RFE/RL NEWSLINE Vol 2, No. 59 Part I, 26 March 1998

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RFE/RL NEWSLINE Vol 2, No. 59 Part I, 26 March 1998

A daily report of developments in Eastern and Southeastern Europe, Russia,
the Caucasus and Central Asia prepared by the staff of Radio Free
Europe/Radio Liberty.

This is Part I, a compilation of news concerning Russia, Transcaucasia and
Central Asia. Part II covers Central, Eastern, and Southeastern Europe and
is distributed simultaneously as a second document. Back issues of RFE/RL
NewsLine and the OMRI Daily Digest are online at RFE/RL's Web site:
http://www.rferl.org/newsline

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RUSSIAN MEDIA EMPIRES II
Businessmen, government leaders, politicians, and financial companies
continue to reshape Russia's media landscape. This update of a September
report identifies the players and their media holdings via charts, tables
and articles.
http://www.rferl.org/nca/special/rumedia2/index.html

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Headlines, Part I

* "TROIKA" SUMMIT OPENS OUTSIDE MOSCOW

* SELEZNEV SAYS KIRIENKO LACKS EXPERIENCE

* TENSIONS EASE IN KOFARNIKHON

* End Note: REGIONS AND RUSSIAN REFORM

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RUSSIA

"TROIKA" SUMMIT OPENS OUTSIDE MOSCOW. French President
Jacques Chirac and German Chancellor Helmut Kohl met with Russian
President Boris Yeltsin outside Moscow on 26 March. The three leaders
agreed to launch a transportation project to provide new rail services
between their three countries that will eventually stretch from London to the
Urals. They reached agreement to strengthen university ties between their
countries. And they also condemned the march by veterans of the former
Latvian SS Legion in Riga on 16 March. Following the leaders' first session,
Yeltsin told journalists that "we agreed on everything." BP

SELEZNEV SAYS KIRIENKO LACKS EXPERIENCE. State Duma
Speaker Gennadii Seleznev, a prominent Communist, told Interfax on 25
March that he asked presidential Chief of Staff Valentin Yumashev to tell
Yeltsin that acting Prime Minister Sergei Kirienko does not have enough
experience to lead the government. Communist Party leader Gennadii
Zyuganov told journalists the same day that his party will support
Kirienko's candidacy only if the government promises to change its social
and economic policies, RFE/RL's Moscow bureau reported. Zyuganov
called on Yeltsin to convene a roundtable including members of the
parliament and regional leaders in order to discuss appointments to the new
government. At a 26 March press conference, Yeltsin declined to say
whether he will nominate Kirienko as prime minister but dismissed
criticism that the 35-year-old Kirienko is too young for the job, RFE/RL's
Moscow bureau reported. LB

LDPR'S STANCE ON KIRIENKO UNCLEAR. Liberal Democratic
Party of Russia leader Vladimir Zhirinovsky on 25 March described
Kirienko as "completely unacceptable" in terms of age, experience, and
political views, Reuters reported. Zhirinovsky added that appointing
Kirienko prime minister is like "putting a sergeant in charge of the Defense
Ministry." The same day, Duma Geopolitics Committee Chairman Aleksei
Mitrofanov of the LDPR said the party has not yet decided whether it would
support Kirienko's candidacy, Interfax reported. The government often
relies on the votes of the LDPR faction in order to get key initiatives passed
in the Duma. LB

NEWSPAPER ACCUSES KIRIENKO OF SHADY FINANCIAL
DEALS... "Novye izvestiya" on 25 March charged that before Kirienko
joined the government last year, he used shady financial deals to withhold
profits accrued by his oil business from both creditors and the Pension
Fund. As a former Komsomol activist and protege of then Nizhnii
Novgorod Governor Boris Nemtsov, Kirienko became head of the Norsi-oil
company and the local bank Garantiya. The newspaper charged that Norsi-
oil managed to avoid paying the oil processing plant Norsi's debts while
"real money" from the plant's transactions flowed into Norsi-oil's bank
accounts. It also reported that Kirienko devised a scheme whereby revenues
from the oil business were deposited into the Garantiya bank, which
performed lucrative transactions with the funds and at the same time issued
promissory notes (rather than cash payments) to cover Norsi and Norsi-oil's
contributions to the Pension Fund. Boris Berezovskii is reportedly one of
the financial backers of "Novye izvestiya." LB

