Security Watch: June 12, 2002

KALININGRAD FOCUS OF BALTIC REGION SUMMIT. The prime ministers of 11 Baltic-region countries plus representatives of the European Union gathered in St. Petersburg on 10 June for a two-day meeting of the Council of Baltic Sea States, Western and Russian news agencies reported. Much of the discussion centered on Russian concerns about EU expansion and the Kaliningrad exclave. Speaking to journalists before the meeting, Prime Minister Mikhail Kasyanov said that Russia insists on "the unimpeded transit of cargo and movement of Russian citizens from Kaliningrad Oblast," ITAR-TASS reported. Denmark takes over the rotating EU presidency in July, and Foreign Minister Igor Ivanov arrived in Copenhagen on 10 June for talks on the Kaliningrad problem, ITAR-TASS reported. In St. Petersburg, the Baltic leaders also discussed regional environmental problems, organized crime, and energy cooperation.

POLISH PRESIDENT IN MOSCOW, COMES OUT AGAINST KALININGRAD VISA-FREE CORRIDOR... Polish President Alexander Kwasniewski arrived in Moscow on 6 June to meet with Russian President Vladimir Putin, ITAR-TASS reported on 6 June. Flying from Seoul, South Korea, Kwasniewski stopped over in Novosibirsk, where he met with presidential envoy to the Siberian Federal District Leonid Drachevskii. In Novosibirsk, Kwasniewski expressed his opposition to Russian appeals for a visa-free corridor for Russia's Kaliningrad Oblast after Poland and Lithuania join the European Union in the next few years as expected. At the same time, he said he favors a liberal visa regime for Russians in the exclave. "We would like to do everything we can to strengthen contacts between neighboring countries, which means giving long-term multiple-entry, cheap, and maybe even free visas to students and young people," he said.

...AS RUSSIA STANDS FIRM... Moscow does not intend to back down in its dispute with the European Union over the Kaliningrad exclave, ITAR-TASS reported on 5 June. Deputy Foreign Minister Sergei Razov said, "Moscow's position is that it is necessary to preserve unhindered the movement of people between Kaliningrad Oblast and the rest of Russia." Razov rejected EU proposals to issue simplified Schengen visas to Kaliningrad residents, noting that only 230,000 of the region's 1 million inhabitants have foreign-travel passports and that EU statistics show that 3-5 percent of visa applicants are rejected. Razov said Russia cannot permit a situation in which the right of Russian citizens to travel between areas of Russia would depend on "the good or bad will of an EU bureaucrat."

...AND PLAYS UKRAINIAN CARD. President Putin and Ukrainian President Leonid Kuchma met in St. Petersburg on 9 June and signed a joint statement ordering their respective governments immediately to prepare a bilateral agreement on strategic cooperation in the natural-gas sphere, ITAR-TASS reported the next day. The statement outlined the proposed agreement, calling for the creation of a consortium that would manage and develop Ukraine's gas-transport system. Deputy Prime Minister Viktor Khristenko said that the agreement "will enhance the reliability of Russian gas deliveries to Europe in the long term," the news agency reported. By making new energy arrangement with Ukraine, Putin put pressure on Poland by making clear that if Warsaw will to cooperate with Russian on Kaliningrad, Moscow may refuse from plans of construction of new oil pipeline through Polish territory and reactivate its energy transit dealing with Kyiv. Commented BBC 10 June.

PUTIN FIRM ABOUT RUSSIA'S CIS SPHERE OF INFLUENCE... In an exclusive interview to the flagship of the Chinese mass media "People's Daily," President Putin said that "Russia openly states that it has special interests within [the zone of] the Commonwealth of Independent States [CIS] as far as the protection of its...national security is concerned," according to the Russian version of the interview posted on Putin's official website (http://www.president.kremlin.ru) on 4 June. He stressed that this aspect of Russia's foreign policy is not intended to dominate or pressure its neighbors, but is dictated by humanitarian factors. "There are over 20 million of our compatriots living in CIS countries, and Russia cannot and will not abandon its responsibility for the way they live and how their rights are observed," Putin said.

