Notebook

Kremlin vs. Yukos

Oil company caught in

Kremlin sights

A major pre-election battle unfolded in Russia this summer, as the country’s biggest oil giant, Yukos, was confronted by the Kremlin. The campaign began when Yukos’s second-largest shareholder and chairman of Menatep bank, Platon Lebedev, 43, was led away in handcuffs from his hospital room to Lefortovo prison on July 2. 

Lebedev, a billionaire and the right hand of Yukos CEO Mikhail Khodorkovsky, is suspected of embezzling over $280 million in stock from Apatit, a state-owned fertilizer producer, in 1994. The arrest was followed by raids on Menatep and Yukos offices. 

As this issue went to press in August, Lebedev was languishing in Lefortovo, awaiting arraignment after having been denied bail. 

Meanwhile, Yukos is facing a number of other criminal investigations. The company’s security chief, Aleksei Pichugin, has been in Lefortovo since the end of June, charged with organizing an assassination attempt on a senior Moscow city official and killing two others. Authorities are also looking into tax evasion charges against both Yukos and Sibneft, which are due to merge this year, creating the world’s fourth largest oil producer. 

The attack on Yukos has sparked fears that a wider review of 1990s privatization deals could be in the offing, threatening property rights and leading to capital flight from Russia. In response, the Russian stock market sank 13 percent in July.

Two political interpretations of the crackdown have been offered. The first is that the Kremlin was responding to Khodorkovsky’s decision to finance the opposition (Yabloko, the SPS, and even the Communist Party) in upcoming parliamentary and presidential elections. Khodorkovsky, according to Forbes, is worth $8 billion and could therefore afford such an underwriting. 

The second interpretation is that the Yukos assault is part of a Kremlin power struggle, brought on by the proposed merger of Yukos and Sibneft, which would strengthen the “Family” (Yeltsin allies and aides), which is allied with Sibneft owner Roman Abramovich (see page 9), vis-a-vis the “Siloviki,” comprised of Putin’s St. Petersburg allies. Prime Minister Mikhail Kasyanov has sided with Yukos, criticizing the attack.

Putin, meanwhile, has given mixed signals. While he said he was against using “arm-twisting and jail cells” to solve economic crimes, he added that the courts should not be hindered from fighting crime. In any event, many observers suggest the attack is a populist campaign by the Powers That Be. There is immense public resentment towards the oligarchs, who are widely seen as having robbed the country through murky privatization deals in the early 1990s.

 

Off the Air 

In  a move some are calling the end of private television in Russia, in June the Media Ministry shut down TVS, replacing it with a state-run sports channel. TVS, the last TV channel to openly criticize the Kremlin, was run by a team of former NTV journalists, led by Yevgeny Kiselyov. In 2001, NTV was seized by the Gazprom concern and the journalists moved to TV6, which was shut down in January 2002. TVS was closed according to a now familiar pattern, citing financial and management difficulties. Most analysts attributed the closure to the impending elections and the Kremlin’s desire to quiet critical voices. Earlier in the year, TVS had been dropped by Moscow’s main cable company for unpaid bills. TVS staff had not been paid for three months.

 

Bat Invasion

This summer Khabarovsk, in the Russian Far East, was invaded by bats. As the bats infiltrated homes and workplaces, residents called wildlife organizations, asking what could be done about the bats. In the end, the bats were collected from roofs and balconies and deported to Bolshe-Khekhtsirsky nature preserve. Environmentalists reported that they had found some rare species among the bats. (Novye Izvestia)

Contested Election

Chechen terrorism continues

despite impending vote

In July, one day after President Vladimir Putin signed a decree that set October 5 as the date for the Chechen presidential election, two female suicide bombers killed 15 people and themselves at the entrance of an open air rock concert in Tushino, near Moscow. 

The Chechen elections follow a Kremlin-sponsored March 2003 referendum in which, according to official results, Chechens approved by a vast majority the republic’s status as a part of Russia. Over 150 people have been killed in suicide attacks since the referendum.

Five days after the Tushino attack, a security officer was killed while trying to defuse a bomb left near a restaurant in the center of Moscow. Shortly afterwards, security officials announced they had discovered and neutralized a bomber hideout in the suburbs of Moscow. Then, on August 1, 50 people were killed when a suicide bomber drove a truck packed with explosive through the gates of a military hospital in the town of Mozdok, North Ossetia.