...SLAMS ACTING FUEL AND ENERGY MINISTER. Also on 25
March, "Novye izvestiya" reminded readers of allegations it had made last
November against Viktor Ott, whom Kirienko recently appointed acting
fuel and energy minister. The newspaper added that Ott, who at the time of
the allegations had been Kirienko's deputy at the ministry, had never
responded. "Novye izvestiya" had charged that as a first vice president of
the state-owned oil company Rosneft, Ott acquired two Moscow apartments
and one cottage. All were constructed using Rosneft funds and were
ostensibly for company use. Once construction had been completed,
Rosneft managers, including Ott, purchased them for "laughable prices," the
newspaper alleged. "Novye izvestiya" concluded that a "happy future"
awaits Russia if all Kirienko's appointments have "talents" similar to Ott's.
LB

OUR HOME IS RUSSIA SEEKS TO PICK UP PIECES... The political
council of the Our Home Is Russia (NDR) movement met in Moscow on 25
March to plan strategy following Viktor Chernomyrdin's departure from the
government. Chernomyrdin has headed the NDR, informally known as the
"party of power," since it was founded in May 1995. Addressing the
movement's leaders, Chernomyrdin warned that the NDR "must not and
cannot go on in the same condition as it is now," RFE/RL's Moscow bureau
reported. He called for unity in the "democratic" and "pro-reform" camp
before the next parliamentary elections and warned that "unless we unite
now... we will lose everything." Other prominent NDR members, including
Duma faction leader Aleksandr Shokhin and Duma deputy Nikolai Travkin,
called for the movement to transform itself into an "independent structure"
rather than an uncritical supporter of the government's and president's
initiatives. LB

...BUT WILL IT SUFFER SAME FATE AS RUSSIA'S CHOICE?
RFE/RL's Moscow bureau reported that some governors who had been
expected to attend the 25 March meeting of the NDR political council
decided not to make the trip to Moscow following Chernomyrdin's ouster.
This suggests the NDR is in danger of repeating the history of its
predecessor as the "party of power." In the December 1993 Duma elections,
Yegor Gaidar's movement Russia's Choice gained 15.5 percent of the vote
and won dozens of seats in single-member districts. At the time, Gaidar and
other members of the movement were in the government. But by the
December 1995 Duma elections, Gaidar had been out of government for
nearly two years, and his party--now called Russia's Democratic Choice--
gained less than four percent of the vote. NDR won some 10 percent of the
vote and 10 seats in single-member districts in the 1995 elections. LB

CHERNOMYRDIN DEFENDS DECISION ON ROSNEFT SALE.
Speaking at a 25 March press conference, Chernomyrdin denied that his
dismissal was prompted by his endorsement of a plan to sell 75 percent plus
one share of the Rosneft oil company (see "RFE/RL Newsline," 24 March
1998). Chernomyrdin defended the decision to sell 75 percent rather than 50
percent of Rosneft shares, which, he said, would have brought less money
to the treasury, Interfax reported. He acknowledged that opinions differed
within the government on the Rosneft privatization plan but said acting
Prime Minister Kirienko had been in favor of the 75 percent option. LB

BANKER CHARGES GAZPROM HAS 'NO RIGHT' TO BID FOR
ROSNEFT... Konstantin Kagalovskii, deputy chief of the Menatep Bank,
argued on 25 March that the gas monopoly Gazprom has neither the legal
nor the moral right to submit a bid in the upcoming auction for Rosneft,
ITAR-TASS reported. Gazprom has formed a consortium with LUKoil and
Royal Dutch Shell to bid for Rosneft. Speaking to Japanese oil industry
executives in Tokyo, Kagalovskii claimed that Russian law prohibits
enterprises that are more than 25 percent state-owned from participating in
privatization auctions. The state owns 40 percent of Gazprom shares.
Mikhail Khodorkovskii, the founder of the Menatep Bank, is the president
of the oil company Yuksi, which plans to bid for the Rosneft stake.
Kagalovskii said Yuksi will insist that the Rosneft sale be conducted
according to the letter and spirit of the law. LB