...BUT NOT WORRIED ABOUT U.S. PRESENCE IN CENTRAL ASIA... In the same interview, Putin said that he is not concerned about the stationing of U.S.-led forces in Central Asia and believes that each country in the region has the right to choose its partners in the fight against international terrorism. However, he added that the presence of outside forces should not inflame "local or interstate frictions or destabilize the situation." He added that it is wrong to speak of conflicts between Moscow and Washington within the CIS because the new relations between the two countries can be characterized as "cooperation instead of competition."

CHINESE, RUSSIAN LEADERS HOLD CONSULTATIONS BEFORE SHANGHAI GROUP SUMMIT. President Putin arrived in St. Petersburg on 6 June to meet with Chinese President Jiang Zemin prior to attending the Shanghai Cooperation Organization (SCO) summit on 7 June, ORT and Russian news agencies reported. Putin said before the meeting that the discussions would center on "the quality of Sino-Russian relations and acute international problems such as combating international terrorism and extremism, the conflict between India and Pakistan, and the situation in Afghanistan." Meanwhile, Deputy Economic Development and Trade Minister Maksim Medvedkov said in Beijing after talks there that China fully supports Russia's rapid accession to the World Trade Organization and believes that Russian membership will boost bilateral trade, RIA-Novosti reported on 6 June.

SHANGHAI GROUP IS FORMALIZED. The SCO became a full-fledged international organization on 7 June, as the leaders of Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan signed the group's legal charter, Russian and Western news agencies reported. The group also created a joint regional antiterrorism structure that will be based in Kyrgyzstan. "We bear a special responsibility for security and stability in Central Asia," President Putin said, according to AP. Although analysts have speculated in recent months that Uzbekistan has been moving increasingly toward the United States since it agreed to host U.S. troops on its territory last fall, Uzbek President Islam Karimov praised the new charter and spoke of the group as an important element in the global struggle against terrorism. Meanwhile, ITAR-TASS reported on 7 June that Indian Ambassador to Russia Krishnan Raghunath said his country fully sympathizes with the SCO and "can make a considerable contribution to its activity." He added that a number of member countries favor India's accession to the organization.

UN SECRETARY-GENERAL PRAISES PUTIN AND RECEIVES GORCHAKOV MEDAL. United Nations Secretary-General Kofi Annan met in Moscow on 5 June with President Putin and highly praised his role in efforts to mediate between India and Pakistan during the recent regional-security forum in Almaty, Russian and Western news agencies reported on 6 June. "I was amused to hear them say President Putin failed to make peace...when the actual situation was that the two leaders failed to seize the opportunity offered by the conference," Annan said. While in Moscow, Annan also lauded Russia's peacekeeping role in the CIS, especially in the Georgian-Abkhaz conflict. Foreign Minister Igor Ivanov presented Annan with the prestigious Aleksandr Gorchakov medal, named after an outstanding 19th-century Russian diplomat. Annan became the first non-Russian to receive the recently created medal, which previously had only been awarded to Putin, Boris Yeltsin, and former Prime Minister Yevgenii Primakov.

PRIME MINISTER'S VISIT 'TURNING POINT' IN RUSSIA-BULGARIA RELATIONS. Bulgarian Prime Minister Simeon Saxecoburggotski began four days of talks in Moscow on 3 June that President Putin described as "a turning point" in bilateral relations, Russian and Western news agencies reported. Putin noted that there had been "a certain decrease in economic ties" between the two countries in 2001 compared to 2000, but added that "positive tendencies" have been observed since Saxecoburggotski was elected, ITAR-TASS reported. The news agency reported that one topic of conversation was restarting construction of a nuclear-power plant in Belene, Bulgaria, work on which was halted in 1990. During the visit, the two countries are expected to sign a bilateral declaration on trade, economic, and scientific cooperation; an interdepartmental agreement on cooperation between the two countries' culture ministries; and a supplement to the Agreement on the Settlement of the Mutual Obligations between the Russian Federation and Bulgaria.

