RITFW - Russia - Chronos

Cable Viewer
Follow us on Twitter
Check our Reddit
Twitter this
Digg this page
courage is contagious
Viewing cable 06MOSCOW5645, CHECHNYA: THE ONCE AND FUTURE

WAR
If you are new to these pages, please read an introduction on the structure of a cable as well
as how to discuss them with others. See also the FAQs
Understanding cables
Every cable message consists of three parts:
● The top box shows each cables unique reference number, when and by whom
it originally was sent, and what its initial classification was.
● The middle box contains the header information that is associated with the
cable. It includes information about the receiver(s) as well as a general
subject.
● The bottom box presents the body of the cable. The opening can contain a
more specific subject, references to other cables (browse by origin to find
them) or additional comment. This is followed by the main contents of the
cable: a summary, a collection of specific topics and a comment section.
To understand the justification used for the classification of each cable, please use this
WikiSource article as reference.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique
reference number. Linking to a specific paragraph in the body of a cable is also possible by
copying the appropriate link (to be found at theparagraph symbol). Please mark messages
for social networking services like Twitter with the hash tags #cablegate and a hash
containing the reference ID e.g. #06MOSCOW5645.
Reference ID Created Released Classification Origin

2006-05-30 2010-12-01 Embassy
06MOSCOW5645 CONFIDENTIAL
09:09 23:11 Moscow
http://wikileaks.ch/cable/2006/05/06MOSCOW5645.html (16 of 37)12/5/2010 3:29:26 PM

Cable Viewer
VZCZCXRO0843
PP RUEHDBU
DE RUEHMO #5645/01 1500927
ZNY CCCCC ZZH
P 300927Z MAY 06
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 6600
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
C O N F I D E N T I A L SECTION 01 OF 10 MOSCOW 005645
SIPDIS
SIPDIS
EO 12958 DECL: 05/25/2016

TAGS PREL, PGOV, MARR, MOPS, RS
SUBJECT: CHECHNYA: THE ONCE AND FUTURE WAR
REF: MOSCOW 5461 AND PREVIOUS
Classified By: Ambassador William J. Burns. Reason 1.4 (b, d)
¶1. (C) Introduction: Chechnya has been less in the glare of

constant international attention in recent years. However, the
Chechnya conflict remains unresolved, and the suffering of the
Chechen people and the threat of instability throughout the
region remain. This message reinterprets the history of the
Chechen wars as a means of better understanding the current
dynamics, the challenges facing Russia, the way in which the
Kremlin perceives those challenges, and the factors limiting the
Kremlin’s ability to respond. It draws on close observation on
the ground and conversations with many participants in and
observers of the conflict from the moment of Chechnya’s
declaration of independence in 1991. We intend this message to
spur thinking on new approaches to a tragedy that persists as an
issue within Russia and between Russia and the U.S., Europe and
the Islamic world.
Summary
--------

Cable Viewer
¶2. (C) President Putin has pursued a two-pronged strategy to

extricate Russia from the war in Chechnya and establish a viable
long-term modus vivendi preserving Moscow’s role as the ultimate
arbiter of Chechen affairs. The first prong was to gain control
of the Russian military deployed there, which had long operated
without real central control and was intent on staying as long as
its officers could profit from the war. The second prong was
“Chechenization,” which in effect means turning Chechnya over to
former nationalist separatists willing to profess loyalty to
Russia. There are two difficulties with Putin’s strategy. First,
while Chechenization has been successful in suppressing
nationalist separatists within Chechnya, it has not been as
effective against the Jihadist militants, who have broadened
their focus and are gaining strength throughout the North
Caucasus. Second, as long as former separatist warlords run
Chechnya, Russian forces will have to stay in numbers sufficient
to ensure that the ex-separatists remain “ex.” More broadly, the
suffering of an abused and victimized population will continue,
and with it the alienation that feeds the insurgency.
¶3. (C) To deal effectively with Chechnya in the long term, Putin
needs to increase his control over the Russian Power Ministries
and reduce opportunities for them to profit from war corruption.
He needs to strengthen Russian civilian engagement, reinforcing
the role of his Plenipotentiary Representative. He needs to take
a broad approach to combat the spread of Jihadism, and not rely
primarily on suppression by force. In this context there is only
a limited role for the U.S., but we and our allies can help by
expressing our concerns to Putin, directing assistance to areas
where our programs can slow the spread of Jihadism, and working
with Russia’s southern neighbors to minimize the effects of
instability. End Summary.
The Starting Point: Problems of the “Russianized” Conflict

--------------------------------------------- --------------
¶4. (C) Chechnya was only one of the conflicts that broke out in
the former Soviet Union at the time of the country’s collapse.
Territorial conflicts, most of them separatist, erupted in
Nagorno-Karabakh, Transnistria, South Ossetia, North Ossetia/
Ingushetia, Abkhazia and Tajikistan. Russian troops were involved
in combat in all of those conflicts, sometimes clandestinely. In
all except Nagorno-Karabakh, Russian troops remain today as
peacekeepers. Russia doggedly insists on this presence and

Cable Viewer
resists pulling its forces out. Its diplomatic efforts have

served to keep the conflicts frozen, with Russian troops
remaining in place.
¶5. (C) Why is this? The charge is often made that Russia’s
motive for keeping the conflicts frozen is geostrategic, or “neo-
imperialism,” or fear of NATO, or revenge against Georgia and
Moldova, or a quest to preserve leverage. Indeed, the continued
deployments may satisfy those Russians who think in such terms,
and expand the domestic consensus for sending troops throughout
the CIS. However, while one or another of those factors may have
been the original impulse, each of the conflicts has gone through
phases in which the conflict’s perceived uses for the Russian
state have changed. No one of these factors has been continuous
over the life of any of the conflicts.
¶6. (C) We would propose an additional factor: the determination

of Russia’s senior officer corps to remain deployed in those
countries to engage in lucrative activity outside their official
military tasks. Sometimes that
MOSCOW 00005645 002 OF 010
activity has been as mercenaries -- for instance, Russian active-
duty soldiers fought on both sides in the Nagorno-Karabakh
conflict from 1991-92. Sometimes it has involved narcotics
smuggling, as in Tajikistan. Selling arms to all sides has been a
long-standing tradition. And sometimes it has meant collaborating
with the mafias of both sides in conflict to facilitate
contraband trade across the lines, as in Abkhazia and South
Ossetia. The officers and their generals formed a powerful bloc
in favor of all the deployments, especially under Yeltsin.
¶7. (C) This “military-entrepreneurial” bloc soon formed an

autonomous institution, in some respects outside the government’s
control. There are many illustrations of its autonomy. For
instance, in 1993 Yeltsin reached an agreement with Georgia on
peacekeeping in Abkhazia. When the Georgian delegation arrived in
Sochi in September of that year to hammer out the details with
Russia’s generals, they found the deal had changed. When they
protested that Yeltsin had agreed to other terms, a Russian
general replied, “Let the President sit in Moscow, drink vodka,
and chase women. That’s his business. We are here, and we have
our work to do.”

Cable Viewer
The Secret History of the Chechen War

-------------------------------------
¶8. (C) The lack of central control over the military, as well as
officers’ cupidity, may have been a prime cause of the first
Chechnya War. Immediately after the collapse of the Soviet Union,
energy prices in the “ruble zone” were 3 percent of world market
prices. Government officials and their partners bought oil at
ruble prices, diverted it abroad, and sold it on the world
market. The military joined in this arbitrage. Pavel Grachev,
then Defense Minister, reportedly diverted oil to Western Group
of Forces commander Burlakov, who sold it in Germany.
¶9. (C) Chechnya was a major entrepot for laundering oil for this
arbitrage. It appears to have been used both by the military
(including Grachev) and the Khasbulatov-Rutskoy axis in the Duma.
Dudayev had declared independence, but remained part of the
Russian elite. Chechnya’s independence, oilfields, refineries and
pipelines made Chechnya perfect for laundering oil. Planes,
trains, buses and roads and pipelines to Chechnya were
functioning, allowing anyone and anything to transit -- except
auditors. In the early 1990’s millions of tons of “Russian” oil
entered Chechnya and were magically transformed into “Chechen”
oil to be sold on the world market at world prices. Some of the
proceeds went to buy the Chechens weaponry, most of it from the
Russian military, and another lucrative trade developed. Dudayev
took much of his cut of the proceeds in weapons. The Groznyy
Bazaar was notorious in the early 1990s for the quantity and
variety of arms for sale, including heavy weaponry.
¶10. (C) Chechnya was the home of Ruslan Khasbulatov and served
various purposes for his faction of the Russian elite. He took
advantage of the army’s independence from Yeltsin’s control. An
informed source believes that it was Khasbulatov, not the
“official” Russian government, who facilitated the transfer of
Shamil Basayev and his heavily-armed fighters from Chechnya into
Abkhazia in 1992, and who ordered the Russian air force to bomb
Sukhumi when Shevardnadze went there to take personal command of
the Georgians’ last stand in July 1993. The Yeltsin government
always denied that it bombed Sukhumi, despite Western eyewitness
accounts confirming the bombing and the insignia on the planes.
Given the confusion of those years, it could well be that the
order originated in the Duma, not the Kremlin.

Cable Viewer
¶11. (C) After Khasbulatov and Rutskoy were written out of the
Russian equation in October 1993, so was Dudayev. Clandestine
Russian support for the Chechen political and military opposition
to Dudayev began in the spring of 1994, according to
participants. When that proved ineffective, Russian bombing was
deployed. (One Dudayev opponent recounted that in 1994 a Russian
pilot was given a mission to fire a missile into one of the top-
floor corners of Groznyy’s Presidency building at a time when
Dudayev was scheduled to hold a cabinet meeting there. Not
knowing Groznyy, the pilot asked which building to bomb, and was
told “the tallest one.” He bombed a residential apartment
building.) When air power, too, proved ineffective, Russian
troops were secretly sent in to reinforce the armed opposition.
Dudayev’s forces captured about a dozen and put them on
television -- and the Russian invasion began shortly thereafter.
¶12. (C) Given the gangsterish background of the war, it is no

surprise that the military conducted the war itself as a profit-
making enterprise, especially after the capture of
MOSCOW 00005645 003 OF 010
Groznyy. By May 1995 an anti-Dudayev Chechen could lament, “When
we invited the Russian army in we expected an army -- not this
band of marauders.” Contraband trade in oil, weapons (including
direct sales from Russian military stores to the insurgents),
drugs, and liquor, plus “protection” for legitimate trade made
military service in Chechnya lucrative for those not on the front
lines. This profitability ended only with the August 1996 defeat
of Russian forces in Groznyy at the hands of the insurgents and
the subsequent Russian withdrawal -- a defeat made possible
because the Russian forces were hollowed out by their officers’
corruption and pursuit of economic profit.
¶13. (C) Before they lost this “cash-cow” to their enemies,

Russian officers went to great lengths to keep their friends from
interfering with their profits. On July 30, 1995, the Russians
and the Chechen insurgents signed a cease-fire agreement mediated
by the OSCE. It would have meant the gradual withdrawal of
Russian forces. Enforcing the cease-fire was a Joint Observation
Commission (“SNK”). The head of the SNK was General Anatoliy
Romanov, a competent and upright officer -- very much a rarity in
Chechnya. After two months at this assignment he was severely
injured by a mine inside Groznyy, and has been hospitalized ever
since. Informed observers believe Romanov’s own colleagues in the

Cable Viewer
Russian forces carried out this murder attempt. The cease-fire,

never enforced, broke down.
¶14. (C) When the second war began in September 1999, Russian
forces again started profiteering from a trade in contraband oil.
Western eyewitnesses reported convoys of Russian army trucks
carrying oil leaving Groznyy under cover of night. Eventually the
Russian forces reached an understanding with the insurgent
fighters. Seeing one such convoy, a Western reporter asked his
guerrilla hosts whether the fighters ever attacked such convoys.
“No,” the leader replied. “They leave us alone and we leave them
alone.”
No Exit for Putin

-----------------
¶15. (C) Sometime between one and two years after Russian forces
were unleashed for a second time on Chechnya, Putin appears to
have realized that they were not going to deliver a neat victory.
That failure would make Putin look weak at home, the human rights
violations would estrange the West, and the drain on the Russian
treasury would be punishing (this was before the dramatic rise in
energy prices). Putin could not negotiate a peace with Maskhadov:
he had already rejected that course and could not back down
without appearing weak. The Khasavyurt accords that ended the
first war were the result of defeat; a new set of accords would
be seen as a new defeat. In any case, the history of the war (and
the fate of General Romanov) made clear that negotiations without
the subordination of the military were a physical impossibility.
¶16. (C) Putin thus found himself without a winning strategy and
had to develop one. He has taken a two-pronged approach. One
prong was subordinating the military. The appointment of Sergey
Ivanov as Defense Minister appears to have been aimed at
subjecting the military to the control of the security services.
A series of reassignments and firings is the surface evidence of
the struggle to subordinate the military in Chechnya. Southern
Military District commander Troshev, who led the 1999 invasion,
refused outright the first orders transferring him to Siberia in
November 2002, and went on television to publicize his mutiny. He
was finally removed in February 2003. Chief of the Defense Staff
Kvashnin, who had held the Southern District command during the
first Chechen war, hung on in a combative relationship with
Ivanov for three years until he, too, was replaced in 2004 (and

Cable Viewer
also sent to Siberia as the Presidential Representative in

Novosibirsk). The spring 2005 dismissal of General Viktor
Kazantsev, Putin’s Plenipotentiary Representative in the Southern
Federal District, was reportedly the final link in the chain.
Military corruption, and feeding at the trough of Chechnya, has
not ended, but the corruption has reportedly been
“institutionalized” and more closely regulated in Kremlin-
controlled channels.
Chechenization, Ahmad-Haji Kadyrov, and the Salafists

--------------------------------------------- --------
¶17. (C) The second prong of Putin’s strategy was to hand the
fighting over to Chechens. “Chechenization” differs from
Vietnamization or Iraqification. In those strategies, a loyalist
force is strengthened to the point at which it can carry on the
fight itself. Chechenization, in contrast, has meant handing
Chechnya over to the guerrillas in exchange for their professions
of loyalty, the formal retention of Chechnya within the Russian
Federation, and an uneasy
MOSCOW 00005645 004 OF 010
cooperation with Federal authorities that in practice is
constantly re-negotiated.
¶18. (C) Chechenization is associated with Ahmad-Haji Kadyrov,

the insurgent commander and chief Mufti of separatist Chechnya.
After he defected to the Russians, Putin put him in charge of the
new Russian-installed Chechen administration. Chechenization was
reportedly agreed between Kadyrov and Putin personally. But the
seeds of the policy were sown by a split in the insurgent ranks
dating to the first war. That split that took the form of a
religious dispute, though it masked a power struggle among
warlords. The split is the direct result of the introduction of a
new element: Arab forces espousing a pan-Islamic Jihadist
religious ideology.
¶19. (C) The traditional Islam of Dagestan, Chechnya and

Ingushetia is based on Sufism, or Islamic mysticism. Though
nominally the Sufi orders were the same as those predominant in
Central Asia and Kurdistan -- Naqshbandi and Qadiri -- Sufism in
the Northeast Caucasus took on a unique form in the 18th-19th
century struggle against Russian encroachment. It is usually
called “muridism.” Murids were armed acolytes of a hieratic

Cable Viewer
commander, the murshid. Shaykh Shamil, the Naqshbandi murshid who

led the mountaineers’ resistance to the Russians until his
capture in 1859, was both a spiritual guide and a military
commander. He also exercised government powers. The largest Sufi
branch (“vird”) in Chechnya is the Kunta-Haji “vird” of the
Qadiris, founded and led by the charismatic Chechen missionary
Kunta-Haji Kishiyev until his exile by the Russians in 1864.
Although the historical Kunta-Haji died two years later, his
followers believe that Kunta-Haji lives on in occultation, like
the Shi’a Twelfth Imam.
¶20. (C) When Arab fighters joined the Chechen conflict in 1995,
they brought with them a “Salafist” doctrine that attempts to
emulate the fundamental, “pure” Islam of the Prophet Muhammad and
his immediate successors, especially ‘Umar, the second Caliph. It
holds that mysticism is one of the “impurities” that crept into
Islam after the first four Caliphs, and considers Sufis to be
heretics and idolaters. The idea that Kunta-Haji adepts could
believe their founder is still alive -- and that they worship the
grave of his mother -- is an abomination to Salafis, who believe
that marked graves are a form of pagan ancestor worship
(Muhammad’s grave in Arabia is not marked).
¶21. (C) Wahhabism-based forms of Islam started appearing in

Chechnya by 1991, as Chechens were able to travel and some went
to Saudi Arabia for religious study. But the true influx of
Salafis (usually lumped together with Wahhabis in Russia) came
during the first Chechen war. In February 1995 Fathi ‘Ali al-
Shishani, a Jordanian of Chechen descent, arrived in Chechnya. A
veteran of the war in Afghanistan, he was now too old to be a
combatant, but was a missionary for Salafism. He recruited
another Afghan veteran, the Saudi al-Khattab, to come to Chechnya
and lead a group of Arab fighters.
¶22. (C) Al-Khattab’s fighters were never a major military factor

during the war, but they were the key to Gulf money, which
financed power struggles in the inter-war years. Al-Khattab
forged close links with Shamil Basayev, the most famous Chechen
field commander. Basayev himself was from a Qadiri family, but he
was too Sovietized to view Islam as anything more than part of
the Chechen and Caucasus identity. In his early interviews,
Basayev showed himself to be motivated by Chechen nationalism,
not religion, though he paid lip-service -- e.g., proclaiming
Sharia law in Vedeno in early 1995 -- to attract Gulf donors.

Cable Viewer
Basayev’s initial interest in al-Khattab, as indeed with other

jihadists starting even before the first war, was purely
financial.
¶23. (C) After the first war, al-Khattab set up a camp in Serzhen-
Yurt (“Baza Kavkaz”) for military and religious indoctrination.
It provided one of the few employment opportunities for
demobilized Chechen fighters between the wars. Young Chechens had
traditionally engaged in seasonal migrant construction work
throughout the Soviet Union, but after the first war that was no
longer open to them. The closed international borders also
precluded smuggling -- another pre-war source of employment and
income. The fighters had no money, no jobs, no education, no
skills save with their guns, and no prospects. Al-Khattab’s offer
of food, shelter and work was inviting. As a result, between the
wars Salafism spread quickly in Chechnya. (Al-Khattab also
invited missionaries and facilitators who set up shop in
Chechnya, Dagestan and Georgia’s Pankisi Gorge, whose Kist
residents are close relatives of the Chechens.)
Battle Lines in Peacetime

MOSCOW 00005645 005 OF 010
-------------------------
¶24. (C) Chechen society is distinguished by its propensity to

unite in war and fragment in peace. It is based on opposing
dichotomies: the Vaynakh peoples are divided into Chechens and
Ingush; the Chechens are divided into highlanders (“Lameroi”) and
lowlanders (“Nokhchi”); and these are further divided into tribal
confederations and exogamous tribes (“teyp”) and their
subdivisions. Each unit will unite with its opposite to combat a
threat from outside. Two lowland teyps, for example, will drop
quarrels and unite against an intruding highland teyp. But left
to themselves, they will quarrel and split. After the Khasavyurt
accords, when Russia left the Chechens alone, the wartime
alliance between Maskhadov and Basayev split and the two became
enemies. Other warlords lined up on one side or the other -- the
Yamadayev brothers of Gudermes, for example, fighting a pitched
battle against Basayev in 1999. But the rise of Basayev and al-
Khattab undermined Maskhadov’s authority and prevented him from
exercising any real power.
¶25. (C) This power struggle took on a religious expression.

Cable Viewer
Since Basayev was associated with al-Khattab and Salafism,

Maskhadov positioned himself as champion of traditional Sufism.
He surrounded himself with Sufi shaykhs and appointed Ahmad-Haji
Kadyrov, a strong adherent of Kunta-Haji Sufism, as Chechnya’s
Mufti. Kadyrov had spent six years in Uzbekistan, allegedly at
religious seminaries in Tashkent and Bukhara, and seems to have
developed links to other enemies of Basayev, including the
Yamadayevs.
¶26. (C) The religious division dictated certain policies to each

side. The Sufi tradition of Maskhadov and Kadyrov had been
associated for over two centuries with nationalist resistance.
Basayev, with his new-found commitment to al-Khattab’s Salafism,
adopted the Salafi stress on a pan-Islamic community (“umma”)
fighting a worldwide jihad, notionally without regard for ethnic
or national boundaries. Al-Khattab and Basayev invaded Dagestan
in August 1999, avowedly in pursuit of a Caucasus-wide revolt
against the Russians. They brought on a Russian invasion that
threw Maskhadov out of Groznyy.
Chechenization Begins
---------------------
¶27. (C) The second Russian invasion did not unite the Chechens,
as previous pressure had. Perhaps the influence of al-Khattab and
his Salafists, as well as the devastation of the first war, had
rent the fabric of Chechen society too much to restore
traditional unity in the face of the outside threat. (We should
also remember that unity is relative. Only a small percentage of
the Chechens actually fought in the first war, and many supported
the Russians out of disgust with Dudayev.) Kadyrov and the
Yamadayevs separately broke with Maskhadov and defected to the
Russians. Kadyrov began to recruit from the insurgency non-
Salafist nationalist fighters who were highly demoralized and
disoriented by the disastrous retreat from Groznyy in late 1999.
Kadyrov began to preach what Kunta-Haji had preached after the
Russian victory over Imam Shamil in 1859: to survive, the
Chechens needed tactically to accept Russian rule. His message
struck a chord, and fighters began to defect to his side.
¶28. (C) Putin appears to have stumbled upon Kadyrov, and their
alliance seems to have grown out of chance as much as design. But
they were able to forge a deal along the following lines: Kadyrov
would declare loyalty to Russia and deliver loyalty to Putin; he

Cable Viewer
would take over Maskhadov’s place at the head of the Russian-

blessed government of Chechnya; he would try to win over
Maskhadov’s fighters, to whom he could promise immunity; he would
govern Chechnya with full autonomy, without interference from
Russian officials below Putin’s level; and he would try to
exterminate Basayev and Al-Khattab.
¶29. (C) If the objective of Chechenization was to win over

fighters who would carry on the fight against Basayev and the
Arab successors to Khattab (who was poisoned in April 2002), it
has to be judged a success. The real fighting has for several
years been carried out by Chechen forces who fight the war they
want to fight -- not the one the Russian military wants them to
-- and who appear happy to kill Russians when they get in the
way. The Russian military is “just trying to survive,” as one
officer put it. Not all the pro-Moscow Chechen units are composed
of former guerrillas. Said-Magomed Kakiyev, commander of the GRU-
controlled “West” battalion, has been fighting Dudayev and his
successors since 1993. But at the heart of the pro-Moscow effort
are fighters who defected from the anti-Moscow insurgency.
The Military Overstays Its Welcome

MOSCOW 00005645 006 OF 010
----------------------------------
¶30. (C) The development of Kadyrov’s fighting force, along with

that of the Yamadayev brothers, left the stage clear for a
drawdown of Russian troops, certainly by early 2004 (leaving
aside a permanent garrison presence). But those troops, still not
fully responsive to FSB control, did not want to leave.
Especially now that Chechens had taken over increasing parts of
the security portfolio, the Russian officers were free to
concentrate on their economic activities, and in particular oil
smuggling.
¶31. (C) Kadyrov could not be fully autonomous until he -- not

the Russians -- controlled Chechnya’s oil. He therefore demanded
the creation of a Chechen oil company under his jurisdiction.
That would have severely limited the ability of federal forces to
divert and smuggle oil. On May 9, 2004, Kadyrov was assassinated
by an enormous bomb planted under his seat at the annual VE Day
celebration. The killing was officially ascribed to Chechen
rebels, but many believe it was the Russian Army’s way of

Cable Viewer
rejecting Kadyrov’s demand. Under the circumstances, one cannot

exclude that both versions are true.
In the Reign of Ramzan

----------------------
¶32. (C) Kadyrov’s passing left power in the hands of his son
Ramzan, who was officially made Deputy Prime Minister. The
President, Alu Alkhanov, was a figurehead put in place because
Ramzan was underage. The Prime Minister, Sergey Abramov, was
tasked with interfacing between Kadyrov and Moscow below the
level of Putin.
¶33. (C) Ramzan Kadyrov has none of the religious or personal

prestige that his father had. He is a warlord pure and simple --
one of several, like the Yamadayev family of warlords. He is
lucky, however, in that his father left him a sufficient fighting
force of ex-rebels. Though they may have been lured away from the
insurgency for a variety of reasons, it is money that keeps them.
Kadyrov feels little need for ideological or religious prestige,
though he makes an occasional statement designed to appeal to
Muslims, and makes a point of supporting the pilgrimage to the
tomb of Kunta-Haji’s mother in Gunoy, near Vedeno (though that is
in part to show he is stronger than Basayev, whose home and power
base are in the Vedeno region). Kadyrov must only satisfy his
troops, who on occasion have shown that, if offended or not given
enough, they are willing to desert along with their kinsmen and
return to the mountains to fight against him. He must also guard
against the possibility, as some charge, that some of the
fighters who went over to Federal forces did so under orders from
guerrilla commanders for whom they are still working.
¶34. (C) Kadyrov is also fortunate in that the FSB, with whom he
has close ties, has by this time emasculated the military as
“prong one” of Putin’s strategy. Kadyrov has slowly but surely
also taken over most of the spigots of money that once fed the
army, and like his father he has started agitating for overt
control over Chechnya’s oil (while prudently ensuring that others
take the lead on that in public). Kadyrov is at least as corrupt
as the military, but the money he expropriates for himself from
Moscow’s subsidies is accepted as his pay-off for keeping things
quiet. And indeed Kadyrov and the other warlords are capable of
maintaining a certain degree of security in Chechnya. The showy
“reconstruction” developments they have built in Groznyy and

Cable Viewer
their home towns demonstrate that the guerrillas cannot or at

least do not halt construction and economic activity. Moreover,
there is enough security to end Putin’s worries about a
secessionist victory. That has allowed Putin to demonstrate a new
willingness to be increasingly overt in support of separatism in
other conflicts (e.g., Abkhazia, Transnistria) when that advances
Russian interests.
¶35. (C) Despite its successes to date, however, Putin’s strategy

is far from completed. He still needs to keep forces in the
region as a constant reminder to Kadyrov not to backtrack on his
professed loyalty to the Kremlin. Ideally, that force would be
small but capable of intervening effectively in Chechen internal
affairs. That is unrealistic at present. The current forces,
reportedly over 25,000, are bunkered and corrupt. When they
venture on patrol they are routinely attacked. One attempt to
redress this is to position Russian forces close but “over the
horizon” in Dagestan, where a major military base is under
construction at Botlikh. However, that may only add to the
instability of Dagestan. A Duma Deputy from the region told us
that locals are vehemently opposed to the new military base,
despite the economic opportunities it represents, on grounds that
the soldiers will “corrupt the morals of their children.”
MOSCOW 00005645 007 OF 010
¶36. (C) Another approach is the Chechenization of the Federal

forces themselves. Recently “North” and “South” battalions of
ethnically Chechen special forces -- drawn from Kadyrov’s militia
-- were created to supplement the “East” and “West” battalions of
Sulim Yamadayev and Said-Magomed Kakiyev. Those formations are
officially part of the Russian army. The Kremlin strategy appears
to be to check Kadyrov by promoting warlords he cannot control,
and to check the FSB from becoming too clientized by allowing the
MOD to retain a sphere of influence. In Chechnya, that is a
recipe for open fighting. We saw one small instance of that on
April 25, when bodyguards of Kadyrov and Chechen President
Alkhanov got into a firefight. According to one insider, the
clash originated in Kadyrov’s desire to get rid of Alkhanov, who
now has close ties with Yamadayev.
What Can We Expect in the Future?

---------------------------------

Cable Viewer
¶37. (C) The Chechen population is the great loser in this game.
It bears an ever heavier burden in shake-downs, opportunity costs
from misappropriation of reconstruction funds, and the constant
trauma of victimization and abuse -- including abduction,
torture, and murder -- by the armed thugs who run Chechnya
(reftels). Security under those circumstances is a fragile
veneer, and stability an illusion. The insurgency can continue
indefinitely, at a low level and without prospects of success,
but significant enough to serve as a pretext for the continued
rule of thuggery.
¶38. (C) The insurgency will remain split between those who want
to carry on Maskhadov’s non-Salafist struggle for national
independence and those who follow the Salafi-influenced Basayev
in his pursuit of a Caucasus-wide Caliphate. But the nationalists
have been undercut by Kadyrov. Despite Sadullayev’s efforts, the
insurgency inside Chechnya is not likely to meet with success and
will continue to become more Salafist in tone.
¶39. (C) Prospects would be poor for the nationalists even if

Kadyrov and/or Yamadayev were assassinated (and there is much
speculation that one will succeed in killing the other, goaded on
by the FSB which supports Kadyrov and the GRU which supports
Yamadayev). The thousands of guerrillas who have joined those two
militias have by now lost all ideological incentive. Since they
already run the country, they feel themselves, not the Russians,
to be the masters, and are not responsive to Sadullayev’s
nationalist calls; Basayev’s Salafist message has even less
appeal to them. Even if their current leaders are eliminated, all
they will need is a new warlord, easily generated from within
their organizations, and they can continue on their current paths.
¶40. (C) We expect that Salafism will continue to grow. The

insurgents even inside Chechnya are reportedly becoming
predominantly Salafist, as opposition on a narrowly nationalist
basis offers less hope of success. Salafis will come both from
inside Chechnya, where militia excesses outrage the population,
and from elsewhere in the Caucasus, where radicalization is
proceeding rapidly as a result of the repressive policies of
Russia’s regional satraps. There are numerous eyewitness accounts
from both Dagestan and Kabardino-Balkaria that elite young adults
and university students are joining Salafist groups. In one case,
a terrorist killed in Dagestan was found recently to have

Cable Viewer
defended his doctoral dissertation at Moscow State University --

on Wahhabism in the North Caucasus. These young adults, denied
economic opportunities, turn to religion as an outlet. They
find, however, that representatives of the traditional religious
establishments in these republics, long isolated under the thumb
of Soviet restrictions, are ill-educated and ill-prepared to deal
with the sophisticated theological arguments developed by
generations of Salafists in the Middle East. Most of those who
join fundamentalist jamaats do not, of course, become terrorists.
But a percentage do, and with that steady source of recruits the
major battlefield could shift to outside Chechnya, with armed
clashes in other parts of the North Caucasus and a continuation
of sporadic but spectacular terrorist acts in Moscow and other
parts of Russia.
¶41. (C) Outside Chechnya, the most likely venue for clashes with
authorities is Dagestan. Putin’s imposition of a “power vertical”
there has upset the delicate clan and ethnic balance that offered
a shaky stability since the collapse of Soviet power. He
installed a president (the weak Mukhu Aliyev) in place of a 14-
member multi-ethnic presidential council. Aliyev will be unable
to prevent a ruthless struggle among the elite -- the local way
of elaborating a new balance of power. This is already happening,
with assassinations of provincial chiefs since Aliyev took over.
MOSCOW 00005645 008 OF 010
In one province in the south of the republic, an uprising against
the chief appointed by Aliyev’s predecessor was suppressed by
gunfire. Four demonstrators were shot dead, initiating a cycle of
blood revenge. In May, in two Dagestani cities security force
operations against “terrorists” resulted in major shootouts, with
victims among the bystanders and whole apartment houses rendered
uninhabitable after hits from the security forces’ heavy
weaponry. It is not clear whether the “terrorists” were really
religious activists (“Whenever they want to eliminate someone,
they call him a Wahhabi,” the MP from Makhachkala told us). But
the populace, seeing the deadly over-reaction of the security
forces, is feeling sympathy for their victims -- so much so that
Aliyev has had to make public condemnations of the actions of the
security forces. If this chaos deepens, as appears likely, the
Jihadist groups (“jamaats”) may grow, drift further in Basayev’s
direction, and feel the need to respond to attacks from the local
government.
¶42. (C) Local forces are unreliable in such cases, for clan and

Cable Viewer
blood-feud reasons. Wahhabist jamaats flourished in the strategic

ethnically Dargin districts of Karamakhi and Chabanmakhi in the
mid-1990s, but Dagestan’s rulers left them alone because moving
against them meant altering the delicate ethnic balance between
Dargins and Avars. Only when the jamaats themselves became
expansive during the Basayev/Khattab invasion from Chechnya in
the summer of 1999 did the Makhachkala authorities take action,
and then only with the assistance of Federal forces. Ultimately,
if clashes break out on a wide scale in Dagestan, Moscow would
have to send in the Federal army. Deploying the army to combat
destabilization in Dagestan, however, could jeopardize Putin’s
hard-won control over it. Unleashing the army against a
“terrorist” threat is just that: allowing the army off its new
leash. Large-scale army deployments to Dagestan would be
especially attractive to the officers, since the border with
Azerbaijan offers lucrative opportunities for contraband trade.
The army’s presence, in turn, would further destabilize Dagestan
and all but guarantee chaos.
¶43. (C) Indeed, destabilization is the most likely prospect we

see when we look further down the road to the next decade.
Chechenization allows bellicose Chechen leaders to throw their
weight around in the North Caucasus even more than an independent
Chechnya would. A case in point is the call on April 24 by
Chechen Parliament Speaker Dukvakha Abdurakhmanov for unification
of Chechnya, Ingushetia and Dagestan, implicitly under Chechen
domination (the one million Chechens would constitute a plurality
in the new republic of 4.5 million). The call soured slowly
normalizing relations between Chechnya and Ingushetia, according
to a Chechen official in Moscow, though the Dagestanis treated
the proposal as a joke.
What Should Putin Be Doing?

---------------------------
¶44. (C) Right now Putin’s policy towards Chechnya is channeled

through Kadyrov and Yamadayev. Putin’s Plenipotentiary
Representative (PolPred) for the Southern Federal District,
Dmitriy Kozak, appears to have little influence. He was not even
invited when Putin addressed the new Parliament in Groznyy last
December. Putin needs to stop taking Kadyrov’s phone calls and
start working more through his PolPred and the government’s
special services. He also needs to increase Moscow’s civilian
engagement with Chechnya.

Cable Viewer
¶45. (C) Putin should continue to reform the military and the
other Power Ministries. Having asserted control through Sergey
Ivanov, Putin has denied the military certain limited areas in
which it had pursued criminal activity -- but left most of its
criminal enterprises untouched. He has done little if anything to
form the discipline of a modern army deployable to impose order
in unstable regions such as the North Caucasus. Recent hazing
incidents show that discipline is still equated with sadism and
brutality. The Ministry of Internal Affairs (MVD) has undergone
even less reform. The Chechenization of the security services,
despite its obvious drawbacks, has shown that locals can carry
out security tasks more effectively than Russian troops.
¶46. (C) Lastly, Putin should realize that his current policy
course is not preventing the growth of militant, armed Jihadism.
Rather, every time his subordinates try to douse the flames, the
fire grows hotter and spreads farther. Putin needs to check the
firehose; he may find they are spraying the fire with gasoline.
He needs to work out a credible strategy, employing economic and
cultural levers, to deal with the issue of armed Jihadism. Some
Russians do “get it.” An advisor to Kozak gave a lecture
recently that showed he understands in great detail the issues
surrounding the growth
MOSCOW 00005645 009 OF 010
of militant jihadism. Kozak himself made clear in a recent
conversation with the Ambassador that he appreciates clearly the
deep social and economic roots of Russia’s problems in the North
Caucasus -- and the need to employ more than just security
measures to solve them. We have not, however, seen evidence that
consciousness of the true problem has yet made its way to Moscow
from Kozak’s office in Rostov-on-Don.
¶47. (C) We need also to be aware that Putin’s strategy is

generating a backlash in Moscow. Ramzan Kadyrov’s excesses, his
Putin-given immunity from federal influence, and the special laws
that apply to Chechnya alone (such as the exemption of Chechens
from military service elsewhere in Russia) are leading to charges
by some Moscow observers that Putin has allowed Chechnya de facto
to secede. Putin is strong enough to weather such criticism, but
the ability of a successor to do so is less clear.
Is There a Role for the U.S.?

-----------------------------

Cable Viewer
¶48. (C) Russia does not consider the U.S. a friend in the
Caucasus, and our capacity to influence Russia, whether by
pressure, persuasion or assistance, is small. What we can do is
continue to try to push the senior tier of Russian officials
towards the realization that current policies are conducive to
Jihadism, which threatens broader stability as well; and that
shifting the responsibility for victimizing and looting the
people from a corrupt, brutal military to corrupt, brutal locals
is not a long-term solution.
¶49. (C) Making headway with Putin or his successor will require
close cooperation with our European allies. They, like the
Russians, tend to view the issue through a strictly counter-
terrorism lens. The British, for example, link their “dialogue
with Islam” closely with their counter-terrorist effort (on which
they liaise with the Russians), reinforcing the conception of a
monolithic Muslim identity predisposed to terrorism. That
reinforces the Russian view that the problem of the North
Caucasus can be consigned to the terrorism basket, and that
finding a solution means in the first instance finding a better
way to kill terrorists.
¶50. (C) We and the Europeans need to put our proposals of

assistance to the North Caucasus in a different context: one that
recognizes the role of religion in North Caucasus cultures, but
also emphasizes our interest in and support for the non-religious
aspects of North Caucasus society, including civil society. This
last will need exceptional delicacy, as the Russians and the
local authorities are convinced that the U.S. uses civil society
to foment “color revolutions” and anti-Russian regimes. There is
a danger that our civil society partners could become what
Churchill called “the inopportune missionary” who, despite
impeccable intentions, sets back the larger effort. That need not
be the case.
¶51. (C) Our interests call for an understanding of the context

and a positive emphasis. We cannot expect the Russians to react
well if we limit our statements to condemnations of Kadyrov,
butcher though he may be. We need to find targeted areas in which
we can work with the Russians to get effective aid into Chechnya.
At the same time, we need to be on our guard that our efforts do
not appear to constitute U.S. support for Kremlin or local

Cable Viewer
policies that abuse human rights. We must also avoid a shift that
endorses the Kremlin assertion that there is no longer a
humanitarian crisis in Chechnya, which goes hand-in-hand with the
Russian request that the UN and its donors end humanitarian
assistance to the region and increase technical and “recovery”
assistance. We and other donors need to maintain a balance
between humanitarian and recovery assistance.
¶52. (C) Aside from the political optic, a rush to cut

humanitarian assistance before recovery programs are fully up and
running would leave a vacuum into which jihadist influences would
leap. The European Commission Humanitarian Organization, the
largest provider of aid, shows signs of rushing to stress
recovery over humanitarian assistance; we should not follow suit.
Humanitarian assistance has been effective in relieving the
plight of Chechen IDPs in Ingushetia. It has been less effective
inside Chechnya, where the GOR and Kadyrov regime built temporary
accommodation centers for returning IDPs, but have not passed on
enough resources to secure a reasonable standard of living.
International organizations are hampered by limited access to
Chechnya out of security concerns, but where they are able to
operate freely they have made a great difference, e.g., WHO’s
immunization program.
¶53. (C) Resources aimed at Chechnya often wind up in private

pockets. Though international assistance has a better record
MOSCOW 00005645 010 OF 010
than Russian assistance and is more closely monitored, we must
also be wary of assistance that lends itself to massive
corruption and state-sponsored banditry in Chechnya: too much of
the money loaned in a microfinance program there, for example,
would be expropriated by militias. Presidential Advisor
Aslakhanov told us last December that Kadyrov expropriates for
himself one third off the top of all assistance. Therefore, while
we continue well-monitored humanitarian assistance inside
Chechnya, we should broaden our efforts for “recovery” to other
parts of the region that are threatened by jihadism: Dagestan,
Kabardino-Balkaria, Ingushetia, and possibly Karachayevo-
Cherkessia. Among these, we need to try to steer our assistance
($11.5 million for FY 2006) to regional officials, such as
President Kanokov of Kabardino-Balkaria, who have shown that they
are willing to introduce local reforms and get rid of the brutal
security officials whose repressive acts feed the Jihadist
movement.

Cable Viewer
¶54. (C) We also need to coordinate closely with Kozak (or his
successor), both to strengthen his position vis--vis the warlords
and to ensure that everything we do is perceived by the Russians
as transparent and not aimed at challenging the GOR’s hold on a
troubled region. The present opposite perception by the GOR may
be behind its reluctance to cooperate with donors, the UN and
IFIs on long-term strategic engagement in the region. For
example, the GOR has delayed for months a 20-million-Euro TACIS
program designed with GOR input.
¶55. (C) The interagency paper “U.S. Policy in the North Caucasus
-- The Way Forward” provides a number of important principles for
positive engagement. We need to emphasize programs in accordance
with those principles which are most practical under current and
likely future conditions, and which can be most effective in
targeting the most vulnerable, where federal and local
governments lack the will and capacity to assist, and in
combating the spread of jihadism both inside Chechnya and
throughout the North Caucasus region. There are areas -- for
example, health care and child welfare -- in which assistance
fits neatly with Russian priorities, containing both humanitarian
and recovery components.
¶56. (C) We can also emphasize programs that help create jobs and
job opportunities: microfinance (where feasible), credit
cooperatives and small business development, and educational
exchanges. U.S. sponsored training programs for credit
cooperatives and government budgeting functions have been very
popular. Exchanges, through the IVP program and Community
Connections, are an especially effective way of exposing future
leaders to the world beyond the narrow propaganda they have
received, and to generate a multiplier effect in enterprise. In
addition to the effects the programs themselves can have in
providing alternatives to religious extremism, such assistance
can also have a demonstration effect: showing the Russians that
improved governance and delivery of services can be more
effective in stabilizing the region than attempts to impose order
by force.
¶57. (C) Lastly, we need to look ahead in our relations with

Azerbaijan and Georgia to ensure that they become more active and
effective players in helping to contain instability in the North

Cable Viewer
Caucasus. That will serve their own security interests as well.

Salafis need connections to their worldwide network.
Strengthening border forces is more important than ever.
Azerbaijan, especially, is well placed to trade with Dagestan and
Chechnya. The ethnic Azeris, Lezghis and Avars living on both
sides of the Azerbaijan-Dagestan border and friendly relations
between Russia and Azerbaijan are tools for promoting stability.
Conclusion
--------
¶58. (C) The situation in the North Caucasus is trending towards

destabilization, despite the increase in security inside
Chechnya. The steps we believe Putin must take are those needed
to reverse that trend, and the efforts we have outlined for
ourselves are premised on a desire to promote a lasting
stabilization built on improved governance, a more active civil
society, and steps towards democratization. But we must be
realistic about Russia’s willingness and ability to take the
necessary steps, with or without our assistance. Real
stabilization remains a low probability. Sound policy on Chechnya
is likely to continue to founder in the swamp of corruption,
Kremlin infighting and succession politics. Much more probable is
a new phase of instability that will be felt throughout the North
Caucasus and have effects beyond. BURNS

Cable Viewer
Twitter this
Digg this page
Viewing cable 06MOSCOW5740, RUSSIA: PRESIDENTIAL SUCCESSION SNAPSHOT

● The top box shows each cables unique reference number, when and by whom it
originally was sent, and what its initial classification was.

