RFE/RL NEWSLINE Vol. 3, No. 128, Part I, 1 July 1999

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RFE/RL NEWSLINE Vol. 3, No. 128, Part I, 1 July 1999

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

* AUDIT REVEALS CENTRAL BANK SHENANIGANS

* BANK CLOSURES PUZZLE ANALYSTS, ALARMS MOSCOW CITY OFFICIALS

* TAJIKISTAN'S PARLIAMENT SCHEDULES REFERENDUM
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RUSSIA

AUDIT REVEALS CENTRAL BANK SHENANIGANS... According to the
unpublished audit prepared by PricewaterhouseCoopers, the
Russian Central Bank underreported its 1996 foreign currency
reserves to the IMF, "The Washington Post" reported on 1
July. According to the daily, the Central Bank granted a $1
billion internal loan to the Russian government and was given
in return a promissory note. That note was then dispatched to
the Jersey Island FIMACO firm without the fund's knowledge. A
anonymous source told the newspaper that the audit uncovered
no criminal dealings -- just "some transactions that one
should question whether a Central Bank should be doing." One
example might be the Central Bank's use of its own pension
fund to invest in short-term treasury bonds. "The Moscow
Times" on 25 June reported that profits from such trading
were then channeled directly through the pension fund, rather
than recorded as Central Bank income, bypassing the
requirement that 50 percent of Central Bank profits be
transferred to the federal budget. JAC

...AS MORE IMF CASH LOOKS IMMINENT. IMF, State Duma, and
Central Bank officials have seen the audit but the bank does
not want that document to be released publicly. Meanwhile, on
30 June Russian government and IMF officials signed a joint
statement on economic policy for 1999. Finance Minister
Mikhail Zadornov told reporters that the IMF mission
currently in Moscow approved the preliminary measures that
the government is supposed to adopt. Mission head Gerard
Belanger told Prime-Tass the same day that "we see rather
good success by the government and Central Bank regarding the
measures that we agreed on and are ready for further
discussions." JAC

BANK CLOSURES PUZZLE ANALYSTS, ALARMS MOSCOW CITY OFFICIALS.
Banking analysts mostly panned the Central Bank's decision to
pull the licenses of four large banks on 30 June. Margot
Jacobs of the United Financial Group told AFP that the
Central Bank's decision pull Mezhkombank's license after it
had just completed a restructuring agreement with its foreign
creditors makes "you ask if the Central Bank is not paying
attention or is just incompetent." According to the agency,
analysts were divided over whether the bank was responding to
pressure from the IMF or was trying to undermine the Agency
for Restructuring Credit Organizations, which had just
announced that it would supply fresh funds for one of the
four banks whose licenses were pulled (see "RFE/RL Newsline,"
22 June 1999). More unnerved than the analysts were Moscow
city officials, one of whom told Interfax that the withdrawal
of Mosbiznesbank's license "may bring the city to the brink
of a default." JAC

RUSSIAN MANEUVERS RAISE EYEBROWS IN WASHINGTON. Two Russian
strategic bombers flew within striking distance of the U.S.
during military exercises last week (see "RFE/RL Newsline,"
26 June 1999), the "Washington Post" and "The New York Times"
reported on 1 July, citing unidentified U.S. officials. The
TU-95 Bear bombers were intercepted by four U.S. F-15
fighters and a P-3 patrol plane near Iceland on 25 June and
escorted around the island. Norway also sent jets to meet two
TU-140 Blackjack bombers that flew down its coastline, but
Russian reports say the bombers turned back before the jets
reached them. A National Security Council official said U.S.
officials believe the incident was linked to recent tensions
over Russia's early intervention in Kosova and debates over
its role in the peacekeeping force there. The "Washington
Post" quoted Colonel-General Anatolii Kornukov, head of the
Russian air force, as saying on 26 June the flights were
planned in advance, "nothing more, nothing less." JC

IVANOV ACKNOWLEDGES SERBIAN ATROCITIES IN KOSOVA... Russian
Foreign Minister Igor Ivanov published an article in
"Nezavisimaya gazeta" on 30 June acknowledging that Serbian
forces in Kosova used "unacceptable measures with the help
of which Belgrade tried to solve the problem of ethnic
balance in Kosova by itself." Ivanov said that this was
"regrettable." He added, however, that both the NATO air
campaign and the "repressive actions in the country"
contributed to the "particular internal bitterness in the
post-conflict period." FS