U.S. GRANTS RUSSIA MARKET-ECONOMY STATUS. The U.S. government recognized Russia as a full-fledged market economy on 6 June, Western and Russian news agencies reported. U.S. President George W. Bush informed President Putin of the decision by telephone. According to AP, the Russian government estimates that the U.S. decision will increase Russian exports to the United States by about $1.5 billion annually. Speaking on RTR television, Economic Development and Trade Minister German Gref expressed hope that the decision will lead the United States "to reconsider all the previously introduced antidumping procedures" that have been initiated, ITAR-TASS reported. "The step also opens new opportunities for investments in Russia, making them more predictable as products produced in our country can be supplied on major world markets on a competitive, nondiscriminatory basis," Gref said. The European Union announced a similar decision on 29 May (see "RFE/RL Security and Terrorism Watch," 4 June 2002).

RUSSIA, CHINA SUMMIT SEEKS TO ACCELERATE ECONOMIC COOPERATION. President Putin held private talks in St. Petersburg with his Chinese counterpart Jiang Zemin on 6 June prior to a summit of the Shanghai Cooperation Organization, Western and Russian news agencies reported. Presidential spokesman Sergei Prikhodko told reporters that Putin briefed Jiang about the results of his recent summit with U.S. President Bush, the Russia-NATO summit in Rome, and the Russia-EU summit in Moscow, ITAR-TASS reported. Both leaders noted the increasing trade and economic cooperation between the two countries and said that even more dynamic expansion is possible. Putin and Jiang also reviewed the recent military discussions held by Defense Minister Sergei Ivanov in Beijing (see "RFE/RL Security and Terrorism Watch," 4 June 2002).

MOSCOW THREATENS EU WITH TRADE WAR. Agriculture Minister Aleksei Gordeev said that Russia will retaliate in response to increased European Union duties on grain imports from Russia, nns.ru reported on 5 June. Gordeev said that Europe buys from 2 million to 3 million tons of Russian grain each year, representing about half of Russian grain exports. The new EU barriers will practically eliminate Russia from the European market and, therefore, the government is considering similar barriers to EU milk and meat imports to Russia.

CENTRAL BANK TO SHUT DOWN ONE-THIRD OF RUSSIA'S BANKS? The Central Bank is preparing to revoke the licenses of more than 400 of the country's 1,270 banks, "Kommersant-Daily" reported on 7 June, citing anonymous sources. According to the newspaper, an order to this effect will be published on 13 June. The report said the Central Bank has tightened up its own rules, significantly increasing the number of circumstances under which it is obligated to revoke a bank's license. Under the newly tightened rules, the paper reports, the Central Bank will have to revoke the licenses of any banks whose capital reserves are less than 1 million euros. "Kommersant-Daily" referred to the coming move as "a purge of the banking system."

GOVERNMENT INTRODUCES LICENSING OF AUDIO AND VIDEO PRODUCTION. Prime Minister Mikhail Kasyanov has signed a decree regulating the licensing of audio and video production and duplication rights, abnews.ru reported on 6 June. According to the document, the Media Ministry will be responsible for licensing the production and duplication of multimedia works on any medium, while the Culture Ministry will license multimedia products designed for presentation to mass audiences. The document requires that all video and audio productions should bear the name of the license holder and the license number.

RUSSIA, TURKEY DISCUSS MILITARY-HELICOPTER DEAL. Chief of the General Staff General Anatolii Kvashnin on 4 June began talks with his Turkish counterpart, General Huseyin Kivrikoglu, about extended bilateral military ties, Russian news agencies reported. The focus of the talks is the joint Russian-Turkish production of 130 combat helicopters for Turkey at an estimated cost of $2.5 billion. Russia is competing for the tender against the United States and France.