● The middle box contains the header information that is associated with the cable. It
includes information about the receiver(s) as well as a general subject.

● The bottom box presents the body of the cable. The opening can contain a more
specific subject, references to other cables (browse by origin to find them) or

additional comment. This is followed by the main contents of the cable: a summary,
a collection of specific topics and a comment section.
Discussing cables

2006-05-31 2010-12-01 Embassy
13:01 21:09 Moscow
VZCZCXRO3110
RR RUEHDBU
DE RUEHMO #5740/01 1511315
ZNY CCCCC ZZH
R 311315Z MAY 06
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 6749
INFO RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE

Cable Viewer
SIPDIS
SIPDIS
E.O. 12958: DECL: 05/19/2016

TAGS: PGOV PREL ECON PINR RS
SUBJECT: RUSSIA: PRESIDENTIAL SUCCESSION SNAPSHOT
REF: A. 2005 MOSCOW 14734

¶B. MOSCOW 5000
¶C. MOSCOW 3335
Classified By: Minister-Counselor for Political Affairs Kirk

Augustine.
Reasons: 1.4 (B/D).
¶1. (C) SUMMARY. Adding fuel to already intense speculation

about who will succeed him, President Putin confirmed to
state media May 13 that he will endorse a candidate before
the March 2008 election. Both Kremlin-connected and
independent analysts believe Putin's choice will be driven by
a desire to ensure his physical and financial security, to
maximize the likelihood of continuity in his policies, and to
preserve the current political system, in which he is the
final arbiter of disputes among rival groups (a role he
likely intends to play even after leaving office). Our
contacts generally think Putin will consult about possible
successors with his closest advisers but make the final
decision alone, without involving elites outside the Kremlin
or relying heavily on public opinion surveys, as former
President Boris Yeltsin did. The conventional wisdom remains
that First Deputy Prime Minister Dmitriy Medvedev and Deputy
Prime Minister/Defense Minister Sergey Ivanov are the two
front-runners, but other horses of varying shades of darkness
are believed to be at least potentially in the running.
Putin's interest lies in prolonging uncertainty to avoid a
premature slippage of power away from him and toward a
perceived successor, but that uncertainty encourages
competitive jockeying for position among the candidates and a
feeding-frenzy among those who fear their snouts could soon
be torn from the trough. END SUMMARY.
.
HELPING RUSSIA BY HELPING HIMSELF
---------------------------------
¶2. (C) Most of our contacts take for granted that Putin's
own physical and financial security and social status
post-2008 loom large in his succession calculations.

Cable Viewer
XXXXXXXXXXXX told us that financial

considerations would drive Putin's thinking.
XXXXXXXXXXXX agreed, describing the Russian
presidency as a business and saying that Putin's decision
on a successor would be based on his sense of who would
best be able to protect the wealth he and his associates
had acquired. Equally important to Putin, according to
XXXXXXXXXXXX, is preserving the elite-based political
system in which ad hoc interest groups vie for political
clout and control over economic resources, with Putin as the
ultimate arbiter. XXXXXXXXXXXX said Putin feared the
system would collapse without him at its center, and therefore
intended to remain active behind the scenes while leaving
day-to-day governance to his successor. XXXXXXXXXXXX
agreed, saying that preserving the current balance of power
among competing elite groups was of great importance to Putin.
¶3. (C) XXXXXXXXXXXX told us that Putin needs to choose a

strong successor who is not beholden to any one group and who
has already amassed a personal fortune during Putin's tenure.
Such a figure, XXXXXXXXXXXX explained, would have a vested
interest in maintaining the status quo in order to protect
his own wealth and standing. XXXXXXXXXXXX disagreed,
arguing that a strong successor would inevitably side with
one group or another, and succumb to the temptation to crush
his rivals. Such a turn of events would not only disrupt the
precarious balance of clans and lead to a redistribution of
assets, but also undermine Putin's role as arbiter of the
competing groups. XXXXXXXXXXXX offered another
perspective, saying that a succession candidate's "strength"
or "weakness" would be of only secondary interest to Putin;
the overriding criterion would be loyalty to Putin personally.
.
PUTIN LISTENING, BUT WILL DECIDE ALONE
--------------------------------------
¶4. (C) Many of our contacts believe that, having weakened

all his potential rivals and atomized the elite, Putin will
be able to make the choice of his successor alone, without
needing to consult extensively with political and economic
elites to ensure their support. XXXXXXXXXXXX expects
Putin to discuss the issue informally with his closest advisers,
but to reveal his final decision to them only shortly before
going public, in order to maintain strict secrecy. The broader
elite and the general public would learn of Putin's decision
simultaneously. XXXXXXXXXXXX concurred, saying Putin
would consult only a handful of close advisers, including
Medvedev, Sergey Ivanov, and Deputy PA head Igor Sechin.
XXXXXXXXXXXX expected that on questions of succession,
Sechin's opinion would carry more weight than Medvedev's or
Ivanov's, because Putin would consider that as possible
successors, the latter two could not give disinterested advice.

Cable Viewer
¶5. (C) Asked whether Putin, by not consulting more broadly,

would not risk alienating those whose financial resources and
media outlets would be central to ensuring a smooth
succession, XXXXXXXXXXXX predicted that the elites, on
hearing the name of Putin's preferred successor, would fight
each other to be first to pledge allegiance to his choice. If
elite opinion mattered to Putin, XXXXXXXXXXXX added
pointedly, former Yukos CEO Mikhail Khodorkovskiy would
still be free. Instead, XXXXXXXXXXXX said, Putin was confident
elites have learned from the Khodorkovskiy case the severe
consequences of defying the Kremlin. XXXXXXXXXXXX
agreed, saying that despite real divisions within the elite,
there
remains a profound corporate interest in maintaining the existing
contours of political and economic power, and that can best be
done by falling in line behind Putin's choice, whoever it may
be.
¶6. (C) Given how extensively former President Yeltsin's team

used public opinion polls to identify an electable successor,
many have assumed Putin would do the same.
XXXXXXXXXXXX, however, told us the Kremlin would
not poll to determine what qualities the public wants to see in
Russia's next president, since the results would be meaningless:
respondents in such a poll would simply describe Putin when
asked what their ideal president would be like -- reversing the
pattern from 1999, when respondents listed as desirable qualities
those that the deeply unpopular Yeltsin lacked
XXXXXXXXXXXX also argued that the Kremlin's control over
major media outlets would not be sufficient in itself to build a
mass following for a presidential candidate -- the key to
winning public support would be to find a way to "resonate
with the public," as Putin did when he gave an emotional speech
in September 1999 in response to a series of apartment bombings
that had terrorized the population. Until that point,
XXXXXXXXXXXX said, even daily television coverage had
only modestly improved Putin's popularity rating.
¶7. (C) XXXXXXXXXXXX and XXXXXXXXXXXX disagreed,

arguing that the Kremlin has sufficient administrative and media
resources to ensure that the public votes "correctly" in 2008.
Taking a different tack, XXXXXXXXXXXX told us public opinion
could be an important variable if the electorate were actively
engaged,
but he did not expect it to be mobilized for this election.
Voters -- like the elites -- would primarily be interested,
XXXXXXXXXXXX thought, in maintaining the higher standard of
living they have attained under Putin, and would see Putin's
chosen
successor as the best available insurance policy.

Cable Viewer
FIVE WHO ARE THOUGHT TO BE ALIVE

--------------------------------
¶8. (C) Upwards of thirty names have appeared in the Russian

press as possible successors to Putin, but XXXXXXXXXXXX
told us she believes Putin has now narrowed the field to
five: First Deputy Prime Minister Dmitriy Medvedev, Deputy
Prime Minister/Defense Minister Sergey Ivanov, Presidential
Administration (PA) head Sergey Sobyanin, Russian Railways
CEO Vladimir Yakunin, and head of the Government apparatus
Sergey Naryshkin. Nearly all analysts see Medvedev and
Ivanov as the clear front-runners at this stage, and most of
our contacts describe Sobyanin, Yakunin, and Naryshkin as at
best "reserve" candidates. XXXXXXXXXXXX dismissed the theory
that Putin was using Medvedev and Ivanov as "red herrings" to
distract attention from the "real," as yet unidentified,
successor, saying that Putin is serious about making Medvedev
or Ivanov Russia's next president. XXXXXXXXXXXX concurred,
noting that Putin has nothing to gain by choosing a less-familiar
figure to succeed him. Those seeing the succession as a
two-horse race are divided as to whether Putin will endorse
Medvedev or Ivanov, with XXXXXXXXXXXX positing a
"power-sharing" scenario in which one would serve as president
and the other as prime minister.
Medvedev
¶9. (C) Medvedev's long-standing loyalty to Putin, his

administrative skills, his propensity for hard work, and his
potential to benefit if the "national projects" that he
supervises are successful are among his qualifications for
the presidency. XXXXXXXXXXXX told us that Medvedev would
respect Putin's wishes and work to maintain the existing balance
among rival elite groups, which would make his selection
acceptable to all key power elements. XXXXXXXXXXXX also
said Medvedev's administrative skills were widely
underestimated.
Citing his Kremlin contacts, XXXXXXXXXXXX said the PA had
run more efficiently under Medvedev than now under
Sobyanin. XXXXXXXXXXXX, who said Medvedev was his own
choice for president, described him as dedicated, hardworking,
and skilled in management. (NOTE: In addition to his duties as
First Deputy Prime Minister, Medvedev directs the implementation
of the national projects, is chairman of the board of Gazprom, is
responsible for coordinating Russia's response to avian flu, and
since mid-May has chaired a government commission on bringing
digital television to Russia. END NOTE.)
¶10. (C) Medvedev nonetheless has challenges to overcome.

XXXXXXXXXXXX told us Medvedev does not come across as
"presidential" on television or in public, although she noted
that he has nearly two years to strengthen his image. The

Cable Viewer
camp of PA Deputy Head Igor Sechin, which is still trying to

convince Putin to remain in office beyond 2008, poses another
challenge to Medvedev. XXXXXXXXXXXX said Sechin's camp
is trying to discredit both Medvedev and Ivanov in order to
convince
Putin to seek a third term. According to XXXXXXXXXXXX,
Medvedev lost a recent battle when Fradkov (who is allied with
Sechin) was given control of the Customs Service, which had
previously been subordinated to Medvedev's frequent ally,
Minister of Economic Development and Trade German Gref.
Sergey Ivanov
¶11. (C) Ivanov has Putin's trust, is widely regarded as a

patriot and pragmatist, comes across as presidential, and has
proven politically resilient in the face of recurrent
criticism, including from within the military establishment.
XXXXXXXXXXXX said Ivanov is regarded as a more effective
administrator and bureaucratic player than Medvedev.
XXXXXXXXXXXX said Ivanov had demonstrated his ability to
weather political attacks over the last year, as his popularity
rating had not been affected by the Sechin camp's efforts to
tarnish his image by exploiting cases of military hazing,
using the Main Military Prosecutor to highlight the high rate
of crime in the armed forces, and publicizing the fact that
Ivanov's son had run over and killed an elderly pedestrian.
XXXXXXXXXXXX told us that Putin's May 10 address to
the legislature gave Ivanov a boost by highlighting
improvements in military capability, innovation, and morale.
¶12. (C) Our contacts note that Putin and others could
perceive some of Ivanov's strengths as weaknesses. For
instance, while many say that Ivanov is not corrupt (at least
in relative terms), some of Putin's close advisers reportedly
see that as a threat, since they do not know how to "do
business" with such a person. XXXXXXXXXXXX said Putin
may also see Ivanov's leadership skills as a potential threat to
the
balance of forces among elites, and potentially to Putin's
own continued influence.
Yakunin
¶13. (C) Putin probably considers Vladimir Yakunin's

long-standing friendship and business experience his best
qualifications for the presidency, according to our contacts.
Yakunin shares Putin's KGB background, and they first met in
the 1990s in St. Petersburg. Yakunin has thus far generally
avoided the public spotlight, and (according to a close
supporter) hopes Medvedev and Ivanov will fall short of
Putin's expectations in the run-up to 2008 (ref A). Our
contacts generally consider Yakunin a fallback candidate who

Cable Viewer
would probably remain loyal to Putin after taking office, but

could have difficulty forging ties with the political and
economic elites and the general public. XXXXXXXXXXXX
said Yakunin was "too exotic and strange" to become president,
citing Yakunin's close and secretive relationship with the
hierarchy of the Russian Orthodox Church, his reported ties
to Fidel Castro and Lyndon Larouche, and his involvement in
organizations like the Center for the National Glory of
Russia. XXXXXXXXXXXX agreed, saying Yakunin was
generally seen as an "outsider" in the elite, notwithstanding
his ties to Putin.
Sobyanin
¶14. (C) Sobyanin is thought by some to be a potential

successor because of his loyalty to Putin and apparent lack
of ambition. He recently visited London at Putin's
direction, providing the beginnings of an international
profile. In XXXXXXXXXXXX's view, Putin could feel
confidentthat Sobyanin, if elected, would continue to defer
to him. XXXXXXXXXXXX said Sobyanin's lack of ambition
was one reasonPutin had felt comfortable bringing him into the
PA. (Note. The basis for the judgment by XXXXXXXXXXXX
and XXXXXXXXXXXX that Sobyanin lacks ambition, rather
than has veiled ambition, is not clear. End Note) Among
Sobyanin's liabilities, according to XXXXXXXXXXXX, was that he
I "one-dimensional" and comfortable
only when dealing with regional affairs. XXXXXXXXXXXX noted
that Sobyanin lacks a public platform that would help him build
support among voters and, despite a good reputation as
governor of Tyumen, he was proving an ineffective manager in
the PA. XXXXXXXXXXXX told us Sobyanin had been charged with
overseeing the drafting of the annual state of the nation
address that Putin had presented May 10, but Putin had been
so dissatisfied with the early drafts that he took over the
speechwriting process himself. Others have painted
Sobyanin's role in the production of the speech in more
positive terms. XXXXXXXXXXXX thought Putin would not be
comfortable making Sobyanin president, given their relatively
brief connection.
Naryshkin
¶15. (C) Sergey Naryshkin's name has recently begun surfacing

with greater frequency in the media and in conversations with
our contacts (ref B), but he continues to be regarded as at
best a long-shot for president. XXXXXXXXXXXX said Naryshkin,
who worked with Putin in the KGB, is a junior partner to
Fradkov,
who has used him to attack Gref and Minister of Finance
Aleksey Kudrin. XXXXXXXXXXXX said Naryshkin dutifully follows
instructions from Putin and Fradkov in the hope of becoming

Cable Viewer
Putin's successor, or at least to be Minister of Economic

Development and Trade in the next president's administration.
XXXXXXXXXXXX described Naryshkin as an "interesting" figure and
cautioned against underestimating his chances.
XXXXXXXXXXXX agreed, saying that Naryshkin is a capable,
detail-oriented official whose loyalty to Putin is undisputed.
.
COMMENT
-------
¶16. (C) XXXXXXXXXXXX's list of five "live" candidates is

not, in our judgment, definitive. Given Putin's tendency to
make surprise personnel decisions and the unforeseeable
political issues that could arise before March 2008, other
potential successors may emerge. Moreover, although we
believe Putin does plan to leave office in 2008, that is at
most a present intention. If as 2008 approaches he is not
persuaded of the viability of any of the succession
candidates, particularly if it appears that Russia will face
difficult domestic or international circumstances, Putin
could still decide to remain in power, and would likely have
little trouble in arranging to do so. XXXXXXXXXXX
told us a third-term scenario was still on the table in the
Kremlin, although only as a fall-back option.
¶17. (C) Our expectation, however, remains that Putin will

step out of the Presidency in 2008. We concur that, in
choosing the person he wants to succeed him, he will be
motivated to protect his wealth and security (e.g., from
prosecution) and to ensure his continuing political influence
and social status after leaving office. We believe he will
also reject any succession candidate who he suspects might
steer Russia away from his policy "legacy." Those factors
suggest he will choose a successor in whom he has a high
degree of personal and political trust and who he sees as at
least competent as an administrator and politician. We share
the judgment that he has a relatively free hand in his
choice, with the political class and broader public ready, at
least initially, to defer to his judgment within broad limits.
¶18. (C) Views differ on how involved Putin plans to be in

day-to-day governance after 2008. Unlike Yeltsin in 2000,
Putin will leave office at a relatively young age, in good
health and with very high public support. If he wants a
highly operational "behind-the-scenes" role, that could
incline him to opt for a successor whom he saw as easy to
control. If he envisions, on the other hand, a "stand-back"
post-2008 role in which he would engage only on strategic
issues (a la Deng Xiaoping, a model that our counterparts in
the Chinese Embassy claim to find germane), that could be
reflected in a choice of a more dynamic and capable successor
expected to act with substantial autonomy. Obviously, the

Cable Viewer
degree to which any successor -- having won popular election

and received at least the externalities of power -- would
long be content to administer day-to-day affairs while
allowing Putin to direct the real course of policy from
behind the scenes is open to question.
¶19. (C) We also agree that last fall's appointments of

Medvedev and Sergey Ivanov to the government put them in
front-runner positions. While some (XXXXXXXXXXXX)
argue that Medvedev is likely to get the nod for the presidency
with Sergey Ivanov as his prime minister, we do not see
compelling evidence for that conclusion. An at least equally
strong argument, we believe, could be made in favor of Sergey
Ivanov as president and Medvedev as prime minister, given
Putin's
demonstrated trust in Ivanov and the likelihood that, in a
world seen to be full of external challenges to Russia, a
"silovik" with experience in the KGB/FSB, as head of the
Security Council, and as Defense Minister and manager of the
MOSCOW 00005740 005 OF 005
military-industrial complex would be seen as best prepared

and most credible as head of state.
¶20. (C) Putin's present interest lies in leaving such issues

unresolved, to prevent the initiation of a shift of power
away from him and towards any perceived successor. The
uncertainty that is beneficial to him, however, feeds
competition among possible (or at least self-perceived)
candidates jockeying for position, and encourages a
feeding-frenzy among those currently in high positions who
fear their snouts could soon be torn from the trough.
BURNS

Cable Viewer
Check our Reddit
Twitter this
Digg this page
Viewing cable 06MOSCOW9533, A CAUCASUS WEDDING

subject.
Discussing cables

2006-08-31 2010-12-01 Embassy
06:06 23:11 Moscow
VZCZCXRO9862

Cable Viewer
PP RUEHDBU
DE RUEHMO #9533/01 2430639
ZNY CCCCC ZZH
P 310639Z AUG 06
FM AMEMBASSY MOSCOW
Thursday, 31 August 2006, 06:39

SIPDIS
SIPDIS
EO 12958 DECL: 08/30/2016
TAGS PGOV, ECON, PINR, RS
SUBJECT: A CAUCASUS WEDDING
Classified By: Deputy Chief of Mission Daniel A. Russell. Reason
1.4 ( b, d)
Summary
-------
¶1. (C) Weddings are elaborate in Dagestan, the largest autonomy
in the North Caucasus. On August 22 we attended a wedding in
Makhachkala, Dagestan’s capital: Duma member and Dagestan Oil
Company chief Gadzhi Makhachev’s son married a classmate. The
lavish display and heavy drinking concealed the deadly serious
North Caucasus politics of land, ethnicity, clan, and alliance.
The guest list spanned the Caucasus power structure -- guest
starring Chechen leader Ramzan Kadyrov -- and underlined just how
personal the region’s politics can be. End Summary.
¶2. (C) Dagestani weddings are serious business: a forum for
showing respect, fealty and alliance among families; the bride
and groom themselves are little more than showpieces. Weddings
take place in discrete parts over three days. On the first day
the groom’s family and the bride’s family simultaneously hold
separate receptions. During the receptions the groom leads a
delegation to the bride’s reception and escorts her back to his
own reception, at which point she formally becomes a member of
the groom’s family, forsaking her old family and clan. The next
day, the groom’s parents hold another reception, this time for
the bride’s family and friends, who can “inspect” the family they
have given their daughter to. On the third day, the bride’s
family holds a reception for the groom’s parents and family.
Father of the Groom

Cable Viewer
-------------------
¶3. (C) On August 22, Gadzhi Makhachev married off his 19 year-
old son Dalgat to Aida Sharipova. The wedding in Makhachkala,
which we attended, was a microcosm of the social and political
relations of the North Caucasus, beginning with Gadzhi’s own
biography. Gadzhi started off as an Avar clan leader. Enver
Kisriyev, the leading scholar of Dagestani society, told us that
as Soviet power receded from Dagestan in the late 1980s, the
complex society fell back to its pre-Russian structure. The basic
structural unit is the monoethnic “jamaat,” in this usage best
translated as “canton” or “commune.” The ethnic groups themselves
are a Russian construct: faced with hundreds of jamaats, the 19th
century Russian conquerors lumped cantons speaking related
dialects together and called them “Avar,” “Dargin,” etc. to
reduce the number of “nationalities” in Dagestan to 38. Ever
since then, jamaats within each ethnic group have been competing
with one another to lead the ethnic group. This competition is
especially marked among the Avars, the largest nationality in
Dagestan.
¶4. (C) As Russian power faded, each canton fielded a militia to
defend its people both in the mountains and the capital
Makhachkala. Gadzhi became the leader from his home canton of
Burtunay, in Kazbek Rayon. He later asserted pan-Avar ambitions,
founding the Imam Shamil Popular Front -- named after the great
Avar leader of mountaineer resistance to the Russians -- to
promote the interests of the Avars and of Burtunay’s role within
the ethnic group. Among his exploits was a role in the military
defense of Dagestan against the 1999 invasion from Chechnya by
Shamil Basayev and al-Khattab, and his political defense of Avar
villages under pressure in Chechnya, Georgia and Azerbaijan.
¶5. (C) Gadzhi has cashed in the social capital he made from
nationalism, translating it into financial and political capital
-- as head of Dagestan’s state oil company and as the single-
mandate representative for Makhachkala in Russia’s State Duma.
His dealings in the oil business -- including close cooperation
with U.S. firms -- have left him well off enough to afford
luxurious houses in Makhachkala, Kaspiysk, Moscow, Paris and San
Diego; and a large collection of luxury automobiles, including
the Rolls Royce Silver Phantom in which Dalgat fetched Aida from
her parents’ reception. (Gadzhi gave us a lift in the Rolls once
in Moscow, but the legroom was somewhat constricted by the
presence of a Kalashnikov carbine at our feet. Gadzhi has
survived numerous assassination attempts, as have most of the
still-living leaders of Dagestan. In Dagestan he always travels

Cable Viewer
in an armored BMW with one, sometimes two follow cars full of

uniformed armed guards.)
¶6. (C) Gadzhi has gone beyond his Avar base, pursuing a multi-
ethnic cadre policy to develop a network of loyalists. He has
sent Dagestani youths, including his sons, to a military type
high school near San Diego (we met one graduate, a Jewish boy
from Derbent now studying at San Diego state. He has no plans to
enter the Russian military).
MOSCOW 00009533 002 OF 005
Gadzhi’s multi-ethnic reach illustrates what the editor of the
Dagestani paper “Chernovik” told us: that in the last few years
the development of inter-ethnic business clans has eroded
traditional jamaat loyalties.
¶7. (C) But the Avar symbolism is still strong. Gadzhi’s brother,
an artist from St. Petersburg, ordered as a wedding gift a life-
sized statue of Imam Shamil. Shamil is the iconic national
symbol, despite his stern and inflexible character (portrayed in
Tolstoy’s “Hadji-Murat” as the mountaineers’ tyrannical
counterpart to the absolutist Tsar). Connection with Shamil
makes for nobility among Avars today. Gadzhi often mentions that
he is a descendant on his mother’s side of Gair-Bek, one of
Shamil’s deputies.
The Day Before
--------------
¶8. (C) Gadzhi’s Kaspiysk summer house is an enormous structure
on the shore of the Caspian, essentially a huge circular
reception room -- much like a large restaurant -- attached to a
40-meter high green airport tower on columns, accessible only by
elevator, with a couple of bedrooms, a reception room, and a
grotto whose glass floor was the roof of a huge fish tank. The
heavily guarded compound also boasts a second house,
outbuildings, a tennis court, and two piers out into the Caspian,
one rigged with block and tackle for launching jet skis. The
house filled up with visitors from all over the Caucasus during
the afternoon of August 21. The Chair of Ingushetia’s parliament
drove in with two colleagues; visitors from Moscow included
politicians, businessmen and an Avar football coach. Many of the
visitors grew up with Gadzhi in Khasavyurt, including an Ingush
Olympic wrestler named Vakha who seemed to be perpetually tipsy.
Another group of Gadzhi’s boyhood friends from Khasavyurt was led
by a man who looked like Shamil Basayev on his day off -- flip-
flops, t-shirt, baseball cap, beard -- but turned out to be the
chief rabbi of Stavropol Kray. He told us he has 12,000 co-

Cable Viewer
religionists in the province, 8,000 of them in its capital,

Pyatigorsk. 70 percent are, like him, Persian-speaking Mountain
Jews; the rest are a mixture of Europeans, Georgians and
Bukharans.
¶9. (C) Also present was Chechnya’s Duma member, Khalid (aka
Ruslan) Yamadayev, brother of the commander of the notorious
Vostok Battalion. He was reserved at the time, but in a follow-up
conversation in Moscow on August 29 (please protect) he
complained that Chechnya, lacking experts to develop programs for
economic recovery, is simply demanding and disposing of cash from
the central government. When we pressed him on disappearances, he
admitted some took place, but claimed that often parents alleged
their children had been abducted when in fact their sons had run
off to join the fighters or -- in a case the week before -- they
had murdered their daughter in an honor killing. We mentioned the
abduction of a widow of Basayev, allegedly to gain access to his
money. Khalid said he had not heard of the case, but knew that
Basayev had had no interest in wealth; he may have been a
religious fanatic, but he was a “normal” person. The fighters who
remain are not a serious military force, in Khalid’s view, and
many would surrender under the proper terms and immunities. He
himself is arranging the immunity of a senior official of the
Maskhadov era, whose name he would not reveal.
¶10. (C) During lunch, Gadzhi took a congratulatory call from
Dagestan’s president, Mukhu Aliyev. Gadzhi told Aliyev how
honored he would be if Aliyev could drop in at the wedding
reception. There was a degree of tension in the conversation,
which was between two figures each implicitly claiming the mantle
of leadership of the Avars. In the event, Aliyev snubbed Gadzhi
and did not show up for the wedding, though the rest of
Dagestan’s political leadership did.
¶11. (C) Though Gadzhi’s house was not the venue for the main
wedding reception, he ensured that all his guests were constantly
plied with food and drink. The cooks seemed to keep whole sheep
and whole cows boiling in a cauldron somewhere day and night,
dumping disjointed fragments of the carcass on the tables
whenever someone entered the room. Gadzhi’s two chefs kept a wide
variety of unusual dishes in circulation (in addition to the
omnipresent boiled meat and fatty bouillon). The alcohol
consumption before, during and after this Muslim wedding was
stupendous. Amidst an alcohol shortage, Gadzhi had flown in from
the Urals thousands of bottles of Beluga Export vodka (“Best
consumed with caviar”). There was also entertainment, beginning
even that day, with the big-name performers appearing both at the

Cable Viewer
wedding hall and at Gadzhi’s summer house. Gadzhi’s main act, a

Syrian-born singer named Avraam Russo, could not make it because
he was shot a few days before the wedding, but there
MOSCOW 00009533 003 OF 005
was a “gypsy” troupe from St. Petersburg, a couple of Azeri pop
stars, and from Moscow, Benya the Accordion King with his family
of singers. A host of local bands, singing in Avar and Dargin,
rounded out the entertainment, which was constant and extremely
amplified.
¶10. (C) The main activity of the day was eating and drinking --
starting from 4 p.m., about eight hours worth, all told --
punctuated, when all were laden with food and sodden with drink,
with a bout of jet skiing in the Caspian. After dinner, though,
the first band started an informal performance -- drums,
accordion and clarinet playing the lezginka, the universal dance
of the Caucasus. To the uninitiated Westerner, the music sounds
like an undifferentiated wall of sound. This was a signal for
dancing: one by one, each of the dramatically paunchy men (there
were no women present) would enter the arena and exhibit his
personal lezginka for the limit of his duration, usually 30
seconds to a minute. Each ethnic group’s lezginka was different
-- the Dagestani lezginka the most energetic, the Chechen the
most aggressive and belligerent, and the Ingush smoother.
Wedding Day 1
-------------
¶11. (C) An hour before the wedding reception was set to begin
the “Marrakech” reception hall was full of guests -- men taking
the air outside and women already filling a number of the tables
inside, older ones with headscarves chaperoning dozens of
teenaged girls. A Dagestani parliamentarian explained that
weddings are a principal venue for teenagers -- and more
importantly their parents -- to get a look at one another with a
view to future matches. Security was tight -- police presence on
the ground plus police snipers positioned on the roof of an
overlooking apartment block. Gadzhi even assigned one of his
guards as our personal bodyguard inside the reception. The
manager told Gadzhi there were seats for over a thousand guests
at a time. At the height of the reception, it was standing room
only.
¶12. (C) At precisely two p.m. the male guests started filing in.
They varied from pols and oligarchs of all sorts -- the slick to
the Jurassic; wizened brown peasants from Burtunay; and
Dagestan’s sports and cultural celebrities. Khalid Yamadayev

Cable Viewer
presided over a political table in the smaller of the two halls

(the music was in the other) along with Vakha the drunken
wrestler, the Ingush parliamentarians, a member of the Federation
Council who is also a nanophysicist and has lectured in Silicon
Valley, and Gadzhi’s cousin Ismail Alibekov, a submariner first
rank naval captain now serving at the General Staff in Moscow.
The Dagestani milieu appears to be one in which the highly
educated and the gun-toting can mix easily -- often in the same
person.
¶13. (C) After a couple of hours Dalgat’s convoy returned with
Aida, horns honking. Dalgat and Aida got out of the Rolls and
were serenaded into the hall, and into the Makhachev family, by a
boys’ chorus lining both sides of the red carpet, dressed in
costumes aping medieval Dagestani armor with little shields and
swords. The couple’s entry was the signal for the emcee to roll
into high gear, and after a few toasts the Piter “gypsies” began
their performance. (The next day one of Gadzhi’s houseguests
sneered, “Some gypsies! The bandleader was certainly Jewish, and
the rest of them were blonde.” There was some truth to this, but
at least the two dancing girls appeared to be Roma.)
¶14. (C) As the bands played, the marriageable girls came out to
dance the lezginka in what looked like a slowly revolving conga
line while the boys sat together at tables staring intently. The
boys were all in white shirts and black slacks, while the girls
wore a wide variety of multicolored but fashionable cocktail
dresses. Every so often someone would shower the dancers with
money -- there were some thousand ruble notes but the currency of
choice was the U.S. hundred dollar bill. The floor was covered
with them; young children would scoop the money up to distribute
among the dancers.
¶15. (C) Gadzhi was locked into his role as host. He greeted
every guest personally as they entered the hall -- failure to do
so would cause great insult -- and later moved constantly from
table to table drinking toasts with everyone. The 120 toasts he
estimated he drank would have killed anyone, hardened drinker or
not, but Gadzhi had his Afghan waiter Khan following him around
to pour his drinks from a special vodka bottle containing water.
Still, he was much the worse for wear by evening’s end. At one
point we caught up with him dancing with two scantily clad
Russian women who looked far from home. One, it turned out was a
Moscow poet (later she recited an incomprehensible poem in
Gadzhi’s honor) who
MOSCOW 00009533 004 OF 005
was in town with a film director to write the screenplay for a

Cable Viewer
film immortalizing Gadzhi’s defense of Dagestan against Shamil

Basayev. By 6 p.m. most of the houseguests had returned to
Gadzhi’s seaside home for more swimming and more jet-skiing-under-
the-influence. But by 8 the summer house’s restaurant was full
once more, the food and drink were flowing, the name performers
were giving acoustic renditions of the songs they had sung at the
reception, and some stupendously fat guests were displaying their
lezginkas for the benefit of the two visiting Russian women, who
had wandered over from the reception.
The Wedding -- Day 2: Enter The Man
------------------------------------
¶16. (C) The next day’s reception at the Marrakech was Gadzhi’s
tribute to Aida’s family, after which we all returned to a dinner
at Gadzhi’s summer home. Most of the tables were set with the
usual dishes plus whole roast sturgeons and sheep. But at 8:00 p.
m. the compound was invaded by dozens of heavily armed mujahedin
for the grand entrance of Chechen leader Ramzan Kadyrov, dressed
in jeans and a t-shirt, looking shorter and less muscular than in
his photos, and with a somewhat cock-eyed expression on his
face. After greetings from Gadzhi, Ramzan and about 20 of his
retinue sat around the tables eating and listening to Benya the
Accordion King. Gadzhi then announced a fireworks display in
honor of the birthday of Ramzan’s late father, Ahmat-Hadji
Kadyrov. The fireworks started with a bang that made both Gadzhi
and Ramzan flinch. Gadzhi had from the beginning requested that
none of his guests, most of whom carried sidearms, fire their
weapons in celebration. Throughout the wedding they complied, not
even joining in the magnificent fireworks display.
¶17. (C) After the fireworks, the musicians struck up the
lezginka in the courtyard and a group of two girls and three boys
-- one no more than six years old -- performed gymnastic versions
of the dance. First Gadzhi joined them and then Ramzan, who
danced clumsily with his gold-plated automatic stuck down in the
back of his jeans (a houseguest later pointed out that the gold
housing eliminated any practical use of the gun, but smirked that
Ramzan probably couldn’t fire it anyway). Both Gadzhi and Ramzan
showered the dancing children with hundred dollar bills; the
dancers probably picked upwards of USD 5000 off the cobblestones.
Gadzhi told us later that Ramzan had brought the happy couple “a
five kilo lump of gold” as his wedding present. After the dancing
and a quick tour of the premises, Ramzan and his army drove off
back to Chechnya. We asked why Ramzan did not spend the night in
Makhachkala, and were told, “Ramzan never spends the night
anywhere.”

Cable Viewer
¶18. (C) After Ramzan sped off, the dinner and drinking --
especially the latter -- continued. An Avar FSB colonel sitting
next to us, dead drunk, was highly insulted that we would not
allow him to add “cognac” to our wine. “It’s practically the same
thing,” he insisted, until a Russian FSB general sitting opposite
told him to drop it. We were inclined to cut the Colonel some
slack, though: he is head of the unit to combat terrorism in
Dagestan, and Gadzhi told us that extremists have sooner or later
assassinated everyone who has joined that unit. We were more
worried when an Afghan war buddy of the Colonel’s, Rector of the
Dagestan University Law School and too drunk to sit, let alone
stand, pulled out his automatic and asked if we needed any
protection. At this point Gadzhi and his people came over,
propped the rector between their shoulders, and let us get out of
range.
Postscript: The Practical Uses of a Caucasus Wedding
--------------------------------------------- --------
¶19. (C) Kadyrov’s attendance was a mark of respect and alliance,
the result of Gadzhi’s careful cultivation -- dating back to
personal friendship with Ramzan’s father. This is a necessary
political tool in a region where difficulties can only be
resolved by using personal relationships to reach ad hoc informal
agreements. An example was readily to hand: on August 22
Chechnya’s parliamentary speaker, Dukvakha Abdurakhmanov, gave an
interview in which he made specific territorial claims to the
Kizlyar, Khasavyurt and Novolak regions of Dagestan. The first
two have significant Chechen-Akkin populations, and the last was
part of Chechnya until the 1944 deportation, when Stalin forcibly
resettled ethnic Laks (a Dagestani nationality) there. Gadzhi
said he would have to answer Abdurakhmanov and work closely with
Ramzan to reduce the tensions “that fool” had caused. Asked why
he took such statements seriously, he told us that in the
Caucasus all disputes revolve around land, and such claims can
never be
MOSCOW 00009533 005 OF 005
dismissed. Unresolved land claims are the “threads” the Russian
center always kept in play to pull when needed. We asked why
these claims are coming out now, and were told it was euphoria,
pure and simple. After all they had received, the Chechen
leadership’s feet are miles off the ground. (A well-connected
Chechen contact later told us he thought that raising
nationalistic irredentism was part of Abdurakhmanov’s effort to
gain a political base independent from Kadyrov.)

Cable Viewer
¶20. (C) The “horizontal of power” represented by Gadzhi’s

relationship with Ramzan is the antithesis of the Moscow-imposed
“vertical of power.” Gadzhi’s business partner Khalik Gindiyev,
head of Rosneft-Kaspoil, complained that Moscow should let local
Caucasians rather than Russians -- “Magomadovs and Aliyevs, not
Ivanovs and Petrovs” -- resolve the region’s conflicts. The
vertical of power, he said, is inapplicable to the Caucasus, a
region that Moscow bureaucrats such as PolPred Kozak would never
understand. The Caucasus needs to be given the scope to resolve
its own problems. But this was not a plug for democracy. Gadzhi
told us democracy would always fail in the Caucasus, where the
conception of the state is as an extension of the Caucasus
family, in which the father’s word is law. “Where is the room for
democracy in that?” he asked. We paraphrased Hayek: if you run a
family as you do a state, you destroy the family. Running a state
as you do a family destroys the state: ties of kinship and
friendship will always trump the rule of law. Gadzhi’s partner
agreed, shaking his head sadly. “That’s a matter for generations
to come,” he said.
BURNS

Cable Viewer
Check our Reddit
Twitter this
Digg this page
Viewing cable 06MOSCOW12751, LITVINENKO ASSASSINATION:

REACTION IN MOSCOW
subject.
Discussing cables

2006-12-01 2010-12-01 Embassy
14:02 23:11 Moscow

Cable Viewer
VZCZCXRO3998
OO RUEHDBU
DE RUEHMO #2751/01 3351444
ZNY CCCCC ZZH
O 011444Z DEC 06
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5613
SIPDIS
SIPDIS
DEPT FOR EUR/RUS
EO 12958 DECL: 11/29/2016

TAGS PGOV, KDEM, PREL, PINR, RS
SUBJECT: LITVINENKO ASSASSINATION: REACTION IN MOSCOW
REF: MOSCOW 11490
Classified By: Ambassador William J. Burns: 1.4 (d).

-------
Summary
-------
¶1. (C) The November 23 death by radiation poisoning of former

FSB agent Aleksandr Litvinenko in London has spawned a welter of
conspiracy theories in Russia. The media have variously traced
Litvinenko’s demise to XXXXXXXXXXXX, suicide, Putin’s Kremlin,
Putin himself, those determined to undermine Putin, FSB agents
unhappy with Litvinenko’s alleged betrayal of their organization,
those unhappy with Litvinenko’s cooperation with Israel-based
businessman Nevzlin on the Yukos affair, and the United States or
“other” countries. This message recounts a representative sample
of speculation, much of it self-serving. End summary.
---------------
Make Putin Stay
---------------

Cable Viewer
¶2. (C) Independent radio station Ekho Moskvy Editor-in-Chief

Aleksey Venediktov, like many here, linked the murders of
Litvinenko and journalist Anna Politkovskaya. (Politkovskaya, who
had accused the GOR of human rights abuses in Chechnya, was
murdered in Moscow on October 7 (reftel).) In his telling, both
murders, with perhaps more to come, are part of an effort to
force Putin to remain in office beyond 2008 by, in effect, making
him persona non grata in the West. (Putin has repeatedly insisted
he will leave when his term expires in 2008.)
¶3. (C) Venediktov pegged the two assassinations to rogue or

retired FSB or military intelligence agents controlled by forces
either within or without the Kremlin. Putin, Venediktov thought,
is well aware of the game being played, but is powerless to stop
it; in part because he is not certain whom to hold responsible.
Venediktov subscribed to the generally-held view here that Putin
values his reputation in the West, and that sabotaging it is one
path to having him reconsider his decision to leave the Kremlin
in 2008.
¶4. (C) Venediktov did not exclude the possibility that the
culprit in Litvinenko’s poisoning may have been ex-FSB agent
turned businessman Andrey Lugovoy, who has loudly advertised his
innocence. Lugovoy met with Litvinenko in London November 1, the
day Litvinenko was allegedly irradiated. Lugovoy’s rush to the
Moscow British Embassy and into the Russian media immediately
after the Litvinenko story broke in the press was designed to
provide him with a measure of protection, Venediktov thought,
should “others” --either those who commissioned the killing or
those unhappy with the furor it has caused-- want revenge.
Venediktov joined National Bolshevik Party leader Eduard Limonov
in finding it suspicious that a Moscow-based businessman and
former FSBer like Lugovoy would want to cooperate commercially
with a man like Litvinenko who was on the Kremlin’s --and the
FSB’s-- enemy list. Lugovoy may have been dispatched to
cultivate, and kill, Litvinenko, Venediktov thought.
¶5. (C) In a separate conversation November 30, the Moscow

Heritage Foundation’s Yevgeniy Volk seconded the version of
events offered by Venediktov, and was at pains in his remarks to
insulate Putin from any association with the murders. Volk
described Putin as a “pawn in a larger game” being played by
those in the Kremlin as 2008 drew nearer. XXXXXXXXXXXX saw

Cable Viewer
Putin’s fingerprints on both the murders, although he admitted he

had no evidence to support his allegations. Noting that Putin had
appointed Ramzan Kadyrov Prime Minister of Chechnya,
XXXXXXXXXXXX offered us his bleak assessment of Putin with the
phrase “you know people by the company they keep.”
---------------
Make Putin Play
---------------
¶6. (C) Stanislav Belkovskiy, political analyst from the National

Strategic Institute also linked the Politkovskaya and Litvinenko
killings, but thought they were designed to influence the
succession struggle. In his far-fetched (but indicative of the
conspiratorial mood that hangs over Moscow) telling, Kremlin
“liberals” XXXXXXXXXXXX had engineered the assassinations in
order to embarrass Putin before the West,
MOSCOW 00012751 002 OF 003
and force him to sacrifice someone from his inner circle in order
to salvage his reputation. Belkovskiy thought that victim would
be Presidential Administration Deputy Head and leader of the so-
called “siloviki,” Igor Sechin. XXXXXXXXXXXX understand that
First Deputy PM Medvedev is a very weak presidential candidate,
and that Putin remains unconvinced that he would make an able
successor. Undermining the “siloviki” is one way to ensure the
inevitability of Medvedev’s candidacy, Belkovskiy told us. He
suggested that Putin could portray Sechin’s ouster as the first
serious step in the fight against government corruption, noting,
“Putin could credibly tar him with the Yukos machinations.”
¶7. (C) The victims to date, Politkovskaya and Litvinenko, had

been selected because they were better known beyond Russia’s
borders, where it was important that the murders resonate most
strongly. Belkovskiy predicted more murders to come if Putin
“failed to get the message.” He suggested that Garry Kasparov’s
absence from the Russian media, ties to the U.S., and name
recognition abroad made him a likely victim.
¶8. (C) Belkovskiy offered in support of his theory what he said

was indirect proof of XXXXXXXXXXXX involvement. Belkovskiy told
us he had been approached the week of October 2 by a longtime
contact from XXXXXXXXXXXXX inner circle who warned him that he
had been targeted and should leave Russia immediately, which he
did. Politkovskaya’s murder that weekend had, Belkovskiy

Cable Viewer
believed, the “liberals’” fingerprints on it. He doubted that he

had ever been the actual target, and speculated that his contact
knew of a plot to kill someone in journalistic circles, and had
warned Belkovskiy “just in case.”
---------------
Make Putin Stay
---------------
¶9. (C) The Institute for Globalization Problem’s Mikhail

Delyagin added the November 18 killing in Moscow of Movdali
Baysarov, Chechen “Gorets” division commander and critic of
Chechen Prime Minister Ramzan Kadyrov; and the November 4
“Russian March” to Belkovskiy and Venediktov’s lists of recent,
linked events. Delyagin joined others here in assuming that
Baysarov’s killing had not occurred as described by the Moscow
police. (Moscow Internal Affairs personnel claimed that Baysarov
had threatened them with a hand grenade when stopped on a busy
Moscow avenue. Russian blogs and the internet press are filled
with alleged eyewitness accounts that claim Baysarov offered no
resistance.) Baysarov’s protective detail had been suspended just
before his murder, something that only could have been done,
Delyagin said, by the FSB or “someone higher.”
¶10. (C) According to Delyagin, the killings of Baysarov,
Politkovskaya, and Litvinenko combine to create an atmosphere of
chaos desired by the “siloviki,” who would like Putin to remain
in office. Delyagin discounted XXXXXXXXXX as possible authors of
the murder of Litvinenko. XXXXXXXXXX In addition, he said, they
lack the connections to confidentially procure the polonium 210
allegedly used in the
SIPDIS killing. Delyagin joined Venediktov and Belkovskiy in
seeing the polonium as the calling card of someone in Moscow.
--------------------------
XXXXXXXXX--------------------------
¶11. (C) ------------------

No Theory Suffices
------------------
¶12. (C) In a December 1 conversation, the Carnegie Moscow

Center’s Masha Lipman cautioned against falling prey to
conspiracy theories. None of the ones available, she thought,

Cable Viewer
fully account for what appears to be happening. She found it

unlikely that the killings were being staged in an effort to
force Putin to remain in office. If so, the strategy seemed
shortsighted, as Putin who felt his hand had
MOSCOW 00012751 003 OF 003
been forced would surely seek revenge if compelled by
circumstances he did not create to remain. With little
information available, the only thing that could be said with
certainty, she thought, was that Russia had again entered a
period, perhaps occasioned by the looming 2008 succession, where
problems were being solved by force. Lipman noted that recent
murders had not been confined to enemies of the Kremlin; she
mentioned the assassination of Central Bank Chairman Kozlov, and
suggested that factors contributing to the recent re-eruption of
violence in addition to 2008 might be corruption, institutions
unable to solve the problems of Russians, and the sense, at least
in the Kremlin, that Putin no longer is fully in control as his
power wanes with the approaching end of his term.
----------
Postscript
----------
¶13. (C) The sense of unease here only deepened with news that
former Prime Minister Yegor Gaidar had been poisoned November 24
while attending a conference in Dublin. United Energy Systems’
Chairman Anatoliy Chubais, who talked to Gaidar after he returned
to Moscow, alleged that Gaidar had been the victim of foul play
even before hearing the verdict of the Moscow physicians. Chubais
implied that Berezovskiy was the culprit. Gaidar Spokesman
Valeriy Natarov reported the evening of November 30 that Gaidar’s
Moscow doctors believed that he had been poisoned. Gaidar’s
daughter Mariya alleged poisoning as well in a November 30 Radio
Moskvy interview. However, she cautioned that a complete
diagnosis would have to await the arrival of initial tests on
Gaidar conducted at the Dublin hospital. Other media report that
Gaidar is recovering and expects to be discharged December 4.
¶14. (C) Masha Lipman believed that the well-connected Chubais’s

early certainty that Gaidar had been poisoned might mean that he
knows, or has reason to suspect that he knows, who was behind the
attempt. Gaidar, she hoped, might shed some light on this when
released from the hospital next week.

