Praise yourself daringly, something always sticks. - Francis Bacon
RFE/RL NEWSLINE

RFE/RL NEWSLINE Vol 2, No. 245, Part I, 22 December 1998


________________________________________________________
RFE/RL NEWSLINE Vol 2, No. 245, Part I, 22 December 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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Headlines, Part I

* NEW GOVERNMENT SHAKE-UP UNDER CONSIDERATION

* DUMA TO PASS BUDGET THIS WEEK?

* DECISION ON AZERBAIJAN OIL EXPORT PIPELINE TO BE TAKEN
IN MID-1999

End NoteTHE: DECLINE AND FALL OF VLADIMIR VINOGRADOV
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RUSSIA

NEW GOVERNMENT SHAKE-UP UNDER CONSIDERATION. Nikolai
Bordyuzha, chief of the presidential administration, is
studying proposals on changes in the administration,
Oleg Sysyuev, deputy chief of the presidential
administration, told reporters on 21 December. Sysuev
said that he expects a decision will be made on them
soon. In the course of studying the proposals, Bordyuzha
met with Kemerovo Governor Aman Tuleev, ITAR-TASS
reported. JAC

DUMA TO PASS BUDGET THIS WEEK? The State Duma will
consider the 1999 budget at an extraordinary meeting on
24 December, one day later than had been previously
scheduled, Interfax reported. The Duma's Budget
Committee will recommend that the lower house adopt the
budget in its first reading, Committee Chairman and
member of Russian Regions Aleksandr Zhukov told
reporters on 19 December. Earlier, Zhukov warned that if
the budget is not passed quickly, then key figures will
have to be revised by the second reading, which "would
mean that the budget may not be adopted at all." Duma
Chairman Gennadii Seleznev said that the budget has a
good chance of passing by a wide margin on 24 December,
since all factions except Yabloko agreed to support the
budget. On 18 December, deputies approved in the first
reading a package of tax bills submitted by the
government. JAC

RUSSIA MAY SEEK BUTLER'S DISMISSAL... Russia may demand
the resignation of UN weapons inspector Richard Butler
at the next UN Security Council meeting, Interfax
reported on 21 December. Meanwhile, Yulii Vorontsov,
Russia's ambassador to the U.S., will be returning to
Washington in a few days and Russia's ambassador to
London will follow later (see "RFE/RL Newsline," 21
December 1998), according to ITAR-TASS. The ambassadors
had been recalled to Moscow for consultations shortly
after the U.S.-British air strikes against Iraq were
launched. JAC

...BUT WILL KEEP RELATIONS WITH NATO ON TRACK. Almost
every fifth missile launched by the U.S. and U.K. missed
their target, according to a Russian General Staff
report, Interfax reported on 21December. The same day,
Colonel-General Leonid Ivashov, head of the Defense
Ministry department for international relations, said
that while Russia will not sever military ties with
London and Washington, it will seek to limit them,
"canceling many joint military exercises and other
planned ventures." Cooperation with NATO, on the other
hand, will proceed as planned, he said. JAC

MOSCOW WANTS COMMON CIS DEFENSE POLICY. Addressing
colleagues from nine of the 12 CIS states in Moscow on
21 December, Russian Defense Minister Igor Sergeev said
that in view of the "unpredictable policy" of the U.S.,
as exemplified by the air strikes against Iraq, CIS
member states should develop a common understanding of
key military-political problems and a common approach to
future defense cooperation, Russian agencies reported. A
report analyzing the results of those strikes, which the
defense ministers condemned as "a totally unjustified
act of aggression," was discussed at the meeting.
Participants also discussed the CIS joint air defense
system, cooperation within the parameters of the 1992
Collective Security Treaty, and the automatization of
control operations, according to Interfax. LF

IMF LOWERS PREDICTION FOR GROWTH RATE. In its World
Economic Outlook, the IMF predicted that Russian GDP
will dip 8.3 percent in 1999, compared with 5.7 percent
in 1998. Inflation, according to the fund, will rise to
56 percent, compared with 26 percent this year and the
30 percent forecast in the government's 1999 budget. The
fund reduced the forecast for GDP that it had made in a
report published in October. Duma Budget Chairman
Aleksandr Zhukov suggested that the fund based its
figures on the assumption that Russia will receive no
foreign loans in 1999. Meanwhile, real incomes plunged
25.1 percent in November, compared with the same month
last year, according to the State Statistics Committee.
Real per capita wages plummeted 35.4 percent over the
same period. JAC