PUTIN IMPOSES SECRECY OVER WEAPONS EXPORTS. President Putin issued a decree allowing the Committee for Military-Technical Cooperation with Foreign Countries (KVTS) to classify data concerning weapons export as state secrets, "Kommersant-Daily" reported on 3 June. The committee already classifies information about Russian arms supplies to China as secret at the request of Beijing. The immediate result of Putin's measure will be that any public evaluation or analysis of Russian exports can now be treated as a matter of "divulging state secrets," the newspaper noted.

RUSSIAN DEFENSE MINISTER WANTS MORE MILITARY COOPERATION WITH GERMANY. Sergei Ivanov told journalists in Germany after talks with his counterpart Rudolf Scharping that both countries are willing to expand military cooperation both within the framework of NATO and on a bilateral basis, Russian and German news agencies reported. Ivanov said that special attention is being paid to cooperation in the area of military transport aviation and joint military training, ITAR-TASS reported. Ivanov added that although he believes the issue of expansion is an internal matter for NATO, he thinks that doing so would create "some problems" for the alliance. He said that he does not understand how expanding the alliance will help combat international terrorism or assist in coping with other contemporary threats.

SHOTS FIRED AT REGIONAL FSB OFFICE. Shots were fired by an unknown gunman at the local department of the Federal Security Service (FSB) in the Irkutsk Oblast city of Bratsk on 4 June, ITAR-TASS reported the same day. The shots were reportedly fired from a 20-millimeter automatic rifle. No one was injured, but the interiors of some offices were damaged. A criminal investigation has been opened under a charge of "hooliganism with a firearm," but investigators have not ruled out the possibility that the assault might be linked to the agency's counterintelligence functions, the news agency reported.

WORLD CUP LOSS SETS OFF RIOT IN MOSCOW... Massive street rioting broke out in downtown Moscow following Russia's 1-0 loss to Japan in the World Cup soccer championships on 9 June, Western and Russian news agencies reported. Some sources reported that two people were killed in the violence, but that information remains sketchy and unconfirmed. An estimated 7,000 to 8,000 fans -- many of them intoxicated -- gathered in a central square to watch the match on a big-screen television, while only about 150 police were on hand to control the crowd. After the match, fans rampaged along Moscow's main street, damaging the building that houses the State Duma, vandalizing about half a dozen restaurants in a fashionable pedestrian area, and attacking several tourists of Asian appearance. One hundred and eighteen people were arrested, and more than 100, including 20 police officers, were hospitalized. Duma Deputy Vladimir Reznik, a leader of the pro-Kremlin Unity faction, said that the Interior Ministry (MVD) must bear responsibility for the rampage because of its poor crowd control. Interior Minister Boris Gryzlov said that he will personally look into the matter.

...BUT WAS THE VIOLENCE SPONTANEOUS? Many observers, including some leading politicians and pro-Kremlin commentators, labeled the 9 June violence an "orchestrated action." Prime Minister Kasyanov called the riots "a well-planned escapade," and Aleksandr Oslon, head of the Public Opinion Foundation, said the disturbances "must have been prepared by somebody," strana.ru reported on 10 June. The pro-Kremlin website also speculated that journalists on the scene may have been "intentionally assaulted." According to "The Moscow Times," anchorman Yevgenii Krivenko said on state-run RTR's evening newscast on 9 June that the violence underscores the need to adopt quickly the controversial, government-sponsored bill on extremism that passed its first reading in the State Duma on 6 June (see "RFE/RL Newsline," 6 June 2002). The incident is reminiscent of a case in 1999 when crowds of soccer fans rampaged near the U.S. Embassy in Moscow during NATO's military action against Yugoslavia.

ACTIVISTS ALARMED BY ANTI-EXTREMISM BILL. Human rights activists on 4 June came out in opposition to a government-sponsored bill on extremism that is due to come before the State Duma on 6 June, Russian news agencies reported. The activists argued at a Moscow press conference that the bill gives too much leeway to law enforcement authorities to abuse their authority under the pretext of combating nationalist and racist violence. One definition of extremism contained in the bill includes "any illegal activity" aimed at "hindering the legal activities" of local governmental structures, which -- activists say -- could include any number of protest activities. Justice Minister Yurii Chaika urged lawmakers to pass the bill, saying, "after this law is passed, law enforcement bodies will obtain an effective tool" against extremism. Liberal State Duma Deputy Sergei Kovalev was quoted as saying that existing laws are sufficient, but that they are poorly enforced by police, prosecutors, and the FSB.