Cable Viewer
-------
Comment
-------
¶15. (C) All of the above putative versions of events are

handicapped by a lack of evidence and by the existence of other
motives for the killings and other potential perpetrators.
Whatever the truth may ultimately be --and it may never be
known-- the tendency here to almost automatically assume that
someone in or close to Putin’s inner circle is the author of
these deaths speaks volumes about expectations of Kremlin
behavior as the high-stakes succession struggle intensifies. BURNS

Cable Viewer
Twitter this
Digg this page
Viewing cable 07MOSCOW1442, RUSSIAN CORPORATE STATISM: WATCH THIS

SPACE



Discussing cables

2007-04-02 2010-12-01 Embassy
07:07 21:09 Moscow
VZCZCXRO1331
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHMO #1442/01 0920750
ZNY CCCCC ZZH
P 020750Z APR 07
FM AMEMBASSY MOSCOW

Cable Viewer
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
SIPDIS
SIPDIS
STATE FOR EUR/RUS; EUR/ERA; EEB/IFD

STATE PLS PASS USTR FOR DONNELLY, MOLNAR
NSC FOR KLECHESKI AND MCKIBBEN
DOC FOR 4231/IEP/EUR/JBROUGHER
E.O. 12958: DECL: 04/02/2017
TAGS: ECON EINV EIND PGOV RS
SUBJECT: RUSSIAN CORPORATE STATISM: WATCH THIS SPACE
REF: 06 MOSCOW 1306
Classified By: Ambassador William J. Burns for reasons 1.5 (b/d)
¶1. (C) Summary: The rise of corporate statism in Russia has

been significant. Since 2004, the government has taken over
the world's largest titanium business, consolidated its
position in Gazprom, merged 10 aviation businesses into a
state-owned conglomerate, and taken controlling positions in
other firms. No less fascinating has been the mix of greed,
politics, and business behind the expansion of the state into
the economy. Looking ahead, our contacts are strongly
divided. Some see troubling signs of continued state
ambition. Others believe the process is essentially
plateauing, and will stabilize at lower levels of state
ownership in the economy after two-three years. In our view,
the current trendline may quickly approach some rather
natural limits, and the Kremlin will eventually have to bow
to the market. In the meantime, we should reinforce
market-driven approaches and the cadre of Russian
policy-makers who doggedly keep these ideas in play. End
Summary.
¶2. (SBU) This cable is based on dozens of conversations with

contacts in industry and banking over the past six weeks,
supplemented by Embassy-based research.
The Breadth of State Ownership

------------------------------

Cable Viewer
¶3. (SBU) The march of the state into parts of the Russian
economy over the past few years has been significant, with
control of swaths of the natural resource, defense, and
select other sectors consolidated in state hands. Annual
revenues of Russia's ten largest state-owned or controlled
companies reached an estimated 20 percent of GDP in 2006.
State-owned or controlled companies account for one-third of
the Russian stock market's capitalization, and in just the
last year, the value of these equity holdings has almost
doubled to an estimated USD 369 billion. And the process
continues: Rosoboronexport is rumored to be in line to buy
Russia's fifth largest steel producer, Mechel; further
consolidation in the energy sector favoring Gazprom and
Rosneft is likely; a new shipbuilding national champion is in
the works; and diamond giant Alrosa has its eye on Norilsk
Nickel, a USD 30 billion company with more than the half the
world's palladium and one-fifth of global nickel output.
Looking Behind This Latest Great Grab

-------------------------------------
¶4. (C) The grab for Russia's resources is an old story, but
contacts agree that traditional motives (greed, power) have
been supplemented in this round with a nationalistic brand of
commercial considerations. Greed in Russia shocks no one,
but the rising value of Russia, Inc. (on the back of high
energy prices) has made the current grab particularly
profitable for some. Power considerations -- both
geopolitical (as in the case of Gazprom) and in the context
of Russia's domestic succession process -- are evident as
well. New to this paradigm is the surprisingly strong role
business considerations seem to be playing -- as the Russian
Government tries to salvage a select few decrepit remains of
Soviet industrial prowess before it is too late. Our
contacts have a lot to say about all three motives; we
summarize what we've heard here.
¶5. (C) Greed: The Kremlin leadership in the economy is in no

small part about money, and the Sibneft takeover by Gazprom
is perhaps the most blatant example of this (only about a
quarter of the $12b selling price for the firm is said to
have actually gone to owner Abramovich). In general, the
insider offtake from M&A deal flows is said to be so large
now that Swiss banks have told Kremlin cutouts (like
gas-trader Timchenko) that they cannot accept further
deposits without knowing the source of the money. The most
lucrative transfers to the state (usually involving natural
resources) may be wrapped in patriotic rhetoric, but include
a healthy dose of financial opportunism. Yet, as ugly as it
looks, our contacts remind, it is not so different than what
happened in Indonesia and South Korea - and Mexico too. As
one contact points out, "the bureaucrats got rich there too."

Cable Viewer
MOSCOW 00001442 002 OF 004
¶6. (C) Power: Creating national champions and projecting a

strong image for Russia abroad has been a leading factor in
many state-connected takeovers and consolidations, including
the removal of the Gazprom ring fence, the Rosoboronexport
makeover, the RUSAL-SUAL deal, and the anticipated takeover
of Norilsk Nickel by Alrosa. Some of what we are seeing is
also is part of the ongoing succession process, putting
individuals into deal flows and thus providing campaign
finance and enhancing their public profile. The decision to
put military hardware exports under Rosoboronexport is seen
in some quarters as buttressing dark horse presidential
hopeful and Rosoboronexport Chairman Sergey Chemezov. Recent
portfolio changes are seen by some as giving First Deputy
Prime Minister Sergey Ivanov a cash-laden institutional base
like that enjoyed by his chief rival for the presidency,
First Deputy Head of the Presidential Administration and
Gazprom Chairman of the Board of Directors Dmitriy Medvedev.
¶7. (C) Nationalistic-Driven Commercial Considerations: Many

believe that Putin and those around him are also driven by a
sincere desire to right the excesses of the 1990s, or
oligarchic plundering of once-proud, though ruinously
inefficient, Soviet companies. The examples here are truly
varied. In the case of Avtovaz, Rosoboronexport's move to
take over the firm last year may be the only thing saving the
car-giant from complete collapse in the face of global
competition. The emerging Norilsk Nickel story is said to be
as much about saving Alrosa (which experts say will run out
of diamonds in ten years' time) as it is about keeping
Norilsk's palladium and nickel output in Russian hands. And,
as driven by national security concerns as the formation of
the United Aircraft Company might be, also at play is a
long-overdue consolidation of an industry largely on the
verge of collapse. These examples are more about saving jobs
and communities and creating viable competitive companies
than personal enrichment. Although making money is not
precluded here, both Avtovaz and UAC, not to mention plans to
create a new shipbuilding national champion, sound more like
cash sinks than cash cows.
What Next?
----------
¶8. (C) Looking ahead, our contacts are divided about what to
expect next. "Statist" believers argue that there are
troubling signs that the trend is far from contained:
state-owned companies are straying farther from their core
business, eyeing the telecom and IT sectors, and expanding
beyond traditional financial services. They point to

Cable Viewer
Gazprom's movement into electricity; Svyazinvest's

significant stake in privately-held telecom provider Comstar;
and VneshTorgBank's overtures to brokerage house Troika
Dialog (ultimately rebuffed). While no one is predicting
another Yukos-style approach, there is a sense that the
authorities can and will come up with new pretexts for
control.
¶9. (C) In contrast, others argue the state's reach is

plateauing, and the current mix of state-private ownership
could start to reverse itself before long. They say national
champions in the sectors that make sense have been created,
and industries such as telecom and IT do not lend themselves
to over-centralization. In gas and electricity, given supply
shortfalls, the GOR has to promote private investment to meet
demand and introduce efficiencies. A shrinking current
account balance (on the back of lower oil prices) and the
drive to diversify the economy only heighten the need for
private capital and better corporate governance (which
implies a move away from state ownership and control). The
Kremlin will also find it increasingly difficult to control
emerging interest groups, from the consumer sector to
regional governments. Integration into the WTO and other
western economic institutions will require greater
transparency, better and more equal market access, and lower
protectionist barriers - which will temper the state's
ambition.
¶10. (C) Some take this latter argument one dark step further.
They say that current GOR leadership, its successors and
supporters, will need to find outlets for their accumulated
wealth, much of which is said to be held in liquid assets
abroad. The theory goes that these funds will start making
their way back to Russia over the next two-three years, and
that the target of the return flows will most likely be the
MOSCOW 00001442 003 OF 004
same assets that have been carefully squirreled away in state

hands over the past few years -- thus spurring share
offerings by Rosneft, spin offs at Gazprom, etc. These
assets are profitable, and equity ownership in Russia carries
less risk for this particular group of investors than the
prying eyes of regulatory authorities abroad. Likewise,
coming into Russia from an European investment platform, as
one contact cynically noted, may make it less likely that
zealous law-enforcement officials abroad would pursue
criminal or civil cases for fear a U.S. or European firm
could get tangled up in the investigation.
Where We Come Out

Cable Viewer
-----------------
¶11. (C) Looking at the three motives most obviously at play,

two of them -- greed and nationalistic commercial
considerations -- suggest equally valid reasons why we might
see the state pulling back from its commanding heights over
the next few years. Greed will tend to push those who have
accumulated shares in state companies towards share
cash-outs, just as it will push those who have accumulated
"private" cash abroad to buy back into Russia's safest
investments. Rosneft is a perfect example. We are watching
to see who in the government argues the loudest for Rosneft's
further privatization -- they more than likely stand to
benefit from either the sell or the buy opportunity. For
industries that are less obvious moneymakers, exemplified by
Avtovaz and UAC, the state is even more likely to divest
(wholly, in the case of Avtovaz) as the firms become
commercially viable and need investment capital and strategic
partners, and as they become less social land mines and
resemble more the typical day-to-day slog of the business
world.
¶12. (C) But pulling back does not mean exiting the field.
XXXXXXXXXXXX does not expect the state ever to
relinquish its control of XXXXXXXXXXXX. Nor will the
GOR allow its stake in Gazprom to drop again below 50%,
although many predict it will shed non-core assets in the
coming years. Nor will the diamond trade or trade in metals
likely see a repeat of the halcyon days of private ownership
in the wake of loans-for-shares. UAC will likely never be
more than 30% privately-owned.
¶13. (C) But even if every firm in the natural resources
sector ends up in state hands, as significant as that would
be, it would account for around 12% of the Russian economy.
Add in state monopolies in the transport and communications
sector, defense industries, and space, and state control over
the economy rings in around 25% of GDP. As disturbing as
this figure might seem, it is not wildly out of line with
other market economies rich in natural resources. As
recently as two years ago, the Norwegian state owned
approximately 32% of the companies listed on the Oslo Stock
Exchange, and still holds shares in 10-15 percent of
Norwegian industry, including controlling shares in oil,
telecoms, and the national airline. In Mexico, the state
fully controls the oil, gas, and nuclear power industries and
has reserved for the state in whole or part the
telecommunications, air travel, and postal sectors.
¶14. (C) And these back of the envelope estimates ignore

important counter trends to the movement toward greater state
control. Whole swaths of the economy, our interlocutors

Cable Viewer
again and again confirm, lie fully outside the ambitions of

the state -- and are thriving. One seasoned businessman (who
has had his hat handed to him on more than one occasion over
the past 15 years) is back in Russia and growing fast, and he
chalks up his current success to the booming service and
retail sector, a place where he says he never comes in
contact with the designs of the Kremlin. There are also
instances, like with XXXXXXXXXXXX, where, despite the
new ownership
structure, the state has left the firm to run the business
without Rosoboronexport grabbing off profits or instructing
where production should go. Lastly, it would be
irresponsible to ignore the progress being made toward the
break-up and privatization of both the electricity and rail
sectors. When all is said and done, these massive reforms
will move some 2-3 percent of GDP from state to private hands.
¶15. (C) There is another reason why more of this economy

will likely move into the private sector. Economic
modernizers, as they have come to call themselves here, may
still
MOSCOW 00001442 004 OF 004
ultimately get the upper hand. XXXXXXXXXXXX,

XXXXXXXXXXXX, XXXXXXXXXXXX and others
recognize that only through greater private sector
participation in the economy will Russia be able to attract
the capital needed to sustain growth over the long run. This
is also where working to bring Russia into international
institutions will help drive policy here in the direction we
favor. Locking the Russian Government into such institutions
and exposing Russian companies to the discipline of the
global market will reinforce the trends we seek to encourage.
Doing so this year, before the election process starts to
create new winners and losers, is a bet on the modernizers
worth taking.

Cable Viewer
Check our Reddit
Twitter this
Digg this page
Viewing cable 07MOSCOW2429, RUSSIAN REACTION TO LITVINENKO

MURDER CHARGES
subject.
Discussing cables

2007-05-24 2010-12-01 Embassy
12:12 23:11 Moscow

Cable Viewer
VZCZCXRO5415
OO RUEHDBU
DE RUEHMO #2429/01 1441227
ZNY CCCCC ZZH
O 241227Z MAY 07
FM AMEMBASSY MOSCOW
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE
SIPDIS
SIPDIS
EO 12958 DECL: 05/23/2017

TAGS PREL, PGOV, PINR, RS
SUBJECT: RUSSIAN REACTION TO LITVINENKO MURDER CHARGES
REF: LONDON 1997
Classified By: Ambassador William J. Burns. Reasons 1.4 (b and d).
¶1. (C) SUMMARY: The GOR is highly unlikely to extradite former

FSB officer Andrey Lugovoy to Britain, citing constitutional and
other legal prohibitions against the extradition of Russian
citizens. Official and unofficial Russian reaction to the May 22
British announcement that Lugovoy would be charged with the
murder of Aleksandr Litvinenko has been nearly uniform in
rejecting the UK request that he stand trial in London. The MFA
held out the prospect of further cooperation in the
investigation, while citing the impossibility of extradition, but
other Russian commentators were more categorical, suggesting that
the British charges were politically motivated. A few opposition
voices called for Lugovoy to voluntarily submit to British
justice. The British Embassy expects a further worsening in the
UK-Russia and EU-Russia relationships. We should continue to
reinforce to the GOR the damaging consequences to Russia’s
reputation should this case fail to reach trial. END SUMMARY.
¶2. (C) On May 22, the UK’s Crown Prosecution Service announced
that it had sufficient evidence to request Lugovoy’s extradition
and to charge him with the polonium poisoning of Litvinenko in

Cable Viewer
November 2006. UK Ambassador Brenton told the Ambassador May 23

that the UK Embassy expected to receive the final warrant by the
end of the week and would transmit it to the Procuracy shortly
thereafter.
EXTRADITION: OBSTACLES AND OPTIONS

----------------------------------
¶3. (SBU) Both the Russian Constitution and the Criminal Code
prohibit the GOR from extraditing Russian citizens, as is the
case in several other European countries whose legal systems have
evolved from the Napoleonic code. Russia has a 2006 Memorandum of
Understanding with the Crown Prosecution Service and is a
signatory to the 1957 European Convention on Extradition. Both of
these were mentioned in the Prosecution Service’s announcement of
the charges, but neither of them would supercede the Russian
Constitution and obligate Russia to extradite Lugovoy. There is a
precedent for the GOR to prosecute Russian citizens in lieu of
extradition. Three times it has done so at U.S. request -- two
murders and one money laundering case -- but none of these cases
led to a conviction, and the British are not apparently
considering this option.
¶4. (SBU) In a May 22 statement on its website, the MFA

reiterated its readiness to cooperate further in an objective
investigation into Litvinenko’s death, but it emphasized that
Russia’s legal prohibitions against extradition were well known
and similar to those in place in other countries.
¶5. (SBU) Other official and unofficial Russian reaction was

overwhelmingly against the British request. Duma Speaker Boris
Gryzlov said that the Russian parliament would uphold Russian law
and not allow Lugovoy to be returned to Britain. International
Affairs Committee Chairman Konstantin Kosachev warned that
diplomatic relations with the UK would be negatively affected
should the charges be politically motivated. Duma Deputy Viktor
Ilyukhin, the vice chair of the Duma’s Security Committee,
rhetorically asked why Russia should even consider Britain’s
request when it ignored the GOR’s efforts to extradite Boris
Berezovskiy and Chechen separatist emissary Akhmed Zakayev. LDPR
Chairman Vladimir Zhironovskiy thought that Russian law
enforcement might want to trade Lugovoy for Berezovskiy.

Cable Viewer
¶6. (SBU) Independent Duma Deputy Vladimir Ryzhkov was one of the
few who suggested Russia’s international interests ought to take
precedence over national law and expressed confidence in the
results of the British investigation. Protecting Lugovoy would
lead to extensive damage to Russia’s image abroad, he said.
Likewise, LDPR Deputy Aleksey Mitrofonov publicly called on
Lugovoy to return to London voluntarily. Mitrofonov said that
Russia and Britain needed to resolve the issue or Russia faced
the prospect of further deterioration in its relations with the
West amid growing suspicions that the GOR was protecting Lugovoy.
He suggested that “public” pressure on Lugovoy to voluntarily
face British justice might be the best way out of an impasse.
BRITAIN’S NEXT STEPS

--------------------
¶7. (C) Noting that the UK would be seeking an EU statement of

support in urging Russia to agree to extradition (reftel),
Brenton predicted that the failure to turn over Lugovoy would
create serious problems in London’s bilateral relationship
MOSCOW 00002429 002 OF 002
with Moscow, and potentially problems in the EU-Russian
relationship as well. Failing any progress, he reiterated the UK
may reassess whether it would support a new EU-Russia Partnership
and Cooperation Agreement. The German and French missions have
expressed to us their doubts about this approach, noting the
similar constitutional restrictions on the extradition of
nationals by some EU countries.
PUBLIC APATHY ABOVE ALL

-----------------------
¶8. (C) Ekho Moskvy’s Aleksey Venediktov told us separately there

is little chance of a resolution soon, particularly given the
rift in relations between Putin and Blair. Putin believes PM
Blair betrayed him over the British refusal to extradite
Berezovskiy, and Venediktov said that the GOR has now pinned its
hopes for a better relationship with Britain on Brown. Venediktov
said Russian public opinion is largely indifferent to the whole
affair, based on responses to Ekho’s on-air discussions about
Litvinenko’s death, and doubted it would be a factor in the GOR
position. Demos Center’s Tanya Lokshina similarly questioned
whether there would be anything other than public support for the
GOR’s position and that the public was more likely to believe

Cable Viewer
that the charge against Lugovoy was one more Western provocation.
¶9. (C) Comment. It is highly unlikely that the GOR will yield
its constitutional principle on extradtion. There is no
indication that any Russian offer of cooperation short of
extradition will satisfy the Crown Prosecution Service’s request.
Given the sensational nature of the murder and the uncertainty
over where the trial may lead beyond Lugovoy, there has been
little official interest expressed in Lugovoy clearing his name
in a UK court. Although we know of no other legal mechanisms that
would trump the Russian constitution, we should continue to
reinforce to the GOR the long-term damage to Russia’s reputation
if this case fails to go to trial. BURNS

Cable Viewer
Twitter this
Digg this page
Viewing cable 07MOSCOW3579, THINKING ABOUT KADYROV




Discussing cables

2007-07-23 2010-12-01 Embassy
06:06 21:09 Moscow
Appears in these articles:
http://www.spiegel.de
VZCZCXRO9428
OO RUEHDBU
DE RUEHMO #3579/01 2040600
ZNY CCCCC ZZH
O 230600Z JUL 07
FM AMEMBASSY MOSCOW

Cable Viewer

SIPDIS
SIPDIS
E.O. 12958: DECL: 07/23/2017

TAGS: PREL PGOV PHUM PINR RS
SUBJECT: THINKING ABOUT KADYROV
REF: A) MOSCOW 3495 AND PREVIOUS B) MOSCOW 673
Classified By: Ambassador William J. Burns. Reason: 1.4 (b, d)
Summary
-------
¶1. (C) Ramzan Kadyrov recently celebrated his 100th day as

President of Chechnya. Characteristics of the new order are
already visible:
-- The appointment of personnel who have no loyalties except

to Kadyrov, and the steady elimination of those with
independent ties to Moscow or independent bases of support
there.
-- An improvement in the economic situation, as well as in
human rights (marginally), as Kadyrov centralizes power and
independent actors (read: rent-seekers and kidnappers) are
reined in and franchised by his administration.
-- Kadyrov's "extraterritorial" efforts to speak for Chechens

everywhere, not just in Chechnya.
-- Regional power aspirations, focusing first on

re-integrating Ingushetia.
Kadyrov faces hurdles on the way to these goals, including

both dissension within Chechnya's ruling elite and the
uncertainties in the run-up to the 2008 Russian presidential
transition. Without buying into either Kadyrov or his motives
(or dealing with him personally), the U.S. should seek ways
to engage the people of Chechnya, who lack exposure to the
outside world.
End Summary.

Cable Viewer
¶2. (C) Ramzan Kadyrov celebrated his hundredth day as

President of Chechnya on July 14. For three years before
that he had been the Republic's strongman, with backing from
President Putin that has seen no limits. Putin promoted
Kadyrov shortly after the latter gunned down rival Movladi
Baysarov -- an FSB lieutenant colonel -- in broad daylight on
a major Moscow street. According to a Presidential
Administration staffer, Putin ascribes the success of his
Chechnya policies to his unlimited backing of Kadyrov.
Assumption of the Chechen presidency should just have been a
bonus. Nonetheless, tendencies visible before Kadyrov became
president have become concrete.
Cutting Out the Competition

---------------------------
¶3. (C) Chechnya has been a mass of federal structures, each

representing its own institutional interests and, often,
competing clans within those institutions. For the three
years before Kadyrov became president, President Alkhanov
and, until his resignation, Prime Minister Abramov, each had
independent ties to Moscow and bases of support there. The
"siloviki," or "power ministries" -- FSB, MVD, MOD -- hate
Kadyrov,xxxxx told us, and
representatives of each try to work with Chechen factions not
loyal to Kadyrov. A good example is ORB-2, the descendant
of the RUBOP, the directorate designed to fight organized
crime. When RUBOP was broken up (it had itself become an
organized crime family) it was integrated into local MVD
offices -- but not in Chechnya. There it was subordinated to
the Southern District MVD in Rostov, to ensure an MVD
presence outside Kadyrov's control.
¶4. (C) All that is changing. When Kadyrov assumed the
presidency there was speculation that Putin would insist on
the appointment of a Prime Minister with a independent power
base, such as Federation Council member Umar Dzhabrailov.
Instead, Kadyrov promoted his maternal cousin Odes
Baysultanov to the job (he had been First Deputy). Kadyrov
named his chief enforcer and right-hand man, Adam
Delimkhanov, as First Deputy Prime Minister. It was
Delimkhanov who traveled to Moscow to pull the trigger on
Baysarov.
¶5. (C) Kadyrov has accused ORB-2 of involvement in kidnapping

and torture, and is militating for the group's withdrawal
from Chechnya. ORB-2 certainly carries out some of these
crimes, but by accusing them Kadyrov is trying both to
exculpate himself and rid Chechnya of a structure not under
his control. According to Presidential Administration
staffer Aleksandr Machevskiy, overall force levels in

Cable Viewer
Chechnya now stand at 35,000, about half of whom are local

Chechens -- most of whom are under Kadyrov's personal
control. Trouble is already brewing between Kadyrov and two
of Chechnya's most powerful warlords, Sulim Yamadayev of the
Moscow 00003579 002 of 005
"East" Battalion (see below) and Said-Magomad Kakiyev of the

"West" battalion, four of whose men were killed in a recent
shoot-out with Kadyrov's security forces.
Rebuilding Chechnya
-------------------
¶6. (C) The centralization of presidential power under Kadyrov

has had positive effects on Chechnya's economic and human
rights situation, as we have reported (reftels). The human
rights watchdog Memorial has documented an 80 percent drop in
abductions over the last year, as Kadyrov, exercising the
"state monopoly on violence," eliminates or neutralizes
kidnappers not working under his direct sanction -- and he
now rarely feels the need to kidnap for either economic or
political reasons. Human rights improvement has its limits,
however. Kadyrov's own "vertical of power," together with
his cult of personality, mean that freedom of the Chechen
media is not likely anytime soon.
¶7. (C) Chechnya's economy also owes its renewal to Kadyrov's

monopoly on violence. In the past, government subsidies were
basically bribes to keep Chechnya quiet, given on the
understanding that that Kadyrov would pocket any funds that
made it to Chechnya past the trough of officials through
which it had to flow after leaving the Treasury. The
economies of Dagestan and Ingushetia still run more or less
on these lines, the latter almost exclusively so. Kadyrov
still keeps the subsidies, but now forces other Chechens to
contribute to rebuilding infrastructure. Derided as the
grand projects are for their facade-deep garishness, they are
still an improvement over the vast desolation that the
Russians made and called "peace."
¶8. (C) Chechnya is still a profit center for the federal

government, despite the missing subsidies. A Chechen
xxxxx told us
that Chechnya pays more income tax into the federal treasury
than neighboring Dagestan, which has nearly three times the
population (a tribute to Kadyrov's persuasiveness?). One
federal moneymaker that Kadyrov is trying to "devolve" is
oil. At present, the Chechen xxxxx told us, Rosneft
spends Rs 800-900 million per year in Chechnya to produce oil
it sells for Rs 30 billion. The xxxxx suggested that it

Cable Viewer
might be advantageous to end subsidies and create a

"Chechneft" analogous to the autonomous subsidiaries of
Rosneft that exist in republics such as Dagestan and
Tatarstan. Kadyrov has put a toe in this pond by contracting
with an American company to recover crude oil from a "lake"
of petroleum runoffs near Groznyy, cleaning up the
environment in the process.
The Godfather of All the Chechens

---------------------------------
¶9. (C) Kadyrov is starting to act as the arbiter of disputes

among Chechens outside Chechnya. The prime example is his
intervention in a mafia-style dispute involving his chief
subordinate Sulim Yamadayev, commander of the "East"
Battalion. Yamadayev and some of his men raided the Samson
Meat Factory in St. Petersburg on September 15, 2006
(interesting to speculate how they got there from Chechnya,
fully armed). Yamadayev was apparently acting as enforcer
for a Chechen from Kazakhstan who had an ownership claim that
put him at odds with the factory's manager, also a Chechen.
Charges were pressed by the visibly battered manager, but he
dropped them after two of his brothers were abducted in
Chechnya. This would not have been considered unusual if the
manager were not a well-connected Chechen, but Samson's owner
is the Moscow Industrial Bank, whose president, Abubakar
Arsamakov, is a relative of the plant's manager, and has
clout in the Moscow Chechen community. Perhaps as a result
of his intervention, in late April Kadyrov ordered Yamadayev
to return the missing brothers. Yamadayev protested that he
was not holding them or involved in their disappearance. Our
sources tell us the two brothers are probably sleeping with
the fishes.
¶10. (C) The incident illustrates not only the Russia-wide

reach of Kadyrov; it also fits into his drive to eliminate
potential rivals. Tensions have been close to boiling with
Yamadayev since April. Kadyrov has told a friendly Duma
member that he will not allow Yamadayev's brother Ruslan
"Khalit" Yamadayev to run for re-election as Duma member for
Chechnya. At that point there will be a confrontation.
Ingathering of Lands
--------------------
¶11. (C) Kadyrov is clearly the strongest figure in the

Caucasus. When earlier this month his 10-year old nephew
crashed a car he was driving (!) and lay in a coma, notables
Moscow 00003579 003 of 005

Cable Viewer
from all over felt it necessary to make the pilgrimage to

Groznyy to condole with Kadyrov. Like his influence,
Kadyrov's ambitions extend well beyond Chechnya's borders, in
the first instance to its neighbors. Chechen Parliament
Speaker Dukvakha Abdurakhmanov floated the idea of uniting
the three republics of the Northeast Caucasus (Ingushetia,
Chechnya and Dagestan) into one larger unit, in which
Chechens would form the largest single ethnic group. In
addition, Chechen officials sometimes recall longstanding
claims to the Novolak district of Dagestan, which was part of
Chechnya before the 1944 deportations. After the Chechens
were moved out, the Soviets gave the land to ethnic Laks and
changed the borders to keep the Laks (a high percentage of
whom were members of the Communist Party) within Dagestan.
¶12. (C) The most likely annexation, however, is the

recreation of the pre-Dudayev Checheno-Ingush Republic.
Well-placed sources have told us Kadyrov is moving towards
this goal, and that it solves a few of Moscow's problems, as
well. Ingushetia still has an intractable dispute with North
Ossetia over the Prigorodnyy Rayon, and any leader of
Ingushetia is forced to sound the drums about the issue at
every available opportunity. It would not be so high a
priority on Kadyrov's agenda.
¶13. (C) Reintegration is also a way of getting rid of Ingush

leader Zyazikov, with whom the Kremlin is intensely
dissatisfied, according to xxxxxxxxxxxx. Zyazikov has failed to
deal
with the Islamist insurgents -- who, it is well known, have
thoroughly penetrated Ingushetia's security organs. In
addition, his level of corruption, and his shamelessness in
flaunting it, is embarrassing even when compared to other
provincial leaders in the Caucasus.xxxxx told us that Zyazikov
recently
hosted xxxxx at dinner in his palace, built by his
predecessor. During the dinner, whose conversation focused
on Ingushetia's dire need for outside humanitarian aid,
Zyazikov mentioned that he was not fond of the palace, and
was going to build another one not far away.
The Challenges Ahead

--------------------
¶14. (C) Despite his successes to date in consolidating power,

Kadyrov's path is not strewn with roses. Kadyrov's
neutralization of potential rivals is not cost-free.
Chechens are notoriously independent, and when conditions are
not to their liking, or they are treated with less than the
respect they think is their due, they have an easy place of
refuge: the mountains, with the fighters. Rumor has it that
already 100 of Yamadayev's followers have taken to the hills

Cable Viewer
with their weapons. As we have reported, the

nationalist-separatist insurgency is nearly dead -- most
fighters were co-opted by Kadyrov and his father; the
remainder scattered and without much capacity to strike. The
Islamist insurgency is thriving, but it is outside Chechnya,
in Dagestan, Ingushetia and Kabardino-Balkaria. But a new,
large injection of disaffected gunmen could breathe new life
into one of these groups, or sweep them up within themselves.
¶15. (C) Another immediate challenge is the Russian

presidential transition of 2008. Kadyrov's deal with Putin
is a highly personal one. Putin allows, supports and
finances Kadyrov's power and scope of activity in Chechnya,
and agrees to abide by the guarantees of immunity and
impunity Kadyrov has given his 10,000-15,000 fighters, mostly
former rebels like Kadyrov himself. In return, Kadyrov is
personally loyal to Putin and ensures that his fighters turn
their guns on separatists, Islamists and other enemies of the
Russian state. Kadyrov is happy with this arrangement, and
was among the first and loudest to support a third term for
Putin.
¶16. (C) The succession unleashes unknowns into this cozy

deal. On the most basic level, the chemistry might just not
be right between Kadyrov and Putin's successor. In such an
exceptionally personal deal inside a Russian system already
much more personal and less institutional than its western
counterparts, that lack of personal rapport can have
significant effects. Perhaps for that reason Kadyrov in
April hosted one of the two leading candidates, Dmitriy
Medvedev, on a tour of Groznyy (Presidential Administration
staffer Machevskiy, who was in Chechnya with Medvedev, said
the discussions focused only on the National Projects).
¶17. (C) Another unknown is what policies the successor will

follow. Most Russian officials we have spoken to tell us
that Kadyrov is a necessity "for now." What happens if the
next Russian president decides he can dispense with Kadyrov
and slowly begins to move against him? Aleksey Malashenko of
Carnegie pointed out to us that the investigation into the
Moscow 00003579 004 of 005
Politkovskaya murder can be used as a "card" to play against

Kadyrov when the time is right -- since Kadyrov's actual
guilt or innocence will have no bearing on whether he is
accused of the murder. To prevent such action, Malashenko
believes, Kadyrov is busy demonstrating how essential he is
to keeping the peace in Chechnya; Malashenko even suggested
to us that there might be collusion between Kadyrov and the
separatist forces of Doku Umarov to keep up a regular stream

Cable Viewer
of armed incidents and attacks. According to Presidential

Administration staffer Machevskiy, however, continuity will
be provided by Presidential Administration deputy Vladimir
Surkov. Surkov, whose father was a Chechen, has developed
close ties with Kadyrov.
¶18. (C) A third unknown about the succession is whether

Kadyrov will try to over-reach and renegotiate the current
deal to get even better terms. Kadyrov's rejection of a
treaty officially setting out the power-sharing arrangement
between Moscow and Groznyy was seen as a demonstration of
loyalty, in that any such document would have to retain a
mention of Chechnya's sovereignty. Two other factors may be
at work, however. First, Caucasians prefer to deal orally
rather than set conditions down in black and white, according
to xxxxx, who contrasts this
characteristic with the legalism of the Tatars (whose own
treaty was recently adopted). Second, Kadyrov might see such
a document as limiting, rather than confirming, his rights,
especially when he starts dealing with Putin's successor.
Kadyrov sees Putin as a father, according to all accounts; he
will scarcely view the successor with the same deference.
Implications For Governance

---------------------------
¶19. (C) We should not have any delusions that Kadyrov's

political achievements or economic successes or even the
amelioration of Chechnya's human rights situation herald an
era of justice and rule of law. His style of governance
implies regulation of violence, but not reluctance to use it;
organization of corruption, but not its overall reduction;
and recognition of property and other rights of Chechens when
outsiders try to violate them, but not with relation to the
Chechen elite itself. At the same time, we should place this
governance in the context of governance in the Russian
regions: as former Parliament Speaker Ruslan Khasbulatov
told us, "it is only a radical form of what is found in all
the regions," with the exception of the application of
violence -- which Russians and Chechens justify by the
insurgent and Islamist threat, and which is common to all
parts of the North Caucasus. The other characteristics -- of
institutionalized corruption, dubious property rights, and
general impunity of officials -- are present to a greater or
lesser degree in many Russian regions.
Implications for the U.S.

-------------------------
¶20. (C) U.S. engagement with Chechnya will be limited not by

Kadyrov but by Moscow, at least until after next year's
presidential transition. We have been told bluntly that

Cable Viewer
Russia wants to reduce international presence in the North

Caucasus, convinced that "Western" powers will use that
presence to destabilize the transition. Given those
suspicions and parameters, our most thoughtful interlocutors
believe that "limited engagement" is the best policy. A
number of them have cited conferences (in Chechnya) and
exchanges as the best programs to implement that engagement.
¶21. (C) Even that approach presents difficulties.

