. He will now
appeal to the Constitutional Court to quash the
controversial bill.
        The trophy art law has long been a thorn in the
president's flesh. An initial version was passed by the Duma
at its very first session following Yeltsin's re-election as
president last summer. Negotiations between post-Soviet
Russia and unified Germany on the return of the artworks
had deadlocked, and the communist-dominated Duma
seemed intent on forcing the hand of the newly re-elected
president, who, from time to time, had resorted to
nationalist patriotic rhetoric during his election campaign.
        But the Duma's bid was foiled by the Federation
Council, which rejected the bill and thereby saved Yeltsin
from having to impose a veto and face the inevitable
accusations of false patriotism. By the time the Duma
passed a mildly revised form of the law, gubernatorial
elections had increased the independence of the Council.
The legislation was approved by the upper house in March
and then swiftly vetoed by an unyielding Yelstin.
        Last month, the Federation Council spared Yeltsin
another potential embarrassment -- this time abroad and
on German soil, to boot. On the eve of the 17 April meeting
between the Russian president and Chancellor Helmut Kohl
in Baden-Baden, the upper house opted for a postal ballot
on whether to override the presidential veto, thereby
postponing a final decision for several weeks. Yeltsin
departed for Germany secure in the knowledge that
German newspapers the next morning would not run angry
headlines about Russia's laying claim to the disputed
treasures.
        It was also fortunate for Yeltsin that the official
results of the mail vote were released on the same day
that Foreign Minister Yevgenii Primakov and NATO
Secretary-General Javier Solana agreed on the Russia-
NATO Founding Act. International media thus focused on
post-Cold War detente rather than on Russian squabbling
over war booty. And later that day, German media turned
its attention to a trophy art issue on home turf, as reports
began to emerge that a mosaic fragment from the
legendary Amber Room -- dismantled and hauled away
from Tsarskoe Selo by the Nazis during World War II -- had
been found in northern Germany.
        In opposing the trophy art law, Yelstin has repeatedly
raised legalistic objections echoing those of Germany,
which is Russia's largest lender and perceived by many as
its closest ally in the West. When he vetoed the law in mid-
March, he argued that the unilateral declaration of the
trophy art as Russian property breached international
legislation, a position frequently stressed by German
officials (who also point to the provision for the return of
all war booty in the 1992 friendship treaty between
Moscow and Bonn).
        Yeltsin also stressed the law's potential negative
impact on relations not only with Germany but also with
countries such as Holland and Italy, which claim some of the
trophy art was removed from their territory before the
Soviets carted it off to Moscow. And, in an apparent bid to
somewhat appease the nationalists -- without unduly
upsetting the Germans -- the Russian president noted that
the law would hinder efforts to retrieve artworks seized
from the Soviet Union during the war.
        But legalistic arguments and warnings about foreign-
policy blunders have had little impact in the face of
nationalist outpourings in the parliament. The law's
proponents have struck a chord among Russians by
frequently reminding them of the 27 million Soviet citizens
claimed to have perished in the Great Patriotic War. They
say that the 200,000 works of art, 2 million books, and 3
kilometers of archival material that Germany wants
returned are minimal compensation for Russian loss of life
and the widespread destruction of artworks and
monuments. Museum curators in Moscow and St. Petersburg
have reinforced this emotive pressure by organizing
exhibitions of trophy art with such seemingly benign titles
as "Twice Saved" (once from the Nazis and then from Soviet
neglect).
        Yeltsin's representative at the Constitutional Court
has said that the president will appeal to the court to
reject the law. The same day the Federation Council
overruled his veto, Nezavisimaya gazeta quoted the
constitutional provision stating that in cases where
international law and Russian federal law are at odds,
international law will be applied. If Yeltsin wins on this and
other points, he will have gained time before the
parliament makes another legislative bid to secure
ownership of the trophy art. He is likely to use that time to
seek a solution with Germany that, in both his and Kohl's
words, is fair to each side.




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