...WHILE NEWSPAPER SAYS NEITHER DOES ONEKSIMBANK.
"Novye izvestiya" on 25 March called on the government to bar
Oneksimbank from the Rosneft auction. The Sidanko oil company (an
Oneksimbank affiliate) and British Petroleum have formed a consortium
that is considered one of the leading contenders for the controlling stake in
Rosneft. "Novye izvestiya" reported that the terms of the auction demand
that all competitors submit documentation proving they have no debts to the
federal budget. Oneksimbank cannot meet this requirement, the newspaper
charged, because Sidanko has yet to pay the tax debts of its subsidiary, the
Angara Petrochemical Company. A government commission on tax and
budgetary discipline ordered Angara to pay its debts last December (see
"RFE/RL Newsline," 18 and 30 December 1997). Berezovskii, who is
believed to help finance "Novye izvestiya," is one of the founders of the
Yuksi oil company. LB

NEMTSOV SAYS NEW GOVERNMENT WON'T BE INFLUENCED
BY BANKS. First Deputy Prime Minister Boris Nemtsov predicted in an
interview with the "Wall Street Journal" on 25 March that the new
government will not be influenced by leading bankers who supported
Yeltsin's re-election campaign in 1996. Nemtsov said the dismissal of
Chernomyrdin and Anatolii Chubais as prime minister and first deputy
prime minister, respectively, will leave the "oligarchs" unable to put
pressure on the government. Asked to comment on Nemtsov's remarks,
Chernomyrdin said Nemtsov often "speaks first and thinks later," Interfax
reported. The former premier added that "I think [Nemtsov] will come to his
senses somewhat and say something absolutely different." Nemtsov told
Interfax on 26 March that he gave the interview in English and that the
newspaper misinterpreted his remarks about Chernomyrdin. LB

PROSECUTORS CHARGE FORMER PRIVATIZATION
OFFICIALS. The Moscow Prosecutor's Office has filed embezzlement
charges against Aleksandr Ivanenko, former first deputy State Property
Committee Chairman, and Boris Veretennikov, a former head of one of the
committee's departments, Interfax reported on 25 March. Prosecutors say
that in December 1993, Veretennikov gave away 20 apartments that the
State Property Committee had purchased from a firm called Eksikom. The
recipients of the apartments allegedly included former State Property
Committee Chairman Alfred Kokh, former Federal Bankruptcy Service
head Petr Mostovoi, and former State Property Committee Chairman Sergei
Belyaev (now a Duma deputy). Moscow prosecutors opened a criminal case
against Kokh last year over a $100,000 payment he received from a Swiss
company (see "RFE/RL Newsline," 29 September and 2 October 1997).
Kokh and Mostovoi were among officials who received $90,000 each,
allegedly for book royalties, from a publishing house linked to
Oneksimbank. LB

OFFICIAL REBUFFS FINAL ATTEMPT TO EXTRADITE
STANKEVICH. Polish Justice Minister and Prosecutor-General Hanna
Suchocka announced on 25 March that former Russian presidential adviser
Sergei Stankevich will not be extradited to Russia, where he is wanted on
bribery charges, the Polish news agency PAP reported. Stankevich is
accused of taking a $10,000 bribe in 1992. He claims the case against him is
politically motivated. Two Polish courts have ruled that he should not be
extradited (see "RFE/RL Newsline," 21 January 1998). Suchocka's decision
is final. LB

CHECHNYA AMENDS CONSTITUTION TO FORMALIZE
OFFICIAL NAMES. The Chechen parliament on 25 March voted to
amend the republican constitution to formally name the republic the
Chechen Republic of Ichkeria, Interfax and AFP reported. Under those
amendments, the Chechen capital, Grozny, is formally renamed Dzhokhar-
kala in honor of former President Dzhokhar Dudaev. LF