 

Doppelgängers

An investigation conducted by Novye Izvestia this summer uncovered students who are “doubling” for other students, helping them to pass difficult entrance examinations. Entrance exams to Russian universities and colleges are held throughout the summer. Applicants submit their high-school diplomas and other documents to the application committee and receive a so-called “examination list” in exchange [an identification sheet upon which test scores are noted]. For students not sure they can pass the examination on their own, the double either arrives at the exam herself with the applicant’s examination list or, if photo ID is being closely checked, applies to the same institution, sits down next to the applicant at the exam and does his work for him.

 

Korean Connection

North Korea

to open first church

This summer, Archbishop Kliment of Kaluga and Borovsk blessed the foundation stone of Holy Trinity church in Pyongyang, the first church to be built in North Korea in 50 years. Russian Orthodox authorities said that North Korean leader Kim Jong-Il proposed the church’s construction after being impressed by the interior decoration of a Russian Orthodox church in Khabarovsk during his August 2001 visit to Russia.

A delegation from the North Korean Council of Believers traveled to Moscow to study the architecture of Orthodox churches, but the church being built in Pyongyang will not be an exact replica of a Moscow church. It will combine architectural features of Orthodox churches with features of Korean architecture. 

The project is being financed and implemented by North Korea. The Russian Orthodox Church is only providing design recommendations. The church will be consecrated by an important figure in the Russian Orthodox Church. 

It is unknown how many Orthodox believers still live in North Korea, a staunchly communist, and thus atheist, state. At the end of the 19th century, up to 10,000 Koreans practiced the Orthodox faith in missionary settlements. A Russian religious mission was set up in Seoul, Korea in 1900, and included a school, a hospice and an orphanage. In the wake of the 1953 division of Korea into two states, the Russian religious mission was closed down. (Interfax)

 

Still Fighting

A group of prominent intellectuals has written to Education Minister Vladimir Filippov, criticizing Russia’s school literature curriculum, which is gradually removing works by great 20th century writers who opposed the soviet totalitarian regime. Works by writers such as Anna Akhmatova, Osip Mandelshtam, Boris Pasternak, Andrei Platonov and Varlam Shalamov are being removed from required-reading lists, while works of “orthodox” soviet literature (e.g. Mikhail Sholokhov’s Quiet Flows the Don) are still being taught. The intellectuals warned that the current curriculum shows a clearly “conservative trend” toward undoing the last decade’s efforts to condemn totalitarianism. The letter was signed by, among others, the writers Fasil Iskander, Rimma Kazakova, Andrei Voznesensky, and Vladimir Voinovich. 

 

Moscow Werewolves

Police force rocked 

by anticorruption campaign

At the end of June, the Interior Ministry’s Internal Affairs Directorate, in conjunction with the FSB and the Prosecutor-General’s Office, launched a huge  operation aimed at rooting out corruption and criminal activity inside the Moscow police force. Six senior officers with the Criminal Investigations Department (MUR) of the Moscow Interior Ministry Directorate and a lieutenant general who heads the Emergency Situations Ministry’s security department were arrested. At least $3 million was seized in more than 40 raids carried out throughout the capital. More than 700 officers were suspended from MUR and interrogated.

The operation was labeled an attack on “werewolves in police uniforms.” The gang of werewolves was accused of fabricating criminal cases in order to extort bribes, as well as extorting “protection” payments from several Moscow casinos, shopping centers, and restaurants. After the arrests, the media were filled with lavish descriptions of the riches found while searching suspects’ homes: tennis courts and soccer fields, golden toilets and priceless antiques. 

Some skeptical analysts, however, said the anticorruption campaign was just a pre-election move by the Interior Ministry to gain public favor. Boris Gryzlov, who heads the Interior Ministry, is also head of the pro-Kremlin Unified Russia party. 

 

End of an Error Era

The Moscow Education Department has ruled that, starting this academic year, schoolchildren can submit homework that has been done on a computer. The decision proved controversial, as computers can spell-check texts, and thus prevent children from mastering the complicated orthography and punctuation of the Russian language. Educational authorities have also agreed that this year some of the capital’s schools will join 47 of Russia’s regions in the Universal State Examination experiment. Eventually, all Russian schools will switch to the Universal State Examination, whose results will be used as standardized scores for university admission processes, like the SATs in the U.S. or A-levels in Britain. The Universal State Examination would thereby replace oral and written entrance exams, presently held by each university independently. 

