Publication: Fortnight in Review Volume: 5 Issue: 3

Moscow appeared afflicted over the past fortnight by the ancient Chinese curse: “May you live in interesting times.” At home, Russia’s domestic political scene descended into a bizarre and unseemly morass of outlandish charges, unexpected resignations, and ominous raids by Russian special forces. This domestic political chaos spilled into the foreign policy arena when Russia’s ailing president traveled briefly and unexpectedly–and with some loss of dignity–to Amman for the funeral of Jordan’s King Hussein.

Elsewhere, however, Russian foreign policy took on more ominous tones. Amid reports that domestic political forces are moving Moscow away from the West, the United States and Russia launched yet another series of harsh exchanges over American criticism of Russia’s arms export controls–or its lack thereof. Simultaneously, a major Russian political figure appeared to throw his weight behind resurgent efforts to maintain a Russian “sphere of influence” on the territory of the former Soviet Union.


While the Russian economy has been running on empty since last August’s financial meltdown, observers had talked about how Yevgeny Primakov’s accession to the premiership had at least brought relative harmony to Russian politics. This past fortnight, however, saw that harmony scatter to the four winds.

Ironically, the proximate cause for the sudden escalation of tensions was the plan that Primakov floated late last month for a “non-aggression pact” among the Kremlin, the cabinet and the parliament. Boris Berezovsky, the tycoon and Commonwealth of Independent States executive secretary (see below), publicly criticized the plan. Soon thereafter, a Moscow court placed Russian Public Television (ORT), the crown jewel of Berezovsky’s shadow empire, under outside management. Berezovsky’s men at ORT accused Primakov of being behind that court decision and much more. Primakov, meanwhile, announced plans to amnesty 90,000 prisoners from Russia’s jails–to make room for “economic criminals.” For good measure, the prime minister said the CIS executive secretary should stop criticizing the head of government of one of the CIS states and concentrate on his own tasks, which remain unfulfilled. Berezovsky hit back, charging that Primakov’s anticorruption drive presaged “massive repressions.”

Primakov’s answer, apparently, was: “If you want repression, I’ll give you repression.” On February 2, a day after Berezovsky’s critique, investigators from the General Prosecutor’s Office, accompanied by heavily armed commandos from the Federal Security Service’s “Alpha” group, searched the offices of two companies believed to be under the tycoon’s control: Sibneft, Russia’s seventh-largest oil company, and Atoll, a private security firm. Last month, a Moscow daily charged that Atoll had been recording the phone calls of top government officials and members of President Boris Yeltsin’s family, after which the General Prosecutor’s Office opened a criminal investigation into the newspaper’s charges.

The day of the raids on Sibneft and Atoll, moreover, Prosecutor General Yuri Skuratov handed in his resignation, officially for health reasons. It was a claim which no one believed. The Moscow press and rumor mill–it is often difficult to distinguish one from the other–went into overdrive. Some said Skuratov was removed for sanctioning the raids on Berezovsky’s holding, others said he was sacked for moving too slowly in the Atoll investigation.

But that wasn’t all. Investigators–again accompanied by spetsnaz in ski-masks and camouflage–next searched the offices of several companies connected to Aeroflot, the state airline company. It too is reportedly controlled by Berezovsky. Just prior to these raids, Aeroflot’s chief, Valery Okulov, had removed two key Berezovsky allies from the airline’s management. Okulov’s role gave the press more fodder for wild speculation. Some reported that the First Family was split, given that Okulov is married to Yeltsin’s elder daughter, Yelena, while the president’s younger daughter, Tatyana Dyachenko, is reportedly under Berezovsky’s sway. A weekly magazine subsequently reported that the raids could not have taken place without the Yeltsin family’s tacit agreement. The same publication, however, reported that Tatyana may be playing a double game, working both for and against Berezovsky.

So much for the hopes that Kremlin politics would become more transparent in the post-Soviet era.