PRIMAKOV WRAPS UP VISIT TO INDIA... A Russian delegation
led by Prime Minister Yevgenii Primakov wrapped up its
visit to India on 22 December after signing seven
agreements, Russian and Indian media reported. Primakov
and Indian Prime Minister Atal Behari Vajpayee attended
the signing of an agreement on military-technical
cooperation that is valid until 2010. Other agreements
covered air links between the two countries, cooperation
in communications, and the development of trade and
economic relations, industrial, financial, scientific
and technological cooperation. Primakov said a
"comprehensive document defining political relations
between the two countries" will be signed when Yeltsin
visits India next year. Primakov said trade with India,
expected to reached $1.5 billion in 1998, should be
doubled by the year 2000 and quadrupled by the year
2005. He also said that he favors giving India a
permanent seat on the UN Security Council. BP

...CLARIFIES STATEMENT ON 'STRATEGIC TRIANGLE.' Primakov
also clarified his 21 December statement about a
"strategic triangle" composed of Russia, India, and
China, saying it was "not a formal proposal," ITAR-TASS
reported. Primakov added that he had thought it was "a
good idea" and that he had wanted to say a partnership
between the three powers could reliably stabilize the
situation in the [South Asian] region." At the same
time, he noted that "a lot depends on the policies of
India and China." He emphasized that "a military bloc"
is not the goal and that "in no case would this
strategic triangle be directed against a third country."
The Russian daily newspaper "Izvestiya" on 22 December
dismissed Primakov's proposal, ascribing it to "the
coincidence of the three states views on the Iraq issue"
and arguing that it "in no way means that the formation
of such an 'axis' is a possibility." BP

RUSSIAN 'SOURCES' SAY NORTH KOREA MISSILE TEST LEGAL.
Officials in Russia's Defense Ministry have said they
are aware of preparations for a ballistic missile test
by North Korea, ITAR-TASS reported on 21 December. The
ministry said the test will likely be conducted before
the end of this year. Interfax on 21 December quotes
"diplomatic sources" in Moscow as saying the test is
consistent with international norms, explaining that
"North Korea is a sovereign state that has the right to
conduct such tests." The same sources claimed that
"greater worry should be aroused by North Korea's
intention to export missile and rocket technologies." BP

EXIT BEREZOVSKII, ENTER RUPERT MURDOCH? A new bankruptcy
suit was filed against Russian Public Television (ORT)
on 21 December, just three days after the Moscow
Arbitration Court had dismissed another one, ITAR-TASS
reported. "Argumenty i Fakty" reported that the
government is preparing to sell 10 percent of the
government's shares in the company to "a serious
investor" and that Rupert Murdoch is allegedly
interested in acquiring the stock so that he will
possess a truly global network. Meanwhile, ORT Director-
General Igor Shabdurasulov wrote an open letter to
President Boris Yeltsin accusing the Moscow Mayor Yurii
Luzhkov and Communist members of the Duma of "putting
colossal pressure" on the station before parliamentary
elections. "Kommersant-Daily" reported on 18 December
that Yevgenii Primakov's government is considering
replacing Shabdurasulov because they do not think he has
coped well with ORT's current difficulties. JAC

CHEMICAL WEAPONS REGIONS DEMAND COMPENSATION. The
administration and people of regions where chemical
weapons are stored and will be destroyed are demanding
financial compensation, such as investment in their
local infrastructure, "Krasnaya zvezda" reported on 18
December. Republics such as Udmurtia and Chuvashia want
financing for the construction of water and gas
pipelines and other housing and social benefits to
compensate them for their exposure to higher health
risks because of the weapons' presence on their
territory, according to the military daily. Meanwhile,
the government is having trouble finding enough
international financial assistance to fund its
participation in the International Chemical Weapons
Convention, under which Russia must start destroying
weapons by December 1999 (see "RFE/RL Newsline," 1
November 1998). JAC

IMPEACHMENT PROCEEDINGS EXPECTED IN JANUARY. Duma
Chairman Seleznev has said he believes the Duma will
vote in January to launch impeachment proceedings
against President Yeltsin, Interfax reported. According
to Seleznev, the impeachment vote will likely focus on
one item, Yeltsin's unleashing of the war against
Chechnya. The Yabloko faction supports impeachment only
on this item. Two-thirds of the deputies would have to
vote in favor of impeachment, then the Supreme Court and
the Constitutional Court would have review the charges,
after which the Federation Council would have to
approve. It is not considered likely that Yeltsin will
be impeached. JAC