Presidential Administration staffer Machevskiy discussed with
us the possibility of holding a model UN at Groznyy
University, with U.S. and other western participants and
advisors. He promised to draft a proposal, but after it went
through his administration's vetting process it came back as
a Model EU, to be held not in Groznyy but in Rostov. There
is clearly no appetite in the Kremlin for ending the
Chechens' isolation.
¶22. (C) Exchanges remain as the best vehicle for U.S.

interests. Up to now, programs such as the Young Leadership
Program and Open World have been hampered by security
concerns from making the visits necessary to select qualified
candidates from Chechnya. The U.S. should place priority on
making such recruitment possible.
Coming to Terms with Ground Facts

---------------------------------
¶23. (C) Beyond the technical aspects of how best to engage,

we need to review the context in which we have placed
Chechnya. Previous conceptions of the Chechen tragedy, still
current in certain think-tank circles, simply do not apply --
Moscow 00003579 005 of 005
the thesis that there is a real government up in the hills,

deriving its legitimacy from the electoral mandate Aslan
Maskhadov won ten years ago, that is still locked in battle
with the Russian invaders and their usurping compradors.
That situation ended years ago, with the execution of the
deal between Putin and Kadyrov senior: the insurgents won,
just a different set of insurgents; those still in the hills
no longer represent any more of a moral authority or
commitment to democracy than does Kadyrov.
¶24. (C) This is sad for those who were outraged by Russian
atrocities in the first two wars and hopeful for the success
of the Maskhadov government between them. Sad, but true.
Attempts to portray Doku Umarov as a fighter for democracy,
or even a fighter against Russian misrule, simply do not
correspond with reality. This does not mean we can accept

Cable Viewer
the Russian version that all opponents of Kadyrov are

international terrorists, or that flaws in Umarov's behavior
in any way justify Kadyrov's. But it does mean that we need
to engage with the Chechen government, at an appropriate
non-Kadyrov level, as a prerequisite for engagement with the
Chechen people -- and Chechen welfare, so bound up with the
stability of the North Caucasus, the containment of Islamic
extremism, and the direction that Russia ultimately takes, is
a major U.S. interest.
Burns

Cable Viewer
Check our Reddit
Twitter this
Digg this page
Viewing cable 07MOSCOW4599, ZHIRINOVSKIY’S NEW SIDEMAN:

LUGOVOY
subject.
Discussing cables

2007-09-18 2010-12-01 Embassy
18:06 23:11 Moscow

Cable Viewer
VZCZCXRO0832
PP RUEHDBU
DE RUEHMO #4599/01 2611806
ZNY CCCCC ZZH
P 181806Z SEP 07
FM AMEMBASSY MOSCOW
SIPDIS
SIPDIS
EO 12958 DECL: 09/18/2017

TAGS PGOV, PINR, RS
SUBJECT: ZHIRINOVSKIY’S NEW SIDEMAN: LUGOVOY
Classified By: Political Officer Bob Patterson: 1.4 (d).
Summary
-------
¶1. (C) The mercurial Vladimir Zhirinovskiy staged yet another

impressive act of political theater on September 17 with the
surprise announcement that the number two position on his party’s
ticket would be filled by Andrey Lugovoy, the former FSB officer
accused by Scotland Yard of orchestrating the murder of Aleksandr
Litvinenko. The announcement made Zhirinovskiy’s party, the LDPR,
front-page news in virtually all major Russian newspapers and
drew greater attention to what had been a lackluster kick-off to
the party’s Duma campaign. Opinions vary in Moscow as to the
reasons behind the move. Zhirinovskiy may hope that the hoopla
surrounding the appointment of Lugovoy will revive the apparently
flagging fortunes of his party. End summary.
¶2. (SBU) In the past months, it appeared that LDPR was on the
ropes, crippled by high-level defections of top party officials
to other parties. The most recent blow was the loss of long-time
Zhirinovskiy confederate Aleksey Mitrofanov, who defected to Just

Cable Viewer
Russia (SR) in late August. LDPR had fallen behind in the funding
race as well, dropping to last place among the top four parties
in the second quarter of 2007, according to the Central Election
Commission. Public opinion polling, such as a mid-September
survey by the Fund for Public Opinion, showed the party scraping
along at the seven-percent minimum required for joining the new
Duma. Levada polling showed LDPR losing about a percentage point
every month since May.
¶3. (SBU) One would not have believed that LDPR was in trouble,
though, to judge by Zhirinovskiy’s swagger and bravado over the
past two days. His stem-winding oration before his party’s
congress in Moscow on September 17 provided a broad overview of
Zhirinovskiy’s peculiar views on international relations,
domestic policies, and party politics, punctuated with his usual
histrionics about Western interference and perfidy. He also
boldly predicted that LDPR would win a minimum 15 percent of the
Duma seats, and that he had hopes for twenty percent. (His
electoral math sees United Russia winning half of the seats, with
12 percent for the Communist Party and 8 percent for Just Russia
(SR). He dismissed all other parties, including the “liberal”
parties of Yabloko and the Union of Right Forces, out of hand.)
Moreover, he spun the defection of LDPR members to other parties
as a “purge” of the party that served only to strengthen it
against its rivals, particularly SR, which he referred to as a
party of “mercenaries.”
¶4. (SBU) Perhaps to set the stage for Lugovoy’s debut,

Zhirinovskiy reserved special vitriol for the role played by
Great Britain over the centuries and today in denying Russia its
“proper place” in the world, according to press reports. At a
press conference on September 18, he launched a diatribe against
a hapless reporter from Voice of America, who had asked Lugovoy
about the need to deal with the problem of international criminal
investigations. During his tirade, Zhirinovskiy blasted the
United Kingdom for sponsoring terrorism in Chechnya (implying as
well that the U.S. was behind the events of September 11). He
criticized London for its campaign of “espionage and lies,”
insisting that the British government was responsible for
Litvinenko’s death.
¶5. (U) Throughout the press conference, Lugovoy appeared

uncomfortable in his new role as straight man for Zhirinovskiy.
It also appeared that he had been reprimanded by his new boss

Cable Viewer
about the rank order in the party. Lugovoy pointedly retracted

his statement of a day earlier that he had ambitions to run for
President, coyly saying that every Russian would want to be the
leader of such a great country, before gamely insisting that
Zhirinovskiy had the mettle to replace Putin. Lugovoy seemed
completely surprised by a question about his plans as a deputy
were he to win a Duma seat, and he said something about working
to be helpful to the government and the Russian people.
(Zhirinovskiy interrupted to say that Lugovoy’s military and
business experience made him an excellent candidate for the Duma
committees on defense and security, particularly in dealing with
questions of economic security.) When asked, Lugovoy reiterated
his statement of September 17 that he was not seeking a position
in the Duma in order to win immunity for he was protected, “like
all citizens,” by the Constitution.
Comment
-------
¶6. (C) Embassy interlocutors disagreed on the reasons behind

Zhirinovskiy’s enlistment of Lugovoy. Chief Editor of “Economy
and World Relations” Andrey Ryabov suggested that
MOSCOW 00004599 002 OF 002
the Kremlin had pushed Lugovoy onto the LDPR list in order to
somehow provide him with protection. Political technologist
Stanislav Belkovskiy told us that it was Zhirinovskiy’s idea to
bring Lugovoy on board in order to improve LDPR’s hand in the
campaign. Belkovskiy thought that regional elites would see the
selection of Lugovoy who, he said, enjoyed the personal
protection of Putin, as a sign of Kremlin favor for Zhirinovskiy
and his party. It remains to be seen how Lugovoy’s new role will
affect LDPR’s election prospects. It seems odd that the Kremlin,
which presumably would want to see the furor over the Litvinenko
matter end as soon as possible, has kept the matter front and
center by sanctioning Lugovoy’s entry into Russian politics. Burns

Cable Viewer
Twitter this
Digg this page
Viewing cable 07MOSCOW5154, ADDRESSING RUSSIAN ARMS SALES




Discussing cables

2007-10-26 2010-12-01 Embassy
07MOSCOW5154 SECRET
02:02 23:11 Moscow
VZCZCXRO9740
PP RUEHDBU
DE RUEHMO #5154/01 2990225
ZNY SSSSS ZZH
P 260225Z OCT 07
FM AMEMBASSY MOSCOW

Cable Viewer

RUEKJCS/SECDEF WASHDC PRIORITY
S E C R E T SECTION 01 OF 04 MOSCOW 005154
SIPDIS
SIPDIS
EO 12958 DECL: 10/09/2017

TAGS PREL, ECON, MARR, MASS, PARM, PINR, PINS, RS
SUBJECT: ADDRESSING RUSSIAN ARMS SALES
REF: A. STATE 137954 B. MOSCOW 3207 C. MOSCOW 3139 D. MOSCOW
3023 E. MOSCOW 557 F. MOSCOW 402
Classified By: Ambassador William J. Burns. Reasons 1.4 (b) and

(d).
¶1. (C) Summary: FM Lavrov’s disinterest in establishing an
expert level dialogue on arms sales begs the question of how best
to address our concerns over Russia’s arms export policy. Russian
officials are deeply cynical about our motives in seeking to
curtail Russian arms exports to countries of concern and the
threatened imposition of U.S. sanctions has not proven successful
so far in modifying Russian behavior. Russia attaches importance
to the volume of the arms export trade, to the diplomatic doors
that weapon sales open, to the ill-gotten gains that these sales
reap for corrupt senior officials, and to the lever it provides
the Russian government in stymieing American interests. While
Russia will reject out of hand arguments based on the
extraterritorial application of American sanctions, Russian
officials may be more receptive to a message couched in the
context of Russian international obligations and domestic
legislation, the reality of American casualties, and the backlash
to Russian strategic interests among moderate Sunni governments.
In making our argument, we should remember that Russian
officialdom and the public have little, if any, moral compunction
about the arms trade, seeing it instead as a welcome symbol of
Russia’s resurgent power and strength in the world. End Summary
-------------------------
Russian Arms Sales Matter
-------------------------
¶2. (C) Russian arms sales are consequential, totaling

approximately USD 6.7 billion in 2006, according to official
figures. This amount reflects a 12 percent increase over 2005,
and a 56 percent increase since 2003. Russian arms sales are
expected to total at least USD 8 billion in 2007. Russia has made
a conscious effort to improve after-sales customer service and
warranties, which has added to the attractiveness of its weapons.

Cable Viewer
As a result, Russian weapons command higher prices than

previously. Russia is ranked second only to the United States in
arms sales to the developing world, and a sizeable portion of its
arms trade is with countries of concern to us.
¶3. (C) While no sales were reported in 2006 to Iran, Syria, or

Sudan, in 2007 Iran reportedly paid Russia USD 700 million for
TOR-M1 air defense missile systems. While Syrian economic
conditions are a natural brake on trade with the Russians, as a
matter of principle the GOR is prepared to sell “defensive”
equipment such as anti-tank missiles and Strelets (SA-18) surface-
to-air missiles, as well as upgrade MiG-23 fighters. The GOR
barred the sale of Iskander-E tactical missiles to Syria only
after intense international pressure. Venezuela remains a growth
market, with arms transfers in 2006 totaling more than USD 1.2
billion, including 24 Su-30MK2 fighter-bombers and 34
helicopters. Russia has an “open arms” approach to Venezuela, and
whether it’s the transfer of more than 72,000 AK-103 assault
rifles or negotiations for the prospective sale of three Amur
class submarines (valued at USD 1 billion), Russia is prepared to
entertain Chavez’s grandiose regional visions.
¶4. (C) Defense experts emphasize that the American and European
domination of traditional NATO markets and capture of new
entrants (and old Soviet customers) from Central and Eastern
Europe means that Russia must court buyers that fall outside the
U.S. orbit. By definition, Iran, Syria, and Venezuela are good
markets for Russia because we don’t compete there.
¶5. (C) While concrete numbers are hard to come by, our best
figures indicate that Russian arms sales to its traditional big-
ticket customers -- China and India -- are growing. Russian
experts, however, predict a declining trajectory in the medium
term. In 2006, Russia completed approximately USD 1.4 billion in
sales to China, including eight diesel submarines and 88 MI-
171’s, which means the PRC only narrowly edged out Chavez as
Russia’s most important customer. Russian defense experts
underscore that as China’s technological sufficiency and
political influence grow, the PRC will develop increasing
military self-sufficiency and greater ability to challenge Russia
as a supplier. At the same time, sales to India totaled only USD
360 million. Russia and India, in fact, have signed arms deals
worth USD
MOSCOW 00005154 002 OF 004
2.6 billion, but not all deliveries and payments have been made.
While Russian experts still downplay the ability of the U.S. to
displace Russia in the Indian arms market, for reasons of cost
and the legacy of decades’ old dependence, they recognize
increasing American inroads and growing influence. Other notable
Russian markets include Algeria, Czech Republic, Vietnam, South
Korea and Belarus.

Cable Viewer
-----------------------
A Legalistic World View
-----------------------
¶6. (S) As the recent 2 2 consultations confirmed, Russian

officials defend arms sales to countries of concern in narrow
legal terms. In answering our demarches, MFA officials always
identify whether the transfer is regulated by one of the
multilateral arms controls regimes (e.g. Wassenaar Group, MTCR,
etc.), UN resolutions, or Russian law. Senior officials maintain
that Russia does take into account the impact on the stability of
the region in determining whether to sell weapons and shares our
concern about weapons falling into terrorists’ hands. This
Russian decision-making process has led to a defacto embargo on
weapons transfers to Iraq, where Russia is concerned over
leakages to Iraqi insurgents and Al-Qaida; to a hands-off policy
towards Pakistan, the country Russia views as the greatest
potential threat to regional stability (with then-Russian Foreign
Minister Igor Ivanov ruling out weapons sales to Pakistan as far
back as 2003); and to a moratorium on “offensive” systems to Iran
and Syria. Concern over leakage has prompted Russia to tighten
its export controls, with the recent institution of new
provisions in arms sale contracts for Small Arms and Light
Weapons (SALW) that require end-user certificates and provide
Russia the right to inspect stockpiles of weapons sold.
¶7. (S) What Russia has not done is accept our strategic calculus
and rule out the possibility of sales to Iran, Syria, Sudan, or
Venezuela. The arguments made are broadly similar:
-- With Iran, we are told that that Russia will not sell any
weapon that violates a multilateral or domestic regime, nor
transfer any item that could enhance Iranian WMD capabilities.
Sales, such as the TOR-M1 air defense missile system, are
justified as being defensive only, and limited by their range of
12 kilometers. While DFM Kislyak told us October 18 that he was
unaware of any plans to sell Iran the S-300 long-range surface-to-
air missile system, MFA officials previously told us that such
sales, while under review, would not violate any Russian laws or
international regimes.
-- With Syria, Russia also argues that its transfers are

defensive in nature, and points to its decision to halt the sale
of MANPADS. The MFA maintains that Russian weapons used by
Hizballah in 2006 were not a deliberate transfer by the Syrian
government, but involved weapons left behind when Syrian forces
withdrew from Lebanon. Russia argues that tightened end-user
controls will prevent any future transfers.
-- With Sudan, the GOR denies any current arms trade with the
regime, and maintains that Russia has not violated UN sanctions
or Putin-initiated decrees. However, based on our demarches, it

Cable Viewer
is clear that -- in contrast to Syria -- Russia has adopted a

“don’t ask, don’t tell” approach to Sudan’s adherence to its end-
use requirements for its existing inventory of Russian/Soviet
weapons.
-- With Venezuela, both MFA officials and Russian experts believe

that a “Monroe doctrine” mentality, and not real concerns over
regional stability, is behind U.S. demarches.
-----------------------------------
What Is Behind the Russian Calculus
-----------------------------------
¶8. (C) A variety of factors drive Russian arms sales, but a

compelling motivation is profit - both licit and illicit. As
former Deputy Prime Minister and senior member of the Duma
Defense Committee Anatoliy Kulikov told us, “Russia makes very
bad cars, but very good weapons,” and he was among the majority
of Russian defense experts who argued that the laws of
comparative advantage would continue to propel an aggressive arms
export policy. While Russian defense budgets have been increasing
25-30 per cent for the last three years, defense experts tell us
that export earnings still matter. The recent creation of
RosTechnologiya State Corporation, headed by Putin intimate
Sergey Chemezov, which consolidates under state control
RosOboronExport (arms exports), Oboronprom (defense systems),
RusSpetsStal (specialized steel production), VSMPO (titanium
producer), and Russian
MOSCOW 00005154 003 OF 004
helicopter production, is further proof of the importance the
Putin government places on the industry.
¶9. (C) Likewise, it is an open secret that the Russian defense
industry is an important trough at which senior officials feed,
and weapons sales continue to enrich many. Defense analysts
attribute Russia’s decision to sell weapons that the Venezuelan
military objectively did not need due to the interest of both
Venezuelan and Russian government officials in skimming money off
the top. The sale of Su-30MK2 fighter-bombers was cited as a
specific example where corruption on both ends facilitated the
off-loading of moth-balled planes that were inadequate for the
Venezuelan Air Force’s needs.
¶10. (C) A second factor driving the Russian arms export policy
is the desire to enhance Russia’s standing as a “player” in areas
where Russia has a strategic interest, like the Middle East.
Russian officials believe that building a defense relationship
provides ingress and influence, and their terms are not
constrained by conditionality. Exports to Syria and Iran are part
of a broader strategy of distinguishing Russian policy from that
of the United States, and strengthening Russian influence in
international fora such as the Quartet or within the Security

Cable Viewer
Council. With respect to Syria, Russian experts believe that

Bashar’s regime is better than the perceived alternative of
instability or an Islamist government, and argue against a U.S.
policy of isolation. Russia has concluded that its arms sales are
too insignificant to threaten Israel, or to disturb growing
Israeli-Russian diplomatic engagement, but sufficient to maintain
“special” relations with Damascus. Likewise, arms sales to Iran
are part of a deep and multilayered bilateral relationship that
serves to distinguish Moscow from Washington, and to provide
Russian officials with a bargaining chip, both with the
Ahmedinejad regime and its P5 1 partners. While, as a matter of
practice, Russian arms sales have declined as international
frustration has mounted over the Iranian regime, as a matter of
policy, Russia does not support what it perceives as U.S. efforts
to build an anti-Iranian coalition.
¶11. (C) A third and related factor lurking under the surface of
these weapons sales is Russia’s inferiority complex with respect
to the United States, and its quest to be taken seriously as a
global partner. It is deeply satisfying to some Russian policy-
makers to defy America, in the name of a multipolar world order,
and to engage in zero-sum calculations. As U.S. relations with
Georgia have strengthened, so too have nostalgic calls for
Russian basing in Latin America (which Russian officials,
including Putin, have swat down). While profit is still seen by
experts as Russia’s primary goal, all note the secondary thrill
of causing the U.S. discomfort by selling weapons to anti-
American governments in Caracas and Damascus.
----------------------------
Taking Another Run At Russia
----------------------------
¶12. (C) As FM Lavrov made clear during the 2 2 consultations,
Russia will not engage systematically at the expert level on its
arms export regime. While the prospect of Russia changing its
arms export policy in response to our concerns alone is slim, we
can take steps to toughen our message and raise the costs for
Russian strategic decisions:
-- Although U.S. sanctions are broad brush, the more we can

prioritize our concerns over weapons sales that pose the biggest
threat to U.S. interests, the more persuasive our message will
be. Demarches that iterate all transactions, including
ammunitions sales, are less credible. Since Lavrov has rejected
an experts-level dialogue on arms transfers, it is important to
register our concerns at the highest level, and to ensure that
messages delivered in Moscow are reiterated in Washington with
visiting senior GOR officials.
-- In the context of potential violations of international

regimes and UNSCR resolutions, Russia needs to hear the concerns

Cable Viewer
of key European partners, such as France and Germany. (In the

wake of the Litvinenko murder and subsequent recriminations, UK
influence is limited.) EU reinforcement is important for
consistency (although Russia tends to downplay the “bad news”
that European nations prefer to deliver in EU channels, rather
than bilaterally).
-- Regional actors should reinforce our message. Russian weapon

sales that destabilize the Middle East should be protested by the
Sunni Arab governments that have the most to lose. Given Russia’s
competing interest in expanding sales
MOSCOW 00005154 004 OF 004
to Saudi Arabia and the Gulf states, the protests of our moderate
Arab partners could also carry a price tag for Russian defiance.
The same is true for Latin America, whose leaders to date have
not made sales to Chavez an issue on their bilateral agenda with
the Russians.
-- The appearance of Russian weapons in Iraq, presumably

transferred by Syria, and the prospect of American and coalition
casualties as a result could change the calculus of Russian sales
to Damascus. The more evidence that we can provide, the more
Russia may take steps to restrict the Asad regime. At the same
time, we need to be prepared for the Russian countercharge that
significant numbers of weapons delivered by the U.S. have fallen
into insurgent hands.
-- Finally, providing the Russians with better releasable

intelligence when arguing against weapons transfers to rogue
states is essential. Our Russian interlocutors are not always
impressed by the evidence we use to prove that their arms are
ending up in the wrong hands. While we doubt Russia will
terminate all its problematic sales for the reasons described
above, more compelling evidence could lead the GOR to reduce the
scope of its arms transfers or tighten export controls.
------------
Final Caveat
------------
¶13. (C) There are few voices in Russia who protest the sale of
weapons to countries of concern and no domestic political
constraints that tie the hands of Russian policymakers on this
score. The pride that Russian officialdom takes in the arms
industry as a symbol of Russia’s resurgence is largely shared by
average Russians. American concerns are interpreted cynically, as
the disgruntled complaints of a competitor, and viewed through
the prism of a 1990’s story line in which the West seeks to keep
Russia down, including by depriving it of arms markets. Burns

Cable Viewer
Twitter this
Digg this page
Viewing cable 08MOSCOW587, RUSSIA-UKRAINE RELATIONS: YUSHCHENKO AND




Discussing cables

2008-03-01 2010-12-01 Embassy
13:01 21:09 Moscow
VZCZCXYZ0007
OO RUEHWEB
DE RUEHMO #0587/01 0611332

ZNY CCCCC ZZH
O 011332Z MAR 08

Cable Viewer
FM AMEMBASSY MOSCOW
C O N F I D E N T I A L MOSCOW 000587
SIPDIS
SIPDIS
E.O. 12958: DECL: 02/21/2018

TAGS: PREL PGOV ECON UP RS
SUBJECT: RUSSIA-UKRAINE RELATIONS: YUSHCHENKO AND
TYMOSHENKO IN MOSCOW
REF: A. MOSCOW 561

¶B. MOSCOW 265
¶C. MOSCOW 147
Classified By: Ambassador William J. Burns. Reasons 1.4 (B/D).
¶1. (C) Summary. After many last-minute changes and

rescheduling involving Tymoshenko's visit, the February 12-13
Putin-Yushchenko Intergovernmental Commission (IGC) convened
without Tymoshenko's participation. GOR officials expressed
dismay at the complicated dynamics between Yushchenko and
Tymoshenko, which required "delicate balancing" on its part.
The IGC session focused on an action plan for all areas of
the bilateral relationship for 2008, while two sensitive
issues -- NATO and gas -- loomed large. A recent series of
small-scale disagreements have also added to the friction.
Compounded by the Yushchenko- Tymoshenko feud, the
on-again-off-again gas deal between Russia and Ukraine is
continuing, with Gazprom threatening another cut-off unless
the debt is paid by March 3. Moscow analysts view bilateral
relations as hostage to Ukrainian domestic political games,
where different forces vie for a better position in next
year's presidential election through attempts to gain an
upper hand over deals with Russia. End summary.
Yushchenko-Tymoshenko "Farce"
-----------------------------
¶2. (C) Yushchenko made two visits to Moscow within two weeks
this month, for the February 12-13 IGC meeting, where he met
bilaterally with Putin, and the February 21-22 CIS Informal
Summit, where he did not (ref A). Yushchenko's travel was
punctuated by PM Tymoshenko's many-times-delayed visit.xxxxx,
told us February 26 that the uneasy dynamics
between Yushchenko and Tymoshenko complicated the IGC

Cable Viewer
proceedings. He termed the situation "disappointing" at best

and "bewildering" otherwise. Tymoshenko, whose February 11
visit, one day before Yushchenko's to avoid the overlap with
him, was delayed till February 21 at Ukraine's request and
then was moved forward by one day for the same reason.
xxxxx said that GOR officials simply could not understand
how the president and prime minister of a country could work
effectively under such odd circumstances.xxxxx, the
GOR's goal was to conduct a meaningful dialogue with the
Ukrainian counterparts in all six commissions without making
the already delicate situation worse. The GOR, which had
prepared for Tymoshenko's participation in the IGC, had to
match the Ukrainian decision not to include her in its team
by pulling PM Zubkov from the session.
Putin-Yushchenko Bilateral
--------------------------
¶3. (C) The two presidents, during their three-hour long

"good" discussion, covered a wide range of bilateral issues,
notably the gas deal, NATO and the dispute over the two
countries' common history. Putin also urged Yushchenko to
take a more active role in the resolution of the Transnistria
conflict.xxxxx that Putin and Yushchenko clashed
over NATO and the GOU's initiatives on Ukrainian national
heroes. Putin was not convinced by Yushchenko's insistence
that Ukraine's request of NATO MAP was not intended to be
anti-Russian.
NATO: Painful and All Encompassing

----------------------------------
¶4. (C) Prior to the Putin-Yushchenko IGC meeting, the GOR
repeatedly expressed its displeasure with Ukraine's NATO bid.
In a January 23 statement on Ukraine's pending request for a
NATO MAP, the MFA warned that further expansion of NATO could
produce a serious political-military upheaval that would
affect the interests of Russia (ref B). Citing the 1997
bilateral agreement laying out the Russian-Ukrainian
strategic partnership, the statement stressed that the
potential integration of Ukraine into NATO would force Russia
to undertake "appropriate measures." During a February 8
meeting with the Ambassador, DFM Karasin said that the GOR
was "disappointed" with the GOU's move (ref C). A positive
decision in Bucharest, Karasin said, would force Russia to
take strategic counter-measures. In his February 14 annual
press conference, Putin lashed out against Ukraine's MAP
request, saying that the majority of Ukrainian citizens were
against their country's NATO membership but Ukrainian leaders
did not ask their opinion, "What kind of democracy is this?"
he asked.

Cable Viewer
¶5. (C) Ukrainian xxxxx told us that Ukraine's interest in closer
relations with NATO -- for the first time as a consensus

decision by the three top leaders of the country -- had
triggered a "deja-vu reaction" from the GOR, which had
surprised no one in Ukraine, and had provoked a genuine and
more mature public discourse on NATO in Ukraine. Although
the topic was "painful" for Russia and was discussed in every
bilateral meeting on every level, xxxxx argued that
the GOR's response had been to date less emotional than in
the early post-Orange years. xxxxx acknowledged that during
Ukrainian National Security and Defense Council Secretary
Bohatyreva's January 29 visit to Moscow, all Russian
interlocutors, including FM Lavrov, Duma Speaker Gryzlov and
other Duma deputies, had expressed hostility to the Ukrainian
move.
¶6. (C) Moscow analysts predict that Ukraine's domestic lack

of consensus on membership and the lack of coordinated
support among NATO member states, combined with a slow-moving
NATO bureaucracy, could make the issue a long-term sore spot
in the relationship. Some argued that an "excessive" push by
the GOU could catalyze radical "counter measures" from the
GOR, including a possible re-examination of the status of the
Black Sea Fleet and GOR-funded activities in and around
Sevastopol.
Gas: Scheming Abounds on Both Sides

-----------------------------------
¶7. (C) Many viewed the January 24 arrest of Semyon

Mogilevich as only the tip of the iceberg of murky,
high-stakes gas deals, given his alleged involvement with
RosUkrEnergo, which became the key middleman in Russian gas
exports to Ukraine after Russia briefly cut off the gas
supply to Ukraine in January 2006. xxxxx noted that PM
Tymoshenko made the removal of the chain of intermediaries
between Gazprom and Ukraine, as well as raising the gas
transit fee through the Ukrainian territory, the central
theme of her February 20-21 visit. Although Yushchenko and
Tymoshenko shared the same goal of removing intermediary
agents in the gas deal, xxxxx said, the latter insisted on
the immediate removal of RosUkrEnergo from the deal. GOR
officials found her, xxxxx added, inflexible and less
trustworthy than Yushchenko.
¶8. (C) According xxxxx, the GOR was particularly not

pleased with Tymoshenko's idea of the White Stream Pipeline,
considering it another attempt to bypass Russia in bringing
Central Asian gas to Europe. Russia values Ukraine as the
key link to Europe, which can work only if the two countries
are "united" and "consistent," he added. xxxxxtold us

Cable Viewer
that Putin and Yushchenko talked over the phone on February

26 to discuss Ukraine's growing arrears and the absence of
the 2008 contract. In the meantime, bickering between
Gazprom and Naftogaz is continuing as of February 28 -- just
another sign of the fragility of the energy deal between the
two countries.
¶9. (C) xxxxx said that Yushchenko wanted more

transparency but preferred to avoid measures which would
further increase the price. Moscow Carnegie Center experts
emphasized to us that the GOR's priority is to have Ukraine
as a reliable economic partner, which would guarantee that
Russian gas (mostly Turkmen and Uzbek gas that transits
Russia) would flow to Europe without disruption. All
interlocutors agreed that until Gazprom's leadership
re-shuffle ended, no long-term deal could be made.
Beyond Gas
----------
¶10. (C) In 2007, the increase in the volume of bilateral

trade between Russia and Ukraine to USD 32 billion disguised
a decoupling of certain Russian-Ukrainian industries.
According to xxxxx Russia is slowly consolidating the
production cycle to do away with imported parts from Ukraine
in the areas where traditionally the two countries were
interdependent, such as aircraft and machine building. With
Ukraine's aspirations to NATO membership, Russia has already
begun to reduce its cooperation in military and technical
fields, as well. xxxxx said, "The quiet process of
economic disengagement in many important areas is under way."
¶11. (C) Some experts noted that GOR officials are reluctant
to talk about Ukraine's 13-percent plus economic growth in
2007, which -- despite Kyiv's political turmoil -- easily
surpassed Russia's 6 percent. They also argued that WTO entry
could give Ukraine leverage in its dealings with Russia.
They predicted, however, that the new Schengen regime could
hurt Ukraine, particularly in its West, as new members would
replace Ukrainian workers in Western Europe. The rise of
unemployment in western Ukraine could create more disparity
among Ukrainian regions, giving eastern Ukraine, which is

better incorporated into the Russian economy, an advantage.
Mazepa: Not Only A Tchaikovskiy Opera

-------------------------------------
¶12. (C) Ivan Mazepa has recently been added to the long list
of historical figures about whom Russian and Ukraine quarrel.
Since the GOR's pronounced dissatisfaction with the GOU's
attempt to reclassify the Holodomor as genocide, and Roman

Cable Viewer
Shukevich as a Ukrainian national hero, other cases have

emerged:
-- the GOU agreed to award political asylum to St. Petersburg

journalist Andrushchenko. Two more Russian journalists have
requested asylum as well.
-- on February 1, Ukrainian political analyst Serhiy Taran

was barred from entering Russia at St. Petersburg's Pulkovo
airport. The February 5 MFA statement confirmed the incident
without giving a reason for the denial, although it cited the
December 2007 refusal of Ukrainian authorities to grant entry
to Ukraine to two Russian political "analysts" -- Dugin and
Zarifulin.
-- Ivan Mazepa, portrayed in Pushkin's tale and

Tchaikovskiy's opera as a boorish Ukrainian soldier, who
joined Swedish King Karl XII against Peter the Great, is at
the center of the current dispute. The GOR termed the GOU's
plan to build a monument to Mazepa "anti-Russian," while
xxxxx scoffed at the Ukraine's planned commemoration of the
300th anniversary of the Battle of Poltava as "absurd." Some
experts thought that the need to create a Ukrainian national
identity was understandable, but choosing controversial
figures as heroes would not resonate well with the Russians.
More to Come: Black Sea Fleet and the Crimea

--------------------------------------------
¶13. (C) The Ukrainian Embassy expressed frustration with the

sluggish pace of Black Sea Fleet negotiations. With its
current agreement set to expire in 2017, the transfer of the
fleet to another location should be a major issue on the
bilateral agenda. The GOR, however, has consistently
insisted that it is "premature" to discuss details.
xxxxx said that the bilateral Black Sea Fleet
sub-commission, with its 6th session completed on January 24,
produced negligible results. In the meantime, the GOR has
intensified activities in Sevastopol through pro-Russian and
Russian-funded NGOs.
Comment
-------
¶14. (C) With the political process still in flux in Ukraine,

and the presidential transition in Russia underway, the
bilateral relationship is on hold, with pivotal issues
deferred until after May.
Burns

Cable Viewer
Twitter this
Digg this page
Viewing cable 08MOSCOW818, CONSTITUENCY FOR CHANGE? OBSERVERS

HOPEFUL AS



Discussing cables

2008-03-25 2010-12-01 Embassy
14:02 21:09 Moscow
http://www.spiegel.de/
VZCZCXYZ0000
OO RUEHWEB
DE RUEHMO #0818/01 0851435

Cable Viewer
ZNY CCCCC ZZH

O 251435Z MAR 08
FM AMEMBASSY MOSCOW
SIPDIS
SIPDIS
E.O. 12958: DECL: 03/25/2018

TAGS: PGOV PINR SOCI KDEM RS
SUBJECT: CONSTITUENCY FOR CHANGE? OBSERVERS HOPEFUL AS
INAUGURATION APPROACHES
Classified By: Ambassador William J. Burns. Reasons: 1.4 (b,d).
¶1. (C) Summary: As candidate Medvedev transitions into

"President-elect" Medvedev, commentators have begun to speak
with increasing frequency about political support for a
reform agenda, not only the expected backing from the
"liberal" economic elite, but also more broadly amongst
Russia's business leaders; federal and regional leaders; and
even among certain strata of society. While none would
describe this support as a mandate for change, Medvedev
appeared to be reaching out to this latent base in his
February 15 Krasnoyarsk speech and during his "seminar" on
the economy last week with business and financial experts.
Admittedly, Russia's political experts acknowledge that
Medvedev's core values are not known, and even less is
understood about how the Medvedev - Putin "tandemocracy" will
function, some believe that the prospects for a new "thaw"
are greater than they have been for years -- if Medvedev
chooses to take the reform path. Other observers, while
agreeing that change is necessary, believe that a Medvedev
who has spent 17 years in the shadow of Putin, is not the
person to get that ball rolling. End summary.
A Return to Reform?
-------------------
¶2. (SBU) In recent weeks, we have noted some signs that a

Medvedev presidency could return to the economic reform
agenda that Putin supported during his first years in office.
Economic analysts xxxxx point to the decision not to include
telecommunications on the list of "strategic sectors" as a
first sign of a potential shift away from the policies of
state capitalism. Further, Medvedev has publicly advocated

Cable Viewer
new policies to streamline the administrative requirements

for the fishing industry, potentially a step toward further
reducing the obstacles to other small businesses across the
country. xxxxx told us that they saw little chance that
Medvedev would tackle administrative reform "off the bat" --
suggesting a more assertive approach to promoting the
innovation economy than Moscow's economic watchers had
expected.
¶3. (SBU) Encouraging signs on economic reform, however, do

not necessarily translate into optimism for reform in the
political sphere. Medvedev has long been with Putin and has
given no indication that he is ready to wade into the
difficult waters of political reform. xxxxx identified the
challenge of
gaining control over the "coercive" elements of the
government - the FSB, the Investigative Commission under the
Prosecutor, and other organs controlled by Sechin's allies --
stands as problem number one for the new president,
particularly given their influence over the state
corporations and likely opposition to their reform. Actions
to assert his authority over those powerful players may
require Medvedev to look for broader support beyond the elite
in support of his reform agenda.
Constituencies for Change

-------------------------
¶4. (C) Taking a cue from observers who have focused their
hopes for change on differences between Medvedev and Putin,
the BBC Moscow's Konstantin Eggert argued to us that Putin
had successfully fashioned himself into the "people's
president" -- one who enjoyed the support of the man on the
street and was able to convert that image into unassailable
popularity. Medvedev, Eggert thought, was not that sort of
man. His personality, background, and temperament suggest
that he would appeal primarily to Russia's intellectual and
technical elite, and to middle class businessmen. There is
some evidence that this stratum is ready for change and could
provide a constituency for reform, if Medvedev were to pursue
a new strategy. The educated middle classes, according to
Eggert, are irritated by the gap between what they have
accomplished in their lives and the fact that lack of
institutions means they remain at the mercy of bureaucrats,
whether they be the traffic police, ministry officials intent
on shaking them down, or members of the judiciary should
their troubles cause them to end up in court. Eggert thought
that this quietly restive part of the population could be a
potent source of support, but is unlikely on its own to
"stick its neck out" without leadership from the top.
¶5. (SBU) A recent Levada Center poll offers some evidence

Cable Viewer
that the looming succession and prospects for change

entertained in Krasnoyarsk have heightened expectations among
a significant minority. Twenty-three percent of those polled
expect that Medvedev will undertake liberal economic reforms,

while sixteen percent believe Medvedev will rely on the
middle class for support (only ten percent expected the same
from Putin when he became President). A reduced number
--from 52 percent for Putin to 38 percent-- believed that
Medvedev would rely on the "siloviki" as he proceeded with
his Presidency. A VTsIOM poll, taken in early March, shows
that 54 percent of respondents expected Medvedev to take
Russia on a more "democratic course."
Dissatisfaction within the Elite

--------------------------------
¶6. (C) xxxxx told us that, in addition to Medvedev's

potential constituency in the electorate, there is support
for resuming the gradual economic reforms that Putin had
begun in his first term, but then abandoned in his second.
According to xxxxx, Deputy Prime Minister Kudrin, Sberbank's
German Gref, multi-billionaire Roman Abramovich, and others
had lobbied for Medvedev as successor in the year preceding
Putin's decision. They, and others like Minister of Regional
Development Dmitriy Kozak (although no friend of Medvedev's)
formed a small, but respected and potentially potent core
group for reform within the Administration. xxxxx thought
that Medvedev might bring additional figures with similar
sympathies into his administration.
¶7. (C) Conversations since the election suggest that support

for a change of course extends beyond the Kremlin walls.
"xxxxx have
separately suggested to us that quiet discontent is the norm
among many -- even those in the United Russia party -- in the
Duma, but that few are willing to lift their heads above the
pack unless they have reason to believe that prospects for
change are real. xxxxx hoped that the economic problems
would ultimately force Medvedev to change course in order to
salvage his presidency.
Will Medvedev Meet the Challenge?

---------------------------------
¶8. (C) As xxxxx told

us: "Medvedev is the best of all possibilities." xxxxx who
had met with Medvedev twice over the years, described him as
"ready to hear sharp criticism," and "ambitious." xxxxx shared
xxxxx
measured optimism about Medvedev who, "wants power," and
would use the corruption campaign he had promised to launch

Cable Viewer
to make inroads on the "siloviki."
¶9. (C) xxxxx agreed that concrete steps would be necessary

in order to overcome the pervasive "cynicism" and "apathy" of
those hoping for more. Gauging the number of such people has
been complicated by the lack of an organization or party for
them to affiliate with. The personalities at the head of the
standard, western-leaning Yabloko and Union of Right Forces
parties have worn thin and street opposition of the sort
promoted by Other Russia has no appeal for the middle class.
¶10. (C) Separately, xxxxx told us xxxxx "on projects I cannot

talk
about," he was convinced Medvedev was looking for ways to
signal change. The President-elect was adamant on the need
for internet freedom and the inability of the government to
control satellite airwaves. Moreover, xxxxx argued that
Medvedev was sensitive to the repercussions of the
administration's heartless approach to former Yukos VP
Aleksanyan's medical condition, although Medvedev was
unlikely to expend political capital at the outset to tackle
this case. xxxxx emphasized that the average Russian
citizen was "as far as the stars" from Western liberal values
-- seeing even the limited liberalism that Medvedev
represents as beyond the pale of what a "free and fair"
election would generate. For a frustrated journalist like
himself, xxxxx posited that Medvedev offered a reasonable
route to reform that the "radicals" such as Kasparov and
Limonov did not.
The Tandem Factor

-----------------
¶11. (C) Whatever Medvedev's intentions about pursuing a

reform agenda may be, much will depend on how the
Medvedev-Putin "tandemocracy" will function; something most
observers suspect even Putin and Medvedev do not understand
completely. Some suggest, and Medvedev seemed to agree in
his "Itogi" interview, that all power resides in the
presidency and, sooner or later, Medvedev will eclipse Putin

as first among equals. They see in Putin's stress on
continuity, efforts to elaborate a strategy to 2020, and
comments that there is no daylight between him and Medvedev
on foreign policy, a tacit acknowledgment that Putin's
ability to chart the course has been curtailed with Medvedev
in the President's seat. It follows for them that a
diminished Putin will therefore remain Prime Minister only
long enough to ensure a smooth transition before bowing out.
¶12. (C) Others are less certain. xxxxx believes that Putin did

Cable Viewer
his best to
handicap Medvedev in preparing him for the presidency.
Unlike Putin, the President-elect has no network in the
Kremlin or the regions, unlike Putin who, xxxxx said, on
becoming President, could count on the loyalty of the
security services throughout the country. xxxxx thought the
"siloviki's" continued loyalty to Putin would cause them to
undercut any of Medvedev's efforts at reform or
liberalization. In any event, xxxxx said, "Medvedev has
worked for 17 years in Putin's authoritarian shadow" without
revealing any liberal impulses. Why would they appear now?"
Comment
-------
¶13. (C) Under Putin, Russians have seen an improvement in

their lives and the stabilization of the political sphere.
Medvedev comes from a different generation and outlook than
his predecessor and he seems to "get it" that Russia needs
reform in order to develop. And there is a potentially
influential stratum of support that is quietly hoping for
change and waiting for leadership. The question remains as
to how far Medvedev is willing to go, particularly under
Putin's watchful eye.
Burns

Cable Viewer
Check our Reddit
Twitter this
Digg this page
Viewing cable 08MOSCOW932, SOLZHENITSYN AND METROPOLITAN

KIRILL ON RUSSIA,
subject.
Discussing cables

2008-04-04 2010-12-02 Embassy
06:06 07:07 Moscow

Cable Viewer
VZCZCXYZ0003
PP RUEHWEB
DE RUEHMO #0932/01 0950657

ZNY CCCCC ZZH
P 040657Z APR 08
FM AMEMBASSY MOSCOW
SIPDIS
SIPDIS
EO 12958 DECL: 04/03/2018

TAGS KDEM, PGOV, PHUM, PINR, RS
SUBJECT: SOLZHENITSYN AND METROPOLITAN KIRILL ON RUSSIA,
MEDVEDEV, UKRAINE
Classified By: Ambassador William J. Burns. Reason: 1.4 (d).
¶1. (C) Summary: In separate conversations recently, Aleksandr

Solzhenitsyn and Metropolitan Kirill criticized the decision to
recognize Kosovo’s independence and sharply condemned plans for
Ukraine to move closer to NATO. Solzhenitsyn, who is partially
paralyzed by a stroke, but remains alert and very engaged in
current events, as his April 2 Izvestiya article on the Holodomor
demonstrated, joined Kirill in voicing his concerns about poverty
and the widening gap between rich and poor in Russia. Kirill
again expressed optimism about prospects for better relations
with Roman Catholic Pope Benedict and described his intention to
attempt to jump-start an ecumenical dialogue under the auspices
of the UN and, in the United States, via the National Council of
Churches. Both Solzhenitsyn and Kirill were optimistic about
prospects for Russia under Medvedev. End summary.
Solzhenitsyn on Town Hall Democracy, Medvedev, Kosovo, Ukraine

and NATO
------------------------------------

Cable Viewer
¶2. (C) In a recent meeting, writer Aleksandr Solzhenitsyn

received the Ambassador at his home outside Moscow. Solzhenitsyn,
who will turn 90 this December has been in declining health for
some time. A stroke has left his left arm paralyzed and his hand
gnarled, but Solzhenitsyn’s legendary energy was undiminished,
and he was alert, spoke clearly, and, as the conversation showed,
actively engaged with the events of the day. With Solzhenitsyn
was his wife Natalya, who followed the conversation carefully,
and did not hesitate to contradict her husband when she thought
it necessary.
¶3. (C) As he had in a 2007 Der Spiegel interview, Solzhenitsyn

positively contrasted the eight-year reign of Putin with those of
Gorbachev and Yeltsin, which he said had “added to the damage
done to the Russian state by seventy years of Communist rule.”
Under Putin, the nation was re-discovering what it was to be
Russian, Solzhenitsyn thought, although he acknowledged that many
problems remained; among them poverty and the widening gap
between rich and poor.
¶4. (C) Solzhenitsyn enthusiastically told the Ambassador of the

need to develop grassroots democracy through instruments of local
self-government. Recalling his time in the United States,
Solzhenitsyn called the Vermont town hall meetings he had
witnessed the “essence of democracy.” Putin’s decision, following
Beslan, to have governors appointed instead of elected had been a
“mistake,” Solzhenitsyn thought. He also dismissed the on-again,
off-again conversations in Russia about the need to construct a
genuine party system as “irrelevant.” Solzhenitsyn thought it was
necessary to elect officials directly, so that they could be held
accountable for their actions.
¶5. (C) President-elect Medvedev struck Solzhenitsyn as a “nice,

young man.” Solzhenitsyn had not met him, but he guessed he was
up to the “enormous challenge of repairing the damage done to
Russian citizens during the Soviet period.” His reference to the
Soviet period caused Solzhenitsyn to worry that young Russians
did not sufficiently appreciate the dangers of Soviet communism.
It was essential, as well, that Russia re-assure the former
Soviet states that it fully appreciated how “deformed” the Soviet
system was, and was aware of the crimes, like the Holodomor, it
had committed against Soviet citizens. (Note: on April 2,
Solzhenitsyn joined the debate here about the famine in Ukraine

Cable Viewer
in a brief article published in Izvestiya. In it, he recalls the

1921 famine that stalked the Urals and rejects the notion that
the 1932 - 1933 famine was a an act of “genocide” against the
Ukrainian people. Solzhenitsyn’s article sparked a mini-
controversy here, with Father Gleb Yakunin taking Solzhenitsyn to
task for “attacking the first CIS state that condemned the
communist genocide.”)
¶6. (C) Solzhenitsyn repeated to the Ambassador his objection to

independence for Kosovo. Why, he asked rhetorically, should the
Serbs be held responsible for the sins of Milosevic? He was
critical of plans to move Ukraine closer to NATO, although he
didn’t belabor the point. The more significant moment, he
thought, was the reaction of the United States after 9/11, when
Putin attempted to extend a helping hand. He cooperated in paving
the way for U.S. bases in Central Asia and joined other foreign
leaders in extending Russia’s condolences to the American people.
Solzhenitsyn hoped for a time when that spontaneous gesture by
Putin would be fully reciprocated.
¶7. (C) Solzhenitsyn told the Ambassador that he continues to

work actively in the archives, and it was clear from the topical
references sprinkled throughout his conversation that he followed
current events actively.
Kirill on Ecumenicalism, Medvedev, the Hazards of Prosperity

----------------------------------
¶8. (C) In a separate meeting, Metropolitan Kirill re-visited

themes he had touched on in the media and in earlier
conversations with Ambassador. Kirill seemed to be in good health
was preoccupied as always with the, in his view, excessive
emphasis on the individual in the West, and stressed the need to
harmonize traditional human rights concerns with “morality and
ethics.” Economic progress had been a two-edged sword for Russia,
Kirill thought. With prosperity, Russians had “lost something”
and Kirill, who is Metropolitan of Smolensk and Kaliningrad,
pointed to less prosperous Smolensk as “better preserved” than
Moscow or St. Petersburg.
¶9. (C) Kirill spoke highly of a UN-sponsored effort to bridge

the gap between East and West by seeking an alliance of
civilizations. Kirill was attempting to interest the UN in his