...WHILE HIS DEPUTY FEARS WEAK UN ROLE IN KOSOVA. Russian
Deputy Foreign Minister Aleksandr Avdeev told Reuters on 30
June in New York that "tendencies have appeared to...dilute
the UN's role in the restructuring of [Kosova] and
make...its secretary-general a mere executor of someone
else's initiatives and efforts." Avdeev alluded to Western
countries, especially the U.S., after UN Secretary-General
Kofi Annan's meeting in New York on Kosova (see Part II).
Avdeev stressed that "we are anxious to preserve the multi-
ethnic nature of [Kosova], where every nationality is
protected politically and economically on the basis of the
territorial integrity and sovereignty of Yugoslavia." He
objected to restrictions on aid being imposed on Serbia as
long as Yugoslav President Slobodan Milosevic remains in
office, arguing that such conditions are an "interference
in Yugoslavia's domestic affairs." FS

NATO, RUSSIA STRUGGLE TO WORK OUT KFOR COMMAND. NATO
Military Committee Chairman Admiral Guido Venturoni told
ITAR-TASS on 30 June that NATO and the Russian military
delegation that arrived at NATO's military command in Mons
on 28 June still disagree over several details of Russia's
role in KFOR (see "RFE/RL Newsline," 29 June 1999). He said
the key disputes are over how to integrate Russian troops
into local KFOR command structures in the respective zones
and the role of the permanent Russian-NATO Council in
solving questions related to the operation. Russia also
demands a representation of Russian forces in the British
sector. NATO currently plans to include Russian troops only
in the French, German, and U.S. sectors. FS

LEBED WARNS THAT KOSOVA COULD BECOME 'MINI-CHECHNYA.'
Krasnoyarsk Krai Governor Aleksandr Lebed told Interfax in
Moscow on 30 June that Kosova could turn into a "mini-
Chechnya" for Russia. Lebed stressed that "Albanians regard
Russian troops as a hostile force" and argued that the
"disarmament of Albanian units by Russians will inevitably
lead to fighting and a mini-Chechnya." Lebed also stressed
that "the sending of this contingent will more than halve the
number of combat-ready troops in Russia.... The situation in
the Caucasus is such that these troops could be needed there
very shortly." Colonel-General Georgii Shpak dismissed the
warnings, saying that "the truth is that the situation around
our peacekeepers is fine and calm, there are no excesses." FS

PRESIDENT'S REMARKS PROVE A VACATION SPOILER. Many Duma
deputies from the Communist Party (KPRF) have elected to stay
in Moscow rather than risk being out of the capital following
President Boris Yeltsin's instructions to the Justice
Ministry to intensify its efforts to check the KPRF's
observance of Russian law (see "RFE/RL Newsline," 29 June
1999). Security Committee Chairman Viktor Ilyukhin told ITAR-
TASS on 30 June that "serious unconstitutional acts on behalf
of the president and his team are under way." Russian
newspapers appeared to take the threat less seriously: both
"Nezavisimaya gazeta" and "Vremya MN" speculated the same day
that the real party in danger was Minister Justice Pavel
Krasheninnikov, who may soon be dismissed. "Kommersant-
Daily," on the other hand, suggested the president merely
wanted to "rattle the Communists' cage." It wrote: "The
president's strategists claim that his poor general state is
due to the fact that the opposition never allow him to relax
properly on vacation. So why should Yeltsin not return the
favor?" JAC

PARTY REGISTRATION DEADLINE EXPIRES. The deadline for re-
registering public associations, parties and organizations
with the Ministry of Justice expired on 30 June. According to
ITAR-TASS, only one-third of 70,000 organizations have been
re-registered. Justice Minister Krasheninnikov told NTV that
day that many of the remaining unregistered organizations,
which are now likely to be liquidated, "exist only on paper."
JAC

POLITICAL, BUSINESS FIGURES BATTLING OVER LEADING
NEWSPAPER... Influential business tycoon Boris Berezovskii
told Interfax on 30 June that a variety of groups, including
his own LogoVAZ, are negotiating to acquire shares in
Kommersant Publishing, which issues "Kommersant-Daily."
According to Berezovskii, the Alfa Group, Unified Energy
Systems, National Reserve Bank are engaged in talks. In
addition, Gazprom, the Most Group and Moscow Mayor Yurii
Luzhkov have also made proposals. On 25 June, Luzhkov's
deputy, Sergei Yastrzhembskii was elected chairman of TV
Center, in which the Moscow government owns a 90 percent
stake, according Interfax. JAC