In the midst of all this, a letter which Skuratov had written to the State Duma on February 1, the day before his “resignation,” was leaked to the press. In it, Skuratov charged that from 1993 to 1997 Russia’s Central Bank had placed US$50 billion from the country’s hard currency reserves in the hands of FIMACO, an unknown asset-management company registered in the Isle of Jersey. Some observers questioned Skuratov’s arithmetic, since the Central Bank never had more than US$24 billion in reserves at any one time. But Viktor Gerashchenko, who headed the Central Bank from 1992-1994 and is now back at the helm, admitted that the Central Bank had indeed founded FIMACO. At one point it had also, he said, entrusted the company with more than US$1.4 billion which it wanted to protect from possible seizure by foreign creditors. On February 10 Boris Fedorov, who was finance minister in the early 1990s and Gerashchenko’s nemesis, charged–rather belatedly–that Central Bank officials had profited from the money entrusted with FIMACO. Federov said he had complained about it in 1993 but was told to mind his own business.

On February 11, finally, one Russian newspaper published an open letter from Sergei Dubinin, who headed the Central Bank from 1994-1998, and Sergei Aleksashenko, who was his deputy. Both former Central Bank officials–who, like Fedorov, are viewed as liberals–echoed Gerashchenko’s defense of FIMACO. Skuratov, they charged, had threatened Russia’s “economic security and state interests” by revealing the offshore firm’s existence.


Arms proliferation issues were once again the source of diplomatic discord between Moscow and Washington over the past fortnight, as the two countries clashed over a proposed Russian arms deal with Syria while a CIA report identified Russia as one of the world’s worst arms proliferators. The latest allegations, all vehemently denied by Russian government officials, only intensified the acrimonious battle that the two countries have waged over Russian defense cooperation with Iran. Since the beginning of the new year the Clinton administration has sanctioned three Russian institutes accused of providing missile or nuclear technologies to Iran. It has also threatened to curtail lucrative Russian launches of U.S. satellites if Moscow fails to halt such activities.

Underlying the Clinton administration’s recent actions is the belief that Russian authorities have, over the past five months or so, slacked off in their efforts to enforce the country’s arms export control regulations. That periodization, not surprisingly, coincides roughly with the assent of former spymaster and Foreign Minister Yevgeny Primakov to the post of prime minister. As Russia’s chief diplomat, Primakov was the architect of a more assertive foreign policy which aimed more directly at reestablishing Russian influence in the Middle East. The linchpins of that strategy have been improved ties with Iran, Iraq and Syria. All three countries enjoyed close ties to Moscow during the Soviet period and all three are considered by the United States to be supporters of international terrorism.

The clash over Russian-Syrian arms dealings is nevertheless a new one. It was made public in early February when news reports said that the United States had threatened to cut US$50 million in aid to Russia if Moscow followed through on a deal to sell advanced antitank missiles to Syria. The U.S. warning had reportedly been delivered to Moscow during U.S. Secretary of State Madeleine Albright’s January visit to the Russian capital.

The Russian Foreign Ministry was sharply critical of the U.S. threat. A ministry spokesman said that Russia does not recognize the authority of the United States to impose sanctions against Russia for Moscow’s dealings with third countries. The spokesman added that there are currently no UN sanctions in force against Syria and that Moscow would therefore feel free to continue its military cooperation with Damascus in accordance with international norms.

The spokesman’s remarks came as a Syrian military delegation was in the midst of a lengthy official visit to Russia to discuss Russian-Syrian defense cooperation. Talks on this topic have intensified in recent months, and Russian reports have suggested that the two countries are on the verge of signing a package of arms agreements which could be worth more than US$2 billion to Russia. In an effort to boost the negotiations, which have been hindered by Syria’s large Soviet-era debt to Moscow, Russian Defense Minister Igor Sergeev traveled to Damascus last November. Syria’s own defense minister is scheduled to arrive in Moscow in late February for talks which both sides hope will move them closer to an agreement.

The highlighting of alleged improper arms dealings by Russian defense institutes continued on February 9 when the CIA delivered a report to Congress analyzing the proliferation of nuclear, chemical and biological weapons worldwide. The report specifically identified Russian and Chinese businesses and quasigovernment agencies–possibly operating outside the purview of their respective governments–as the most important emerging threats in this area. The CIA report thus reprised charges by the Clinton administration that Russian authorities are failing to control the activities of various Russian defense “entities” operating abroad.

The day that the CIA report was made public, moreover, Russia’s Foreign Ministry was compelled to deny allegations that military hardware from Russia is finding its way to ethnic Albanian separatists in Yugoslavia’s troubled province of Kosovo. The charge was made by Albania’s ambassador to Moscow.