Cable Viewer
efforts to sponsor ecumenical dialogue especially, he said, in

the Middle East. As he has in past conversations, Kirill
contrasted Roman Catholic Pope Benedict favorably with his
predecessor John Paul II, and again held out the prospect of
significant improvement in Russian Orthodox - Roman Catholic
relations. Also on the ecumenical front, Kirill reported to the
Ambassador efforts, via the Russian Orthodox Church of America
and the National Council of Churches to reach out to Protestant
denominations in the U.S.
¶10. (C) Kirill joined Solzhenitsyn in identifying enduring

poverty as one of the chief challenges that President Medvedev
will face. He called poverty as a by-product of corruption and
red tape which were “stumbling blocks” to progress in Russia.
Kirill, who unlike Solzhenitsyn has had a number of direct
conversations, was optimistic that the President-elect was equal
to the tasks ahead, and predicted that he would concentrate on
Russia’s many socio-economic problems.
¶11. (C) While Kirill largely echoed Solzhenitsyn’s arguments

against Kosovo independence, he was even sharper than
Solzhenitsyn about NATO expansion. Ukraine was “not ready,” and
NATO membership could cause a split in that country’s population,
and created turmoil in Eastern Europe, he maintained. BURNS

Cable Viewer
Twitter this
Digg this page
Viewing cable 08MOSCOW1187, MOSCOW'S RUMORMILL ON SUCCESSION




Discussing cables

2008-04-28 2010-12-01 Embassy
14:02 21:09 Moscow
VZCZCXRO9808
PP RUEHBW
DE RUEHMO #1187/01 1191419
ZNY CCCCC ZZH
P 281419Z APR 08
FM AMEMBASSY MOSCOW

Cable Viewer

SIPDIS
SIPDIS
E.O. 12958: DECL: 04/25/2018

TAGS: PGOV PHUM SOCI PINR RS
SUBJECT: MOSCOW'S RUMORMILL ON SUCCESSION
REF: 2007 MOSCOW 05153
Classified By: CDA Daniel Russell. Reason: 1.4 (d).
Summary
-------
¶1. (C) Putin's actions since the March elections have

heightened political uncertainty about the shape of the
Medvedev-Putin tandem. Lacking hard information, everything
from Putin's decision to head United Russia to administrative
changes at the White House is seen by the chattering class
through the prism of the "succession question" - Putin's
dilemma of leaving office without losing influence. Within
the commentariat, two general lines have emerged. The
"hand-off scenario" sees Putin marshaling control to protect
his successor as regent before handing off the torch. The
second, "Putin triumphant," scenario predicts a power shift
from the Kremlin to the White House. Between the two are
many variations, each with expectations of some conflict
between Medvedev and Putin. In any case, Putin's tactical
wiles have expanded his political options but have also
deepened uncertainty about his intentions. End summary.
A Season of Elite Uncertainty

-----------------------------
¶2. (C) Moscow is simmering with expectation about the coming

transition as evidenced by the wide range of theories,
speculation, and rumors (but no hard information) that our
contacts are circulating. The center of the debate remains:
how does a healthy, young, and popular politician like Putin
retain influence after leaving the Kremlin in a system that
accrues a preponderance of influence to the presidency (ref
a). His decision to head, but not join, United Russia;
warnings about the need to clean out that party; and the

Cable Viewer
Kremlin's preference for secrecy about cadre changes have

reinvigorated debate about the Medvedev-Putin tandem and
deepened the uncertainty among the elite about the shape of
things to come. Coupled with the natural nervousness about a
change in administration (with reports that ministers and
other top officials are afraid to travel out of concern of
being "out of touch" during cadre selection), the tempo of
rumor-mongering and speculation has increased exponentially.
¶3. (C) Despite their differences on a host of issues, our

contacts all expected competition within the elite to
increase. They predicted that struggles could affect the
development of relations between Medvedev and Putin,
notwithstanding what appears to be their shared values and
close personal ties. Already, we have seen evidence that
some within the elite are taking advantage of perceived
weakness during the transition to pursue their agendas:
Mikhail Fridman's moves against TNK-BP and Sergey Chemezov's
accelerated campaign to draw more state assets into
Rostekhnologiya.
¶4. (C) Elite disquiet stems as well from fears about

impending changes in government cadres at the central and
regional level. xxxxx accentuated Putin's call to reform United
Russia, predicting a personnel shake-up that mysteriously
would "change everything" yet would not involve the emergence
of new faces in the leadership ranks. He expressed concern
that United Russia's "monopoly of the political process"
could be broken by splits within the party, although he did
not consider the new "clubs" within the party as posing a
danger in that regard. xxxxx also told us that a shake-up
of the regional elite was already under way, with the
replacement of the Irkutsk governor and the "voluntary"
resignation of the Starvopol governor. Others have likewise
predicted changes in the cadre ranks, but envision Putin
positioning Medvedev to clean house, be it to remove
Yeltsin-era warhorses like Moscow Mayor Luzhkov or Tatarstan
President Shaymiyev xxxxx or remove troublesome siloviki hetmen
xxxxx.
¶5. (C) xxxxx argued that the

general uncertainty among the political elite flows from
Putin's own indecisiveness. Rather than following a
pre-ordained strategy, xxxxx described Putin as following
a path of tactical decision, from the selection of Medvedev
as successor to the snap United Russia congress April 21-22
where Putin agreed to take the helm. Moreover, xxxxx
posits that because Putin has not ruled out a return to the
Presidency, he faces the constraints of wanting to preserve
the power of the presidency, even as he seeks insurance

Cable Viewer
Moscow 00001187 002 of 003
against the possibility that Medvedev could use that power

against him. xxxxx agreed, speculating that Putin is seeking
insurance against Medvedev in the coming months. Although
xxxxx was largely dismissive of Medvedev, considering him
less a politician than an inexperienced administrator, he
still sees risk to Putin as he takes over as Premier - an
institutionally weaker position, with responsibility for
unpopular decisions.
¶6. (C) There are others, however, who describe Putin's

decisions as creating the foundation for a transition to a
more institution-based political system. An article in
xxxxx argued that the creation of a second center of power in the
White House mitigates the risk of another round of
re-distributing property or a change in the general course
for the country. xxxxx told
us that Medvedev has no recourse but to tap public support
for his putatively more liberal agenda, much as Mikhail
Gorbachev did in his struggle with the more conservative
elements of the then Communist Party of the Soviet Union. In
the long run, xxxxx sees the potential for an evolution
away from the inter-clan struggles to a public competition of
ideas.
The Party of Putin

------------------
¶7. (C) Indicative of the uncertainty in Moscow, our

interlocutors discussed a wide range of theories about
Putin's decision to accept the United Russia leadership. As
an advocate of the "Putin Triumphant" scenario,
xxxxx saw Putin maneuvering the Duma, United
Russia, and the regional elite to check the predominate
influence that Medvedev will enjoy thanks to the
constitution's bias in favor of the presidency. xxxxx
explained his bid to head United Russia as a means to balance
Medvedev's authority to appoint governors, by giving Putin
control over the regional legislatures, whose approval is
required before a gubernatorial candidate can take office.
Moreover, xxxxx argued that by heading United Russia, Putin
will be able to dominate the Duma and Federation Council and
thus control the passage of legislation.
¶8. (C) xxxxx also saw Putin's leadership of the

party as providing the basis for constraining Medvedev's
ability to remove him from the premiership. xxxxx alleged that
PA Head Sergey Sobyanin was working on legislation that would
constrain the President's ability to dismiss the Premier,
although she offered no information about how this could be

Cable Viewer
done without altering the constitution, which Putin has

repeatedly stated he will not do. In their xxxxx envisioned a
similar motive, but a different
tactic in Putin's decision. By controlling the majority
party in the Duma, Putin insures that any move to remove him
from the Premiership results in a political crisis. (The
United Russia-controlled Duma could exercise its
constitutional prerogative and refuse to approve Medvedev's
choice for a replacement premier, leading to new elections
and potential stalemate.)
¶9. (C) Not all of our contacts shared the view that Putin's
recent moves represented a shifting of the balance of
influence. xxxxx dismissed Putin's move to head United
Russia as sign of his desperation, vice a strong tactical
move to check Medvedev. xxxxx characterized United Russia as
an amalgamation of careerists and bureaucrats, which is loyal
to whoever holds power. Comments by xxxxx that United
Russia is guided by self-interest, without any common values,
appear to support xxxxx assertions. xxxxx called Putin's
decision to take the party lead a mistake, seeing the
processes underway now, including the sensational article
about his marriage plans to gymnast-turned-Duma deputy Alina
Kabayeva, as part of the inevitable "de-mystification" of the
soon to be former president.
A New Kind of Premiership

-------------------------
¶10. (C) Against the backdrop of Putin's decision to head

United Russia, news about the government structural and
personnel changes have heightened speculation about a
metamorphosis of the Premiership. Press reports last week
told of a new paradigm in which virtually all responsibility
outside of defense, security, and the protection of societal
order that lay with the government (and ultimately the
Premier) would be pushed down to the ministries. Initial
reactions interpreted this as shaping a new order in the
government, in which the Premier sets the "strategic"
Moscow 00001187 003 of 003
direction and holds the expected new stratum of technocratic

Deputy Premiers to account for the actions of the ministries.
As such, proponents of this view argued that Putin is hoping
that he can stand above the fray, blaming his subordinate
"scapegoats" for any potential government failings or
missteps. Others, however, see this less as a result of
grand politics and more of a sensible re-alignment of duties
- "housecleaning" before Putin takes office.

Cable Viewer
¶11. (SBU) There has also been considerable speculation about

a reworking of the relationships between the President, the
Premier, and the governors. The Kremlin and Minister for
Regional Development Kozak took quick action to squash rumors
floated in the business newspaper Vedemosti early this month
that control over the regional plenipotentiaries (polpreds)
would shift to the government, although Kozak but did not
rule out future changes in the role and jurisdiction of the
polpreds. xxxxx noted that changing the polpreds may not
be necessary, since the government has responsibility for
assessing the "effectiveness" of regional leaders and thus
could shape the president's approach to gubernatorial
appointments.
Comment
-------
¶12. (C) The "succession question" continues to dominate the

Russian political scene, despite the remarkable changes that
have taken place over the past six months. Putin has proven
his ability to reshape the landscape and create his own
opportunities by accepting the Premiership under Medvedev as
well as the mantle of "party leader" for United Russia,
creating what some see as a potential alternative power
center in the White House. Nevertheless, his success in
spinning out alternatives for himself has served to prolong
the agony of the "succession question" and fostered
uncertainty among the elite. Uncertainty multiplies the risk
of conflict between the elite clans over influence. Putin's
problem can be seen as a Hobbesian security dilemma - the
greater his personal security, the less security there is for
the other players, including his chosen successor Medvedev.
Russell

Cable Viewer
Twitter this
Digg this page
Viewing cable 08MOSCOW1215, MORE FROM THE RUMOR MILL: READING PUTIN'S



Discussing cables

2008-04-30 2010-12-01 Embassy
14:02 21:09 Moscow
VZCZCXRO2125
RR RUEHBW
DE RUEHMO #1215/01 1211414
ZNY CCCCC ZZH
R 301414Z APR 08
FM AMEMBASSY MOSCOW

Cable Viewer

SIPDIS
SIPDIS
E.O. 12958: DECL: 04/29/2018

TAGS: PGOV PINR ECON RS
SUBJECT: MORE FROM THE RUMOR MILL: READING PUTIN'S
PRE-INAUGURATION SIGNALS
REF: MOSCOW 1187 AND PREVIOUS
Classified By: CDA Daniel Russell: Reasons 1.4 (b, d).
¶1. (C) Summary: Among some Kremlin-critics and

establishment figures, speculation has grown over the past
month that Putin and his entourage may be laying the
groundwork for a return to the Kremlin, rather than
safe-guarding the transition of President-elect Medvedev.
While our contacts speculate that Putin has kept his
political options open, some point to his self-conceived
"historic mission" to return Russia to its former glory,
concerns over a rapacious and self-devouring elite, and
distrust of Medvedev's long-term ambitions as fueling recent
maneuvers to further entrench the out-going president's
powers. Acknowledging Medvedev's personal loyalty to Putin,
observers point to competition among staff and rumors over
Mrs. Medvedev's ambitions for her husband. Rumors
notwithstanding, little of this speculation has a factual
underpinning, but it does reflect continual nervousness among
the elite about Putin's intentions and the fate of the
tandemocracy. Putin's intentions and actions have rarely (if
ever) been correctly forecast over the past year by Moscow's
political elite. End Summary
Putin: Once and Future President?

---------------------------------
¶2. (C) Some Moscow politicians and Kremlin watchers are

reading post-electoral and pre-inaugural political maneuvers
(ref a) as signs of the possibility that Putin could return
to the Kremlin, either at the end of Medvedev's term or -- in
the event of underperformance or disloyalty -- before. As
Kremlin opponent xxxxx told the Ambassador, Putin's
continued domination of political life, the focus on his
transition to the White House (rather than on Medvedev's

Cable Viewer
shift to Putin's Kremlin office), the possible creation of a

Cabinet-like host of Deputy Prime Ministers, and Putin's
decision to take up leadership of the ruling party, has
fueled theories that Putin could be keeping his options open
to return as President. Putin's xxxxx and
others have stressed, is how to override the political
predisposition that leads Russians to look to the Kremlin
(whether to the Tsar or the General Secretary) for authority.
As president, xxxxx argued, Medvedev's stature will be
enhanced both constitutionally and psychologically.
¶3. (C) Acknowledging today's shift in political speculation

away from the hypothesis that Putin would serve a limited
period as Prime Minister in order to safeguard Medvedev's
transition, prominent xxxxx
argued that Putin's decision to lead United Russia was about
protecting his own interests, and not those of Medvedev.
Absent a pre-existing gentleman's agreement with the
President-elect, xxxxx characterized Putin's choreography
of the last several weeks as a "humiliation" of his
successor. xxxxx
told us that, based on blowback from Kremlin ideological guru
Vladislav Surkov over critical xxxxx articles, it was clear to
him that "Putin wants to be the leading guy." As an example
of Kremlin sensitivities, xxxxx pointed to Surkov's quick
intervention in the wake of an NG article that described
Medvedev's prospective rule as a period of liberal thaw.
Because the term "thaw" connotes Khrushchev's initial reign,
xxxxx noted, it begged the question of "who was Stalin"
and implied that change was needed, rather than the
continuation of Putin's course.
Putin's Historic Mission, Internecine Clans
-------------------------------------------
¶4. (C) Pointing to Putin's sense of historical mission in

returning Russia to its previous world power status, analysts
tell us that intra-elite divisions remain too poisonous and
the prospect for elite conflict too great for Putin to remove
himself from a power construct that he (and not a system of
checks and balances) polices. xxxxx who also serves on
Medvedev's think tank, questioned why Putin sought
"dictatorial powers" over the party, given his preexisting de
facto command of United Russia. His decision was "alarming,"
xxxxx claimed, because it demonstrated the uncertainty
that exists in Putin's entourage over the political
transition, despite the fact that "all executive powers will
be shared between Putin and Medvedev" and the government
machinery will be "as focused on Putin, if not more."
xxxxx separately suggested that Putin's party leadership
was an additional layer of protection should Medvedev become
too confident with the presidential perquisites and seek to

Cable Viewer
modify Putin's imprimatur.
Moscow 00001215 002 of 003
¶5. (C) As a long-time advocate of a third presidential term

for Putin, xxxxx editor xxxxx told us
that Putin had been hemmed in by his desire for international
legitimacy, even though amending the Russian constitution to
remove term limits would have been "easy and understandable
in the context of Russia's stage of political development."
xxxxx speculated that the de facto rejiggering of power
between the Kremlin and White House was awkward, but
necessary, given Putin's self-imposed requirement of
respecting the Russian constitution. While xxxxx argued
that the concentration of power was a "temporary phase" in a
"long, very long" evolution to more democratic institutions,
liberal critics like former Duma deputy xxxxx see
the accumulation of power -- with Putin in "de facto and de
jure control over the club of the top administrative and
economic nomenclature" -- as an end in itself. As xxxxx
noted, the flurry of presidential orders shifting Kremlin
staff to White House positions in advance of Putin becoming
Prime Minister on May 8 were an interesting reflection of
Putin's mentality: rather than have "little Dima" sign the
presidential decrees authorizing the transfer of cadre, Putin
continued to dictate the terms of his premier-ship, revealing
how lopsided this partnership will be at the outset.
¶6. (C) Amidst the political uncertainty, the idea of Russia

evolving into a parliamentary republic is batted around, but
mostly batted down. While both xxxxx and RAO UES and SPS
opposition party deputy xxxxx were at a loss to
explain Putin's decision to head United Russia absent a
strategy based on constitutionally reconfiguring Russia's
political system, each conceded Putin's public opposition to
the idea. Given Putin's domination of politics since
Medvedev's March 2 electoral win, many viewed his comments at
the one-year memorial of former President Yeltsin's death,
that the presidency would "continue to serve the Russian
people and protect (Russia's) sovereign interests," as
significant. xxxxx confirmed to us that during the course
of his xxxxx with Medvedev,
the President-elect was insistent that Russia required a
presidential system and dismissive of public speculation over
the "tandem."
¶7. (C) xxxxx while discounting the role of opposition

parties at present, warned against GOR policies that created
competition between bureaucrats rather than parties. While
Russia was not a democracy, xxxxx maintained that it was

Cable Viewer
on a path that could lead to democracy, but only if more

pluralism was built into the system. The problem with the
ruling party's self-conscious imitation of Japan's Liberal
Democratic Party, with its creation of "clubs," he stressed,
was that United Russia lacked intra-party ideological
coherence and competition. At the end of the day, it would
not matter what liberal United Russia Duma deputy Pligin
thought, but rather how the Kremlin told him to vote that
would determine the outcome of any Duma contest. The
challenge for Medvedev, xxxxx posited, will be to
reintroduce faith in the system among middle class voters,
who stayed home or spoiled their ballot, that their voice
matters. It is that portion of the electorate, xxxxx
stressed, that the government will need to rely upon for
support for economic modernization.
Staff and Spousal Ambitions

---------------------------
¶8. (C) The maneuvering begs the question of what Putin and
his entourage could possibly fear in the reflexively loyal
Medvedev. Ekspert magazine speculated that the mere
formation of an economic think-tank (ref b) by the
President-elect had been enough to raise concerns of a rival
team and vision. When asked, xxxxx did not dispute the
analysis, acknowledging that between the outgoing and
incoming presidents' staff there were elements of
competition. Even on minor issues, such as extending press
invitations for the inauguration, xxxxx said that
confusion over lines of authority had led to delay. United
Russia Duma deputy and Kremlin spin-doctor Sergey Markov
admitted to us that the transition had produced legislative
and political paralysis, with everyone "waiting for
directions" on how to work with the tandem.
¶9. (C) The role of Medvedev's wife, Svetlana, in generating

tensions between the camps remains the subject of avid
gossip. xxxxx hinting at Svetlana's reputation for
aggressive social climbing, xxxxx was less discrete, calling her
a "stupid and
ambitious" woman, who purportedly had already drawn up a list
of officials who should "suffer" for their betrayal of
Moscow 00001215 003 of 003
Medvedev when First Deputy Prime Minister Sergey Ivanov was

ascendant.
Comment
-------

Cable Viewer
¶10. (C) In the absence of facts, speculation is driving

Moscow political currents. While it will be months before we
get a better sense of the division of labor between Medvedev
and Putin, the sense here is that the pre-inaugural
atmospherics have diminished, rather than buttressed
Medvedev's political stature and fueled nervousness among
Moscow's hyper-sensitive political elite as to whether the
succession question has been definitively resolved. Putin
has been master of the political surprise over the past year
and consistently bamboozled the chattering class and pundits
as to his long-term intentions.
Russell

Cable Viewer
Twitter this
Digg this page
Viewing cable 08MOSCOW1991, RUSSIA RETURNS TO THE HOLY LAND




Discussing cables

2008-07-11 2010-12-01 Embassy
12:12 21:09 Moscow
VZCZCXRO4887
PP RUEHROV
DE RUEHMO #1991/01 1931227
ZNY CCCCC ZZH
P 111227Z JUL 08
FM AMEMBASSY MOSCOW

Cable Viewer

INFO RUEHXK/ARAB ISRAELI COLLECTIVE
SIPDIS
E.O. 12958: DECL: 07/11/2018

TAGS: PGOV PREL ECON SOCI MARR IS RS
SUBJECT: RUSSIA RETURNS TO THE HOLY LAND
REF: A. MOSCOW 517

¶B. MOSCOW 1255
Classified By: Acting Political Counselor Robert Patterson for

reasons
1.4 (b/d).
¶1. (C) Summary: The return to Russia of historic properties

in Jerusalem and the West Bank, and the end of the visa
regime for travel to Israel, are the latest indicators of
deepening Russia-Israel relations that depend significantly
upon personal contacts as well as official channels. The
properties, which will be used to establish a Russian
consulate in Jerusalem and cultural and religious centers,
will enhance Russia's soft power by increasing the Russian
presence at a time when immigration to Israel has declined.
Russia continues to benefit economically from these emigres,
many of whom have established businesses in Israel that trade
with Russia or have returned to their homeland to work in
Russia's booming economy. The end of the visa regime is
expected to significantly increase personal and economic
contacts between these countries that currently enjoy deep
cultural ties and the strongest political relationship in
their often stormy history. Close ties to Israel do not
appear, however, to have had much impact on Moscow's
"pragmatic" positions on issues of concern to Tel Aviv, such
as arms sales to Syria. End summary.
Israel and Palestinians Return Russian Property

--------------------------------------------- --
¶2. (U) Russia will receive several properties in Jerusalem

and the West Bank from the Palestinian Authority (PA) and
Israeli government, which are returning land that Russia
originally acquired in the nineteenth century for the
construction of Orthodox churches and facilities for Russian
pilgrims to the Holy Land. During a June ceremony, the PA
formally gave Russia ownership of three plots of land in the

Cable Viewer
West Bank that will be the site of new Russian cultural and
religious centers. Russian and Israeli officials announced
in May that they were close to finalizing the terms for
Russia to take ownership of a large compound in Jerusalem
that includes St. Sergiev Church and an adjacent building
originally used as a religious mission. As one of his last
acts as President, Putin ordered that the GOR provide $4
million to restore the church.
Return to the Holy Land Symbolizes Russian Revival

--------------------------------------------- -----
¶3. (C) xxxxx

told us that the return of historically Russian property in
the Holy Land was a symbol of Russia's post-Soviet cultural
and religious renaissance. The properties, which had either
been abandoned by the USSR or sold to Israel, would be used
for facilities for religious pilgrims and tourists, as well
as Russian language schools and clinics that would benefit
local residents, including the large number of
Russian-speaking Israelis. The MFA was also considering
establishing a consulate at the compound in Jerusalem.
xxxxx said that at present Russia had only its Embassy in
Tel Aviv and a small Mission in Ramallah to handle relations
with the PA. A presence in Jerusalem would help provide
assistance to the many Russian citizens living in Israel as
well as Russian tourists, whose numbers, presently estimated
at 200,000 per year, were expected to grow significantly
after the Russian-Israeli agreement to end visa requirements
became operative in September.
¶4. (C) xxxxx explained that countries in the region

recognized that providing land to Russia was a means to
improve bilateral relations and attract Russian tourists. In
addition to Israel and the PA, Jordan had already given
Russia land on the banks of the Jordan River historically
associated with Jesus' baptism (ref A). Lebanon also had
property that once belonged to Russia, although discussion of
its return had not begun.
¶5. (C)xxxxx that GOR

interest in the Holy Land property was part of the Russian
desire to "return" to the Middle East in various ways:
politically by resurrecting ties with Arab states that had
been allowed to atrophy during the 1990s, diplomatically by
enhancing its role in the Middle East Peace Process, and
culturally by re-establishing a physical presence for the
Russian State and Church. For Russians, it was only fitting
that the Orthodox Church should have a presence in Jerusalem
along with the other ancient Christian dominations already
present: the Roman Catholics and Greek Orthodox. xxxxx
said that the PA hoped that giving Russia land for cultural

Cable Viewer
and religious facilities would attract Russian tourists to

the West Bank.
Moscow 00001991 002 of 003
Working for the "Glory of Russia"

---------------------------------
¶6. (U) xxxxx explained that while the GOR would formally
own the properties in Israel and the West Bank, the
non-governmental Imperial Orthodox Palestine Society (IOPS)
would run the cultural and religious facilities. Although
the GOR referred to the IOPS, founded in 1872, as "one of the
oldest" Russian NGOs, the organization is not independent of
the government. The head of Russia's Audit Chamber, Sergey
Stepashin, is Chairman of the IOPS and MFA Middle East
Department Deputy Director Oleg Ozerov heads its
international section. The MFA and IOPS signed a memorandum
of cooperation in June to facilitate GOR assistance to the
organization's efforts to develop Russia's "humanitarian,
scientific and cultural relations" with states in the Middle
East. During a June address, FM Lavrov highlighted IOPS'
role in "peoples' diplomacy" that supplemented official
political contacts. He praised IOPS for helping Russia's
spiritual revival and demonstrating that the country was an
"influential and respected power." Lavrov closed, "In order
to worthily return to the Holy Land, we must work...to the
glory of Russia!"
¶7. (U) IOPS will depend financially upon Russian oligarchs,

including Roman Abramovich and Israeli resident Arkadiy
Gaidamak, both of whom reportedly agreed to the GOR request
that they pay expenses related to acquiring the compound in
Jerusalem.
Russian Emigres: A "Bridge" Between Russia and Israel

--------------------------------------------- ---------
¶8. (C) xxxxx said that the immigration of Russian Jews to

Israel created a bond between the two countries that had a
profound impact on Russia-Israel relations. This did not
mean that those who fled Soviet anti-Semitism had pressured
their new homeland for closer ties with the country that had
repressed them. Instead they created in Israel a center of
Russian culture and formed a "bridge" between the countries.
xxxxx said that many
Russian-speakers in Israel maintained strong ties to their
homeland and some had even returned. The Israeli Embassy
estimated that "tens of thousands" of Israel's
Russian-speakers currently live and work in Moscow. xxxxx

Cable Viewer
said that he personally knew many Russian-speaking Israelis

who came to participate in Russia's economic boom. With
their knowledge of Russian language and culture, plus
university degrees and business experience gained in Israel,
Europe or the U.S., they could easily find opportunities here.
Emigres Create "Warm Feelings" for Israel

-----------------------------------------
¶9. (C)xxxxx, differentiated the Jews who fled Soviet oppression

and anti-Semitism in the 1970s and 1980s from those who left
in the 1990s to avoid the chaos and uncertainty of
post-Soviet Russia. The latter group did not leave as
"ideological enemies" and maintained positive feelings for
their homeland. Thanks to cable television and the Internet,
they have been able to maintain contact with Russia. While
this has been the experience of Russian immigrants who landed
in different countries, xxxxx said it was especially
acute in Israel where Russian-speakers were one-seventh of
the population. This played well within Russia, where a
Russian cultural foothold in the Middle East generated "warm
feelings toward Israel." During Israel's 2006 war with
Lebanon, Russian television showed Russian-speaking Israeli
soldiers, which helped heighten Russian sympathy for Israel's
situation. xxxxx cited public opinion polls that
showed Russians were more inclined to have a favorable
opinion of Israel than the U.S.
¶10. (C) xxxxx said that immigrants to Israel and

elsewhere extended Russia's cultural reach, which the GOR
recognized as a means to project at least the perception of
influence. For example, the World Congress of Russian Jewry,
an organization that represents Russian Jews in 35 countries
and receives government support, met in May in Jerusalem
where Russian Federation Council member Boris Shpigle said
that Russian Jews must cultivate a special relationship with
their homeland. xxxxx stressed that with the exception
of Ukraine and the Baltic, where Russia had serious political
concerns, the GOR saw its compatriots abroad not as a "fifth
column" but as a bridge between their homeland and adopted
countries. In Israel, a country of which some of Russia's
biggest oligarchs were citizens, the GOR hoped this would
provide opportunities for investment and give Russia access
to Israeli technology. Israeli investment might also come to
Moscow 00001991 003 of 003
Russia, as it did in the case of Lev Levayev, whose

development company is reportedly undertaking large-scale
projects in Moscow and will expand its existing jewelry
factory in Perm. xxxxx thought Russia-Israel trade,

Cable Viewer
which is estimated at $2.3 billion in 2006, could be several

times higher.
Immigration to Israel is "Dead"

-------------------------------
¶11. (C) While Russia continues to benefit from the presence

of its existing emigres in Israel, Russian immigration to
Israel is "all but dead" according to Leonard Terlitskiy, the
Hebrew Immigrant Aid Society's representative in the CIS.
Terlitskiy, who was among the first Jews to leave the USSR
during the Brezhnev era, told us that "anyone who wanted to
leave has already left." The Russian economy offered enough
opportunities and anti-Semitism is not the problem it once
was, allowing Jews to remain where they face less chance of
becoming a victim of terrorism than they would in Israel.
Russian daily Vremya Novestey reported that in 2007, only
6,700 people immigrated from the CIS to Israel, compared to
34,000 in 2001. Meanwhile, 38,000 Israeli nationals were
known to have returned recently to live in Russia and the CIS.
¶12. (C) xxxxx thought that the prospect of visa-free travel

to Israel would allow Russian Jews to visit Israel and
develop an affinity for the country and their compatriots
there without the need to emigrate. Members of Moscow's
Jewish community recently told Vremya Novestey that they saw
no need to emigrate and could always visit Israel on a
holiday.
Russia Maintains "Pragmatic" Policies

-------------------------------------
¶13. (C) Observers noted that despite the increasing cultural
proximity of Russia and Israel, the GOR maintained its
"pragmatic" stance on weapons sales to Syria and contacts
with Hamas, despite Israeli opposition. This stemmed from
Moscow's ability to compartmentalize aspects of a foreign
policy that fostered relations with Israel and Syria
simultaneously. xxxxx joked that perhaps Israel had evened
the score through military sales to Georgia, including
unmanned aerial drones, the shooting down of which recently
contributed to increasing tensions between Moscow and Tbilisi
(ref B). xxxxx and Israeli Emboffs told us separately that
military sales to Georgia were not an irritant in
Russia-Israel relations, although the GOR had asked Israel
not to sell offensive weapons systems to Tbilisi.
Beyrle

Cable Viewer
Twitter this
Digg this page
Viewing cable 08MOSCOW2306, SVETLANA MEDVEDEVA STEPS INTO THE

SPOTLIGHT



Discussing cables

2008-08-08 2010-12-01 UNCLASSIFIED//FOR Embassy
08MOSCOW2306
06:06 21:09 OFFICIAL USE ONLY Moscow
VZCZCXRO6107
OO RUEHLN RUEHPOD RUEHVK RUEHYG
DE RUEHMO #2306/01 2210609
ZNR UUUUU ZZH
O 080609Z AUG 08
FM AMEMBASSY MOSCOW

Cable Viewer

UNCLAS SECTION 01 OF 02 MOSCOW 002306
SENSITIVE
SIPDIS
E.O. 12958: N/A

TAGS: PGOV SOCI PINR RS
SUBJECT: SVETLANA MEDVEDEVA STEPS INTO THE SPOTLIGHT
¶1. (SBU) Summary: Since Dmitriy Medvedev's election to the

post of president, a degree of uncertainty permeated the
press as the public tried to figure out what role his wife,
Svetlana Medvedeva, would play in the new administration.
The role of First Ladies in Russia and the Soviet Union has
often been a contentious issue. Some, such as Raisa
Gorbacheva, were quite active and frequently seen in public,
while others, such as Lyudmila Putina, were more reclusive
and less involved in state affairs. Due to her recent
involvement in the planning for the "Day of Family, Love, and
Fidelity," many have compared Medvedeva to Gorbacheva, but
that analogy seems less apt; instead she seems to be
altogether a new type of Russian First Lady, one who is more
active than Putina, but -- for now -- less flashy than
Gorbacheva.
Previous First Ladies

---------------------
¶2. (SBU) In a May 14 article, Georgiy Zotov of the Moscow

daily Argumenty i Fakty attempted to compare the roles of
several Russian first ladies to set-up a context for
Medvedeva's recent activities. While Naina Khrushcheva did
travel with her husband to the U.S., she was not involved in
his decision making. Viktoriya Brezhneva was not involved in
her husband's public life. Raisa Gorbacheva was perhaps the
most controversial; the public saw her as being overly active
and her stylish dress provoked much criticism as the Soviet
Union teetered economically. Yet Zotov asserted that Mikhail
Gorbachev would not make any decisions without first
consulting her. Naina Yeltsina always traveled with her
husband but spent her time smoothing his increasingly erratic
edges, while devoting her many energies to philanthropy.
Then there was Lyudmila Putina, the least active publicly of
all First Ladies. Putina typically appeared at those events
required by protocol and avoided making public statements.
Over time, as rumors started over her health and the
extramarital pursuits of her husband, she became increasingly
remote, frumpy (to a condescending Moscow elite), and distant

Cable Viewer
from public life. She even chose not to accompany her

husband to Sochi for his farewell meeting as president with
President Bush.
Svetlana Medvedeva as First Lady

--------------------------------
¶3. (SBU) Svetlana Medvedeva does not fit neatly into any of
these roles. After graduating from the Leningrad
Financial-Economic Institute in 1987, she worked for several
years but gave up her job at the behest of her husband when
their son was born in 1995. Yet many have characterized her
as the driving force both in the family and in Dmitriy
Medvedev's career. Sources close to the couple describe
Medvedeva as charismatic, and as having opened up doors for
her husband, then a non-important law school professor in the
early 90's when they lived in St. Petersburg. Recently, she
has worked almost exclusively on a variety of cultural and
philanthropic initiatives and has a strong connection with
the Russian Orthodox Church (ROC). Some of her activities
include the Festival of Russian Art and the Council for the
Spiritual-Moral Culture of the Rising Generation of Russia
that was founded by Aleksey II.
Criticisms of Medvedeva
-----------------------
¶4. (SBU) Few have directly criticized Medvedeva in the

media -- a taboo set by Putin as president -- most simply
have noted her previous social habits. When the couple moved
to Moscow as Medvedev's governmental career took off in the
mid-1990's, Medvedeva was known to frequent elite parties,
fashion shows, and the circles of high society. Many have
noted her penchant for high fashion, just like Gorbacheva,
which is why the two are often compared. However, on
becoming First Lady, Medvedeva took a half-step back from
public view, most likely once again at Medvedev's behest.
She and the Kremlin seem cognizant of the attention that is
being placed on her and are trying to find a balance between
the reclusiveness of Putina and the perceived
ostentatiousness of Gorbacheva. XXXXXXXXXXXX attributed
his inability to interview Medvedeva in person as "over
cautiousness" by Medvedev's handlers, fearful of inciting
public opinion against an "overly ambitious" Kremlin spouse.
¶5. (SBU) Most recently, Medvedeva took the national stage

with planning for the new Russian holiday, the "Day of
Family, Love, and Fidelity." Medvedeva was at the forefront
of this project's spiritual and moral realm because of her
links with the ROC. The holiday was celebrated on July 8
MOSCOW 00002306 002 OF 002

Cable Viewer
because, according to the Orthodox Church's calendar, this is

the holy day for the patron saints of families. According to
a Russian legend, a Ryazan peasant's daughter named Fevroniy
cured a prince Peter from Murom, who then married her against
the wishes of his family. They lived a long and happy life
together, died within hours of each other, and in 1547, were
canonized. While festivals have been held in Murom on this
date for centuries to celebrate the two saints, some
political observers noted to us the irony of this childless
couple being chosen to headline Russia's pro-family message.
While discussing the holiday with the media, Medvedeva summed
up her role in the initiative, saying "A woman should by her
nature strive for humility. Her mission is to keep peace and
love in the family. Of course, today's couples are more
inclined to a balanced relationship."
¶6. (SBU) While there has been no direct criticism of

Medvedeva and this recent family-based initiative, the
government's policies towards the demographic problem
continue to be criticized for not effectively addressing the
political, cultural, and economic causes of the problem.
Olga Vorobyeva, chair of Social Statistics and Demography at
Russian State Social University, said that initiatives
addressing the demographic problem need a two-pronged
approach, improving family-life values and the public
mentality. She also cited housing problems and access to
education as contributing factors. Mikhail Nikolayev, Deputy
Speaker of the Federation Council, said that the economic
problems of families are not being adequately addressed by
the government. Nikolayev also stressed the need for
spiritual and moral education.
Comment
-------
¶7. (SBU) As president, Medvedev has said that he wants

Russians to be optimistic about their country's future, and
Medvedeva has carefully chosen to spearhead an issue that
clearly conforms to his priorities. While she took an active
role in planning the "Day of Family, Love, and Fidelity," she
has been careful not to attract too much attention to
herself. Despite Medvedeva's fascination with high fashion,
she -- or her handlers -- has made an apparent conscious
decision to avoid unflattering references to Gorbacheva;
instead she has chosen to chart her own path, publicly
engaging in philanthropy and work with the ROC, while
purportedly exerting influence on Medvedev behind the scenes.
RUBIN

Cable Viewer
Twitter this
Digg this page
Viewing cable 08MOSCOW2319, TFGGO1: RUSSIA-SOUTH OSSETIA SITREP 2

AUGUST 9



Discussing cables

2008-08-09 2010-12-01 Embassy
08:08 21:09 Moscow
VZCZCXYZ0000
OO RUEHWEB
DE RUEHMO #2319/01 2220856

Cable Viewer
ZNY CCCCC ZZH

O 090856Z AUG 08
FM AMEMBASSY MOSCOW
INFO RUCNCIS/CIS COLLECTIVE IMMEDIATE
RUEHXD/MOSCOW POLITICAL COLLECTIVE IMMEDIATE
RUEHZG/NATO EU COLLECTIVE IMMEDIATE
RUEAIIA/CIA WASHDC IMMEDIATE
RUEKJCS/JOINT STAFF WASHDC IMMEDIATE
RHEHNSC/NSC WASHDC IMMEDIATE
RUEKJCS/SECDEF WASHDC IMMEDIATE
SIPDIS
E.O. 12958: DECL: 08/09/2018

TAGS: PREL PGOV MARR GG RS
SUBJECT: TFGGO1: RUSSIA-SOUTH OSSETIA SITREP 2 AUGUST 9
Classified By: Charge d'Affaires Eric S. Rubin. Reasons 1.4(b)

and (d)
¶1. (C) Summary. U.S. demarche will be delivered to the

Russian MFA at 1400 Moscow time (0600 EDT). The Russian
government continues to characterize its actions as "peace
enforcement," with Russian media claiming that troops have
reached Tskhinvali's outskirts. Officials emphasize they
have a responsibility to protect the local populace and
stress that they will take all necessary actions to deal with
the humanitarian situation. Local press has been covering
the conflict extensively, showing convoys of Russian tanks,
and interviews with persons who have fled their homes in
South Ossetia for North Ossetia. Russia's political parties
and populace have acclaimed Russia's actions, with the
Communists and nationalist Zhirinovskiy pressing for a harder
line. The lackluster performance of Medvedev has raised
questions, but the fact Putin has not returned from Beijing
and is shown talking to Olympic athletes indicate he is
content to let Medvedev handle the situation (for public
consumption, at least). Some commentators are questioning
whether the U.S. gave Georgia the go-ahead, and say the GOR
is awaiting the U.S. reaction. End summary.
DFM Karasin Not Available

-------------------------
¶2. (C) MFA informed Embassy Moscow that DFM Karasin was not
available to meet with Charge today. The French Embassy got
the same message this morning when it requested an
appointment to deliver an EU demarche paralleling ours.

Cable Viewer
Acting DCM will deliver our demarche to MFA at the

directorate level at 14:00 Moscow time.
Medvedev Steps Forward, Hesitantly

----------------------------------
¶3. (SBU) A pale and hesitant Medvedev, with none of the

bravado of Putin, was pushed forward into the limelight on
Saturday morning, with televised coverage of his opening
remarks following a meeting with Defense Minister Serdyukov
and the Chief of the General Staff Makarov. Medvedev
reiterated to the military leadership that the Russian
peacekeepers and additional units were entrusted with
bringing the Georgian side to peace, with the responsibility
for protecting the local population. Medvedev then met with
officials from the Ministry for Emergency Services, as well
as Health and Social Services, to underscore that Russia
would take all steps necessary to deal with the difficult
humanitarian situation that had been brought out by Georgian
military actions. Reiterating that it was Russia's
obligation to resolve the crisis situation and assist the
civilians, Medvedev entrusted the Russian officials with
overseeing the complex of issues associated with the
"humanitarian response." Press reports note the pro
vision of a mobile hospital facilities among the assistance,
with a hot-line established for families to find out
information about friends and relatives in the conflict area.
¶4. (C) Medvedev's performance has been lackluster, with

potential implications for his longevity in office. That
said, we do not see divisions in the leadership, with
prominent foreign policy experts reinforcing to us the
consensus that undergirds Russia's policy towards Georgia.
The fact that Putin has not come rushing home from Beijing to
help manage the crisis in Moscow reflects his confidence that
the policy course is not in doubt. Medvedev's efforts to
frame Russian actions in legal terms, as an obligation to
assist Russian peacekeepers, who are present in the conflict
zone under international agreement, reflects his lawyerly
bent and perhaps his inclination to keep this conflict
focused on the restoration of status quo ante.
¶5. (C) xxxxx said the key question the GOR was
trying to determine was whether the U.S. had given
Saakashvili the go-ahead. The GOR had expected the U.S. to
again convince Georgia to pull back and when that didn't
happen, it raised the question whether the U.S. had allowed
Georgia to go ahead. The GOR was questioning whether this
was a first step in the U.S.'s attempt to isolate or contain
Russia, and were waiting for America's reaction and
intentions.

Cable Viewer
Russia's Conception of "Status Quo Ante?"