...AS CONTROVERSIAL FIGURE FROM LAST ELECTION RESURFACES.
Also elected to the board of directors was Sergei Lisovskii,
head of SV Holding and former presidential campaign aide to
Yeltsin. According to "Kommersant-Daily" on 26 June,
Lisovskii is rumored to be a financial backer for Luzhkov's
presidential campaign. In an interview with "Argumenty i
Fakty" on 30 June, Lisovskii predicted that the upcoming
election will witness more voter fraud than the 1996 ballot.
He also said he believes that Yeltsin has not decided to
cancel the presidential elections. JAC

POLITICAL PRESSURE ON SUPREME COURT ALLEGED. The 10-year term
of Russian Supreme Court Chairman Vyacheslav Lebedev is
expiring and the court will take up the issue of its
leadership on 2 July, "Moskovskii Komsomolets" reported on 1
July. According to the newspaper, sources in the presidential
administration claim that it is holding off on renominating
Lebedev in order to obtain a favorable decision regarding
Prosecutor-General Yurii Skuratov. The Federation Council
earlier asked the court to decide whether President Yeltsin
had the right to suspend Skuratov pending the outcome of a
criminal investigation without the upper chamber's approval
(see "RFE/RL Newsline," 10 June 1999). "Izvestiya" reported
on 26 June that the decree renominating Lebedev has already
been signed and that the chairman wants to be named a
lifetime member of the court. "Moskovskii Komsomolets" is
considered close to Moscow Mayor Luzhkov, who has accused the
Kremlin of conspiring against him. JAC

CHECHNYA SAYS 11 EXECUTED FOR DRUG DEALING. The Chechen
presidential press service issued a statement on 30 June
saying that 11 people have been executed so far this year in
Chechnya for drug trafficking, Interfax reported. Seven of
them were identified as citizens of the Russian Federation,
although their nationality was not specified. The statement
said that claims by senior Russian officials that there are
drug laboratories in Chechnya are untrue and "an
exceptionally unfriendly step toward the Chechen people." It
also affirms readiness to cooperate with any international
organization in the fight against illegal drug trafficking.
But Georgian parliamentary deputy Mamuka Areshidze told
Caucasus Press that low-grade heroin produced in Chechnya is
regularly smuggled across the frontier into Georgia and
offered for sale outside schools. Areshidze said that some
Georgian police are involved in drug-trafficking with the
backing of senior officials, whom he declined to name. LF

TRANSCAUCASUS AND CENTRAL ASIA

NEW NAGORNO-KARABAKH PREMIER NAMED. Arkadii Ghukasian,
president of the unrecognized Nagorno-Karabakh Republic, has
named a Ukrainian citizen of Armenian origin to head the
enclave's next government, RF/RL's Stepanakert correspondent
reported on 30 June. Anushavan Danielian, who is 43, was born
in Stepanakert but worked for many years in Crimea, where he
held the posts of chairman of the parliamentary committee for
state and legal affairs and then deputy speaker of the
parliament, according to Noyan Tapan. He was named director
of a state-run factory in Yerevan earlier this year.
Ghukasian noted Danielian's role in coordinating humanitarian
relief to Nagorno-Karabakh in the early 1990s. LF

KURDS IN ARMENIA, KAZAKHSTAN REACT TO OCALAN VERDICT. Several
hundred Kurds congregated in the center of Yerevan on 1 July
to protest the death sentence handed down to Kurdistan
Workers' Party (PKK) leader Abdullah Ocalan and to demand his
release, RFE/RL's Yerevan bureau reported. The previous day,
representatives of Kazakhstan's estimated 50,000-strong
Kurdish minority met in Almaty but decided to refrain from
any demonstrations to protest the Ocalan verdict, according
to RFE/RL correspondents in the former capital. Kurds in
Shymkent and Zhambyl Oblasts were forbidden to travel to
Almaty to attend that meeting. In Azerbaijan, State Foreign
Policy Adviser Vafa Guluzade described Ocalan as "a primitive
terrorist," adding that the death sentence was "absolutely
correct," Turan reported. LF