CHUBAIS ASSOCIATE TARGET OF CORRUPTION PROBE. The MVD has initiated an investigation of Mosenergo Director Arkadii Yevstafiev, a close associate of United Energy Systems (EES) head Anatolii Chubais, Interfax and NTV reported on 8 June. Mosenergo is a EES subdivision. According to investigators, the case against Yevstafiev is linked to his business activity before becoming head of Mosenergo. Yevstafiev became known during the 1996 re-election campaign of then-President Boris Yeltsin when he was caught leaving a government building with $538,000 in cash in a cardboard box; Yevstafiev declined to explain anything about the money. Commenting on the MVD investigation, gazeta.ru wrote that it is linked to another 1996 episode, in which Yevstafiev and Chubais took a loan of several million dollars for an NGO called the Center for the Protection of Private Property, which they headed. The loan was allegedly never paid back. In his 1998 book "Obscurantism," MVD Colonel Valerii Streletskii wrote that significant evidence of fraud had been uncovered in both cases but that the investigations were stopped for political reasons.

YAVLINSKII LOSES DEFAMATION LAWSUIT TO BASHKORTOSTAN PRESIDENT. Moscow's Kuntsevo Municipal Court ruled on 5 June that Yabloko faction leader Grigorii Yavlinskii must publicly apologize to Bashkortostan President Murtaza Rakhimov for statements published during the 1999 election campaign in the republic and pay him 20,000 rubles ($645) compensation, RIA-Novosti reported. Specifically, Yavlinskii was ordered to publish a statement in the regional newspaper "Izvestiya Bashkirii" renouncing his assertion that Rakhimov is ruling a "feudal, patronage-based regime" characterized by "lying, stealing, and making concessions to bandits." These assertions were included in a flyer distributed by Yabloko throughout the republic. Yavlinskii's lawyer, Dmitrii Steinberg, called the verdict absurd and said he will file an appeal. He said that the court was trying to compel Yavlinskii to renounce his political convictions and that it is illegal to force him to issue an apology in a newspaper in which his initial statements did not appear.

DUMA SAYS CYRILLIC ALPHABET SHOULD BE MANDATORY FOR ALL RUSSIA'S PEOPLES. The State Duma adopted on 5 June in its first reading a bill making the Cyrillic alphabet obligatory for all ethnic groups in the Russian Federation, RIA-Novosti reported. Deputy Anatolii Nikitin (Communist) of the Nationalities Committee introduced the bill as an amendment to the law on the languages of the peoples of the Russian Federation. The amendment stipulates that all state languages of the federation and its constituent republics should use Cyrillic and that the use of any other graphical basis for alphabets must be affirmed by federal law. The government's representative in the Duma, Andrei Loginov, said he supports the amendment because "if everyone invents their own alphabet, it would bring the state to chaos."

BOOK ON 1999 BOMBINGS WINS NATIONAL LITERARY PRIZE

By Victor Yasmann

Ardent anti-Western author and publisher Aleksandr Prokhanov won on 31 May the prestigious 2002 National Bestseller Prize for his controversial book "Gospodin Geksogen" (Mr. Gexogen), Russian news agencies reported. The book, which is posted on the Internet at http://www.geksogen.ru, is a thinly fictionalized account that maintains the 1999 apartment-block explosions in Moscow and other cities, the renewal of fighting in Chechnya, and the election of Vladimir Putin as president were all the result of a security-organs conspiracy led by veterans of the KGB.

The National Bestseller Prize was established by several Russian banks last year for the promotion of democratic and capitalist values in literature (see its statute at http://www.guelman.ru/slava/bestseller/index.html). Still, awarding this prize to such a figure as Prokhanov is more a political than literary event.