-----------------------------------------
¶6. (SBU) In a phone call with German President Merkel,
President Medvedev insisted that returning to the status quo
ante would entail Georgian troops returning to their "initial
positions." This likely supports Foreign Minister Lavrov's
emphasis on a Georgian withdrawal from the current zone of
conflict, a point he made in numerous calls with foreign
counterparts. What remains unclear is whether a return to
"initial positions" refers to the positioning of Georgian
forces immediately before the outbreak of violence on
Thursday, or an adherence to the terms of the 1994 Cease-fire
Agreement. Although Russian officials have yet to cite the
1994 Agreement as a condition for status quo ante, Medvedev
has announced the need for a legally binding, "non-use of
force" agreement. Russia has repeatedly called on Georgia
to sign such an agreement.
¶7. (C) The status quo ante could become a moot point if
Russia throws its support behind South Ossetian independence.
While the Kremlin and the Government have largely stayed
silent on recognizing South Ossetia's independence,
Federation Council Speaker Mironov said the FC would examine
this issue in the near future. We believe Mironov's comments
are parliamentary bluster.
President Medvedev Orders Aid to Fleeing South Ossetians

--------------------------------------------- -----------
¶8. (U) Russians remain fixated with the scope of

Georgian-inflicted casualties. Hourly news bulletins on all
channels are showing tearful refugees telling tales of terror
and flight. On August 8, head of the South Ossetia
information department in the Joint Control Commission (JCC)
told Interfax that the Georgians shot at residential areas
and a hospital. He said, "All business and organizations are
on fire: schools, the university, the Culture Ministry, the
parliament. The peacekeeper's city has been destroyed."
South Ossetia leader Eduard Kokoity estimated the number of
dead at 1,400. Vice Premier Sergey Sobyanin announced that
Russia has accepted more than 30,000 refugees from South
Ossetia. South Ossetia's entire population is estimated at
70,000 people. UNHCR tells us it continues to closely follow
the situation in South Ossetia. The Federal Migration
Service had told their office to expect thousands of refugees
and IDPs, but she questioned the 30,000 figure reported in
the Russian media.
¶9. (U) On August 9, President Medvedev ordered the Emergency

Situations Ministry, the Health and Social Development
Ministry, and the Federal Migration Service to address the
"very complicated humanitarian problems have arisen, which we

Cable Viewer
need to address in line with our mandate and simply in line

with the duty that our state has." Medvedev stressed that, "
the people responsible for this humanitarian disaster need to
be held liable for what they have done, considering, among
other, the international legal aspect of this problem."
Emergency Situations Ministry spokeswoman Irina Andrianova
said that 19 provisional centers for the refugees are
operating in North Ossetia and a Ministry airmobile hospital
has been deployed to the region. News reports also said that
most South Ossetians are staying with relatives in North
Ossetia, and that Russia's Rostov region is preparing to
accommodate thousands of South Ossetians.
Criminal Case Opened to Investigation Peacekeeper Losses

--------------------------------------------- -----------
¶10. (U) By August 9 midday, Russian news agencies reported 15

Russian peacekeepers had been killed and over 50 were
injured. The spokesman of Russia's Office of the Chief
Military Prosecutor announced the launch of a criminal
investigation into the peacekeeper's deaths, comprised of 30
investigators and headed by a deputy chief military
prosecutor.
Rubin

Cable Viewer
Twitter this
Digg this page
Viewing cable 08MOSCOW2425, PRESS BIAS SHIFTS IN FAVOR OF MEDVEDEV, BUT

PUTIN



Discussing cables

2008-08-15 2010-12-01 Embassy
10:10 21:09 Moscow
VZCZCXYZ0002
RR RUEHWEB
DE RUEHMO #2425/01 2281049

Cable Viewer
ZNY CCCCC ZZH

R 151049Z AUG 08
FM AMEMBASSY MOSCOW
SIPDIS
E.O. 12958: DECL: 08/15/2018

TAGS: PGOV PREL RS
SUBJECT: PRESS BIAS SHIFTS IN FAVOR OF MEDVEDEV, BUT PUTIN
STILL IN CONTROL
Classified By: Acting Deputy Chief of Mission Alice G. Wells for

reason
1.4(d).
¶1. Summary: xxxxx reported the results xxxxx in a recent meeting

with PolOff. While
Medvedev dominated Russian programming on four of five
surveyed stations, his appearances were disproportionately
ceremonial in contrast to Putin's hands on control of the
Russian government. The virtual absence of airtime provided
to most opposition parties continued to slow an already weak
opposition, and experience and intuition told xxxxx that
his study would fall on deaf ears, a prediction already
supported by the empty auditorium at his press conference
hours before our meeting. Russian Communist Party (KPRF)
leader Gennadiy Zuganov publicly and privately praised
xxxxx for his research as a boost to KPRF calls for
greater press freedom. Medvedev's sagging standing in the
polls, despite lavish T.V. coverage, is one indication of his
difficulty in coming out from Putin's shadow. End Summary.
Medvedev Main Headliner, but Putin Top Dog

------------------------------------------
¶2. (C) On August 4, xxxxx told PolOff that while

Medvedev received twice as much press coverage as Putin
during the testing period, most of his meetings were largely
ceremonial, while Putin's on-air performances continued to
give the impression that he held the reins of power. xxxxx
unabashedly called Medvedev a "no one" in Russian politics,
claiming he was nothing more than a "pen in one's pocket" or
"a glass on the table" as he raised a pen and glass from his
desk. Medvedev continued to attract interest with his
anti-corruption campaign, but Putin still called the shots

Cable Viewer
that mattered.
¶3. (C) An August 7 poll from Levada Center indicated only 9%

of Russians believe Medvedev controlled Russia's direction,
while 36% believed Putin remained in sole power and almost
50% saw a tandem presidency. A related Levada Center poll
from July 18-22 showed that 82% of Russians believed, to some
degree, that Medvedev merely continued Putin's policies,
while only 11% saw Medvedev gradually changing the country's
political course. Leading pollsters tended to agree with
survey results. xxxxx hinted to
PolOff on August 6 that Russians would probably see Medvedev
as even less in control after Putin's recent Mechel comments
and subsequent stock market scare. xxxxx told PolOff on
August 8 that the then-emerging conflict in South Ossetia
clearly painted Putin as the country's leader.
Study Results: Winners Won, Losers Lost

---------------------------------------
¶4. (SBU) xxxxx detailed the results of his recent

research project on propaganda in the press, done in
conjunction with Memo 98 Media Monitoring. The project
tracked primetime press coverage of major political figures
and government departments from June 5-20 on three
government-run television stations (Channel One, TV Rossiya,
and TV Center) and two privately-owned channels (NTV and REN
TV). xxxxx ascribed a positive, neutral, or negative
connotation to each news item, then calculated the total
amount of time devoted to each person or group.
¶5. (SBU) The study revealed that all channels, except for
REN TV, dedicated a disproportionate amount of airtime to
positive or neutral coverage of incumbent politicians and
cabinet members, rarely casting them in a negative light. REN
TV, however, distributed airtime more evenly to a greater
number of political parties and levied negative commentary
against the Federal Security Service (FSB) and the Vladimir
Zhirinovskiy-led Liberal Democratic Party of Russia (LDPR).
Most of REN TV's remaining coverage was neutral and biased.
Stations devoted remaining airtime to less important
government figures including Duma Speaker and Chairman of the
High Council of United Russia Party Boris Gryzlov, First
Deputy Prime Minister Igor Shuvalov, Russian Minister for
Emergency Situations Sergei Shoigu, Vice Premier and Finance
Minister Alexei Kudrin, Regional Development Minister Dmitriy
Kozak, and Economic Development Ministry chief Elvira
Naibullina. xxxxx produced the following
results:

Cable Viewer
Channel One (16.9% market share, formerly ORT,

state-controlled network): Medvedev (48.9%), Putin (22.9%),
United Russia (6.1%), Russian Deputy Premier Sergei Ivanov
(3.0%), A Just Russia (1.4%), FSB (1.3%), KPRF (0.3%).
TV Rossiya (15.8% market share, formerly RTR,

state-controlled network): Medvedev (50%), Putin (26.8%),
Russian Foreign Minister Sergei Lavrov (2.7%), Ivanov (2.0%),
United Russia (1.9%), FSB (0.9%), KPRF (0.9%), LDPR (0.8%), A
Just Russia (0.1%).
TV Center (4.2% market share, city of Moscow-owned national

network): Medvedev (43.9%), United Russia (17.1%), Putin
(16.9%), Moscow Mayor Yuriy Luzhkov (15.7%), Lavrov (4.8%),
Ivanov (3.0%), A Just Russia (0.2%), FSB (0.1%).
NTV (12.3% market share, Gazprom-owned national network):

Medvedev (57.3%), Putin (17.6%), Ivanov (5.7%), United Russia
(2.2%), Lavrov (2.0%), KPRF (1.1%), FSB (0.6%).
REN TV (7.1% market share, Rossiya Bank majority ownership,

independent network): Medvedev (28.6%), Zhirinovsky (12.2%),
KPRF (12.0%), LDPR (12.0%), Yabloko (11.3%), United Russia
(10.4%), Union of Right Forces (SPS) (6.7%), FSB (6.0%),
Putin (2.1%), A Just Russia (0.8%).
xxxxx and Communists: an Unexpected Alliance

--------------------------------------------- --
¶6. (C) xxxxx showed PolOff a letter from Zuganov that

lavished praise on xxxxx his outstanding
contribution to political reform in Russia. xxxxx then
recalled to PolOff that Zuganov approached him at the Embassy
Independence Day celebration at Spaso House, joyously thanked
him in front of numerous witnesses, hugged him, and named
xxxxx a "friend of the Communist Party." xxxxx retorted
to Zuganov saying "I did not do this research for you, I did
it for my country's future." xxxxx shuddered as he relayed
the story, sheepishly noting that his grandfather and father
would turn in their graves had they heard he had helped the
Communists. (Note: xxxxx grandfather was shot and killed
by Communists, and his father spent time in the Gulag)
¶7. (U) On July 14, the Communist Party presented the results
of the June 2008 Center for Research of Russian Political
Culture's complementary study on press freedom and propaganda
as it pertained to the KPRF. Zuganov noted that the study
found 45% of all KPRF references to be decidedly negative and
only 14% decidedly favorable. The Russian channel TVT
provided the most negative coverage while NTV projected the
KPRF most favorably. Considering xxxxx, however, NTV only

Cable Viewer
dedicated about 1% of its

programming to the KPRF; therefore, its resonance with and
impact on the public remained minimal despite its positive
tone.
Opposition Hamstrung by Press Bias

----------------------------------
¶8. (C) xxxxx said data supported the opposition claim

that they received less government-controlled airtime, but
didn't address the GOR counter-charge that the classic
"liberal" opposition is doing little to generate news. xxxxx
agreed, charging that "Russians feed from the same
information trough." xxxxx attributed much of the blame for
the stagnation of Russia's political opposition to a lack of
leadership; however, he claimed the lack of unbiased press
coverage reinforced the Russian population's unwavering
support of the current leadership.
Press Research Lacks Public Influence

-------------------------------------
¶9. (C) xxxxx bemoaned the fact that no one showed up to

the August 4 press conference at the House of Journalists
organized to discuss the results of his research. (Note:
PolOff was the only attendee present) While he admitted that
both he and the organizers did a poor job of informing the
press and publicizing the event, he felt that the public's
general ennui about press freedom contributed to the lack of
attendance. When asked about the projected influence of his
research, xxxxx told PolOff that he hoped organizations
such as the UN and OSCE would utilize his analysis to
advocate for greater political transparency in Russia.
Conversely, he claimed the largest influence of his
organization sprung from its relations with foreign
journalists at the Washington Post, Le Monde, and other
western papers. While his center operated quietly, trying not
to attract attention, it cooperated with foreign journalists
by supplying opinions and information for more scathing
articles. xxxxx told PolOff with obvious delight, "when
western press articles have infuriated Kremlin officials in
the past, xxxxx
Comment
-------
¶10. (C) xxxxx data strikingly demonstrates that despite

Medevedev's lavish courage in the media, he has yet to come
out from Putin's shadow and create a political identity that

Cable Viewer
resonates with Russian viewers.

Beyrle

Cable Viewer
Twitter this
Digg this page
Viewing cable 08MOSCOW2545, TFGG01: PARLIAMENT UNANIMOUSLY ENDORSES

ABKHAZ,



Discussing cables

2008-08-25 2010-12-01 Embassy
15:03 21:09 Moscow
VZCZCXYZ0005
OO RUEHWEB
DE RUEHMO #2545/01 2381519

ZNY CCCCC ZZH
O 251519Z AUG 08
FM AMEMBASSY MOSCOW

Cable Viewer

RUEAIIA/CIA WASHDC PRIORITY
SIPDIS
E.O. 12958: DECL: 08/25/2018

TAGS: PREL PGOV PHUM PINR RS
SUBJECT: TFGG01: PARLIAMENT UNANIMOUSLY ENDORSES ABKHAZ,
SOUTH OSSETIAN INDEPENDENCE
REF: A. A) MOSCOW 2535

¶B. B) MOSCOW 2491
Classified By: Minister Counselor for Political Affairs Alice G.

Wells;
reasons 1.4 (b) and (d)
¶1. (C) SUMMARY: In a solid show of support, both the

Federation Council and the Duma voted unanimously to urge
that President Medvedev recognize Abkhazia and South Ossetia
as independent states. Parliamentarians blasted Georgia for
having launched a military campaign against South Ossetia,
and pointed the finger at the U.S. as having planted the
seeds for the aggression by arming and training the Georgian
military. Having ratcheted up expectations of imminent
Russian action, some observers now believe Medvedev and Putin
will wait to see if the international community meets
Russia's demands: UN confirmation of Russia's peacekeeping
role and condemnation of Saakashvili. Medvedev can be
expected to proceed cautiously, taking advantage of a
situation that, at the moment, he perceives to be in Russia's
favor. END SUMMARY.
¶2. (SBU) The Federation Council, meeting August 25,

unanimously approved an appeal to President Medvedev that he
immediately recognize the independence of Abkhazia and South
Ossetia. In a remarkably organized and disciplined one-hour
session, Council leaders and 45 members quickly delivered
statements pillorying Georgia for having attacked Tskhinvali
August 7. Abkhaz and South Ossetian leaders Bagapsh and
Kokoity also addressed the session, proclaiming the support
of residents of those territories for independence from
Georgia. The Abkhaz leader also confirmed his readiness to
sign a agreement on military cooperation with Russia.
¶3. (SBU) Following smartly on the heels of that session, the

Cable Viewer
Duma convened to consider a similar appeal to Medvedev. In

that larger body, popularly elected legislators took their
time to score rhetorical points. The resolution calling for
recognition was introduced by CIS Committee Chairman
Ostrovskiy. International relations Committee Chairman
Kosachev introduced a companion appeal to the UN and to
parliaments of UN member states urging them also to recognize
the two entities. Once again, Bagapsh and Kokoity led off
discussion of the appeal, charging that steps by "western
states" to arm Georgia emboldened leaders in Tbilisi to
launch its attack against South Ossetia.
¶4. (SBU) Speeches by Duma party faction leaders took on a

very anti-Georgian and anti-American tone. Communist leader
Zyuganov and LDPR leader Zhirinovskiy specifically accused
the U.S. of having precipitated the attack on South Ossetia
by arming and training Georgian military forces, and that
U.S. motives included destabilizing Russia and controlling
energy transit routes from the Caucasus and the Caspian
regions. Vice President Cheney was accused of coordinating
the anti-Russian, pro-Georgian campaign. Zhirinovskiy
alleged that Israel had intended to attack Iran just prior to
the U.S. elections, and that the Georgian military strike now
disrupted that plan. In the end, the lower house also
adopted the appeals to Medvedev (for Russian recognition) and
to the UN and UN member states unanimously.
Not So Fast
-----------
¶5. (C) In the days just prior to the special session of

Parliament, experts and academicians filled newspapers and
airwaves with concern for the political consequences of
recognition. While conceding that public sentiment has been
affected by the events in South Ossetia, esteemed figures
including former Ambassadors Adamishin and Lukin urged
Medvedev to hold off on recognition. They argued that
Moscow's diplomatic hand has been strengthened as a result of
"Georgian aggression" and Russia's decisive victory in the
war, and that now was not the time to consign the two
entities to the same fate as Northern Cyprus, i.e. to being
recognized by only one other country.
Now What?
---------
¶6. (C) There was little doubt that the legislative moves were
coordinated by the Kremlin. The question remains, though,
for what purpose? XXXXXXXXXXXX that the same Duma
that had said nothing during the war, and had also not been
called back earlier from its August recess, was now being
used by the Kremlin to further muddy international waters and

Cable Viewer
to give the Kremlin another card to play with European

mediators. The Federation Council and Duma were already on
record (as of March, 2008) as supporting independence for

Abkhazia and South Ossetia. By orchestrating a solid show of
support for independence from the parliament, she contended,
the Kremlin can take a tougher line with respect to drawing
back Russian forces to pre-August 7 lines of demarcation.
Expecting that disputes over interpretation and
implementation of Point 6 of the Medvedev-Sarkozy cease-fire
agreement will continue with Europe and the U.S., the Kremlin
can now either move to recognize, declaring that it cannot
stand in the way of strong public sentiment, or it can argue
for acceptance of its interpretation of Point 6. In either
case, Medvedev will be able to demonstrate to the world and
to the Russian public that, having weathered the storm of
world criticism, he took quick action before opportunities
created by military action faded away. XXXXXXXXXXXX suggested
that
factors that might restrain Medvedev from immediately
recognizing included positive signals from Europe, and a
desire to await the outcome of U.S. presidential elections.
Even if he chooses to wait, the parliamentary show will still
give Russian diplomats enough cover to take tough positions
on the future of Abkhazia and South Ossetia at the OSCE and
the UN for months to come.
¶7. (C) XXXXXXXXXXXX did not anticipate Medvedev approving

recognition in the immediate term. Acknowledging that supporting
independence
was not in Russia's objective interests, XXXXXXXXXXXX said
Medvedev's decision would be driven by other factors.
Medvedev, he argued, would use the vote to build pressure for
an international mechanism that met Russia's bottom line. In
particular, he argued that Russia sought a UNSCR confirming
its status as peacekeeper in South Ossetia and Abkhazia, and
expected the international community to halt its unqualified
support for President Saakashvili. Otherwise, he intimated,
recognition of the two entities might be expedited. He cited
an interview given by Saakashvili in recent days in which the
Georgian leader reportedly declared that he would strive not
to convince South Ossetians to "come back to Georgia," but
that "Georgia would come to them (e.g., militarily)."
XXXXXXXXXXXX
charged that this only further confirmed Saakashvili's future
military intentions against South Ossetia and the need to
ensure that the Georgian military never launches a military
attack against the region again.
¶8. (C) Comment: The Duma and Federation Council's actions

will be used by the Kremlin and the MFA in dealings with
foreign intermediaries to demonstrate strong broad support

Cable Viewer
for even tougher measures regarding the two regions, and to

further ratchet up pressure against the Saakashvili
government. Despite the unanimous votes, Medvedev and Putin
can play the recognition game out further, increasing
pressure on European allies to compromise on a
Russian-preferred UNSC draft resolution while avoiding a step
that - XXXXXXXXXXXX's bravado aside - could have unpredictable
consequences in Russian domestic terms.
BEYRLE

Cable Viewer
Twitter this
Digg this page
Viewing cable 08MOSCOW2563, MEDVEDEV LOSES OUT IN RUSSIA-GEORGIA WAR




Discussing cables

2008-08-26 2010-12-01 Embassy
14:02 21:09 Moscow
VZCZCXYZ0000
PP RUEHWEB
DE RUEHMO #2563/01 2391404

ZNY CCCCC ZZH
P 261404Z AUG 08

Cable Viewer
FM AMEMBASSY MOSCOW
SIPDIS
E.O. 12958: DECL: 08/22/2018

TAGS: PGOV PREL PINR RS
SUBJECT: MEDVEDEV LOSES OUT IN RUSSIA-GEORGIA WAR
Classified By: Ambassador John R. Beyrle: Reasons 1.4 (b, d).
¶1. (C) Summary. Unlike Putin, whose leadership during the

Chechen war strengthened his political power, Medvedev's
performance to date has reinforced his status as junior
member of the tandem. Two anecdotal reports suggest that
Putin was displeased with the President's performance at the
start of the conflict; Putin, not Medvedev, set the tone and
tenor of Russia's war policy. The conflict exposed Medvedev's
weaknesses, his lack of a "team" of advisers, and the paucity
of levers that he holds to influence policy, particularly in
foreign affairs. While most Russians have yet to calculate
the long-term consequences of the Georgian war, a near term
conclusion is that the conflict has reinforced Medvedev's
need for a "regent" and validated Putin as the man most
Russians trust to protect their national interests. End
Summary.
Medvedev Stumbles
-----------------
¶2. (C) The war in Georgia capped Medvedev's first 100 days in
office, and provided him the chance for a defining moment as
the country's military and political chieftain. Yet, two
anecdotal reports suggests that Medvedev blinked when the
Georgian conflict began. xxxxx told the German Ambassador that
Putin was deeply
concerned by the failure of Medvedev to take immediate
actions and to show resolve on August 8. Putin intervened
repeatedly from Beijing, where he was attending the Olympics.
Several phone calls took place between the Prime Minister
and Medvedev, with Putin using a meeting with Kazakh
President Nazarbayev to set the initial Russian public
hard-line. Similarly, in either an indiscretion or a
deliberate slight, FM Lavrov confided to the French
Ambassador (on the margins of Sarkozy's August 12 visit to

Cable Viewer
Moscow) that Medvedev had come in for significant criticism

among the ruling party elite for his handling of the initial
hours of the crisis.
¶3. (C) At first glance, the interaction between the two

during the Georgia war appeared a confirmation of the
"regency" model of leadership posited by many Kremlin
observers about the tandem, with Putin taking charge when his
protege faltered and then stepping back once he had righted
the ship of state. Putin, not Medvedev, made the first
strong public Russian address on the conflict after his
return from China. His bristling speech in Vladikavkaz on
August 9 set the tone and message of Moscow's approach:
accusations of genocide, promises of aid to mitigate the
"humanitarian disaster," and an explanation of Russian action
as justified and legitimate. In the days that followed, a
pale and tired Medvedev met with various military and
government officials before the television cameras, but he
never addressed the people directly -- in part because Putin
had already done so. Olga Kryshtanovskaya of the Academy of
Sciences Institute for the Study of Elites characterized
Medvedev's performance during the first days of the war as a
schoolboy who learned his lessons by rote, but without the
vehemence of true conviction. Indeed, at one of the few
public meetings between Putin and Medvedev, the Premier
resorted to "suggestions" that the military prosecutor should
look into evidence of "genocide" in South Ossetia, and
Medvedev duly agreed to give the order.
¶4. (C) As the conflict cooled down and Medvedev took a

visible role in hammering out a ceasefire agreement with
French President Sarkozy, the public portrayal of the tandem
began to shift back to its "proper" balance, even as the
French told us it was Putin who joined the meeting to broker
the "Medvedev-Sarkozy" agreement. Medvedev moved to the
forefront of Russia's government controlled television stage
and Putin returned to focus on other matters. According to
the newspaper Kommersant, Levada Center polls in August
showed a slight increase in popular perceptions of Medvedev's
position in the tandem, with 14 percent of respondents
agreeing that real power is in the President's hands, up from
9 percent in June, but still far below the near 20 percent
figure at the time of Medvedev's inauguration. Tellingly,
nearly half of respondents saw Medvedev and Putin sharing
power.
100 Days Leaves Medvedev Poorly Prepared

----------------------------------------
¶5. (C) Few are surprised that Medvedev was unprepared for the
Georgian war. Before the conflict, Medvedev had focused on
domestic issues that had been his forte as Deputy Premier.

Cable Viewer
He had taken initial steps in his first three months in

office to define himself: promoting the domestic themes of
anti-corruption, economic modernization, and, in foreign
policy, a new European security architecture. He also went as
far as indirect criticism of Putin's attack on the Mechel
coal company in late July. Pro-Kremlin commentators like
lawyer Pavel Astakov and analyst Dmitriy Orlov in recent
weeks penned paeans to what they claimed were Medvedev's
successes in launching judicial reforms, promoting small
business, and tackling the thorny issue of pervasive
corruption.
¶6. (C) While debates have continued over whether Medvedev is

a "liberal" or a Putin flunky, there is general consensus
that Medvedev remains circumscribed in his ability act
independently. xxxxx conceded
that Medvedev had ambitions and was being pushed by his inner
circle (largely remnants of the Yeltsin team) to be "more
liberal," but he had no capacity to carry them through.
xxxxx attributed this to Putin's shift of Kremlin cadre to
the White House -- a move that left Medvedev largely adrift
in his own administration. Editor/owner of the independent
xxxxx judged Medvedev
politically naive, despite 17 years in the inner circle.
xxxxx who with eight other prominent editors attended a
long, liquid dinner with the President, described Medvedev as
saying the right things, but with no clear ability to
translate them into practice.
¶7. (C) While Medvedev spoke vaguely of new European security

structures, some argued that Putin remained the real foreign
policy helmsman, who used informal relations and the creation
of new White House entities to forge his own policy team. The
newly appointed Director of the Russian Institute for
Democracy in NY, Andranik Migranyan, judged to us that even
before the Georgia crisis, Medvedev had taken a beating in
foreign policy, with the appointment of Ambassador Yuri
Ushakov to the White House a clear sign of Putin's
encroachment on Kremlin turf. Medvedev lacked a foreign
policy team, and his hesitancy, or "lack of tonality," on
important issues was apparent in the diplomatic mishap at the
G8 over Zimbabwe. Migranyan predicted that Putin would
continue to dominate the policy milieu through his connection
to the intelligence services and deployment of Ushakov.
Looking Ahead
-------------
¶8. (C) For those who see Putin as protecting and developing
his successor as "regent" -- including xxxxx and Gleb
Pavlovskiy -- the conflict gave some indication of Medvedev's
strengths and weakness during times of crisis. Medvedev

Cable Viewer
stills needs Putin, according to Pavlovskiy, as the primary

source of the President's legitimacy. If Putin were to leave
office today, Medvedev would have a tough fight; in the eyes
of half the Russian public, trust of Putin constitutes
Medvedev's writ. Kryshtanovskaya argued that Putin cannot
afford to allow Medvedev to lose his legitimacy as president,
in that Putin has staked his reputation on his successor.
¶9. (C) For others, the war showed that Medvedev is not up to
challenge of leadership. Russian Caucasus experts told DCM
August 21 that Russia could not show weakness in the face of
Georgia's challenge in South Ossetia for fear of both
external and internal security consequences. Putin, not
Medvedev, understood that and orchestrated the required
action to meet the challenge, they argued.
¶10. (C) While most of our contacts agreed that 100 days is
too short to draw conclusions, xxxxx and Kryshtanovskaya
predicted the war could hasten a shift towards a
parliamentary system. xxxxx characterized Putin's public
persona as Russia's CEO, rolling up his sleeves on issues
that matter more to Russians while Medvedev handles the
ceremonial duties of President. He likened the situation to
the German model, which Putin well understands, and posited
that the Premier may aspire to play Chancellor to Medvedev's
German President. Kryshtanovskaya likewise sees Putin as
laying the foundation for a parliamentary republic, by taking
the lead of Russia's most politically powerful party and
shifting many formerly presidential functions to the White
House.
Comment
-------
¶11. (C) After the Georgian conflict, nobody questions Putin's

dominance of the political system. What remains to be seen
is whether he intends to transfer the power mantle to
Medvedev, as the "regency" school predicts, or to further
consolidate his power as Premier. Putin's modus operandi is
to create options and to avoid picking one particular path,
suggesting that we will see him continue to follow both
options as he waits to see how things play out. Among the
populace, there is a sense of national pride and patriotism
as the vast majority of Russians rally around the Kremlin.
The success of Moscow's "short, victorious war" accrues to
the tandem team, although we assess more so to Putin than the
President. The Russian elite, highly attuned to signals from
the Kremlin, are likely to see the Georgian war as evidence
that it is too early to dismiss the influence of the silovik
wing or its captain, Putin. And in light of the Kremlin
wagon-circling we expect to follow the independence
recognition decision, Medvedev's agenda of economic

Cable Viewer
modernization, anti-corruption, and European security focus

will lose any sense of urgency that it might have had. End
comment.
Beyrle

Cable Viewer
Twitter this
Digg this page
Viewing cable 08MOSCOW2615, AFTER THE WAR WITH GEORGIA: RUSSIA'S

ECONOMIC



Discussing cables

2008-09-02 2010-12-01 Embassy
11:11 21:09 Moscow
VZCZCXYZ0000
PP RUEHWEB
DE RUEHMO #2615/01 2461149

Cable Viewer
ZNY CCCCC ZZH

P 021149Z SEP 08
FM AMEMBASSY MOSCOW
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
SIPDIS
STATE FOR EUR/RUS; NSC FOR MWARLICK
E.O. 12958: DECL: 08/28/2018

TAGS: ECON PREL PGOV ETRD EINV RS
SUBJECT: AFTER THE WAR WITH GEORGIA: RUSSIA'S ECONOMIC
FUTURE MORE UNCERTAIN
REF: MOSCOW 2563
Classified By: Ambassador John R. Beyrle for Reasons 1.5 (b) and
(d).
------
Summary
-------
¶1. (C) That Russia is "back," at least economically, has been

an insistent theme of the Kremlin the last few years.
Russia's economic recovery from the depths of its financial
crash in 1998 is indeed impressive. High growth, burgeoning
international reserves, and rising living standards were the
result of luck in the form of a five-fold increase in the
prices of oil and gas, Russia's main exports, but also the
result of prudent macroeconomic policies that stressed fiscal
and monetary stability.
¶2. (C) We would argue, however that the Russian government

has overstated the extent of this economic restoration and
its sustainability. After seven years of 7 percent growth or
better, per capita income remains below $10,000 a year and
only last year did Russia's GDP finally surpass its level in
¶1991. Moreover, unlike other emerging markets such as China
and India, Russia's impressive growth has not been fueled by
its manufacturing sector but rather by rising but volatile
commodity prices.
¶3. (C) The underlying fragility of the Russian economy and

its uncertain future have been brought into sharp focus by
the war in Georgia. Some of our contacts agree with the line

Cable Viewer
from the Russian government, that the economy will quickly

recover from its current turmoil. Other observers believe
that higher political risk has returned for the foreseeable
future -- bringing with it lower economic growth. However,
all of our contacts are increasingly pessimistic about the
ability of the GOR to pursue the reforms needed to modernize
and diversify the Russian economy.
----------------
Short Term Costs
----------------
¶4. (C) One of the persistent myths that Russian government

officials press publicly about the Russian economy is that it
is "decoupled" from the global financial system, by which
these officials mean its growth and stability are not
affected by global developments and specifically are immune
to the effects of the sub-prime crisis in the United States.
A corollary of this argument is that Russia is a "safehaven"
for international investors. However, the performance of
Russia's stock markets over the past two months and
especially since the war with Georgia erupted belies these
claims.
¶5. (C) As we have reported elsewhere, the Russian stock

market began its slide in mid-May. Global conditions -- a
strengthening dollar and softening demand for commodities -)
were contributing factors. However, a series of government
actions culminating in the decision to invade Georgia and
recognize Abkhazia and South Ossetia's independence are
principal causes that have driven the stock markets to their
lowest levels in nearly two years, in the process wiping out
hundreds of billions of dollars in shareholder value.
¶6. (C) With military activities subsiding, local newspapers

have been increasingly filled this past week with articles
about the economic cost of the war and its aftermath for
Russia, citing especially the stock market losses and the
downturn in business confidence. The Kremlin has seemed
oblivious to these concerns, claiming that the economy is
fundamentally strong and will quickly recover. Some local
analysts agree, citing in particular Russia's status as the
world's largest exporter of hydrocarbons. Chris Weafer of
Uralsib noted in an August 27 e-mail to clients that Russia
has $1 billion in oil and gas revenue coming in each day and
tensions with the West, including possible sanctions, will
not affect this.
¶7. (C) However, other analysts are less sanguine. xxxxx told us
that the decline in the
stock market is "how the business community gets to vote
about the government's economic policies." He said foreign

Cable Viewer
and Russian investors' bet on the Russian economy is on its

"convergence" with Western economies. With that now in
question, he and other analysts see the return of "high
political risk" to the Russian economy and worry that it may
be permanent. Although they don't see a 1998-style collapse
coming, they do see lower growth over time. In fact, most

analysts have been systematically cutting their forecasts for
2008 growth over the past two weeks.
¶8. (C) The effect of the global credit crunch has been
magnified by increased political risk in Russia, further
raising the cost of capital. More expensive capital will
cause Russian and foreign businesses here to delay or cancel
expansion and improvement plans, lowering growth. The
Russian economy is particularly vulnerable in this regard
because it is heavily reliant on foreign capital for its
long-term financing needs. Russian corporations reportedly
have $500 billion in increasingly expensive short-term
foreign debt.
¶9. (C) According to xxxxx lower growth in turn ultimately

puts at risk the grand bargain the GOR has made with the
Russian people -) rising living standards in return for
political quiescence. He believes, as do many of our other
contacts, that a likely outcome is that the GOR will
intervene and recapitalize Russian companies in place of the
expensive foreign loans. Norilsk Nickel's Vladimir Potanin
had a highly publicized meeting last week with Medvedev in
which he reportedly asked for this. While xxxxx thought
this might spark a market rally and ease the short-term costs
to the Russian economy, he acknowledged that the long-term
economic consequences would be negative.
----------------------
Long Term Consequences
----------------------
¶10. (C) A second myth about Russia's economy is that it has

been moving beyond dependence on exports of natural resources
and that its current prosperity is now driven by a
self-perpetuating growth in consumer spending. In fact, the
boom is threatening to go bust. Inflation has risen rapidly
over the past year, exposing the underlying disconnect
between supply and demand in the economy. Simply put, the
energy bonanza has fueled sharply increased domestic demand
and in the absence of an adequate supply response, prices
have soared.
¶11. (C) The GOR explicitly acknowledged that economic growth

was off kilter in the run-up to the presidential election in
March. President Medvedev made a series of statements, the

Cable Viewer
most famous his February "four I's" speech at the Krasnoyarsk

Economic Forum, at which he called for fundamental reforms to
the Russian economy, including: strengthening institutions,
improving infrastructure, moving to a value added
"innovation" economy, and improving the climate for
investment. The net result, according to Medvedev and his
inner circle, would be a more modern and more competitive
economy.
¶12. (C) Medvedev's agenda appears to be one of the casualties

of the war in Georgia. There was already entrenched
opposition to the reforms within the ruling elite, and
especially to Medvedev's emphasis on fighting official
corruption and reducing state control. Much to the dismay of
the majority of the business community, Medvedev's apparent
loss of influence (reftel) would seem to put paid to the
reforms, at least for the time being. It has also raised two
very important questions: who is in charge of Russian
economic policy and what are their objectives?
¶13. (C) The easy answers in the wake of the Georgian conflict
would be Vladimir Putin and that his goal is maximizing the
economic power of the state. However, it is more complicated
than that. There are three primary economic tendencies or
groups that are discernible within the Russian government
elite. All of them enjoy some degree of support from the
"tandemocracy," and all of them have influence and shape
policies.
¶14. (C) Two of these groups are generally characterized as

economic "liberals" who favor market solutions: one group
centered on Finance Minister Aleksey Kudrin and the other on
President Medvedev in the person of his principal economic
advisor, Arkadiy Dvorkovich. For Kudrin's group, which
includes his Finance Ministry and the Central Bank, the
watchword is stability. They favor more moderate growth and
more gradual reforms. Dvorkovich's group, which includes the
Presidential Administration and most of the Ministry of
Economic Development, favors faster growth and faster
reforms.
¶15. (C) These two groups probably agree on more issues than
they disagree on, especially on the need for the

modernization, integration and diversification of the economy
encapsulated in Medvedev's reform agenda. However, a month
ago it was their disagreements over inflation and taxes that
were driving economic policy. Kudrin thought the economy was
overheating and wanted to slow growth and rededicate the GOR
to fiscal discipline. Dvorkovich argued for lower taxes to
stimulate even faster growth which, when combined with
structural reforms and infrastructure investments, would

Cable Viewer
unleash the supply response he thought was needed to restore

equilibrium to the economy.
¶16. (C) The result of the competition between these two

groups seemed to be a healthy debate within the GOR that was
likely to lead to a set of compromise economic policies that
would have promoted Medvedev's reforms while emphasizing
continued stability. xxxxx that the
government's policies could be summed up as: legal reform,
leading to reduced corruption, leading to increased economic
freedom, leading to a surge in small and medium sized
enterprises, leading to faster and better economic growth,
the benefits of which would be more widely and evenly
distributed.
¶17. (C) However, the third group within the governing elite
that has a great deal of sway over economic policies -- the
so-called "siloviki" -- has very different goals. They are
not easily identifiable as a group and have no natural leader
on a par with Kudrin, since their members are driven
primarily by self-interest. They do, however, share two
overarching characteristics: a preference for state control
and a high tolerance for official corruption. They are often
closely linked or overlap with another amorphous group, the
"oligarchs," Russia's fabulously rich billionaires, most of
whom made their money out of political connections, are loath
to challenge the government in the wake of the Yukos affair,
and an increasing percentage of whom, like Deputy Prime
Minister Sechin or the head of state corporation
Rostechnologia, Sergey Chemezov, have backgrounds in the
security services.
¶18. (C) The siloviki are by all accounts the big winners out
of recent events. There were reports that Medvedev was
planning to move many of them aside in a fall government
reshuffle. If such plans existed, they are now shelved. The
siloviki are also the main opponents of modernization and
integration, which would have limited their ability to
extract rent from the economy. These individuals are now
more likely to succeed in arguing for continuing state
control, and therefore their control, over the commanding
heights of the economy, especially the energy sector -- where
the profits are high and the profit margins even higher.
¶19. (C) The Kremlin's consistent rejection of the economic

consequences of its action, whether over the TNK-BP investor
dispute, the Mechel incident, or the conflict with Georgia,
has played into the siloviki's hands, reinforcing their
authority and their ability to delay reforms. That said, the
weakness of the siloviki's position, according to xxxxx and
others, is that the long-term uncertainty about the GOR's
commitment to market economics and international integration

Cable Viewer
) to playing by the rules at home and abroad ) will

inevitably reduce the economic resources at the government's
disposal and that in turn will put their two principal
objectives, personal enrichment and continued control of the
country, in direct competition.
-------
Comment
-------
¶20. (C) There are two economic futures for Russia. The first
is the one that Medvedev and the economic liberals have
sketched out in the government's ambitious "2020" development
plan. This future is that of an "innovation" economy that
has diversified away from a reliance on commodity exports
toward industries where Russia can add value. In this
economic future, Russia's enormous revenues from oil and gas
would have been used to transform and modernize the economy.
60 percent of Russians would be "middle class" providing a
lasting force for political and economic stability. This
future seemed poised to emerge as a central government
priority just a few months ago; now it is clearly on a back
burner.
¶21. (C) The darker future is one all too familiar to many
countries that are blessed with natural resources and cursed
with poor governance. It is a Russia still dependent on
volatile commodity exports, the surplus of which is easily

captured by an entrenched and self-interested governing
elite. It is a country of income extremes and unstable
politics. And it is a country that, with its resources being
rapidly depleted or with the world moving toward other energy
sources, may have missed its chance at lasting prosperity.
¶22. (C) Both of these futures pose opportunities and threats
for the U.S. A prosperous, more self-confident Russia is one
that will require the intensive engagement and policy
give-and-take that characterizes our relations with our
European allies. It is less likely to be a Russia that
threatens its neighbors and fears their stability and
prosperity. A Russia still dependent on commodity exports
will likely be intrinsically weaker and less influential
globally, but lacking domestic accountability, it will pose
more of threat to its neighbors and therefore to
international order.
¶23. (C) Without doubt, the U.S. has a clear interest in the
first future: for a more prosperous, better integrated, more
stable Russia. With that in mind, we would argue that the
U.S. needs to be careful that our efforts to demonstrate that
Russia's actions vis-a-vis Georgia have real consequences do

Cable Viewer
not play into the hands of the anti-reform circles who are
promoting that other future.
¶24. (C) The Russians of course, especially the progressives

around Medvedev, also face a difficult choice. Medvedev's
recent public statements, especially the harsh rhetoric that
Russia has nothing to fear from economic isolation, are
contradicted by privately-expressed hopes that we not take
steps to isolate them. They will ultimately have to decide
when and how to confront their domestic opponents if they are
to avoid this fate and if they are to resume their efforts to
transform Russia's economy.
Beyrle

Cable Viewer
Twitter this
Digg this page
Viewing cable 08MOSCOW2632, XXXXXXXXXXX




Discussing cables

2008-09-03 2010-12-01 Embassy
13:01 21:09 Moscow
VZCZCXRO4284
PP RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHMO #2632/01 2471313
ZNY CCCCC ZZH
P 031313Z SEP 08
FM AMEMBASSY MOSCOW
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY

Cable Viewer

RHMFISS/DEPT OF ENERGY WASHINGTON DC PRIORITY
SIPDIS
DEPT FOR EUR/RUS, FOR EEB/ESC/IEC GALLOGLY AND WRIGHT

EUR/CARC, SCA (GALLAGHER, SUMAR)
DOE FOR FREDRIKSEN, HEGBORG, EKIMOFF
EO 12958 DECL: 09/02/2018

TAGS EPET, ENRG, ECON, PGOV, PHUM, RS
SUBJECT: XXXXXXXXXXX
TRANSPARENCY
Classified By: DCM Eric S. Rubin for Reasons 1.4 (b/d)
-------
SUMMARY
-------
¶1. (C) XXXXXXXXXXX is seeking information about the companies’

relations with shadowy and reportedly Kremlin-connected oil
trader Gunvor. XXXXXXXXXXX he just wants to shed light on the
fundamental need for transparency in Russia, where no one seems
to care about “massive corruption.” XXXXXXXXXXX End summary
-------------------------
“TOTALLY NON-TRANSPARENT”
-------------------------
¶2. (C) A primary and very large hurdle for those who analyze
Russia’s oil and gas sector is the dearth of reliable
information. News reports abound of large business transactions
related to little-known companies and involving undisclosed sums.
This lack of transparency is often discussed, but is seldom
officially challenged. XXXXXXXXXXX
¶3. (C) XXXXXXXXXXX. Both XXXXXXXXXXX told us that the rising and
reportedly massive volumes of trade through secretive Swiss-based
oil trading firm Gunvor were the genesis of the cases against
Rosneft, Gazpromneft, and Surgutneftegaz. This trade was
resulting in reportedly very large profits for Gunvor and its
secretive ownership, which is rumored to include Prime Minister
Putin.
¶4. (C) XXXXXXXXXXX said he believes that XXXXXXXXXXXX and he is

frustrated that nobody in Russia seems to care. According to

Cable Viewer
XXXXXXXXXXX and XXXXXXXXXXX, Gunvor has risen quickly to become

the top trader of Russian oil exports, now responsible for up to
50% of the total. He is seeking information from the companies
about their relationships with Gunvor: trading volumes, the
general terms of the contracts, and how this particular trading
company was selected by the oil companies. The companies, have
stonewalled -- their relations with Gunvor are &totally non-
transparent,” XXXXXXXXXXX complained.
¶5. (C) XXXXXXXXXXX XXXXXXXXXXX Transneft, the primarily

government-owned oil transportation monopoly. XXXXXXXXXXX
information related to 13 billion rubles ($530 million) that the
company reportedly donated to “charity” in the last two years.
According to XXXXXXXXXXX, the company gave more to charity than
it spent on pipeline repair and maintenance or paid out in
dividends. However, the company has refused to disclose any
information related to its charitable contributions, including
the names of the beneficiaries.
¶6. (C) XXXXXXXXXXX
---------------------------------------------
WHO OWNS RUSSIA’S FOURTH LARGEST OIL COMPANY?
---------------------------------------------
¶7. (C) Of the companies XXXXXXXXXXX one stands out for its
secrecy -- Surgutneftegaz. As with Gunvor, the company is rumored
to be one of Putin’s sources of undisclosed wealth. No one knows
who the ultimate beneficiaries are of the company, XXXXXXXXXXX
“Can you believe,” he told us, “that no one knows who owns
Russia’s fourth largest oil company?” XXXXXXXXXXX told us that he
personally does not believe Putin owns either Surgutneftegaz or
Gunvor since the Prime Minister does not really need to have a
direct link to an asset to benefit from it.
¶8. (C) XXXXXXXXXXX added that all requests for information from
Surgutneftegaz are routinely denied. After numerous requests and
many instances of “not our department” responses, sometimes
someone in the company provides some vague information that is
“totally unverifiable.” XXXXXXXXXXX said that unfortunately
little can be done but to sue, and those suits are clearly going
nowhere.
--------------------------------------------- -
NO ILLUSIONS OF WINNING, BUT SUITS TO CONTINUE
--------------------------------------------- -
¶9. (C) XXXXXXXXXXX-------
COMMENT
-------

Cable Viewer
¶10. (C) Opacity is commonplace in Russian business, especially

in the sensitive oil sector, and it is a major hindrance to
modernization. Without a steady flow of verifiable information,
efficient capitalism is impossible. XXXXXXXXXXX End comment.
BEYRLE

Cable Viewer
Twitter this
Digg this page
Viewing cable 08MOSCOW2700, MOSCOW TOLERANCE MUSEUM TO OPEN IN 2011




Discussing cables

2008-09-09 2010-12-01 Embassy
08MOSCOW2700 UNCLASSIFIED
14:02 21:09 Moscow
VZCZCXRO8625
RR RUEHLN RUEHPOD RUEHVK RUEHYG
DE RUEHMO #2700 2531405
ZNR UUUUU ZZH
R 091405Z SEP 08
FM AMEMBASSY MOSCOW

Cable Viewer

RUEHTV/AMEMBASSY TEL AVIV 2210
UNCLAS MOSCOW 002700
SIPDIS
E.O. 12958: N/A

TAGS: PGOV PHUM PREL RS
SUBJECT: MOSCOW TOLERANCE MUSEUM TO OPEN IN 2011
¶1. (U) Summary. The Federation of Jewish Communities in

Russia announced its plans for the opening of the world's
l...

