Publication: Monitor Volume: 5 Issue: 144

Russian Prime Minister Sergei Stepashin’s trip to Washington is, in part, aimed at changing Russia’s bad image among potential investors. To that end, the Russian prime minister spoke last night at a dinner hosted by the U.S.-Russia Business Council, which promotes investment in Russia. Stepashin told the assembled businessmen, among other things, that investors can come to Russia “without fear of racketeers” and that they should take “with a grain of salt” reports concerning the “criminalization” of Russia’s economy (AP, July 27).

Stepashin’s message was somewhat muddied by the fact that he was traveling with Yevgeny Nazdratenko, governor of the Primorsky region in Russia’s Far East. Stepashin and his entourage, who on July 25 had stopped over in Seattle on their way to the U.S. capital, were greeted by an article in the “Seattle Post Intelligencer,” in which Seattle-based businessmen working in Russia’s Far East described Nazdratenko as “a crook,” “a thug” and “the godfather of Vladivostok.” The paper described an instance in which Nazdratenko allegedly tried to force a Seattle-based company working in Primorye to contribute 10 percent of its revenues during one year for his re-election campaign, “transferring” the company’s boats to a competitor when the company refused to contribute (Moscow Times, July 27). A British businessman working in Vladivostok described the situation there as one of “total lawlessness” (Washington Post, July 26).

Meanwhile, yesterday morning, Pavel Kapysh, head of the Baltic Financial Industrial Group, was shot dead in downtown St. Petersburg, the city where Stepashin got his start in politics. The attackers first fired rocket-propelled grenades at Kapysh’s armor-plated Chevrolet Blazer and then finished him off with Kalashnikovs. The driver was unhurt. According to a newspaper account, police investigators say the most likely explanation for Kapysh’s murder is that he had come into conflict with the leaders of the Tambov group, the most powerful criminal organization operating in Russia’s second city. The Baltic Financial Industrial Group has lately been heavily involved in providing fuel for ships in the ports of St. Petersburg, Murmansk and Kaliningrad, among others–a sphere of business in which the Tambov group is reportedly also involved. According to the paper, Kapysh had been threatened several times and had appealed not only to the police for protection, but to another criminal group–the one headed by Kostya Mogila (Kostya the Grave), who controls St. Petersburg’s graveyard business. Kapysh himself was arrested in both 1992 and 1993 on suspicion of involvement in various criminal activities, including the sale of contraband oil, but was later released for lack of evidence (Kommersant, July 27).

Genrikh Epp, acting mayor of the southern Siberian town of Kyzl, was killed on July 21 in an assassination similar to Kapysh’s murder. A bomb disabled Epp’s car as he left for work, after which an unidentified gunman finished him off (Russian agencies, July 21). Epp was a member of Right Cause, the center-right coalition formed by Yegor Gaidar and Anatoly Chubais; some of its members have charged that his murder was politically motivated. Several press accounts, however, have suggested that it was related to his commercial activities.