DATE=7/15/2000
TYPE=BACKGROUND REPORT
TITLE=RUSSIA / BUSINESS CRACKDOWN (CQ)
NUMBER=5-46676
BYLINE=EVE CONANT
DATELINE=MOSCOW
CONTENT=
VOICED AT:
/// EDS: in 5-46669 of 7/14, fixing
translation of Kadannikov Act in Russian Fade Under
(fourth Act) to read: 200-thousand cars were made
etc., instead "two-thousand cars were made." Graph is
being re-dubbed to tape and corrected tape to be
available in the bubble ///
INTRO: This past week in Russia has been marked by a
series of crackdowns against some of Russia's leading
businessmen, part of what many see as an orchestrated
campaign by President Vladimir Putin to restore order
to the Russian economy. V-O-A Moscow Correspondent
Eve Conant reports a series of investigations into a
top Russian media company, the country's largest auto
maker, and Russia's electricity monopoly has left the
country's business elite, known as the "oligarchs,"
fearing for the power they built up since the collapse
of the Soviet Union.
TEXT: During the election campaign, President
Vladimir Putin promised to -- in his words --
"destroy the oligarchs as a class." A series of raids
and investigations into top businesses this past week
has many believing he is keeping his promise. And
there is little concern among average Russians for the
handful of powerful businessmen, who are believed to
have used close ties to the Kremlin to make illegal
fortunes while average Russians lost their life
savings or went months without their salaries.
In one of several comments he made this past week on
the subject, President Putin vowed to fight against
those who exploited political connections to make
their millions in what he called the "muddy waters" of
post-Soviet capitalism.
/// PUTIN ACT IN RUSSIAN - FADE UNDER ///
Mr. Putin says the government has promised that it
would act more energetically as far as setting
conditions for businesses. He says that means getting
Russia's tax system and economy in order. And he
adds, "the state is doing this, whether it is popular
or not."
/// OPT /// The director of the Center for Policy
Studies, Vladimir Orlov, says the campaign will face
little resistance from average Russians.
/// OPT ACT ORLOV ///
This is becoming popular. It doesn't matter
whether it's good or bad. The general public
believes the oligarchs are bad guys that should
be killed. They are not analyzing the details
of the situation.
/// END ACT // END OPT ///
On Tuesday, investigators for a second time searched
the offices of a media company, whose owner, Vladimir
Gusinsky, faces charges of embezzling state funds
during a privatization deal in the mid-1990's. His
television network has been critical of the Kremlin
and Moscow's military campaign in Chechnya.
The early part of the week also saw pressure turned up
on Russia's natural gas giant "Gazprom," oil company
LUKoil, and the owner of Russia's largest nickel
plant, Vladimir Potanin. Mr. Potanin has been
requested to return 140-million dollars he allegedly
stole from the government when he acquired Norilsk
Nickel in the mid-1990's.
The chief economist for Russia's "Renaissance"
investment bank, Roland Nash, says the investigations
and raids are simply a way for President Putin to
prove that he, and not a handful of powerful
businessmen, is in charge of Russia's economy.
/// NASH ACT ///
It is just part of the ongoing process that
Putin is taking to centralize control and to
grab back control for the federal center. The
oligarchs for too long have been able to act as
they wanted to. There has been no centralized
power. And what Putin is trying to do -- he is
using these specific events as an excuse to say
to the oligarchs `look, that time is over. Now
you have to listen to what I want you to do.
/// END ACT ///
On Wednesday, Russia's tax police went after AvtoVaz -
the country's largest automaker, which is facing
charges of cheating the government out of 600-million
dollars in taxes. The chairman of the auto company,
Vladimir Kadannikov, told V-O-A the charges against
the company are nonsense.
///KADANNIKOV ACT IN RUSSIAN - FADE
UNDER///
He says, "I finally understand the essence of the
charges that more than 200-thousand cars were made `in
shadow -- `in secret' -- to cheat the state." He
says, "but anyone who is familiar with car production
knows that is ridiculous."
The director of the Carnegie Moscow Center, Alan
Rousso, says only if Mr. Putin takes on the truly
politically entrenched oligarchs, like Boris
Berezovksy, will it be clear if he is really out to
fight corruption, or simply playing favorites. But
Mr. Rousso says President Putin has chosen a
politically dangerous path by making at least a few
oligarchs accountable for past actions.
/// ROUSSO ACT ///
Starting with a clean slate would have been an
easier approach by all means for Putin. That
would have meant he had fewer political enemies,
but also it would not have meant a sincere
attempt to change the rules of the game in favor
of the rule of law. I think he's chosen a more
difficult path, one which is certainly dotted
with pitfalls.
/// END ACT ///
The business week culminated on Friday with a
challenge to the creator of Russia's privatization
program of the early 1990's, Anatoly Chubais.
Investigators from Russia's Audit Chamber say they are
examining whether Mr. Chubais sold an illegal number
of shares of Russia's electricity monopoly to
foreigners in the first years after the Soviet Union
collapsed.
/// OPT /// Mr. Chubais, who served as deputy
prime minister under President Boris Yeltsin, said the
legal basis for the case was, in his words,
"laughable."
/// OPT CHUBAIS ACT - IN RUSSIAN - FADE
UNDER ///
/// OPT /// Mr. Chubais says, "This is not a
conflict of laws, this is the Communists trying to
carry out political revenge. /// END OPT ///
A Russian liberal politician says he has persuaded
President Putin to hold a meeting with business
leaders later this month aimed at easing tensions
between Russia's business and political elite. But in
a newspaper interview published Friday, President
Putin said simply that those people who try to abuse
the state or win privileges because of political
connections, will in his words "be forced to give up
their ideas." (Signed)
NEB/EC/JWH/PW
15-Jul-2000 15:23 PM EDT (15-Jul-2000 1923 UTC)
NNNN
Source: Voice of America
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