TRANSCAUCASUS AND CENTRAL ASIA

TENSIONS EASE IN KOFARNIKHON. Representatives of the Tajik
government, the National Reconciliation Commission, and the UN have
succeeded in securing a cease-fire agreement with an armed group that had
recently been involved in fighting in the Kofarnikhon region, RFE/RL
correspondents reported on 25 March. The armed group and the government
exchanged the bodies of 22 of those killed in fighting the previous day.
Despite the cease-fire agreement, some 109 government soldiers are still
being held in the Romit Gorge by the armed group. The government has
sent an additional 200 troops in armored vehicles to the area. A spokesman
for UN Secretary General Kofi Annan condemned the attacks by the armed
group and laid the blame on the United Tajik Opposition. UN special envoy
to Tajikistan Gerd Merrem called on UTO leaders to remind their forces
that they now have representatives in the government, whose police and
soldiers they are killing. BP

NAZARBAYEV REPRIMANDS GOVERNMENT OFFICIALS.
Kazakh President Nursultan Nazarbayev on 26 March reprimanded Energy
Minister Asygat Jabagin, Justice Minister Baurjan Muhamedjanov, and
Yerjan Utembayev, the chairman of the agency for strategic planning and
reform, RFE/RL correspondents and ITAR-TASS reported. The president's
press service said the reason for the reprimand was failure to fulfill the
presidents orders. But according to ITAR-TASS, "inadequate information
about the investment activities of one of the foreign companies" prompted
the president's decision. BP

KAZAKHSTAN OPENS MISSION AT NATO. Kazakhstan opened a
mission at NATO headquarters in Brussels on 25 March, ITAR-TASS and
Interfax reported. The Kazakh Foreign Ministry said the mission will help
"raise relations with the alliance to a higher political level." Kazakhstan is
already a member of NATO's Partnership for Peace program, and
Kazakhstan's armed forces participated in NATO-sponsored training
exercises in September 1997 under that program. BP

KOCHARYAN PROPOSES CHANGES TO ARMENIAN
CONSTITUTION. Meeting with supporters in Yerevan on 25 March,
Prime Minister and acting President Robert Kocharyan called for the
consolidation of all Armenian political forces to implement "a common
goal, a common program," Interfax reported. Kocharyan advocated
substantive changes to the 1995 constitution to curtail the "excessively
broad" powers of the president and redefine the latter's relations with the
prime minister, the government, the parliament, and the judiciary. He
proposes stripping the president of the right to dissolve the parliament,
which, he said, is conducive to creating, rather than resolving, domestic
political conflicts. Instead, he suggests that the constitution grant the
parliament the right to disband itself. LF

KARABAKH INTELLECTUALS ISSUE PROTEST. In a statement
issued on 24 March and circulated the following day by Noyan Tapan,
members of the Nagorno-Karabakh Unions of Writers and Journalists and
faculty from the Karabakh State University condemned attempts by
unspecified Armenian politicians to capitalize on the Karabakh conflict
during the presidential election campaign. Recent articles in both the
Armenian and Russian press on the election campaign adversely affect the
image of the unrecognized Nagorno-Karabakh Republic and devalue its
achievements in the "national liberation struggle," the statement reads. LF

GEORGIAN OPPOSITION TO DEMAND DEFENSE MINISTER'S
RESIGNATION. The Abkhazeti faction has begun collecting signatures to
demand the impeachment of Defense Minister Vardiko Nadibaidze,
Caucasus Press reported on 25 March. The People faction immediately
expressed its support for that initiative. Opposition deputies have long been
critical of Nadibaidze, a former Soviet army general whom they accuse of
serving Russia's interests. A minimum of 75 signatures from members of
the 225-strong parliament is needed to include the issue on the agenda of
the legislature. LF

ARAB CONNECTION IN SHEVARDNADZE ASSASSINATION
BID? The men who perpetrated the failed 9 February attempt to assassinate
Georgian President Eduard Shevardnadze were trained in Lebanon and
Libya by representatives of the intelligence services and NGOs of "several
Islamic states," "Nezavisimaya gazeta" reported on 26 March. Georgian
First Deputy Prosecutor Revaz Kipiani has claimed that the attackers were
trained in Chechnya (see "RFE/RL Newsline," 23 March 1998), though not
at the behest of the Chechen leadership. Chechnya's diplomatic
representative to Tbilisi, Khizar Aldamov, has denied that allegation,
however. LF