Some Russian commentators have suggested in recent weeks that the apparent intensification of defense ties between Russia and such countries as Iran and Syria is a product of a shift in Russia’s domestic political landscape. The daily newspaper “Segodnya,” for example, has written of an increasingly powerful pro-Iranian faction within Russia’s political and industrial elite. That newspaper and others suggest that Russian authorities are considering renouncing–or finding a way around–an earlier, informal Russian-American agreement limiting Russian military exports to Iran.

Another commentator has argued that Russia’s recent economic woes have undermined the political clout of both the country’s financial elite and its raw materials exporters and simultaneously increased the influence of Russia’s defense industrial complex. That last group, the commentator claims, has little interest in cooperative relations with the West. Instead, it is driving Russian foreign policy toward improved relations with such countries as Iraq, Iran and Syria in the belief that they could prove to be lucrative markets for Russian arms.


It is not customary for the head of an organization to use his influence to undermine the interests of constituent members. Yet such appears to be the case with Boris Berezovsky, the Russian business and media magnate, who also holds the post of CIS executive secretary. Currently losing ground in Russia on both the political and the business fronts, Berezovsky is campaigning to increase his powers in the CIS. Berezovsky’s effort to streamline and centralize the organization under his own leadership inevitably conflicts with the interests of the independent-minded member countries.

“Nezavisimaya gazeta,” the influential Moscow daily with a liberal reputation, is the flagship of Berezovsky’s press conglomerate. The newspaper has recently carried a series of articles strongly criticizing the CIS member countries which seek to minimize Russian political influence and to gravitate toward the West. The articles tend to focus on the significance of military bases, viewed as central to Russian policy and a litmus test of those countries’ attitude toward Russia. On some major issues, “Nezavisimaya gazeta” takes a harder line than the official position of the Foreign Ministry. In the controversy over the Russian-Ukrainian treaty, the Berezovsky-controlled daily weighed in on the side of the nationalist opponents of the treaty. It thereby outdid the communists, who ultimately sided with the Foreign Ministry in supporting the treaty.

UKRAINE: “WHAT FRIENDSHIP?” Berezovsky’s flagship daily has successfully opposed the ratification of the Russian-Ukrainian interstate treaty by Russia’s Federation Council. On the eve of the debate in that chamber, “Nezavisimaya gazeta” printed an article by Konstantin Zatulin, detailing the case against ratification and posing territorial claims on Ukraine. Zatulin is the director of a government-sponsored institute for relations with CIS countries and the adviser on that subject to presidential aspirant Yuri Luzhkov, the foremost political opponent of the treaty with Ukraine. On the day of debate, the Federation Council members presumably found on their desks the “Nezavisimaya gazeta” issue with the article of its own chief editor, Vitaly Tretyakov. Headlined “What Friendship?” the editorial attacked the basic assumptions of the Friendship Treaty and urged the Federation Council not to “kowtow” to Ukraine. Both the ultranationalist Zatulin and the liberal Tretyakov expressed concern bordering on indignation over the Ukrainian government’s efforts to develop relations with the West. They portrayed independent Ukraine as inherently hostile to Russia and working against fundamental Russian interests. (Nezavisimaya gazeta, January 26-27)


Reacting to a recent Organization for Security and Cooperation in Europe resolution which called for the withdrawal of Russian troops from Moldova, “Nezavisimaya gazeta” urged the Russian government to “keep the troops where they are” in Moldova and in other newly independent countries. The article argued that this would constitute a proper Russian response to NATO’s enlargement. The military presence could also “guarantee the former Soviet republics’ correct behavior toward Russia and the Russians residing there.” In the specific case of Moldova, the article encouraged Russia’s Foreign Ministry to make the case that breakaway Transdniester has a right to request the continued presence of Russian troops there, irrespective of the Moldovan government’s position. It also said that a Transdniester referendum could “legitimize” the Russian troops’ presence there. (Nezavisimaya gazeta, January 30) The newspaper’s Moldova specialist, a member of the anti-independence organization Interfront during the final years of Soviet rule in that republic, has since resisted Moldovan independence in the pages of the Moscow press.