IS NDR PARTY DISINTEGRATING? Leader of Our Home is
Russia (NDR) Viktor Chernomyrdin has asked NDR faction
leader Aleksandr Shokhin to resign from the party,
"Moskovskii komsomolets" reported on 22 December.
Shokhin had been suggesting lately that Chernomyrdin
should not seek the presidency of Russia in 2000 (see
"RFE/RL Newsline," 1 December 1998). According to the
daily, Shokhin refused but Chernomyrdin is likely to ask
again. The newspaper also noted that Shokhin is not the
only "powerful rebel" in the NDR, since Samara Oblast
Governor Konstantin Titov and Saratov Oblast Governor
Dmitrii Ayatskov have also openly criticized
Chernomyrdin. Therefore, the newspaper concluded,
Shokhin's departure "may only speed up NDR's
disintegration." "Moskovskii komsomolets" is considered
close to Moscow Major Luzhkov. JAC

LEBED COMES UNDER PRESSURE TO CEDE POWERS. Financial
magnate Boris Berezovskii oversaw negotiations between
Krasnoyarsk Governor Aleksandr Lebed and Anatolii Bykov,
head of the Krasnoyarsk aluminum plant, who has recently
opposed Lebed (see "RFE/RL Newsline," 10 December 1998),
"Izvestiya" reported on 19 December. Bykov reportedly
suggested that Lebed redistribute power in favor of the
government and at the expense of the governor. Bykov
also wants Lebed to refocus his efforts from politics to
the economy. On 17 December, directors of large plants,
factories, and coal-mining companies followed Bykov's
lead by announcing that Lebed's policies are leading the
region to catastrophe, the daily reported. The newspaper
argued that Lebed must hand power over to the local
elite or his government "will be finished." It added
that gathering enough signatures for an impeachment
referendum could be easily accomplished. JAC

'PEACE AGREEMENT' REACHED IN VLADIVOSTOK. An agreement
of sorts has been reached between the new and old mayors
of Vladivostok, Russian Television reported on 21
December. With a group of State Duma deputies acting as
mediators, supporters of former Mayor Viktor Cherepkov
agreed to stop picketing the mayor's office, where the
police have also abandoned their vigil. According to the
report, dual power will exist in the city until new
mayoral elections are held on 17 January. Six
contestants have registered to run, including Cherepkov.
JAC

CONFUSION OVER REMAINS OF MURDERED FOREIGNERS. Chechen
presidential spokesman Mairbek Vachagaev told ITAR-TASS
on 21 December that the decapitated heads of one New
Zealand and three British telephone engineers would be
handed over to the respective embassies in Moscow on 22
December. But Prosecutor-General Masur Tagirov told that
agency on 22 December that the Chechen authorities are
still trying to locate the headless bodies and plan to
hand over both the bodies and the heads simultaneously
at some unspecified future date. Tagirov also denied
media reports that the killers are demanding payment of
$2,000 for each of the bodies. But he admitted that the
abductors want to exchange the bodies for an accomplice
arrested on unspecified criminal charges. LF

FORMER PRO-RUSSIAN CHECHEN PREMIER ABDUCTED.
Chechengazprom head Salambek Khadzhiev was abducted on
his way to work in Grozny on 21 December, ITAR-TASS
reported. Khadzhiev previously headed the Chechen
government of national accord that elicited Russian
support to overthrow President Dzhokhar Dudaev. He
resigned from that post in October 1995. LF

CHECHEN WARLORD TO UNDERGO SURGERY. Maverick field
commander Salman Raduev, until recently regarded as
posing a serious threat to the authority of President
Aslan Maskhadov, was admitted to a Grozny hospital on 20
December, where he will shortly undergo craniocerebral
surgery to alleviate the aftereffects of earlier
injuries, Russian agencies reported. Raduev was
seriously wounded and believed killed in a shootout in
the spring of 1996, but he resurfaced months later after
extensive plastic surgery abroad. The Chechen Sharian
Supreme Court has ruled that in view of his poor health,
the four-year jail sentence handed down on him in early
November should be suspended (see "RFE/RL Newsline," 5
November 1998). LF