Cable Viewer
Twitter this
Digg this page
Viewing cable 08MOSCOW2701, NEW SARKOZY-MEDVEDEV AGREEMENT:

QUESTIONS REMAIN



Discussing cables

2008-09-09 2010-12-01 SECRET// Embassy
08MOSCOW2701
15:03 21:09 NOFORN Moscow
VZCZCXRO8679
PP RUEHFL RUEHKW RUEHLA RUEHROV
DE RUEHMO #2701/01 2531507
ZNY SSSSS ZZH
P 091507Z SEP 08
FM AMEMBASSY MOSCOW

Cable Viewer

NOFORN
SIPDIS
E.O. 12958: DECL: 09/08/2018

TAGS: PREL PGOV GG RS
SUBJECT: NEW SARKOZY-MEDVEDEV AGREEMENT: QUESTIONS REMAIN
Classified By: Political Minister Counselor Alice G. Wells for

reasons
1.4(b) and (d)
¶1. (S/NF) Summary: While achieving some key concessions

from Russia on next steps in the Georgia conflict, the
Sarkozy-Medvedev agreement from September 8 still leaves open
questions about the nature and size of Russian troops, role
of EU observers, and the format of October security talks.
After contentious talks lasting four hours, the two sides
reached agreement on the timing of the withdrawal of Russian
forces from Georgia, international observer mechanisms, and
the convening of an international conference on security and
refugees for October 15 in Geneva. FM Lavrov called for
South Ossetia and Abkhazia to participate in the security
conference, and announced Russian troops would remain in
those areas. Medvedev made clear that Russia would not
reverse its recognition of Abkhazia and South Ossetia.
Medvedev and especially Putin remain defiant toward the U.S.,
with Deputy Chief of General Staff General Nogovitsyn
alleging U.S. "complicity" in the armed conflict. Pundits
claim the September 8 Sarkozy visit a victory for Russia,
with the Sarkozy follow-on agreement likely to produce the
Cyprus scenario the Russians say they are comfortable with.
End Summary
------------------
Tense negotiations
------------------
¶2. (U) In their meeting September 8, Presidents Sarkozy and

Medvedev discussed their August 12 six-point ceasefire
agreement and agreed upon additional points in three areas.
-- Withdrawal of troops. Within seven days, Russia will

withdraw its troops from the observation posts between Poti
and Senaki, while Russia will within 10 days following the
deployment of "international mechanisms" withdraw its

Cable Viewer
peacekeepers from the zones adjacent to South Ossetia and

Abkhazia to pre-war positions. The document also calls for
the complete return of Georgian armed forces to their bases
by October 1, 2008.
-- International observation mechanisms. Both the existing

UN and OSCE observer missions will remain, while "at least
200" EU monitors will be deployed by October 1, 2008 in the
zones adjacent to South Ossetia and Abkhazia.
-- International discussions. An international conference on

Caucasus security will begin on October 15, 2008 in Geneva,
devoted principally to security, refugees and internally
displaced persons (IDPs). The GOR considers that this
conference fulfills the requirements of point six of the
Medvedev-Sarkozy plan of August 12, 2008, which calls for
international discussions on security and stability
arrangements.
¶3. (S/NF) XXXXXXXXXXXX told DCM that the atmosphere

during the negotiations was quite charged and at times became
openly hostile. Sarkozy at one point grabbed FM Lavrov by
the lapels and called him a liar in very strong terms, reacting
to Lavrov's denial that Russia had failed to comply with its
previous withdrawal commitments.XXXXXXXXXX said that
Sarkozy had arrived with a "take it or leave it attitude, very
American in style and very confrontational," and the Russians
Had responded icily. Levitte played a central role in negotiating
the text with Prikhodko, who seemed to be under a lot of pressure
and in fairly bad spirits.
¶4. (S/NF) In the end, the French believe they got the best
agreement that could be hoped for. XXXXXXXXXXXX said they
attribute their success primarily to the Russians being ready
to reach such a deal -- and in fact anxious to have it as a
way of withdrawing their forces. EU unity and harmony
between the U.S. and the EU also played a role;
XXXXXXXXXXXX observed that the Russians were
clearly conscious that they were facing a united front.
Sarkozy reportedly warned Medvedev that Russia's standing
as a "serious power" had been severely harmed and failure
to meet the obligations Russia is assuming under this agreement
could do a great deal of further damage.
¶5. (S/NF) XXXXXXXXXXXX added that the Russians

treated Barroso harshly and condescendingly, and tried to exclude
him from many of the sessions. The French attributed this to
the
Russian view that Barroso is basically a glorified international
civil servant "not worthy to be in the Czar's XXXXXXXXXXXX
confirmed that Putin was nowhere to be seen during the visit.

Cable Viewer
MOSCOW 00002701 002 OF 004
¶6. (SBU) In their joint press conference after the meeting,

Medvedev contrasted the EU and U.S. roles, calling the EU
"our natural partner, our key partner," and welcoming the EU
approach as "balanced," while contrasting it to "exotic or
extremist" positions calling for sanctions. He again accused
the U.S. of blessing Georgia's desire to use force in the
conflict, whether by "direct order or silent approval," and
used this purported U.S. behavior as a reason to call for a
new world order. Medvedev made clear that Russia would not
reverse its recognition of Abkhazia and South Ossetia.
¶7. (SBU) Sarkozy in turn renewed the EU's rejection of

Russia's recognition of South Ossetian and Abkhazian
independence, and at times seemed amused when he thanked
Medvedev for speaking as the "representative of the European
position" on Georgia, and again later when he questioned
Russia's right to "determine Georgia's borders."
------------------
Ambiguities remain
------------------
¶8. (C) By fixing a timeline for withdrawal, the agreement

succeeds in rendering obsolete Sarkozy's August 14
clarifications to the August 12 points, to which the GOR
maintained it had never agreed. However, the September 8
agreement leaves open several points that are unclear or
contentious. The number and nature of Russian troops
remaining in South Ossetia and Abkhazia is not specified.
Late September 9, Medvedev declared that Russia would keep
7,600 troops in the two zones; 3,800 in each area. The
Sarkozy agreement appears to accept Russian conditionality
that EU observers be limited to the areas "adjacent" to the
conflict zones. The nature of the international discussions
leaves the precise format of the talks open, not clarifying
if Russia will participate as a mediator or as one of the
conflict parties, whether and in what capacity Abkhazia and
South Ossetia will participate, and what the precise goals of
the talks are. Finally, while Sarkozy gave Medvedev a
non-use of force statement signed by Saakashvili, the
document has no legally binding effect, and it is unclear
whether there will be an effort to make it legally binding.
¶9. (C) Following Sarkozy's departure, FM Lavrov used a press

conference on September 9 to clarify that Russian troops (not
peacekeepers) would remain in South Ossetia "for a long
time," ostensibly to protect the residents there from
Georgian aggression. On the EU observers, he said their role
would be to guarantee that Georgia would not use force
against South Ossetia and Abkhazia. On the international

Cable Viewer
discussions, he demanded that South Ossetia and Abkhazia be

given a seat at the table as full-fledged participants.
¶10. (U) Ambassadors and Defense Attaches were invited to a

briefing by Ministry of Defense spokesman General Anatoliy
Nogovitsyn September 9. Despite a standing-room only
attendance Nogovitsyn disappointed the diplomatic corps by
simply rehashing Russian arguments used to justify Russia's
actions in Georgia, highlighting the history of the
agreements authorizing Russian peacekeeping forces and the
chronology of events from August 6-10. He noted that in
response to a Georgian request, the U.S. had quickly helped
withdraw Georgian troops from Iraq and transported them to
Georgia. By helping Georgia, the U.S. had "set a precedent
of complicity" in the armed conflict, he claimed. Nogovitsyn
also showed alleged Georgian plans of attack for Abkhazia
which Russian forces had "recovered," arguing that they
showed that Georgia had planned to occupy all of Abkhazia,
target hospitals and civilian infrastructure, prevent
refugees from fleeing, etc. He claimed they showed an
"explicit manifestation of genocide." He said that as of
September 9, Russia had 2452 peacekeepers in the conflict
zone. He summarized the plan agreed by Sarkozy and Medvedev
September 8, only noting that Russia expected the EU to send
"at least 250" observers.
----------------------------------
Russia defiant; Tandemocracy watch
----------------------------------
¶11. (C) XXXXXXXXXXXX claimed that the EU observer mission,

limited to Georgia proper, was a diplomatic success for Russia,
even though the GOR on the eve of the Sarkozy-Medvedev meeting
had categorically refused to allow EU observers to participate in
the
post-crisis management. XXXXXXXXXXXX considered the
Sarkozy-Medvedev deal the most likely compromise, and the
maximum that either side could expect. He called the agreement
on Russian troop withdrawal something
MOSCOW 00002701 003 OF 004
that Moscow needed, in order to escape continued

international pressure for not honoring its commitments.
¶12. (C) Well-connected editors tell us that the mood within

the ruling circles remains defiant. XXXXXXXXXXXX both
XXXXXXXXXXXX and XXXXXXXXXXXX separately
told us September 8 that they had seen Putin "at his toughest."
Putin brushed aside the significance of any Western backlash
to Georgia: on the Sochi Olympics, "let them cancel it: we'll
build one stadium instead of two;" on energy, "we'll sell Central

Cable Viewer
Asian gas to those who want it, including Asia;" on estrangement

with Europe, "don't worry, European leaders tell me that
everything will be normal." If the West did not want Russia,
Russia did not need the West, Putin repeated. "They cannot
intimidate us." At the same time, XXXXXXXXXXXX stressed
that Putin did not advocate a preemptively punitive response
and specifically demurred from pulling Russian investments from
Fannie Mae and Freddie Mac, arguing that the markets needed
more, not less, predictability. Putin maintained that
Russia wanted to be like China -- to "sit under the roots of
the tree" and build its power quietly -- but that immediate
global responsibilities forced it to act. "When Russia is
challenged, it must respond: we cannot just concede."
XXXXXXXXXXXX told us that the leadership continued to
brush aside the market's punishment of Russian policies,
arguing that they believe the public line that America's
downturn -- and not Georgia -- has precipitated Russia's
beating.
¶13. (C) The public allegations made by Medvedev and Putin

that the U.S. turned a blind eye to, or encouraged, Georgia's
August 7 attack on Tskhinvali continue to be reinforced in
private. Putin told the editors that the U.S. was engaged in
cynical electoral politics and needed to create an "enemy" to
combat, and received no push back in his description of a
one-sided U.S. policy aimed at shoring up the "puppet,"
Saakashvili. There was also no argument with Putin's
assessment that the Georgian leader was politically "dead,"
likely insane, and irrelevant to Russia's decision to
recognize South Ossetia and Abkhazia. XXXXXXXXXXXX
marveled at Putin's posture, noting the Prime Minister was
"convinced that right was on his side," and authoritarian in
tone.
XXXXXXXXXXXX, warned us that Russian actions were
animated by a wave of patriotism and anti-American sentiment.
"Never have Russians been so united behind Putin and Medvedev"
a stance made easier, he noted, by the public revulsion towards
Saakashvili, which he shared.
¶14. (C) In assessing the ruling tandem, XXXXXXXXXXXX

stressed that "Putin had proved himself" in the crisis; while
discounting the theory that the Prime Minister intended to return
to the Kremlin soon, XXXXXXXXXXXX said the war in Georgia
made it absolutely clear that Putin did not intend to leave
Medvedev alone. While XXXXXXXXXXXX downplayed the
demise of Medvedev's reform agenda, he agreed that it had been
put to the side. XXXXXXXXXXXX struck a more pessimistic
note, arguing that the war played to the strengths of the anti-war
camp. Russians looked at U.S. statements and concluded that
America was uncomfortable with Russian independence and
hostile to Russian strategic interests. XXXXXXXXXXXX
argued that having "surrounded" Russia, the U.S. should

Cable Viewer
understand the backlash that it produced.
¶15. (C) XXXXXXXXXXXX told us on September 9 that

the President had emerged stronger because of the
Georgian crisis. Whereas Putin appeared to take the
lead during the fight, Medvedev showed his mettle by
arranging the terms to stop the conflict. The decision to
recognize the separatist regions was "unavoidable" after the
leadership had decided to go beyond the borders of South
Ossetia (a decision that XXXXXXXXXXXX linked to Putin's
personal enmity for Saakashvilli) and underscored that
Moscow could not backtrack on that decision. Medvedev was
apparently comfortable with the state of affairs
XXXXXXXXXXXX noted that Medvedev looked "relaxed"
during a private dinner at Sochi on September 2. For the time
being,
XXXXXXXXXXXX sawMedvedev as somewhat boxed in and
forced to take a more aggressive, "emotional" public stance than
his
usual lawyerly approach to policy. In the current Russian
political
environment, any effort at taking a "softer approach" would only
make him appear weak.
-------
Comment
-------
¶16. (C) The September 8 Sarkozy-Medvedev document is a step
MOSCOW 00002701 004 OF 004

forward in setting clear deadlines for Russian troop
withdrawal. However, the limits on the EU observer mission,
as well as questions about the October 15 security
conference, and Medvedev's insistence that Russia will not
reverse its decision on recognition, presage the likelihood
of a new "Cyprus-like" frozen conflict in the Caucasus.
BEYRLE

Cable Viewer
Twitter this
Digg this page
Viewing cable 08MOSCOW2837, RABBIS SHAYEVICH AND GOLDSCHMIDT

CAUTIOUSLY



Discussing cables

2008-09-22 2010-12-01 Embassy
15:03 21:09 Moscow
VZCZCXYZ0002
RR RUEHWEB
DE RUEHMO #2837/01 2661514

Cable Viewer
ZNY CCCCC ZZH

R 221514Z SEP 08
FM AMEMBASSY MOSCOW
SIPDIS
E.O. 12958: DECL: 09/22/2018

TAGS: PGOV PHUM PINR PREL RS
SUBJECT: RABBIS SHAYEVICH AND GOLDSCHMIDT CAUTIOUSLY
OPTIMISTIC ABOUT RUSSIAN JEWISH COMMUNITY
REF: MOSCOW 02696
Classified By: Ambassador John Beyrle for reason 1.4 (d)
¶1. (C) Summary: The Ambassador met separately with xxxxx during
the week of September 15.
xxxxx probed for potential U.S. sanctions against
investors in South Ossetia and Abkhazia, and flagged concern
over Iran's nuclear program. Both xxxxx agreed that
manifestations of anti-Semitism in Russia had fallen in
recent years, but xxxxx attributed Putin's relatively
pro-Jewish stance to his need to not appear anti-Semitic
during his campaign against the oligarchs. Regarding the
Jewish community, xxxxx praised the positive effects of
Russia's explosion of wealth, while xxxxx linked economic
expansion to a negative shift in the occupational and
educational interests of the Russian Jewry. Both xxxxx
added that immigration from Israel to Russia vastly exceeded
Russian emigration to Israel, but xxxxx noted the
reduced Israeli financial support because of the falling
dollar. End Summary.
Anti-Semitism: Muted Compared to Soviet Era

-------------------------------------------
¶2. (C) xxxxx told the

Ambassador on September 16 that anti-Semitism in Russia has
declined in recent years, and that Russian Jews faced fewer
problems today than in Soviet times. xxxxx noted that
the chance for a reversal of fortune for Russian Jews
existed, characterizing Russia as a country of extremes. He
drew an analogy to Gorbachev's prohibition of alcohol and the
Russian penchant to drink excessively as a manifestation of
these extremes. xxxxx more cautiously agreed that

Cable Viewer
anti-Semitism was not widespread -- especially in Russia's

political sphere -- as it had been in past years. However, he
attributed this change, in part, to Putin's conscious desire
to appear unbiased in his campaign against Russia's
predominately Jewish oligarchs. xxxxx added that
economic prosperity brought tolerance and reduced the need
for scapegoats, noting that Russia's newfound wealth softened
a principal grievance of Russian society. He also applauded
the Russian government's efforts to punish those that
committed racially-motivated crimes, saying that the 16-year
imprisonment of Aleksandr Koptsov for stabbing 11 people in a
Moscow synagogue in 2006 left an indelible impression on
society. xxxxx also explained the role of numerous
Jewish organizations in Russia and Eastern Europe, referred
specifically to the increasing prominence of the Russian
Jewish community in Germany, and he said that Russian Jews
wQl eventually assume leadership of the Jewish community
there.
Political Jockeying, Georgia, Iran

----------------------------------
¶3. (C) xxxxx admitted that he did not have the same
level of contact with the Kremlin as xxxxx, Chief
Rabbi of Russia Berel Lazar (Note: Along with Chief Rabbi of
Russia Berel Lazar, xxxxx Calling himself an old man, he claimed
to have
little interest in attending official functions, and he
appreciated the fact that he was no longer "bothered" by the
ruling elite. He singled out the Kremlin's disapproval of
Russian oligarch Vladimir Gusinsky, xxxxx as the chief reason for
his past and current
political "suffering."
¶4. (C) xxxxx in his meeting, probed for information

about potential U.S. crackdowns against any oligarchs for
investing in South Ossetia or Abkhazia, curious about the
future funding for the Jewish community. He specifically
mentioned diamond magnate Lev Leviev's rumored financial
problems stemming from some bad investments, and added that
the current financial crisis damaged the Russian elite.
xxxxx expressed concern over Iran, noting to his recent
travel to Brussels for the European Jewish Congress (EJC)
annual meeting, chaired by EJC President and Russian
billionaire Vyacheslav Moshe Kantor. Kantor called for
strong, legal, multilateral measures against Iran for their
development of a nuclear weapons program in a May 2008 press
conference, then subsequently traveled to Tehran for
meetings, according to xxxxx He spoke about Kantor's
work on Holocaust issues, specifically drawing on Kantor's
work with the government of Poland on the 65th anniversary of

Cable Viewer
the liberation of Auschwitz, as well as his cooperation with

the government of Ukraine in 2006 on remembering the 65th
anniversary of the executions at Babi Yar. xxxxx

estimated that Kantor had dedicated approximately 30-40
million dollars to his work in Eastern Europe, but did not
specifically say if Kantor drew on his own funds for this
purpose.
Jewish Community Relations

--------------------------
¶5. (C) While xxxxx gave a mixed assessment on the future

of Russia's Jewish community, xxxxx saw Russia's
economic growth as positive for the Jewish middle class.
While naming the Georgian and Azeri Jewish communities in
Moscow as strong and calling the entire Jewish community more
stable, xxxxx criticized the motivations of Russia's
Jewish youth, saying they no longer strove for prestigious
careers in science, teaching, or theology as in Soviet times.
xxxxx placed importance on current youth projects,
pointing to the need for a more robust Jewish upbringing in
contemporary society considering that many young Jews pursued
business careers. xxxxx on the other hand, saw
Russia's newfound wealth as a positive factor for the Jewish
community since it has enabled the formerly lower class
citizens to reach a middle class status. Community members
have earned the ability to buy cars and real estate, travel
once a year, and even provide donations for community
projects. He also relayed the fact that the Moscow Jewish
community had taken control of its financial situation, no
longer relying on help from abroad.
¶7. (C) While the number of Jews in Russia remained low, the
community retained strong support. xxxxx could not give
an exact number for Russia's Jewish population, estimating
the community's number at 500,000 with only 1,500 Jews left
in his birthplace of Birobidzhan, Jewish Autonomous District
(Note: 2008 International Religious Freedom Report estimated
Russia's Jewish population at 250,000). xxxxx blamed the
decline of the Jewish Autonomous District on a lack of
leadership. He tallied 112 Jewish communities in Russia and
added that new synagogues had been built in Petrogorsk,
Tomsk, Tula, and in the northern Caucasus. xxxxx told
the Ambassador that the Congress of the Jewish Religious
Organizations and Associations of Russia (KEROOR) had over
100 communities in Russia, predominantly based in St.
Petersburg, Moscow, and the Golden Ring outside of Moscow.
Those communities outside of these three regions typically
depended on financial support from Moscow.
¶8. (C) xxxxx for a

Cable Viewer
Jewish museum failed to bear fruit. While Lazar's Museum of

Tolerance (reftel) received high-level support from Putin and
Luzhkov, his past efforts to create a non-denominational
Jewish museum never took off. xxxxx saw the Museum of
Tolerance as a Chabad project, one that will present Lazar's
perception of Jewish history and culture and confirmed that
Leviev financed Lazar's project, along with Roman Abramovich.
Israel
------
¶9. (C) xxxxx indicated that Jewish immigration from

Israel to Russia greatly exceeded that of emigration from
Russia to Israel. xxxxx appeared impressed by the level
of reverse immigration from Israel to Russia, saying that
only approximately 1,000 Russians emigrated to Israel over
the past year. xxxxx
impressions, saying that approximately 2,000 Jews in the
entire former Soviet Union moved to Israel in the past year.
Both regarded the figures as the product of Russia's growing
stability and wealth. Adding greater depth on
Russian-Israeli relations, xxxxx blamed the falling
dollar for the reduction of Israeli support to the Russian
Jewish educational system. xxxxx lauded the
recently signed visa-free travel agreement between Russia and
Israel since it would mean less work for him, no longer
needing to help his community members receive visas.
Beyrle

Cable Viewer
Twitter this
Digg this page
Viewing cable 08MOSCOW3343, MEDVEDEV’S ADDRESS AND TANDEM POLITICS




Discussing cables

2008-11-19 2010-12-01 Embassy
06:06 23:11 Moscow
VZCZCXYZ0000
PP RUEHWEB
DE RUEHMO #3343/01 3240643

ZNY CCCCC ZZH
P 190643Z NOV 08
FM AMEMBASSY MOSCOW

Cable Viewer
Wednesday, 19 November 2008, 06:43

SIPDIS
EO 12958 DECL: 08/15/2017
TAGS PGOV, PHUM, SOCI, RS
SUBJECT: MEDVEDEV’S ADDRESS AND TANDEM POLITICS
REF: MOSCOW 03265
Classified By: DCM Eric Rubin. Reason: 1.4 (d).
¶1. (C) Summary. Medvedev’s address to the Federal Assembly last
week provided a prism for viewing the power relationship in the
Medvedev-Putin tandem, refracting opinion amongst our contacts
into three, very divergent, camps. The first group views Medvedev
as ascendant, slowly accruing power as he plays to his strengths
managing the economic crisis. The second, more skeptical, group
argues that Medvedev continues to play Robin to Putin’s Batman,
surrounded by a team loyal to the Premier and checked by Putin’s
dominance over the legislature and regional elites. Adherents to
the third group see no essential difference between Putin and
Medvedev, taking at face value the tandem’s unanimity in purpose
and vision. All are hindered by the impenetrable nature of
Kremlin politics and the fertile field of speculation and rumor
that the information vacuum creates. Putin’s address to United
Russia on November 20, which will be televised on Channel 1,
could provide an opportunity to make a more definitive judgement
on the balance of forces within the tandem. End Summary.
Medvedev’s Fans
---------------
¶2. (C) Medvedev’s public bravura as the “commander-in-chief”
during the Georgia war and his proactive approach to the
darkening economic picture have led some of our contacts to see
the president coming into his own in recent months. Aleksey
Mukhin, the director of the Center for Political Information,
told us that Medvedev’s address demonstrated how far the
president has come, learning from his predecessor the art of
balancing the contradictory elite impulses and interests. Mukhin
was not surprised by the strong language directed at the U.S.,
since Medvedev’s rhetoric has toughened since August. Yet, Mukhin
saw the aggressive language primarily as a sop to Putin and the
hard-liners before Medvedev moved on to his reform agenda.
Extending the presidential term will provide Medvedev the
possibility of 10 years in power -- enough time for him (or his
successor) to implement lasting reform. Mukhin explained that the
main thrust of the political reforms is to compel regional
leaders to establish closer contact with local assemblies and
with voters. He sees this as a first step in Medvedev’s plan to
build his own constituency within United Russia and the regional
elite as the basis for a re-election run in 2012.
¶3. (C) Mark Urnov of the Higher School of Economics viewed Putin
as the principal decision maker, but one who is under increasing

Cable Viewer
pressure owing to the financial crisis. Urnov largely dismissed

Medvedev’s address as a “PR effort” to demonstrate to a domestic
audience that he could deliver a strong speech on foreign policy
and security issues. Like Mukhin, Urnov argued that the elements
of political reform bear closer examination as Medvedev’s first
steps in creating his own team. The president’s anti-corruption
agenda provided a signal to the elite that he has the will and
power to target their economic interests. Urnov expects him to
use this selectively to begin to remove people in ministries
(deputy ministers and above) as well as some regional leaders and
to replace them with “his people.”
¶4. (C) Urnov told us that Medvedev’s tough rhetoric toward the U.
S. was dictated equally by his poor standing in the eyes of the
military and by the inability of Putin and his closest advisors
to deal with the stresses of the economic downturn. As for the
former, Urnov said that recent surveys of military officers --
which are being kept quiet -- indicate the absolute abysmal
regard with which the military holds Medvedev. Promises of
increased funding will have to be scaled back, leaving Medvedev
to turn to words about the importance of the military in
protecting Russian interests and belittling the U.S. as acting
irresponsibly. On the second point, Putin (and indirectly
Medvedev) do not understand how to function politically in an
economic crisis. They understand how to exploit the good times
to their advantage, but not how to lead and survive in the bad.
Urnov noted that rhetoric is only going to get them so far,
especially now after the U.S. elections as the Obama victory and
a change of administrations makes it much harder for them to put
blame on Washington for Russia’s travails.
Putin’s the Man
---------------
¶5. (C) Other contacts are less generous toward Medvedev,
considering him an instrument of Putin’s power rather than an
independent player. A review of Medvedev’s address by the
business paper Vedemosti argued that many of the proposed
“liberal reforms,” such as having the majority party recommend
gubernatorial candidates and making the government answerable to
the Duma on some issues, would strengthen the Putin-led United
Russia -- indicating that his agenda continues to shape the
tandem policy line. Likewise, press reporting pointed out that
the other proposals, such as giving 1-2 seats to minority parties
that garner 5-7 percent of the vote and measures to ease the
registration of parties, would have made no difference in the
past election and are unlikely to signal a broadening of
political pluralism. In short, those analysts saw Medvedev’s
reform agenda strengthening Putin and his position, despite the
democratic rhetoric in the address.
¶6. (C) XXXXXXXXXXXX cited the Stalinist credo “cadres decide
everything” as justification for dismissing Medvedev as a real
contender (indeed, XXXXXXXXXXXX sees the president as the number
3 guy, behind Putin and Deputy Premier Igor Sechin). In his
formulation, Putin remains the main arbiter of elite conflict and

Cable Viewer
continues to balance the two, unequal factions against each

other. For opposition leader Boris Nemtsov, whose SPS party was
bought out by the Kremlin, Medvedev remains the Lilliputian to
Putin’s commander-in-chief. Insecurity and lack of legitimacy
would drive a Putinesque policy, but Nemtsov stressed that it was
Putin who pulled all the strings.
Two Peas in a Pod
-----------------
¶7. (C) Other contacts commented that a search for evidence of
dissonance between the two leaders is either the forlorn hope of
Western-leaning liberals for a political thaw or a legacy of
“Kremlinology” that presupposes inter-leadership conflict as the
sine qua non of Russian politics. Perhaps more important, they
point to the unity of message between Putin and Medvedev on the
most important issues: the revival of Russia’s role as a great
power, the need for combating corruption within the system, and
the goal of improving the quality of life for everyday Russians.
U.S. resident, but United Russia-connected analyst Nikolay Zlobin
concluded to us that the “tandem works.” No one outside Medvedev
and Putin were privy to the codicils of this political
arrangement, but the lack of transparency, he maintained, did not
mean a lack of political efficiency.
¶8. (C) Tatyana Stanovaya of the Center for Political
Technologies is representative of the “tandem as team” camp and
sees little reason to read the tea leaves for signs of a split.
She pointed to Medvedev’s address as the contradictory medley of
a “Putin line” seeking to strengthen the state and a “Medvedev”
impulse to scale back state involvement. Both the Kremlin and the
White House approved the message, and the final product reflected
coordination and compromise between the two leaders. Stanovaya
underscored that those aspects attributed to Putin, particularly
the proposal to extend the presidential term to 6 years, will
have an immediate impact, while those considered more “Medvedian”
-- lowering the barriers for smaller parties, for example -- will
only have significance further down the road. Perhaps most
important, Stanovaya emphasized that all of the elements of the
address, like all other aspects of policy, enjoyed at least some
support from both sides of the tandem, or they would not have
been introduced.
Constitutional Changes
----------------------
¶9. (C) The most controversial moment of Medvedev’s address was
his proposal to extend the presidential term to 6 years, and that
for Duma members to 5 years. The press was, and remains, rife
with rumors that the constitutional change is designed to create
the conditions for a Putin return to the presidency, either by
Medvedev’s resignation or through a snap election, brought about
by the change itself. Other rumors, including comments by
Communist party leader Zyuganov consider the proposed amendment
to be a “graceful” way for Putin to leave his post as Premier,
before the economy collapses, requiring a new round of Duma
elections and the resultant dismissal of the current government.

Cable Viewer
The haste in which the administration is moving forward -- the

Duma may accomplish the required three readings and vote its
approval by November 21, and there are no apparent obstacles to
having regional parliaments ratify the change -- has served to
heighten speculation about the reasons behind what would be the
first amendment to the 15-year old constitution.
¶10. (C) Most of our contacts saw the term limit issue in terms
of the tandem’s longer-term agenda, rather than a short-term plan
to shake up the leadership. Stanovaya reminded us that Putin had
raised the idea of extending term limits when he was president,
but he did not want to lose face with the West or his own society
by adapting the constitution. Now that Putin’s successor has come
to power, she argued, the time has come to make the changes.
Urnov sees the pressures of the looming economic crisis driving
the timing of Medvedev’s proposal. He noted that the
constitutional change did not need to be included in Medvedev’s
address -- indeed, initial drafts did not include it. The
decision to go forward now was dictated completely by politics:
Putin and Medvedev see that their approval ratings dropping
somewhat, and they fear how far they might go. Urnov believes
that the tandem decided that is better to use whatever political
momentum they still have due to the Georgia conflict to push
through the constitutional change now.
¶11. (C) Few of our contacts gave any credit to rumors about
Putin leaving his office. XXXXXXXXXXXX quipped that “Putin is not
Ghandi -- having succeeded in achieving major political goals, he
would not be content to become the spiritual leader of his
party.” XXXXXXXXXXXX said that Putin knows he will expose his
loyal team to risk, including removal from power, loss of
fortune, and even imprisonment if he were to leave the scene.
Mukhin also dismissed rumors about a possible Putin resignation,
which would represent the abandonment of all that he has built up
to this point. He argued that Putin recognizes that his
resignation would signal a real clash between the elite clans and
likely lead to political, economic, and even social instability.
Moreover, there are plenty of scapegoats for Putin to blame if
the economic downturn deepens substantially. Zlobin, however, saw
the constitutional amendments strengthening the party’s oversight
of the governors as a preliminary step for preparing Putin’s
shift to head United Russia on a daily basis, without the
responsibility for managing a sinking economy.
Where You Sit is Where You Stand
--------------------------------
¶12. (C) Broadly speaking, analysis of the tandem reflects the
political orientation of the analyst. As noted in earlier
reporting, our contacts from the “liberal democratic” camp are
dismissive of any proposals from the tandem government, seeing
the proposals as further undermining the structure of Russian
democracy (Reftel). “Establishment liberals,” like Mukhin and
Urnov, are inclined to place greater emphasis on ideas, looking
at Medvedev’s progressive rhetoric as a sign of possible change
and ultimately a growing challenge to Putin’s statist

Cable Viewer
inclinations. Less ideological analysts focus more on systematic

factors and tend emphasize Putin’s overwhelming advantage in
public opinion, control over cadres policy, and standing as
United Russia head as largely precluding a Medvedev ascension.
Indeed, these “systemic” analysts downplay competition within the
tandem as contradicting the very framework of the power
arrangement.
¶13. (C) The opacity of Kremlin politics and the conspiratorial
leanings of Russia’s political commentary have created fertile
ground for a wide range of speculation and have impaired the
emergence of a more broad-based consensus on the tandem’s future
course. Deeping economic troubles, however, are certain to
challenge the tandem and could create new pressures on the unity
of leadership. Putin’s speech to United Russia’s conference on
November 20 -- which in an unprecedented display of the
strengthened stature of the Premier’s position will be televised
to the nation -- provides an opportunity to analyze the
differences between, or perhaps unaminity among, the two leaders.
We will be watching closely to see if Putin uses the public
rostrum to paint a different picture of events or to demonstrate
a competing agenda to that outlined in Medvedev’s address and
will follow up with additional reporting.
BEYRLE

Cable Viewer
Twitter this
Digg this page
Viewing cable 08MOSCOW3380, C) OIL TRADERS: PIPELINE EXPORTS TO EUROPE

STILL



Discussing cables

2008-11-24 2010-12-01 Embassy
06:06 21:09 Moscow
VZCZCXRO7650
PP RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR
DE RUEHMO #3380/01 3290635
ZNY CCCCC ZZH
P 240635Z NOV 08
FM AMEMBASSY MOSCOW

Cable Viewer

RHMFISS/DEPT OF ENERGY WASHINGTON DC PRIORITY
SIPDIS
DEPT FOR EUR/RUS, FOR EEB/ESC/IEC GALLOGLY AND WRIGHT

EUR/CARC, SCA (GALLAGHER, SUMAR)
DOE FOR HEGBURG, EKIMOFF
EO 12958 DECL: 11/21/2018

TAGS EPET, ENRG, ECON, PREL, RS
SUBJECT: (C) OIL TRADERS: PIPELINE EXPORTS TO EUROPE STILL
OPAQUE; SEABORNE TRADE MORE COMMERCIAL
REF: A. MOSCOW 2880 B. MOSCOW 2632
Classified By: Econ MC Eric T. Schultz for reasons 1.4 (b/d)
-------
SUMMARY
-------
¶1. (C) The oil trading business in Russia has long been opaque,
benefiting politically connected firms such as the secretive oil
trading firm Gunvor. Contacts tell us, however, that the business
has lately become more transparent because seaborne trade is now
largely conducted via commercial tenders and terms. They caution,
however, that pipeline exports to Europe remain problematic.
XXXXXXXXXXX, for instance, told us he believes the recent supply
reduction to the Czech Republic (ref A) was politically
coordinated. To the extent that a shift toward greater
transparency has taken hold, it is another example of the role of
international commerce and finance in forcing Russian businesses
to behave commercially. End summary.
--------------------------
RUSSIAN OIL TRADING OPAQUE
--------------------------
¶2. (SBU) Oil traders at major Western companies explained to us

recently that the market for physical oil trades is very
developed globally and has two segments. One is comprised of
major international oil companies who trade oil largely to
optimize their own global operations -- to ensure the right
amounts of oil are transferred to the right facilities at the
lowest cost. The other is comprised of companies such as

Cable Viewer
Glencore, Vitol, and others who serve as intermediaries simply

trying to make money buying and selling oil using their
marketing, shipping, or risk tolerance advantage.
¶3. (C) According to these experts, oil trading in Russia has had
a reputation for secretive deals involving intermediary companies
with unknown owners and beneficiaries. Oil exports from state-
owned or state-influenced oil companies have reportedly been
funneled through favored oil traders, potentially yielding
billions of dollars of profits for these companies. Of particular
note in the Russian oil trading business is the Swiss firm
Gunvor. The company is rumored to be one of Putin’s sources of
undisclosed wealth, and is owned by Gennady Timchenko, who is
rumored to be a former KGB colleague of Putin’s.
¶4. (C) XXXXXXXXXXX estimates that Gunvor may control up to 50%

of total Russian oil exports. He and his lawyer told us recently
that it is impossible to know the extent of Gunvor’s penetration
of the market, however, because the companies involved refuse to
disclose this information. (Note: Gunvor claims in its glossy but
uninformative brochure that it “handles a third of Russia’s
seaborne oil exports.” End note.) As XXXXXXXXXXX has discovered,
verifiable information on the volumes and terms of oil trades is
very difficult to come by.
----------------------------
BUT BECOMING MORE COMMERCIAL
----------------------------
¶5. (C) Managers at two western oil companies, however, explained

to us recently that oil trading in Russia has taken a welcome
turn toward greater transparency thanks to open tenders for
seaborne exports. XXXXXXXXXXX told us in a recent meeting that
oil trading via Russian seaports is now, in his view, “completely
commercial.” XXXXXXXXXXX explained that during the last year and
especially since Medvedev’s inauguration, there has been a
deliberate and successful push by the state to ensure
transparency and commercial terms for most of the oil exported
from Russia via ports.
¶6. (C)XXXXXXXXXXX claimed his view is not just conjecture. He

said it comes directly from hard numbers and evidence that he
sees from his participation in tenders by Rosneft, Lukoil, and
other major Russian oil companies. He said that while
MOSCOW 00003380 002 OF 003
Gunvor rose based on the “administrative support” of the GOR, the
government came to realize it could no longer promote Gunvor at
the expense of, for example, state-owned Rosneft and Gazpromneft.
XXXXXXXXXXX said he believes the trend toward greater
transparency in seaborne exports will continue XXXXXXXXXXX.
¶7. (C) XXXXXXXXXXX painted a similar picture of oil trading in

Cable Viewer
Russia, calling seaborne trade “open and transparent.” He added

that domestic trading, while depending on middlemen, is now also
largely commercial. XXXXXXXXXXX told us the Russian oil trading
market is among the most difficult in the world, but that it also
offers good opportunities and that XXXXXXXXXXX has built a
“healthy business” here. He said he has seen great changes in the
1 1/2 years he has been in his current job, and suggested that
much of the change has come as a result of the government’s push
for greater transparency in the economy as a whole. He added that
he believes this push has largely been driven by the financing
needs of the state-owned companies.
¶8. (C) XXXXXXXXXXX was less impressed by the degree of

transparency in the business, even for seaborne oil exports. He
told us recently that while there are more open tenders and more
participants for seaborne exports, “the same firms seem to often
win.” He suggested that favored firms may get inside information
and a “second chance” to bid. XXXXXXXXXXX agreed, however, that
there has been a trend toward greater transparency, but cautioned
that it is far from an “open and commercial” market. He
highlighted Rosneft as a company that has evolved toward greater
transparency, and Surgutneftegaz (another reported source of
Putin’s illicit wealth) as a company that has not.
------------------------------------------
PIPELINE EXPORTS TO EUROPE STILL A PROBLEM
------------------------------------------
¶9. (C) All three company representatives noted, however, that

the trend toward greater transparency stops with seaborne trade.
They all said Russian oil exports to Europe through pipelines,
especially through the southern Druzhba pipeline, is still a very
opaque business. XXXXXXXXXXX said pipeline exports, in general,
are inherently more political than exports from ports, and that
the trade through southern Druzhba is so opaque that “no one
knows who is getting what.” XXXXXXXXXXX said many in the
business “wonder what goes on between buyers and sellers” along
that route.
¶10. (C) As an example, XXXXXXXXXXX specifically cited the recent

oil supply reductions from Russia to the Czech Republic (ref A).
He said that despite claims by officials that “middlemen” were
the problem, he did not believe that to be the case. He said
producers generally offer their oil using formulas that include
some premium on top of a base price, depending on the export
market. He explained that just prior to the supply reduction to
the Czech Republic (where Shell has a stake in a refinery), all
producers demanded the exact same premium, $1.25 per barrel,
which he said was 4 to 5 times the previous figure for that
route. He believed this price increase was coordinated, and
resulted in the re-routing of oil exports away from the Czech
Republic.