Georgia’s cautious efforts to negotiate the withdrawal of Russian forces from the country have drawn a menacing response from the Berezovsky daily. An article accused Georgia of allowing itself to be “brainwashed by NATO promises” and of “purposely making difficulties for the Russian troops.” It reminded Tbilisi that three of the four Russian bases in Georgia are situated in areas inhabited by ethnic and/or religious minorities, whose leaderships are both “inclined toward self-determination” and friendly to the Russian military. According to the newspaper, the Batumi base in Ajaria “guarantees the inviolability of Ajaria’s autonomy.” The Akhalkalaki base in Javakhetia is so popular with local Armenians that a withdrawal of Russian troops “may lead to disorders among Armenians. The situation may develop along the lines of the Karabakh scenario.” The Gudauta base in Abkhazia performs an indispensable “peacekeeping” function. Should Georgia persist with its “active demands for the withdrawal of Russian troops… the situation may seriously worsen in the republic,” the article warned. It urged the Russian government to increase funding for these troops in order to maintain an effective presence “in regions of interest to Russia” (Nezavisimaya gazeta, February 4).


According to “Nezavisimaya gazeta,” Azerbaijan is being used by the CIA and U.S. oil companies against Russia’s strategic interests. Dwelling on “the anti-Russian policy of the United States in the Caspian region,” the newspaper wrote that “U.S. special services have consolidated a stronghold in Azerbaijan.” “Evidence” to that effect is Azerbaijan’s support for sectoral division of the Caspian Sea, for the Baku-Ceyhan main oil export pipeline, and for general U.S. efforts to “weaken the influence of Moscow and of Tehran” in the region. Falling back on Soviet terminology, “Nezavisimaya gazeta” pilloried “American financial capital” and “the knights of cloak and dagger from Langley” for inveigling Azerbaijan into their activities. Rather than attacking the Azerbaijani leadership directly, the newspaper implied that it has passively allowed itself to be used by the United States; and cautioned the current leadership that it may at some stage be dumped by Washington in favor of the Azerbaijani opposition. This line suggests that some in Moscow have not yet written President Haidar Aliev off, still hoping against hope to gain influence with his government. The reference to common Russian-Iranian interests fitted in with Berezovsky’s stated view that Iran is a promising partner for Russia and even a desirable candidate for CIS membership (Nezavisimaya gazeta, February 2).


The Committee for National Security of Kazakhstan (KNB) recently uncovered a mole within the institution. According to the KNB’s account, the agent had worked for Iranian and Turkish intelligence. Before the KNB had publicized the case, however, “Nezavisimaya gazeta” preemptively built a theory that the agent had spied on Kazakhstan for a Western power or group of powers. It also asserted that President Nursultan Nazarbaev had ordered the agent’s exposure in retaliation for Western criticism of the manner in which Nazarbaev had staged his reelection as president. As it did in the case of Azerbaijan (see above), the newspaper cautioned Nazarbaev against counting on Western support. In the Soviet tradition of “active measures,” the article appeared designed, however crudely, to introduce an irritant in Astana’s relations with the West. (Nezavisimaya gazeta, January 28).


The International Security Conference, a high-level annual event just held in Munich, ended on a controversial note owing to Russian Deputy Foreign Minister Yevgeny Gusarov’s intervention. Reinforcing the familiar warning that Moscow had drawn a “red line” around the ex-Soviet republics, Gusarov insisted that the borders of the former USSR represented a “natural limit” to NATO’s enlargement. Ukrainian, Baltic and Georgian representatives sharply disagreed with the implication that the old sphere of influence was still somehow in place.

“Nezavisimaya gazeta” addressed the same issue in an analysis steeped in the spheres-of-influence thinking. It accused the United States of frustrating Russian policy “in the post-Soviet space and the former socialist camp.” While “Russia has substantial chances to regain its political influence in those areas, first of all in the CIS countries,” the West is intruding in order to “counterbalance Russia in Eastern Europe and in CIS integration processes.” The article singled out “America’s penetration of Ukraine”–a double swipe at Kyiv and at Washington–and inferred that a “sanitary cordon is being restored” in the process of denying Russia its rightful role in the CIS. (Nezavisimaya gazeta, February 5)

Berezovsky is currently conducting an active personal diplomacy in the CIS, seeking the support of the national leaderships for his plans to centralize and control the organization. During those diplomatic tours, Berezovsky is careful to minimize public controversy and to create an impression of consensus around his proposals. But what is known about the content of those proposals, and the “Nezavisimaya gazeta” articles, tell a different story.