TRANSCAUCASUS AND CENTRAL ASIA

DECISION ON AZERBAIJAN OIL EXPORT PIPELINE TO BE TAKEN
IN MID-1999. David Woodward, newly appointed president
of the Azerbaijan International Operating Company
engaged in developing three offshore Azerbaijani
oilfields, told journalists in Baku on 21 December that
the consortium will decide in mid-1999 which route it
considers optimum for the so-called Main Export Pipeline
for Azerbaijan's Caspian oil, ITAR-TASS reported. That
decision, which was to have been taken during the second
half of 1998, was twice postponed. The Azerbaijani,
Turkish, and U.S. governments are all lobbying for the
Baku-Ceyhan route, rather than alternatives to either
Supsa in Georgia or the Russian terminal at
Novorossiisk. The AIOC has misgivings about the Baku-
Ceyhan option, which is by far the most expensive of the
three. The estimated cost of building that pipeline is
between $2.5 billion and $3.7 billion. LF

AZERBAIJAN STRESSES CONCERN OVER RUSSIAN-ARMENIAN
DEFENSE COOPERATION. The Azerbaijani Foreign Ministry
has issued a statement characterizing the ongoing
defense cooperation between Russia and Armenia as a
"factor that hinders peace, stability, and security in
the South Caucasus," Turan and ITAR-TASS reported on 21
December. The statement was pegged to the 15-16 December
visit to Armenia of Russian air force commander Colonel-
General Anatolii Kornukov, during which Russia sent five
MiG fighter aircraft to the Russian military base in
Armenia to participate in the joint defense of CIS air
borders (see "RFE/RL Newsline," 17 December 1998). The
statement also appealed to the Russian leadership to
suspend implementation of the August 1997 Russian-
Armenian Treaty on Friendship, Cooperation, and Mutual
Security. LF

FORMER ARMENIAN COMMUNIST BOSS PREDICTS VICTORY IN 1999
POLL. Karen Demirchian addressed the founding congress
of a local branch of his People's Party of Armenia in
Yerevan on 20 December, RFE/RL's bureau in the Armenian
capital reported. Demirchian criticized the present
authorities for allegedly tampering with the results of
the March 1998 presidential election, in which he lost
in the runoff to Robert Kocharian. Demirchian also said
that Armenia's industry and agriculture "are in tatters"
and advocated a greater role for the state in regulating
the economy. He characterized his party's program as
social-democratic. Demirchian commands strong support
among voters impoverished by the collapse of the former
command economy, and he believes that with their
support, his party will win the 1999 parliamentary
elections, provided the poll is free and fair. LF

GEORGIA, ABKHAZIA SATISFIED WITH GENEVA TALKS... Levan
Aleksidze, foreign policy adviser to Georgian President
Eduard Shevardnadze, told Interfax on 21 December that
the 17-18 December Geneva talks under UN auspices were
unexpectedly fruitful. He said that although the two
sides failed to resolve their "sharp differences," they
expressed readiness for unspecified compromises, and
resumed work on a protocol on the repatriation to
Abkhazia of ethnic Georgian displaced persons. Aleksidze
noted what he termed the positive role in those talks of
Abkhaz Prime Minister Sergei Bagapsh, who also expressed
satisfaction at their outcome, according to Caucasus
Press, citing "Alia" of 21 December. LF

...AGREE ON STABILIZATION MEAURES. Bagapsh met in Gali
on 21 December with Georgian Minister of State Vazha
Lortkipanidze and the interior and security ministers to
discuss the recent upsurge of terrorist activity in
Gali, Caucasus Press reported. The two sides agreed on
the withdrawal of Georgian Interior Ministry forces from
the village of Khurcha, a Georgian exclave on the Abkhaz
side of the River Inguri, which forms the internal
border between Abkhazia and the rest of Georgia. Tamaz
Nadareishvili, chairman of the so-called Abkhaz
parliament in exile, condemned that decision as
tantamount to ceding Georgian territory to the Abkhaz,
Caucasus Press reported. In his weekly radio address on
21 December, President Shevardnadze again called for a
compromise solution to the conflict and abjured the use
of force, according to ITAR-TASS. In an oblique
reference to the Georgian guerrilla formations operating
in Gali, Shevardnadze described official Georgian
support for terrorist organizations as "unacceptable."
LF