SOUTH OSSETIA WANTS MORE PEACEKEEPERS. The parliament
of Georgia's would-be secessionist republic of South Ossetia has voted
against the withdrawal of the Russian peacekeeping force currently
deployed in the region. It has also demanded that the numbers of
peacekeepers in Tskhinvali Raion be increased, Caucasus Press reported on
26 March. A group of Georgian military intelligence trainees staged an
armed raid on a village in the raion earlier this month (see "RFE/RL
Newsline, 6 March 1998). LF

END NOTE

REGIONS AND RUSSIAN REFORM

by Paul Goble

	People in the small and medium-sized cities of Russia's far-flung
regions may ultimately become the political base for a move against
corruption and organized crime in the country as a whole. As such, this
demographic group may play a major role in the current reshuffling of the
Russian government.
	Less touched by corruption and crime themselves but increasingly
fearful of both, Russians in the regions are a potentially powerful political
force waiting to be tapped by Moscow politicians who are prepared to take
their concerns into consideration. To the extent that happens, Russia's
regions could play a somewhat unexpected role in re-establishing government
authority and promoting democratic and free market reforms.
	Yurii Veremeenko, editor in chief of Moscow's "Invest 100"
magazine and the former spokesmen for the governor of Tver, told RFE/RL
in Washington on 23 March that media exposes about organized crime have
left people in smaller Russian cities fearful. Such reports on Russian
television and in the national newspapers have convinced the residents of
such cities that they are equally threatened, even though statistics
suggest that
they are much less likely to be victims of crime than they believe. As a
result,
Veremeenko said that the residents of the Russian regions are ever more
prepared to support law-and-order candidates, especially if the latter couch
their message in terms of a nationalist defense of Russia itself.
	Asked which Russian leader might find it the easiest to tap into such
sentiments, Veremeenko, who also heads the Tver Association of Political
Culture, immediately named retired general and former presidential candidate
Aleksandr Lebed. But he suggested that other Moscow leaders  were likely to
turn increasingly to this issue, running as it were against crime, the long-
despised "center," and foreigners, whom many Russians blame for their
current problems. Indeed, Veremeenko argued, President Boris Yeltsin
himself might seek to draw on precisely those sentiments as he moves to
form a new government following his dismissal of the entire cabinet earlier
this week.
	In an otherwise upbeat characterization of the role such attitudes and
appeals to them could play, Veremeenko argued that there are three potentially
serious downside risks. First, few Russians in the regions have much
experience with either democracy or law and thus may be prepared to back
anyone who says he can eliminate crime, regardless of the methods he
proposes to use.
	Second, any linking of  these anti-crime attitudes with anti-foreign
ones could help power a very ugly kind of xenophobic nationalism,
something that could short-circuit the path toward reforms of all kinds.
	And third, at least for the next few years, the power of those who
have benefited from corruption and organized crime may be so great that any
movement that sought to root out those evils could  fail and thus undercut
public confidence in democratic institutions.
	Although Veremeenko did not mention them, two other factors
undoubtedly work against the successful use of these anti-crime attitudes in
Russia's regions.
	On the one hand, Russian politics remains so centered on Moscow
that few politicians there yet seem ready to reach out beyond the ring road
around the Russian capital. Consequently, they may raise this issue but not
seek to mobilize opinion outside Moscow in any systematic way. On the
other hand, many Russians in the regions, like many Russians in Moscow,
appear to have little faith in the political system as a solution to their
problems.
	To the extent that they feel insulted and injured but see no obvious
redress to their difficulties within the political system, those groups may
simply withdraw, seeking to protect themselves as best they can rather than
supporting someone who can address their problems.
	For all those reasons, Veremeenko may be far too optimistic about the
role Russia's regions will play in the future of that country. But his
argument
that attitudes outside of Moscow may help to overcome crime and corruption
there suggest that Russia's regions may play a positive role, something few
Russian leaders or observers have been willing to consider in the past.



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