MORE REPRISALS AGAINST PRESS IN AZERBAIJAN. Ten men forced
their way into the editorial offices of the newspaper
"Hurriyet" on the evening of 29 June and beat up four of its
employees, Turan reported. The assailants said the attack was
in response to an article published in "Hurriyet" about the
oil mafia in Gyanja. "Hurriyet" supports the Democratic
Party, whose co-chairman is former parliamentary speaker
Rasul Guliev. On 30 June, three people claiming to be
employees of the National Security Ministry intercepted a car
in which two journalists from the opposition newspaper "Yeni
Musavat" were travelling and abducted the newspaper's deputy
editor, Shirzad Mamedli. Mamedli was released one hour later
after having been severely beaten. LF

GEORGIAN PRESIDENT INSPECTS SPECIAL SECURITY DETACHMENTS.
Eduard Shevardnadze attended a training exercise in Tbilisi
on 30 June in which members of his bodyguard simulated
deflecting an attack on a presidential motorcade, Interfax
and Caucasus Press reported. Two of Shevardnadze's bodyguards
were killed in such an attack in February 1998 (see "RFE/RL
Newsline," 10 February 1998). The various branches of the
Georgian Security Service are responsible for the safety of
the president, foreign diplomats stationed in Georgia, and
the Baku-Supsa oil export pipeline. LF

GEORGIAN INTELLIGENTSIA WANTS CLEMENCY FOR JAILED WARLORD. A
group of prominent-Soviet-era Georgian writers has appealed
to President Shevardnadze to release Djaba Ioseliani, leader
of the Mkhedrioni paramilitary formation, who was jailed for
11 years in November 1998 on charges of terrorism and
attempting to assassinate Shevardnadze, Caucasus Press
reported. Ioseliani, who denies those charges, recently
underwent emergency surgery (see "RFE/RL Newsline," 28 June
1999). LF

GEORGIAN DEFENSE MINISTRY EMPLOYEES FORM TRADE UNION. Some
102 delegates from 51 organizations subordinated to the
Georgian Defense Ministry attended the founding congress in
Tbilisi on 30 June of a trade union intended to protect their
interests, Caucasus Press reported. The ministry is facing a
serious funding shortage and intends to fire several thousand
military and civilian personnel. LF

KAZAKHSTAN TO CREATE POST OF HUMAN RIGHTS COMMISSIONER. Bolat
Baikadamov told Interfax on 30 June that the presidential
commission on human rights, of which he is secretary, has
drafted a bill on creating the office of ombudsman. That
draft will be discussed at an OSCE-initiated forum in August.
The commission has also drafted a report on the human rights
situation in Kazakhstan for submission to President Nursultan
Nazarbaev. LF

PENSIONERS STAGE PROTEST IN KAZAKHSTAN'S FORMER CAPITAL. Some
200 pensioners blocked two main avenues in Almaty on 30 June
to demand the restoration of their right to free travel on
the city's public transportation system, Reuters and RFE/RL
correspondents in Almaty reported. That right had been
abolished on 1 June. The pensioners had earlier picketed the
city mayor's office to demand that pensions be raised. Deputy
Mayor Adil Ibraev told Reuters that the mayor is ready to
meet pensioners to discuss their demands, but he said it is
highly unlikely that the city can afford at present to
fulfill them. Pensioners in the town of Semey (East
Kazakhstan Oblast) staged a similar protest on 30 June,
RFE/RL correspondents reported. LF

TAJIKISTAN'S PARLIAMENT SCHEDULES REFERENDUM. Tajikistan's
parliament voted on 30 June to submit to a nationwide
referendum a package of constitutional amendments, including
some demanded by the United Tajik Opposition, Reuters and AP
reported. The referendum is set for 26 September. The
amendments extend the presidential term of office from five
to seven years but restrict the incumbent to one term. They
also provide for the creation of a bicameral parliament and
abolish the current ban on political parties with a religious
orientation. Addressing the session, President Imomali
Rakhmonov sought to allay some deputies' fears that the
latter provision could lead to the establishment of an
Islamic state in Tajikistan. He assured them that other
articles of the constitution ensure that the country will
remain a secular state, according to AP. LF

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