NEW POLITICAL MOVEMENT FORMED IN KAZAKHSTAN. Independent
journalist Seydakhmet Kuttykadam announced the formation
of a new political movement on 21 December, RFE/RL
correspondents in Almaty reported. The Orleu-Progress
movement will be composed of members of the country's
intelligentsia, and branches will be opened in all
regions. Kuttykadam said the movement's main task is to
prepare for the next parliamentary elections. However,
the movement's first priority will be to register.
Another movement, "For Fair Elections" announced itself
in early October but has still not been registered by
the Ministry of Justice. BP

NAZARBAYEV COMPLAINS OF RUSSIAN OBSTRUCTION TO KAZAKH
OIL EXPORTS. Kazakh President Nursultan Nazarbayev met
with Russian officials in Astana on 21 December, RFE/RL
correspondents there reported. He called for better
cooperation with the governors of Russian regions
bordering Kazakhstan, and he criticized Russia for
creating "obstacles" to Kazakhstan's exporting oil via
Russian pipelines, saying that Kazakhstan "has to
struggle" for every kilometer of the pipeline. He added
that such obstruction is "not understandable for me as
leader of a country that is known to be one of the main
economic partners of Russia." Pipelines are certain to
be on the agenda when Nazarbayev meets Russian Prime
Minister Yevgenii Primakov in Astana on 23 December.
Meanwhile, Nazarbayev has scheduled meetings with
officials from the U.S. Mobil Oil Company on 22
December. BP

KAZAKHSTAN, UKRAINE SIGN COOPERATION PROTOCOL. Kazakh
Foreign Minister Kasymjomart Tokayev and his Ukrainian
counterpart, Boris Tarasyuk, met on 21 December and
signed a protocol on cooperation between the two
countries' Foreign Ministries in 1999-2000, ITAR-TASS
reported. The two also discussed CIS reforms, and
Tarasyuk said "the reform process is continuing, but it
is too early to speak of results." Tokayev said it is
"necessary to improve the effectiveness of the
Commonwealth," especially in adhering to accords signed
by the heads of member states. BP

NIYAZOV RE-ELECTED CHAIRMAN OF PARTY. Turkmen President
Saparmurat Niyazov has been unanimously re-elected
chairman of the country's Democratic Party, the only
official party in Turkmenistan, Interfax reported on 21
December. Niyazov announced a second political party
will be registered in the near future, RFE/RL
correspondents in Ashgabat reported. BP

KYRGYZSTAN SETS UP CORRUPTION HOTLINE. Kyrgyz
Prosecutor-General Asanbek Shirshenaliyev announced at a
21 December press conference that a hotline has been
established so that residents of the country can file
complaints about corrupt officials, Interfax reported.
Shirshenaliyev said the project will work in conjunction
with the Council Against Corruption and Economic Crime,
set up by presidential decree earlier this month. The
prosecutor pointed out that during the last five years,
383 government officials, mostly lower level ones, have
been dismissed from their posts. The latest anti-
corruption campaign began when the head of the
presidential administration, Omar Sultanov, was sacked
on 10 December. Government officials who asked to remain
anonymous told RFE/RL correspondents in Bishkek that
Economics Minister Taalaibek Koichumanov and Interior
Minister Omurbek Kutuev may soon be dismissed.
Koichumanov has tendered his resignation following the
dismissal of two of his deputies on corruption charges.
It is rumored that Prime Minister Kubanychbek Jumaliev
will do the same. BP