 

Common Cause

Yekaterinburg-based student Sergei Smerdov has sued the Moscow Directorate for Passenger Services for its failure to provide him with free toilet access during a stopover at Moscow’s Yaroslavsky train station, Izvestia reported. After downing two cups of tea, Smerdov discovered that all the toilets at the station were closed for two hours for cleaning. According to Smerdov, he could not wait and was forced to use a pay toilet – in direct violation of the fifth paragraph of Article 80 of the Charter for Railway Transportation of the Russian Federation. Smerdov, who is a law student and works for the human rights organization Sutyazhnik, in Yekaterinburg, seeks 510 rubles ($16.50) in punitive damages and to cover the cost of using the pay toilet. Sutyazhnik once sued Yekaterinburg Mayor Arkady Chernetsky because the city had too few public toilets. But the organization lost the case and was forced to pay Chernetsky compensation, which they did by ceremoniously delivering several baskets of coins to the mayor’s office. (RFE/RL Newsline)

 

“I simply don’t want the executive powers to get caught up in political shakeups. We have organs of power that do this professionally.” 

Vladimir Putin, president of the Russian Federation (Itogi)

 

“We have only one God – the state, and we all place before it the sacrifices of our lives and of our children’s lives, and we are grateful when it accepts them. We ourselves believe that we have one tsar and that we are all fleas. And as long as we have this idea in our heads, there is no point in speaking about the power of the oligarchs or, even less, about democracy ... As a citizen, I not only have the right, but I am obligated to have my own political views and to defend them. If we do not do this, then our political life will be determined by the prosecutors.”

 Mikhail Khodorkovsky, Yukos CEO, 

who has been under fire from the Kremlin (Moskovskiye Novosti)

 

“In Saratov we rounded up local prostitutes and brought them to the labor exchange, proposing various job
openings – not only for janitors and cleaning women, but also other respectable professions. And, can you imagine, not one came!”

Alexander Lando, human rights envoy in Samara region (Itogi)

 

39,000

families live in Chechnya 

 

350,000

rubles will be paid to Chechen families who lost homes or property 

 

472,845 

Russian families live “in extreme poverty,” which includes some 866,000 children 

 

26,220 

school-age children should have begun school last Sept. 1, 2002, but did not

 

300,000

servicemen have fought in Chechnya since 1996

 

2,240

have been killed there since 1999

 

170 

rebels had surrendered by July 17 in connection with the amnesty campaign in Chechnya

 

$1,160,000,000

is the estimated size of the Russian advertising market during the first half of 2003 (a 32% increase over last year)

 

50

tons of black caviar were exported by Russia in 2002 

 

25,130,000

cellular phone subscribers in Russia (up from 18 mn in Jan.)

 

43

Russians out of every 100,000 committed suicide in 2002
(average world level is under
15 per 100,000)

 

27

out of 100,000 were murdered

 

60,800 

traffic accidents in Russia in January-May 2003 (resulting in death to 9,600 and injury to 71,400)

R1.23 trillion

money Russians held in cash (rubles and dollars) as of June 1, 2003 

 

Russians who

 

have a negative 

opinion
of the oligarchs 77% 

 

have never hitchhiked 69%

 

are indifferent to the fact that  businessman and governor of the Chukotka autonomous district, Roman Abramovich, recently bought the English 

football club Chelsea 36%

 

oppose uncontrolled sales of arms for purposes 

of self-defense 60%

 

are in favor 18%

 

own a gun for hunting 4%

 

feel the murder of Tsar Nicholas II and his family was: 

“a  bloody villainy 

of the bolshevik 

regime” 48%

 

the Soviets’ 

only option 21%

 

the result of general 

disorder and 

lack of coordination 21%

 

feel all Russia’s elections, 

at all levels, 

are necessary 43%

 

feel that some elections 

could be done 

away with 37%

 

say they always vote  49%

 

say they rarely vote  21%

 

say they never vote 10%

 

are against legalization 

of marijuana  70%

 

favor it  5%

 

support a universal state exam for high school 

graduation 25%

 

trust the police  31%

 

STATISTICS SOURCES

NUMBERS (page 8): 1, 2: Russian Minister for the Socioeconomic Development of Chechnya, quoted by Interfax; 3-4: Labor and Social Development Ministry quoted by Interfax; 5, 7: Viktor Ozerov, chairman of the Federation Council’s defense and security committee, quoted by Interfax; 6: Major- General Sergei Tochilin, deputy commander-in-chief of Russia’s Interior Troops, quoted by Interfax; 8: Regional headquarters for the counter-terrorism operation in the North Caucasus, quoted by Interfax; 9: Russian Association of Advertising Agencies quoted by ITAR-TASS; 10:  Fisheries Committee quoted by Interfax; 11: ASM-Consulting quoted by Interfax; 12: State Statistics Committee; 13-14: WHO, quoted by Bolshoi Gorod magazine and Russian Health Ministry’s Research Institute of Psychiatry, quoted by Interfax; 15: Interior Ministry’s Traffic Police Department quoted by Interfax. 