First of all because Prokhanov, who in the 1980s already deserved the nickname "songbird of the Soviet General Staff," in the last two decades became one of the chief ideologists of the antidemocratic opposition in Russia. Second, because his new book is on politics for politicians and has clear political goals. Indeed, the book is a fictionalized account of the mysterious advent to power of Vladimir Putin, only three year ago a little-known retired KGB lieutenant general. It is features characters closely based on former President Yeltsin, former Prime Minister Sergei Stepashin, former Prosecutor-General Yurii Skuratov, KGB General Fillip Bobkov, and mass-media magnates Boris Berezovskii and Vladimir Gusinskii. Putin appears in the book under the name "Chosen One."

In the book there are two prime driving forces acting behind the scenes, moving all developments and characters of the Russian political scene of recent years. The first is the KGB veterans group represented by Bobkov and his associates, who are confronted by the GRU "Stalinist" group, known also as the "Russian Order." Their goal is to crush the oligarchs, primarily Gusinskii and Berezovskii, take control over Russia and its economy, and to this end gain influence over the "Chosen One." To make the "Chosen One" the successor to Boris Yeltsin, the plotters first compromise and remove from power former Prime Minister Sergei Stepashin, then organized the bombings in Moscow and used its as a pretext to renew the Chechen war under the leadership of the "Chosen One."

At this point Prokhanov's book echoes the journalistic investigation of former FSB officer Aleksandr Litvinenko and historian Yurii Feltishinskii entitled "Assault on Russia" posted on the Internet by "Novaya gazeta" (http://www.novaya.gazeta.ru). In contrast to this book, which dealt with particular events (i.e. the September 1999 bombing), Prokhanov united all political developments into a continuous line of conspiracies and plots. In Prokhanov's universe, there is no place for probability, random chance, human mistakes, or simple callousness or stupidity: all events are predetermined by the will of the prime movers. This is a specifically Marxist view of history, which Prokhanov shares with the members of the Russian elite, judging by the decision of the National Bestseller jury.

Another element of the Prokhanov book (posted on the Internet at http://www.geksogen.veshnyaki.ru/text.html) is its rabid anti-Semitism Indeed, there are anti-Semitic remarks on almost every page of the novel. Just like his Nazi spiritual inspiration, Prokhanov endows Jews with an almost supernatural ability to create evil, to organize endless "anti-Russian plots" and, above all, to enjoy it. Fortunately Prokhanov's perceptions about Jewish plots are even less trustworthy than his knowledge of Jewish traits. Thus, in one of the most demonizing scenes of the novel, the oligarchs and Moscow Jewish leaders are celebrating the success of another of their intrigues against Russia in the Kremlin. Waiters bring to the table countless delicious dishes, among which is a suckling pig!

Ironically enough, a book with such a strong anti-Semitic bent was rewarded by a jury headed by Vladimir Kogan, the chairman of the board of one the city's biggest banks, Promstroibank. The St. Petersburg businessman is reputed to have strong ties to the Kremlin. In fact, the presence in the jury of Kogan, often seen in Putin's entourage, as well as several liberal critics from Moscow provide Prokhanov with respectability and national recognition which the former can only dream about.

It is a sign of the times that the prize for the best novel of 2002 is awarded to a book which says that most of the political developments in Russia in last couple years were under the control of the Chekists and that both the jury and the public seem to accept this fact more than condemn it.

It also symbolic that the literature award set up by Russian banks was given to Prokhanov, the publisher of the pro-imperialist and xenophobic weekly "Zavtra," as well as the most strident antagonist of Western capitalism, who, nevertheless, accepted the $10 000 prize for his book.

Finally, it is remarkable that in accepting the prize money for his book, Prokhanov announced that he will donate most of the sum to the defense of his "national-patriotic" comrade, Eduard Limonov, whose trial on charges of illegal arms possession and attempting to overthrow the constitutional order is expected to get under way in Saratov in the near future.