END NOTE

THE DECLINE AND FALL OF VLADIMIR VINOGRADOV

by Julie A. Corwin

	The rise of former Inkombank President Vladimir
Vinogradov to the top of Russia's financial and
political circles was rapid, but his fall was even
quicker. In a little over two months, Vinogradov went
from being one of Russia's handful of "oligarchs," a
small elite of powerful businessmen and financiers who
reportedly rule the nation, to the disgraced former head
of a financial institution on the brink of receivership.
	Come 28 January, when a Moscow arbitration court
hears a bankruptcy case filed by private creditors
against Inkombank, the bank's actual status will be
clearer. However, few analysts believe that much remains
of Inkombank that is worth preserving. Those individuals
and institutions who once expressed an interest in
saving the bank--National Reserve Bank Chairman
Aleksandr Lebedev, Gazprom Deputy Chairman Sergei
Dubinin, and Union of Industrialists and Entrepeneurs
head Arkadii Volskii--say that Inkombank is beyond
saving. Its liabilities exceed its assets, Lebedev
announced on 23 November. Volskii was more blunt, saying
top managers at Inkombank "had been playing dishonest
games" and were "transferring Inkombank assets to other
firms."
	Ten years ago, Inkombank started in the kitchen of
Vladimir Vinogradov's communal apartment. Vinogradov was
working in a state bank at a "low-paying" job that was
"boring." So, according to him, he and two friends
started a commercial bank. Later, they moved their
"headquarters" to the top room of a bar on the outskirts
of Moscow, where they managed to attract nine
shareholders including the economics think-tank, the
Plekhanov Institute; the association of aircraft
manufacturers, Sokol; and the oil and gas pipeline
operator, Transneft. They then approached Central Bank
for a credit of 10 million rubles. They got it, although
the official who okayed the loan was let go soon after,
according to Vinogradov.
	In September 1998, Inkombank got its last break
from the Central Bank--a $100 million loan--from another
outgoing official, its chairman, Sergei Dubinin. The
loan was just one of many parting gifts to troubled
commercial banks from Dubinin, who knew he was leaving,
a source at an international financial institution told
RFE/RL. When Viktor Gerashchenko replaced Dubinin,
Inkombank's last hope was to be designated one of
Russia's "socially important" banks. These banks, though
basically insolvent, were still considered worth saving
with a massive influx of government cash.
	As Russia's second-largest bank in terms of private
deposits and third-largest in terms of assets, Inkombank
might have seemed a good candidate. It also serviced 10
percent of Russia's total foreign trade and 4-5 percent
of the country's bank accounts, according to
"Kommersant-Daily." But if Inkombank's example is any
indication, then the emphasis in the phrase "socially
important" should perhaps be on the first word,
socially. Gerashchenko and Vinogradov do not like each
other, according to a variety of sources. Vinogradov had
earned Gerashchenko's hostility during Gerashchenko's
last reign at the Central Bank through his frequent
criticisms of Gerashchenko's policy as a vocal member of
the Association of Russian Banks.
	In an official statement after it pulled
Inkombank's license on 29 October, the Central Bank
explained that Inkombank "had taken excessive risks
ahead of the 17 August [ruble] devaluation and its
obligations dwarfed its assets." It is true that
Inkombank persisted in writing forward currency
contracts much longer than its counterparts. According
to Fitch IBCA estimates, Inkombank had concluded between
$12-14 billion in forward currency contracts by mid
August. It is not clear, however, that Inkombank acted
that much more imprudently than Menatep, Most Bank, and
SBS-Agro, all of which have been granted a second life.
	It is also not yet clear whether Vinogradov's tale
is one of rags to riches back to rags again. In addition
to Volskii's charge, the head of Moscow's Tax Police
accused Inkombank management of diverting funds intended
for tax payment. And analysts cited by the "Moscow
Times" on 15 December noted that Inkombank's ownership
in food-processing, metals, and aerospace enterprises
had been carefully structured to allow for easy asset-
stripping, since most of the holdings are not owned
directly by Inkombank but by "affiliated persons"
possibly leading back to Vinogradov. Among the bank's
holdings were a 26 percent interest in the giant
Magnitogorsk steelworks, of which only 3 percent is
owned directly by the bank. The bank also owned an
extensive collection of Russian avant-garde painting,
including Kazimir Malevich's "Black Square," according
to "Argumenty i Fakty."
	In the meantime, at least some of Inkombank's
depositors are anxious about the fate of their savings.
Three years ago, Galina Oleinikova, a university
professor in St. Petersburg, put her entire life
savings, as well those of her mother, which she had
inherited, into an Inkombank interest-bearing U.S.
dollar account. On 5 September 1998, she sent a
registered express letter, asking that her account be
transferred to a U.S. bank in California, where she is
now living. She got no response, and although she was
worried, she didn't panic because she believed
"President Yeltsin and other Russian leaders who said
that bank accounts of individuals would be protected."
	Now she is panicking. A friend in St. Petersburg
acting on her behalf told her that she still has the
option of transferring her money to Sberbank, but she
will have no access to it for two years and will be
reimbursed in rubles, not dollars. In the meantime, her
daughter, a high school senior, is heading off to
college, but since she is not yet a U.S. citizen, will
not qualify for a scholarship, despite her excellent
grade point average. Her American husband, who is
recuperating from two surgeries, cannot provide any
financial assistance. Perhaps the Central Bank can spare
her a few dollars short of $100 million, but she is
likely not considered "socially important" enough.

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Updated: 1998-11-

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