 

RUSSIANS WHO (page 10): 1-8, 14-15, ROMIR Monitoring; 9-13, 16: Public Opinion Foundation

 

 

Britons who know that Vladimir Putin is the current 

president of Russia 45%  

(Public Opinion Foundation)

 

“Government is like the weather. There will always be those who are dissatisfied with it.”

Valery Goreglyad, vice-spokesman of the Federation Council,
about attempts to organize a no-confidence vote in the government (Itogi)

 

“As far as the [two-headed] Russian eagle is concerned, it must, without a doubt, turn both of its heads towards democracy and wealth, even if in so doing, the head, which is traditionally accustomed to looking toward
authoritarianism and poverty, has its neck broken.”

 Vladislav Inozemtsev, head of the Center for
Post-Industrial Society Studies (Profil)

 

Insure or else!

In July, a law came into force requiring car owners to purchase automobile insurance by January 1, 2004, after which they will be fined if they are caught driving without it. The base tariff for mandatory insurance of a passenger car was set at 1980 rubles per year (about $65). The tariff is then multiplied by a regional coefficient, and by coefficients related to the tenure and age of the driver. An average insurance fee is about $130. Car owners all over Russia (as these protesters in Kaliningrad, left) have protested the law, which they consider unfair, especially for owners of cheap cars or for pensioners, who have owned the same car for decades.

 

 

“The purchase of Chelsea was Abramovich’s second major mistake. The first one was getting to know me.”

 

Boris Berezovsky, exiled oligarch, on Roman Abramovich’s purchase of 

the British soccer club, Chelsea, see page 9. (Argumenty i Fakty)

 

CSKA’s Two Trades

CSKA Moscow gave their squad a boost ahead of the start of a new season in the European Champions’ League by signing Croatian marksman Ivica Olic.

The Red Army team set the Russian record for the price paid for a new player when they struck a 8.2 million Euros deal with the 23-year-old player’s former club, Dynamo Zagreb.

According to the deal Dynamo Zagrad received 5 million Euros, while Olic, who was the Croatian league’s top striker for the past two years, will pocket 3.2 million Euros in salary for his next four seasons with CSKA.

Olic scored in his first appearance for the Red Army team, helping CSKA to a 1-1 tie in their away match at Yaroslavl.

The previous record trade price was also set by CSKA Moscow earlier this year, when the club signed Czech midfielder Jiri Jarosik from Sparta Prague for 3.7 million dollars.

CSKA will have to wait at least a year to prove their ambitions in the European cups. They crashed out of this year’s Champions’ League, suffering a 3-2 aggregate defeat at the hands of Macedonia’s Vardar.

Russia to host first-ever PGA European Tour event

The BMW Russian Open, an event with a 400,000 Euro purse, will tee off in Moscow on August 13, becoming the most important golf event in the history of Russia.

Hosted by the Moscow Country Club at their course, the tournament is the first-ever PGA European Tour event ever held in Russia.

Like tennis, golf was frowned upon by the Soviet authorities for being a corrupt, individualist sport of the capitalist West.

Russia’s first golf course – a smallish nine-hole affair – was built on the edge of Moscow near a row of Western embassies in 1988, by Sven “Tumba” Johansson, a Swedish ice hockey great.

Yet, after 15 years, Moscow still has just two golf courses, despite a massive inflow of foreigners into the Russian capital over the past decade.

However, a senior Russian golfing official said earlier this year that the country’s ruling body for golf was planning to build up to 500 golf courses in Russia over the next 15 years.

Russian Cyclist Wins Tour de France

Hidden behind the headlines of Lance Armstrong’s fifth consecutive yellow shirt at the 2003 Tour de France was the fact that the winner of the Best Youth Jersey (white) was Russian cyclist Denis Menchov. 

Menchov was riding in the race for his third time and placed 11th in the final, overall rankings. The 25-year-old was born in Oryol and placed 93rd and 47th in the 2001 and 2003 Tour de France races, respectively. Menchov was riding for the Spanish team Banesto and led his team’s finish.

The next best finish for a Russian rider in this year’s race was Alexander Bocharov, who finished 24th and rode for France’s AG2R Prevoyance.

The 24-year-old Menchov comes from Oryol, a town 350 km from Moscow. In 1998, he was racing for Lada-Samara in the Ronde de l’Isard  amateur race when he was spotted by Francis Lafargue, from Banesto, which was looking for promising racers. Menchov joined Banesto in January 1999.