Cable Viewer
¶11. (C) XXXXXXXXXXX said that in the case of the Czech Republic,
the refineries involved had access to other supplies, but that
there was indeed an additional cost associated with obtaining
alternate supplies. He said similar demands for higher premiums
have occurred with regard to deliveries to a German refinery
partly owned by Shell, but that the refinery had more limited
access to alternatives. In such cases, XXXXXXXXXXX explained,
managers have to decide whether to run refineries at sub-optimal
levels, or pay the higher costs.
¶12. (C) XXXXXXXXXXX also noted that oil exports to Hungary, by

Transneft decree, must go through “a certain
intermediary” (Gunvor), which adds one dollar to each barrel. He
said in a competitive market, by contrast, an oil trader might
add anywhere from five to 20 cents “maximum” to the price of a
barrel of oil.
-------
COMMENT
MOSCOW 00003380 003 OF 003

-------
¶13. (C) Oil traders play an important role in the market,

helping provide liquidity and optimizing the operations of oil
refiners and producers. However, while it appears that the GOR
has realized that the more transparent and commercial the trading
business, the better it is for Russia’s oil sector, it
unfortunately has not decided to apply this realization
uniformly. Greed, corruption, and geopolitical concerns still
trump efficiency, especially with regard to certain export routes
to Europe and with regard to certain connected oil traders, such
as Gunvor. End comment. BEYRLE

Cable Viewer
Twitter this
Digg this page
Viewing cable 09MOSCOW226, PROVOCATIONS FROM RUSSIAN SECURITY

SERVICES



Discussing cables

2009-01-30 2010-12-01 Embassy
09MOSCOW226 SECRET
15:03 21:09 Moscow
VZCZCXYZ0007
PP RUEHWEB
DE RUEHMO #0226/01 0301525

ZNY SSSSS ZZH
P 301525Z JAN 09
FM AMEMBASSY MOSCOW

Cable Viewer

SS E C R E T MOSCOW 000226
SIPDIS
E.O. 12958: DECL: 01/30/2019

TAGS: PGOV PHUM PINR RS SOCI
SUBJECT: PROVOCATIONS FROM RUSSIAN SECURITY SERVICES
REF: MOSCOW 00202
Classified By: Ambassador John Beyrle. Reason: 1.4 (d).
¶1. (S) Summary. With their usual light touch and unique sense
of timing, the security services appear to be tightening the
screws on what they see as Russia's internal and foreign
enemies along three fronts. First was a confidential letter
from the Federal Security Service (FSB) demanding that USAID
stop funding NGOs in the North Caucasus. Second, the Interior
Ministry has brought pressure on the liberal Higher School of
Economics to expel students who took part in anti-government
demonstrations in December. Third, and most disturbing, we
believe the FSB is behind a personal smear attack
XXXXXXXXXXXX the National Democratic Institute's Moscow
office (NDI) that was emailed to NDI and USAID staff this week.
The second provocation has become a public issue, with
critical articles even in the popular tabloid, Moskovskiy
Komsomolets, on Ren TV, and commentary on prominent blog
sites. Taken together, we assess that hard-line silovik
elements are testing the political waters at home and
potentially making waves at a time of otherwise positive
signals of interest in improving US-Russian relations. End
Summary.
Warning to USAID
----------------
¶2. (S) A January 17 letter from the FSB, sent through liaison
channels, explicitly warned against continued USAID funding
for NGOs in the North Caucasus. Citing a November trip by a
named USAID officer, the FSB alleged that US funding to the
region was "incompetent" and that USAID was not in a position
to guarantee that funds provided for humanitarian programs
did not fall into the hands of illegal armed groups. Given
the tensions in South Ossetia, as well as the conflict in the
Middle East, the FSB gave notice that "it is necessary to
refrain from financing any NGO in the North Caucasus,
regardless of USAID's goals." The letter closed with an
ominous admonition that unless USAID stops its "incompetent

Cable Viewer
actions," the FSB would implement strict preventative

measures, including the denial of visas.
¶3. (S) The FSB letter attempted to justify its position by

highlighting the complexity of nationalities and religions in
the North Caucasus, the prevalence of extremist movements,
and the predominant role played by family loyalties as
factors that made funding of NGOs in the region dangerous.
The FSB made implicit threats that information about US
funding of illegal groups would likely be made public through
the media, damaging US-Russian counterterrorism efforts.
Further, the letter noted that "incompetent actions" on the
part of the "Embassy sections, like USAID" could escalate
tensions in regions beyond the borders of the North Caucasus
to the detriment of US and Russian interests. When the
Ambassador protested this FSB salvo, Deputy Foreign Minister
Ryabkov claimed (credibly) that the security service
complaints had not been coordinated with the MFA.
Warning to Students
-------------------
¶4. (SBU) In mid-January, the Moscow branch of the MVD issued

a letter to the Higher School of Economics, raising the issue
of four students (possibly six) who participated in December
opposition marches with the veiled recommendation that they
be expelled. According to press reports, the letter warned
"implementation of un-sanctioned mass acts was one of the
forms of extremist activity, carrying a high level of
societal danger, and demands adequate reactive measures on
the part of the law enforcement organs." The MVD called on
the institute to look into the circumstance of the students'
participation in the opposition protests and to consider the
efficacy of continuing their education. Further, the letter
sought comments from the heads of the Politics and Economics
departments about extremism, as well as personal statements
from the four students. MVD sources told the newspaper
Moskovskiy Komsomolets (MK) that they were "legally required"
to inform the place of employment or school of any citizens
violating social stability.
¶5. (C) The institute will hold a meeting on February 4 to

consider its response, but public comments by the director
and rector suggest that the school considers such political
activity to be a "personal" decision, beyond the scope of
institute censure. XXXXXXXXXXXX XXXXXXXXXXXX
"no way" that the institute would adhere to the
recommendations of the MVD and underscored the unanimity
of the faculty and student body on this issue. Nezavisimaya
Gazeta criticized the letter, seeing it as a demonstration of
the government's "panic" after the anti-tariff protests and
highlighting the "Soviet" aspect of going after politically

Cable Viewer
"unreliable" students. Besides the usual lineup of opposition

newspapers and websites, the MK article ensures that a
broader swath of society will learn about this incident --
already it has spawned a sharp reaction of support for the
students and condemnation of the MVD in Russia's blogosphere.
¶6. (C) XXXXXXXXXXXX said that XXXXXXXXXXXX

was sure that other institutes and universities had received
similar letters, but had chosen not to make the silovik
demands public or had quietly capitulated. Our consulate
in St. Petersburg noted last year's closing of the European
University, ostensibly for "fire safety" issues, because of
the Political Science department had taken a grant to do
research on electoral politics in Russia.
Getting Ugly and Personal with NDI

----------------------------------
¶7. (C) On January 29, USAID FSNs received an email from

XXXXXXXXXXXX with a photoshopped image of
XXXXXXXXXXXX reclining with an underage
child. The picture was attached to a message, ostensibly from
a Russian citizen, which accused XXXXXXXXXXXX of raping
her 9-year old daughter. This latest provocation falls on the
heels of a scandal in Murmansk alleging NDI interference in
local elections and harassment of NDI staff XXXXXXXXXXXX.
The Ambassador met with representatives from NDI on January
30 on harassment of the NGO, reported septel.
Panic or Provocation
--------------------
¶8. (C) Emboldened by the economic crisis, the silovik forces
have taken the initiative to stir the waters of Russian
politics, not only with those letters, but also with the
proposed revision of the law on treason, on jury trials, and
the heavy-handed response to the protests in Vladivostok.
Some of those initiatives have been blunted directly, such as
Medvedev's decision to revise the proposed law on treason,
others by publicizing the issue (the letter to the Higher
School of Economics, for example, received coverage in the
popular tabloid MK and on Ren TV) -- suggesting an
intensification of inter-elite conflict.
¶9. (C) Comment. We cannot rule out that those provocations

may in part be directed at complicating efforts to improve
US-Russian relations. At a time when both Putin and Medvedev
have indicated the potential for starting with a clean slate
in relations with the new Obama administration, those within
the security services who see value (including to their
budgets) from continued tensions or whose world view is
predicated on US-Russia conflict are likely under pressure to

Cable Viewer
play a spoiler role. Ambassador plans to raise all of those

incidents forcefully in high-level meetings next week to send
a message back flagging the risks inherent in allowing rogue
elements to run amok in the relationship. End Comment.
BEYRLE

Cable Viewer
Twitter this
Digg this page
Viewing cable 09MOSCOW405, RUSSIA DELAYS DELIVERY OF S-300S TO IRAN?




Discussing cables

2009-02-18 2010-11-28 Embassy
09MOSCOW405 SECRET
15:03 18:06 Moscow
VZCZCXRO5612
OO RUEHDBU
DE RUEHMO #0405 0491518
ZNY SSSSS ZZH
O 181518Z FEB 09
FM AMEMBASSY MOSCOW
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE IMMEDIATE
RUEHAD/AMEMBASSY ABU DHABI IMMEDIATE 0137

Cable Viewer
RUEHAM/AMEMBASSY AMMAN IMMEDIATE 0187

RUEHEG/AMEMBASSY CAIRO IMMEDIATE 0268
RUEHKU/AMEMBASSY KUWAIT IMMEDIATE 0161
RUEHMK/AMEMBASSY MANAMA IMMEDIATE 0052
RUEHRH/AMEMBASSY RIYADH IMMEDIATE 0286
RUEHTV/AMEMBASSY TEL AVIV IMMEDIATE 2214
S E C R E T MOSCOW 000405
SIPDIS
E.O. 12958: DECL: 02/18/2019

TAGS: PREL PGOV ETTC MCAP MARR MOPS PARM PINR PTER
IR, RS
SUBJECT: RUSSIA DELAYS DELIVERY OF S-300S TO IRAN?
REF: A. BEYRLE-BURNS FEBRUARY 18 E-MAIL

¶B. MOSCOW 357
Classified By: DCM Eric Rubin. Reasons 1.4 (b) and (d)
¶1. (S) In response to media reports surrounding the visit of

Iranian Defense Minister Najar to Moscow February 16-18 that
Russia would move ahead with the delivery of the S-300 air
defense missile system to Iran, Ambassador expressed strong
concern to DFM Ryabkov February 17 (ref A). Ryabkov replied
that Moscow had "gotten the message." This followed
Ambassador's demarches on the issue the previous week to
Presidential Foreign Policy Advisor Prikhodko and PM FP
Advisor Ushakov, as well as U/S Burns' and NSC Senior
Director McFaul's expressions of strong concern regarding the
possible completion of the delivery with FM Lavrov (ref B),
Prikhodko and Ushakov.
¶2. (SBU) Late February 17, news daily Kommersant reported

that Rosoboronexport spokesman Vyacheslav Davidenko said that
Russia and Iran were "unlikely to agree on deliveries of the
S-300 air defense missile system" during Najar's visit.
Davidenko reportedly said that "nothing has changed as to the
deliveries of S-300 to Tehran" and that "things were unlikely
to change" after Naijar's visit. Press reports February 18
followed up, saying that Russia had "deferred" its plan to
sell S-300's to Iran "in an effort to improve Moscow's
relations with the new Obama Administration." They cited
Rosoboronexport General Director Isaikin's comment that "if
the president and government of the Russian Federation make a
decision, Rosoboronexport must implement it." Isaikin said

Cable Viewer
Russia had not delivered the system to Iran, but was ready to
do so "if ordered." Daily Izvestiya also reported that DFM
Ryabkov said that Russia "saw to it that its military
cooperation is transparent and in keeping with international
law."
¶3. (C) Israeli DCM Yuval Fuchs told us February 17 that FM

Lavrov was in Israel over the weekend and assured the GOI
that Russia was not supplying any S-300 missiles to any
countries in the Middle East. According to Fuchs, Lavrov
failed to give any heads up to the GOI about Najar's visit
this week. Fuchs added that Rosatom head Sergey Kiriyenko
and Deputy FM Aleksey Borodavkin will make separate trips to
Iran later this month. Kiriyenko will travel to discuss
Iran's nuclear facility at Bushehr, while Borodavkin is going
for consultations.
¶4. (C) Comment. Russian officials appear to have stepped

back, at least temporarily, from announcing a delivery of the
S-300's, but pressure will remain within the military and
security services to move forward as much for financial
reasons as for political or foreign policy considerations.
The prospect of more constructive U.S.-Russian relations may
have tempered the GOR response, but we will continue to be
told that Russia retains its "right" to proceed with an arms
sale that does not violate national or international regimes.
For better or for worse, the delivery of S-300's have become
a barometer of our bilateral relations.
BEYRLE

Cable Viewer
Twitter this
Digg this page
Viewing cable 09MOSCOW532, QUESTIONING PUTIN'S WORK ETHIC




Discussing cables

2009-03-04 2010-12-01 Embassy
14:02 21:09 Moscow
VZCZCXRO9373
PP RUEHDBU
DE RUEHMO #0532 0631454
ZNY CCCCC ZZH
P 041454Z MAR 09
FM AMEMBASSY MOSCOW

Cable Viewer
SIPDIS
E.O. 12958: DECL: 03/04/2019

SUBJECT: QUESTIONING PUTIN'S WORK ETHIC
¶1. (C) Summary. Rumors about Prime Minister Putin's

disengagement from his duties have proliferated in Moscow,
suggesting that he has lost his "edge" in making critical
decisions on measures linked to the economic crisis. Putin
has reportedly been "working from home" on many issues,
leaving much of the running of the government to his
deputies, particularly First Deputy Prime Minister Igor
Shuvalov. While some here see Putin's withdrawal as
increasing the odds that he might step down from office, most
continue to emphasize his centrality in the political
constellation, with his hands-off behavior reflecting the
lack of an acceptable compromise amongst the Kremlin elite on
difficult economic issues. End Summary.
¶2. (C) There are consistent reports that Putin resents or

resists the workload he carries as Prime Minister to
galvanize the Russian bureaucracy. Well-connected XXXXXXXXXXXX
XXXXXXXXXXXX told us that Putin is
said to be "distracted" and "disinterested," leaving
day-to-day management of the GOR to Shuvalov. XXXXXXXXXXXX, who
was a member of XXXXXXXXXXXX,
said that only Putin has the authority to lead the GOR and,
in his absence, economic policy responses to the crisis have
been entirely ad hoc. XXXXXXXXXXXX saw the ongoing budget revision
process as further evidence of Putin's fatigue; in more
resolute times, Putin would have ended the fiscal haggling
quickly. Instead, it has dragged on for two months during the
worst financial crisis in a decade. Prominent XXXXXXXXXXXX
XXXXXXXXXXXX agreed about Putin's isolation, saying
that the PM is increasingly isolated and has regular contact
only with Shuvalov and Kudrin.
¶3. (C) Similarly, XXXXXXXXXXXX

XXXXXXXXXXXX told us that Putin has
not been on a regular schedule at the Russian White House,
preferring to leave the day-to-day operations of government
in the hands of the "actual Prime Minister" Shuvalov, an
assessment shared by XXXXXXXXXXXX.
XXXXXXXXXXXX alleged that there are a number of documents waiting
for Putin's signature, several of which are linked to the

Cable Viewer
government's anti-crisis package, that are creating backups

in the implementation of important projects. XXXXXXXXXXXX
XXXXXXXXXXXX told us it is well known
that Putin did not like coming to the Russian White House,
where he was confronted with stacks of papers on issues of
minuscule importance, on which he did not want to expend his
energy. The problem, XXXXXXXXXXXX noted, was that the Russian
system was geared to top-down decisions and paralysis was
often the result of Putin's inaction.
¶4. (C) The rise of rumors such as these suggest that Putin
may be losing some of his Teflon persona under the pressures
of Russia's economic woes, at least among the elite. However,
recent Levada surveys reinforce that most Russians continue
to see Putin as "running" the country (87 percent of
respondents saw him holding his power, up from 74 percent a
year ago). While some speculate that Putin's disengagement
may presage a readiness to step down from office, most
continue to stress his centrality in the ruling structure and
his personal sense as the "savior" of Russia. Indeed, his
disengagement reflects his long-standing predilection to
prevaricate on difficult issues and his recognition that a
sharp reduction in resources limits his ability to find
workable compromises among the Kremlin elite.
BEYRLE

Cable Viewer
Twitter this
Digg this page
Viewing cable 09MOSCOW821, RUSSIAN MIDDLE CLASS NOT DEAD YET?




Discussing cables

2009-04-01 2010-12-01 Embassy
14:02 21:09 Moscow
VZCZCXRO6429
PP RUEHDBU RUEHHM
DE RUEHMO #0821/01 0911401
ZNY CCCCC ZZH
P 011401Z APR 09
FM AMEMBASSY MOSCOW
RUEHXI/LABOR COLLECTIVE PRIORITY

Cable Viewer

SIPDIS
STATE FOR EUR/RUS, DRL

NSC FOR ELLISON
DOL FOR BRUMFIELD
E.O. 12958: DECL: 04/01/2019

TAGS: ELAB ECON EIND PGOV SOCI RS
SUBJECT: RUSSIAN MIDDLE CLASS NOT DEAD YET?
REF: MOSCOW 03242 2008
Classified By: EconMinCouns Eric T. Schultz, Reasons 1.4 (b,d)
-------
SUMMARY
-------
¶1. (C) Leading Russian sociologists concur the GOR missed the
chance to invest in the middle class during the economic
boom. As a result, the middle class remains only
approximately 20 percent of the population. That said,
experts assert that the small middle class is nonetheless
well positioned to weather the current crisis owing to its
savings and human capital. Moreover, they see the middle
class less as a revolutionary class than an inert mass,
inclined to support the administration. Neither sociologists
nor the administration consider the middle class a threat to
the regime, even in the throes of an economic downturn. As
such, the government has decided to focus its anti-crisis
resources on blue-collar workers instead of providing the
support and institutional reform needed for middle class
development -- and ultimately the innovation economy that
Medvedev and Putin advocate. End Summary.
----------------------------------------
MIDDLE CLASS SURVIVING, BUT NOT THRIVING
----------------------------------------
¶2. (U) During last month's annual conference on the

sociopolitical challenges of the 21st century, sponsored by
the Independent Institute for Social Politics (ISP), panels
of sociologists and economists, many of whom advise President
Medvedev, said the Russian middle class would survive the
economic crisis but would not thrive. Igor Yurgens, of the
Institute for Modern Development, opened the conference by

Cable Viewer
underscoring the GOR's neglect of investment in the public

and social institutions necessary to nurture the middle class
during the eight year economic boom that coincided with Prime
Minister Putin's presidency. The opportunities provided by
massive petrodollar inflows were now gone, he stated. Owing
to the government's failure to capitalize on these
opportunities and the reversal in Russia's economic fortunes,
the vertical impetus for social mobility had stopped
functioning.
¶3. (C) XXXXXXXXXXXX, further stressed the lack of

quantitative middle class growth in spite of Russia's
economic prosperity. She used studies from 2000 and
2007 to demonstrate that the size of the middle class
remained relatively constant, at anywhere from 12 to 20
percent of the population. By her estimate, the core of the
middle class was between 5-7 percent of the population,
although by lowering the income standards and the standard
set for social and professional status, the middle class
would then range between 12-20 percent of the population. In
her calculations, the middle class was made up primarily of
managers of large companies, bank directors, financial
specialists, business owners (restaurants, retail trade),
part of the intelligentsia, and middle to high-level
bureaucrats. The latter category had grown during the crisis
(owing to the slowdown in the private sector), and she said,
now comprised about a quarter of the middle class.
---------------------------
GETTING THROUGH THE CRISIS
---------------------------
¶4. (C) During a separate meeting with us, XXXXXXXXXXXX
claimed that the fall in real incomes, not job losses, was now
the
biggest threat to middle class prosperity. XXXXXXXXXXXX
estimated that middle class incomes would shrink this year by
10 to 15 percent with a negative GDP growth rate of 3.5 percent.
(In comparison middle class incomes dropped by 25 percent during
the 1998 crisis). She added that the "core" of the middle
class had actually contracted slightly, from 6.9 to 5.3
percent, which she said was probably due to the fact that a
number of white collar workers (bankers, managers, as well as
small and medium sized entrepreneurs) had fallen out of the
middle class since the beginning of the crisis. She
contended, however, that the employment situation with the
middle class had for the most part stabilized.
¶5. (C) XXXXXXXXXXXX commented that the middle

class had certain "cushions" which gave it an advantage
over the blue collar, or poorer classes during the crisis.
First of all, many of the middle class had accumulated

Cable Viewer
MOSCOW 00000821 002 OF 003
savings during the boom years (comprising between seven to

10 percent of their total incomes, or the equivalent of four or
five monthly salaries). Between October 2008 and February
2009, they tended to take advantage of the GOR's gradual
devaluation to purchase foreign exchange, trade it for rubles,
and then purchase large consumer items and durables, such
as automobiles and refrigerators, which were priced in rubles.
She said as of February, however, the middle class "consumer
binge"
had pretty much run its course owing to the decline in real
incomes, depletion of personal savings, and persistent
inflation.
-----------------
NOT REVOLUTIONARY
-----------------
¶6. (C) Despite claims by political activists like Garry

Kasparov that the middle class will create "problems" for the
administration when job cuts start and salaries freeze, most
sociologists here portray the middle class as a conservative
force rather than a potentially disgruntled constituency
eager to defend its interests. XXXXXXXXXXXX argued
the number of "entrepreneurs" within the middle class had
not grown during the Putin years. He claimed virtually all
of the growth had come instead from the rise of government
bureaucrats who benefited from impressive pay increases
under Putin. As a result, the mentality of the middle class
has shifted considerably away from the more
independent and market-oriented conceptions of the
Yeltsin-era (in which entrepreneurial types dominated).
¶7. (C) During the Putin era, Russia has developed what
XXXXXXXXXXXX termed a "third world" middle class
with a conservative mentality, shaped by hierarchical thinking,
and largely risk averse. Indeed, according to his research,
the core of the middle class has now absorbed much of the
bureaucratic worldview of the majority. This explains the
broad support for Putin and Medvedev across society, the
power of social conservative values, and a reluctance to
challenge authority.
¶8. (C) Paradoxically, Russia's youthful middle class is more

Western in its lifestyle, but still very anti-Western in its
politics, according to XXXXXXXXXXXX. She sees Russia's
young "social innovators" (her company eschews the term
"middle class" as too controversial) as characterized by a more
Western lifestyle, including the willingness to take bank loans,
use the internet, pay for fitness centers, etc. Their better

Cable Viewer
education makes them mentally more flexible but does not make
them more politically liberal. Far from afraid of the
economic downturn, most are confident that their abilities
allow them to re-invent themselves and adapt to challenges.
¶9. (C) XXXXXXXXXXXX commented to us that today's

youth are firmly indoctrinated in a "patriotic" mindset that
blames the US and the West for much of Russia's ills.
They remain largely apolitical, but more attuned to the
interests of the state, rather than the rights and opportunities
of the individual. As such, he sees Russia's youth as more
inclined
to rally in defense of the state than to agitate for
revolutionary
change.
--------------------------------------------- --
MIDDLE CLASS WELL POSITIONED, BUT LACKS SUPPORT
--------------------------------------------- --
¶10. (C) That said, XXXXXXXXXXXX and XXXXXXXXXXXX

told us in separate meetings that the middle class still had the
best
chance of stimulating Russia's development in the post-crisis
world.
It had invested more in its own human capital (education and
training)
during the high growth years; whereas the lower socio-economic
strata
used most of their new-found cash to purchase basic consumer
items.
In addition, the middle class had acquired work experience and
professional skills enabling them to adapt to shifts in labor
market
demand. Blue-collar households, in contrast, were suffering
disproportionately from inflation, down-sizing, and salary
reductions. XXXXXXXXXXXX concluded the middle class
would be the best candidate for supporting collaboration
between the state, society, and private sector to address
Russia's economic problems.
¶11. (U) However, these analysts pointed out that the GOR's
focus on blue-collar workers in its anti-crisis measures had
MOSCOW 00000821 003 OF 003
deprived the middle class of resources and opportunities to

stimulate growth or reform. According to Tambovtsev, the
main hope for middle class to play a transitional role in
society lay in small business entrepreneurship.
Unfortunately, the absence of secure property and contract

Cable Viewer
rights, a biased judiciary, and administrative barriers

impeded SME growth. Falling consumption was also hurting
SME's, which tended to orient themselves toward household
consumers. Without the resources and institutional reforms
necessary to improve their productivity, middle class
entrepreneurs were unlikely to serve as a strong
countermeasure to current economic trends.
-------
COMMENT
-------
¶12. (C) While not dead, the Russian middle class does not
show signs of rapid growth in the near term, nor does it seem
likely to be the engine of democratic change in Russia.
Better equipped to deal with the downturn than the working
classes but politically inert, the middle class poses little
threat to political and social stability. Moreover, despite
the administration's emphasis on preparing for post-crisis
development through innovation and small/medium businesses,
the most likely candidate to help the government achieve
those aims -- the middle class -- has largely been ignored by
the state. We expect this process to continue: budget
constraints will leave minimal resources for cultivating the
human capital of the middle class. End Comment.
BEYRLE

Cable Viewer
Twitter this
Digg this page
Viewing cable 09MOSCOW1108, WAITING AND WATCHING: NORTH KOREA AFTER

CURRENCY



Discussing cables

2009-04-29 2010-11-30 Embassy
13:01 16:04 Moscow
VZCZCXRO2039
OO RUEHDBU
DE RUEHMO #1108/01 1191330
ZNY CCCCC ZZH
O 291330Z APR 09
FM AMEMBASSY MOSCOW

Cable Viewer
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY

RUEHBJ/AMEMBASSY BEIJING PRIORITY 4481
RUEHUL/AMEMBASSY SEOUL PRIORITY 2784
RUEHKO/AMEMBASSY TOKYO PRIORITY 4250
RUCNDT/USMISSION USUN NEW YORK PRIORITY 0485
CSE C R E T SECTION 01 OF 02 SHENYANG 000004
NOFORN
SIPDIS
DEPARTMENT FOR EAP/K, EAP/CM, INR
E.O. 12958: DECL: TEN YEARS AFTER KOREAN UNIFICATION

TAGS: PREL RU UNSC KNNP KN
SUBJECT: WAITING AND WATCHING: NORTH KOREA AFTER CURRENCY
REFORM
REF: 09 SHENYANG 167
Classified By: Consul General Stephen B. Wickman. For

Reasons 1.4 (b) and (d)
¶1. (S/NF) SUMMARY: On December 15, EAP DAS David Shear and
ConGen
staff met with XXXXXXXXXXXX, a major player
here in Chinese-North Korean economic exchanges. XXXXXXXXXXXX
attributed the DPRK,s recent currency reform to several
factors: controlling rampant inflation, preventing 'hot
money' flows, leveling the wealth gap between workers and
traders, controlling domestic currency, and most importantly,
uncovering potential political opposition. As a result of the
reform, commerce has come to a halt. The leadership, as part
of an ambitious 2012 development strategy, hopes for the
restoration of relations with the United States. XXXXXXXXXXXX
also
believes that current plans assume Kim Jong-il will be around
for some time and that Kim Jong-un will be his successor. The
recent recall of DPRK scholars, students and scientists from
China following the defection of a North Korean exchange
student, for example, suggests increasing levels of paranoia.
END SUMMARY.
GIVE ME GOOD REASON

-------------------
¶2. (S/NF) On December 15, EAP DAS David Shear and Consulate

Cable Viewer
Shenyang staff met with XXXXXXXXXXXX, XXXXXXXXXXXX visits

Pyongyang frequently. Admitting he is unsure of the exact
value of Chinese investment into North Korea, XXXXXXXXXXXX
believes
the number to be many billions of renminbi. Chinese
companies, like their ROK counterparts, use North Korea as a
processing zone, primarily in the mining and seafood
industries. According to XXXXXXXXXXXX, the DPRK leadership's 2012
target for achieving 'strong-country' status should form the
principal basis for analyzing recent political developments,
including the currency reform measure.
¶3. (S/NF) The most important reason for the recent DPRK currency
reform, according to XXXXXXXXXXXX, is to uncover political
opposition,
particularly against Kim Jong-il's younger son. Controlling
inflation, leveling the wealth gap, controlling domestic
currency and access to foreign currency, are all part of this
strategy. XXXXXXXXXXXX believes that the third son, Kim Jong-un,
favored the currency revaluation, and that going forward Kim
Jong-un leans toward a Vietnamese-style of economic reform.
Opposition to the currency exchange, according to XXXXXXXXXXXX,
might
reveal who opposes the ascension of Kim Jong-un to
leadership. According to XXXXXXXXXXXX, Kim Jong-il's support of
the
currency reform points to his favoring the third son; those
opposing the revaluation, also oppose the third son. XXXXXXXXXXXX
drew
parallels to the 2009 nuclear tests, which he said were
also influenced by succession plans. XXXXXXXXXXXX said that the
first
son, Kim Jong-nam, opposes his younger brother's reform
plans and favors a Chinese-style of economic opening.
¶4. (S/NF) XXXXXXXXXXXX said that the number of factions

competing for Kim
Jong-il's attention have made it increasingly difficult for
Kim Jong-il to listen to anyone. As a sign of Kim Jong-il's
paranoia, he recently recalled all students, scholars, and
scientists in China following the defection of an exchange
student in Northeast China. He did this despite the need for
Chinese knowledge, production skills, and technology to
achieve the country's goals for 2012. However, XXXXXXXXXXXX
believes
that current instability will settle and the government will
move ahead with reform, fully expecting Kim Jong-il to be
around for sometime to come. The reform, according to
XXXXXXXXXXXX, may
not be toward a more open economy. Rather, with currency
reform giving the regime the ability to control domestic
currency, reforms will lead to tighter control over the

Cable Viewer
economy.
¶5. (S) Prior to revaluation, one dollar equaled 3500 won. To

put that in perspective, the average worker in Pyongyang
earns 3000-4000 won per month. XXXXXXXXXXXX reported that
according to
the DPRK Embassy, the official exchange rate following reform
is now one dollar equals 129 won. For the common person,
SHENYANG 00000004 002 OF 002
besides suffering from a significant cut in won-based

savings, supermarkets and department stores that deal in won
have suspended activity as they wait to see what impact
currency reform will have on commodity prices. Thus, it has
become difficult to purchase day-to-day needs. XXXXXXXXXXXX
pointed
out, if commodity prices rise, the economy will be ruined.
However, if prices settle as a result of reform, and assuming
constant wages, the economy will be okay as workers once
earning one dollar a month will now earn nearly 20 dollars.
¶6. (S) Traders, who earn many times more than the average
wage-earner, have been unaffected by the reform in monetary
terms, as savings are held mostly in euro and dollars. Since
the revaluation, only stores dealing with foreign exchange
have been open and prices in these stores have increased
400-500 percent. For example, a TV that cost RMB 4000 now
costs RMB 20,000. Many of these stores raised prices in
anticipation of the reform, with the expectation that prices
would then fall. However, prices have not fallen. Many of the
stores that raised prices prior to reform have since been
closed by the government, their goods confiscated. Thus, even
traders who have not lost money from revaluation now have
nothing to buy. Chinese traders along the North Korean border
have also been affected by currency reform even though most
trade is done in euros and dollars. As is the case within
North Korea, people are waiting and watching to see what will
happen to prices. In the meantime, nobody wants to sell
anything.
NOT A CRISIS YET BUT CLOSE

--------------------------
¶7. (S/NF) XXXXXXXXXXXX does not believe the DPRK is in crisis

mode at this
time. As he said, the people are used to this sort of thing.
He saw the currency reform as being part of a broader
conflict within the government as it moves forward in the
next several years. Since 2002, the DPRK has allowed some
economic reform, without expressing strong support or

Cable Viewer
opposition. As he put it, the government has been waiting and

watching to see what would happen.
CHINA, the U.S., and EVERYTHING

-------------------------------
¶8. (S/NF) XXXXXXXXXXXX said many in the DPRK believe the Chinese
do not
understand their country. While neither the Chinese nor the
DPRK are likely to criticize the other in public, XXXXXXXXXXXX
said
that in private the DPRK has disparaged the Chinese for not
including North Korea on its list of 147 tourist destinations
or 137 investment destinations. These omissions and the
disparate Chinese actions on regional development projects
clearly indicate that North Korea is not a priority for the
Chinese. For instance, while China recently elevated the
long-beleaguered Changchun-Jilin-Tumen River development plan
to a national level project, the DPRK left the Tumen River
Development Plan, as it sees no benefit (REFTEL). Relations
between the two countries were getting so bad, in fact,
Premier Wen Jiabao visited Pyongyang two months ahead of
schedule.
¶9. (S/NF) According to XXXXXXXXXXXX, North Korea has set an

ambitious
target of developing a strong country by 2012. As part of
this project, it is planning to build 100,000 residential
apartments in Pyongyang by 2012. In order to encourage
Chinese investment, the DPRK is offering Chinese investors
mining and ocean rights for their injection of cash into the
project. A former Consul General of the North Korean
consulate in Shenyang, recently spent two weeks in Beijing
attracting about RMB 12 billion for this project and planned
to come to Shenyang following his time in Beijing.
¶10. (S) Restoration of relations with the United States is
another important part of the DPRK's reform plans. He said,
however, that North Korea looks forward to an ongoing cycle
of ups and downs in negotiations and that it counts on the
U.N. to be slow in implementing sanctions. As he said, he
believes that once things settle down, North Korea will show
China and the U.S. "its bottom card."
WICKMAN

Cable Viewer
Twitter this
Digg this page
Viewing cable 09MOSCOW1111, FM LAVROV DISCUSSES MISSILE DEFENSE AND

IRAN WITH



Discussing cables

2009-04-29 2010-11-28 Embassy
09MOSCOW1111 SECRET
13:01 18:06 Moscow
VZCZCXRO2069
OO RUEHBC RUEHDBU RUEHDE RUEHDIR RUEHFL RUEHKUK RUEHKW RUEHLA
RUEHNP
RUEHROV
DE RUEHMO #1111/01 1191349
ZNY SSSSS ZZH
O 291349Z APR 09

Cable Viewer
FM AMEMBASSY MOSCOW
RUEHZL/EUROPEAN POLITICAL COLLECTIVE IMMEDIATE
RUCNIRA/IRAN COLLECTIVE IMMEDIATE
SIPDIS
E.O. 12958: DECL: 04/29/2019

TAGS: PREL PGOV MARR KACT IR RS
SUBJECT: FM LAVROV DISCUSSES MISSILE DEFENSE AND IRAN WITH
CODEL LEVIN
Classified By: Ambassador John R. Beyrle for reasons 1.4(b) and

(d)
¶1. (S) Summary. Foreign Minister Lavrov told visiting Codel

Levin April 15 that arms control issues were Russia's top
priority. Noting that Moscow was waiting for concrete
proposals, including specific language, from the U.S. on a
post-START treaty agreement, Lavrov said he recognized that
the U.S. would not want to address the link between offensive
and defensive weapons in the post-START negotiations, but it
would be important to have such a dialogue in the future.
Russia was interested in developing a joint missile defense
system (MD) with the U.S., but we should start "from
scratch," with joint threat assessments, determination of
necessary resources, and best location for MD assets. Lavrov
rejected a quid pro quo in which the U.S. would discontinue
its MD plans for eastern Europe in exchange for Russia
pressuring Iran to end its nuclear weapons program,
emphasizing that each issue should be considered separately.
He acknowledged that Moscow was concerned about Iran's
longer-range missile development and said Russia would be
prepared to undertake a "dual-track" approach towards Iran's
nuclear program; offering incentives to Tehran, but keeping
in reserve measures within the Agreed Framework. He
reconfirmed that Moscow had suspended the sale of S-300's to
Iran "for the moment." In a follow-on meeting, DFM Sergey
Ryabkov stressed that while Russia was interested in working
with the U.S. on MD, it would be difficult for Russia to join
a U.S. MD effort that included sites in Poland and the Czech
Republic, and urged that if the U.S. intended to pursue sites
in Europe, they should be further west and south, so as to

Cable Viewer
diminish the effect on Russian capabilities. Ryabkov

emphasized that "no one can deliver Iran to the U.S., except
the U.S. itself," and argued that, while the S-300 sale was
"frozen," the "less Moscow heard from Washington about it,
the better." End summary.
¶2. (C) In a meeting with Foreign Minister Sergey Lavrov in

Moscow April 15, Chairman of the Senate Armed Services
Committee, Carl Levin (D-MI), together with SASC members Bill
Nelson (D-FL) and Susan Collins (R-ME) emphasized that they
were united in their hope that the U.S. and Russia could
strengthen their cooperation to address common challenges.
Noting the Senate's Constitutional role in ratifying treaties
and providing advice and recommendations on foreign policy
issues to the President, Senator Levin raised missile defense
(MD) as an issue that had divided the two countries, but
should unite them. He suggested that if Russia and the U.S,
could work together on MD, it would send a powerful message
to those who might threaten us, including to Iran.
¶3. (C) FM Lavrov welcomed the Senators' visit, and noted that
it was timely, coming two weeks after the first meeting
between Presidents Obama and Medvedev. He highlighted the
important role "Parliaments" play in building constructive
relationships and expressed the hope that the U.S. and Russia
could overcome the "inertia" that had characterized the
relationship in the past.
Arms Control, NPT

-----------------
¶4. (C) Lavrov said that arms control issues were Russia's top
priority. The U.S.-Russia agenda was positive, even though
we had differences. Moscow hoped the U.S. Administration
would submit the Comprehensive Test Ban Treaty for
ratification, and would reconsider sending the "123"
Agreement to the Hill. He welcomed President Obama's remarks
supporting nuclear weapons reductions, saying that such
reductions were not just a matter of security for the U.S.
and Russia, but carried a political message that would be
important for the 2010 review of the Non-Proliferation Treaty
(NPT). While characterizing the elimination of nuclear
weapons as "a noble goal," Lavrov said it was not "an
immediate project." We needed to have some clear proposals,
which would give others a clear idea of the way forward. He
suggested that the next stage after the post-START
negotiations should consider how to engage others, such as
the UK, in discussions of further reductions, as well as
looking at tactical nuclear weapons.
¶5. (C) There was "a lot to do" on non-proliferation issues,

Lavrov said, including Iran and North Korea. Pakistan was a

Cable Viewer
concern, and we should think about engaging them as well as

India and Israel. The U.S. and Russia had cooperated to
MOSCOW 00001111 002 OF 005
address the danger of non-state actors acquiring nuclear

material though programs such as the Global Initiative to
Combat Nuclear Terrorism and UN Security Council Resolution
¶1540. The U.S. and Russia should also look at ways to
strengthen the NPT regime, including how to universalize the
Additional Protocol. We should also work on issues like fuel
supply, the Nuclear Fuel Center Russia had started, and
programs like the Global Nuclear Energy Partnership.
Post-START
----------
¶6. (C) Lavrov expressed appreciation for the Senate's

confirmation of Rose Gottemoeller as A/S for VCI, noting that
the U.S. and Russia had a lot of work to do to achieve a
follow-on agreement to the START Treaty. The issue would be
discussed at the meeting between DVBR Director Anatoliy
Antonov and A/S Gottemoeller in Rome on April 24, as well as
in his meeting with the Secretary in Washington in May. The
teams would report to the Presidents in July, and hope to
reach a framework agreement by the end of the year. He said
that while the Presidents in their statement April 1 had
endorsed reductions below the Moscow Treaty limits and had
agreed to use many of the verification procedures of the
START Treaty, Moscow was waiting for more concrete proposals
from the U.S., including specific language.
¶7. (C) Lavrov highlighted the April 1 Joint Statement's
reference to the link between offensive and defensive
weapons, saying that the balance between the two that had
existed in the Soviet Union had been thrown off kilter when
the U.S. withdrew from the ABM Treaty. He stressed that he
recognized this did not mean the U.S. would support
addressing the linkage during the post-START negotiations,
but it was important to have a discussion on it at some point
in the future.
Missile Defense and Iran

------------------------
¶8. (C) Senator Levin said the SASC was interested in

exploring the possibility of U.S. and Russia working together
on MD. The U.S. was focused on the threat from Iran, but he
recognized that Russia may have a broader perspective.
However, we were both opposed to a nuclear-armed Iran, which
would be able to put pressure on other countries in the

Cable Viewer
region. The U.S. also perceived the possibility of an

Iranian long-range missile as a threat. He noted that press
reports indicated that Medvedev had told Henry Kissinger and
the Hart-Hagel Commission that he was concerned that the
Iranian nuclear program was more of a threat than Russia had
previously believed. (Lavrov emphatically corrected this,
saying Medvedev had expressed concern about Iran's missile
launch). Noting that the U.S. had made commitments to Poland
and the Czech Republic, Senator Levin said the U.S. would
need to consider how to keep those commitments and include
Europe in a common MD program with Russia.
¶9. (C) Agreeing that MD should unite the U.S. and Russia,
rather than divide us, Lavrov said Russia was interested in
developing a MD system with the U.S., but the U.S. proposals
for an MD system in Poland and the Czech Republic ("3rd
Site"), disrupted the balance between the U.S. and Russia's
nuclear potential. He stressed that then-President Putin's
Kennebunkport proposal for a cooperative MD effort using
Russian resources, joint analyses and determinations of the
threat, and data exchange centers, was still on the table.
He welcomed President Obama's statement that if the Iran
nuclear issue were resolved satisfactorily, there would be
less need for the 3rd Site, but took care to emphasize that
Russia did not support a quid pro quo between Russia helping
to get Iran to end its nuclear weapons program and the U.S.
discontinuing its deployment in eastern Europe. These two
issues should be dealt with separately, on their own merits,
Lavrov stressed.
¶10. (C) Noting that the Congressional Budget Office had

presented three alternatives on the MD project, Lavrov said
this showed there were issues with the proposal. Hastening
to add that Russia did not endorse any of the three
alternatives, Lavrov commended the Administration's intent to
review them, noting this was the difference with the new
Administration: it was willing to listen and take the time to
analyze the alternatives, instead of saying "this is what
MOSCOW 00001111 003 OF 005
must be done; everyone must say yes sir."
¶11. (C) In response to Senator's Levin question why Russia

was not more concerned about Iran's missile capabilities,
since Russia was closer to Iran, Lavrov said Moscow was "not
complacent; we are closer." But whenever Russian negotiators
had protested to the U.S. side that the proposed radar could
cover Russia up to the Urals and the interceptors could reach
Russian territory, the U.S. response had simply been that the
system "was not aimed at Russia." As Medvedev and Putin had

Cable Viewer
said, "when there is something risky on the ground, you need

to take it into account." Russia had warned it would need to
take countermeasures if the 3rd site was deployed, and that
it would put missiles in Kaliningrad. Noting that Moscow
would announce soon just how much it had withdrawn from
Kaliningrad, Lavrov said he hoped the U.S. and Russia could
find common ground on MD.
¶12. (C) Lavrov cautioned that Russia did not perceive Iran in
the same way as the U.S. Iran for Russia was "much more than
a country which might cause concern in the international
community." Russia opposed Iran getting a nuclear weapon,
because Russia did not want any more "members of the nuclear
club," but Iran and Russia were historical and traditional
partners and neighbors, with a "rich bilateral agenda."
Lavrov said he was certain Iran wanted to have a full nuclear
fuel cycle and would negotiate from that basis. It was
unfortunate that the U.S. had not accepted the proposals a
few years before when Iran only had 32 centrifuges; now they
had over 5,000. Nonetheless, Russia wanted Iran to cooperate
fully with the IAEA and implement, and eventually ratify, the
Additional Protocol. As agreed to in the E3-plus-3
statement, Russia wanted Iran to prove the peaceful nature of
its nuclear program, in a verifiable way.
¶13. (C) Lavrov commended the new U.S. approach to Iran,

welcoming President Obama's readiness for the U.S. to engage
"fully" in talks with Iran. Willingness to discuss "all" the
issues was a welcome step, and one which Russia had been
advocating for several years, Lavrov said. Iran wielded a
lot of influence in the region, including on Afghanistan,
Iraq, Hizbollah, Hamas, Gaza, etc. Iran had long been
concerned about Israel, and saw Pakistan as a nuclear-weapons
competitor. Putin had asked Ahmadinejad during a meeting in
Tehran a few years before why he made such anti-Israeli
statements, but Ahmadinejad had not responded, only saying
that Iran was "not doing anything in the nuclear sphere
different from Brazil." Putin had replied that Brazil was
not in the Middle East. While Iran wanted to dominate the
region and the Islamic world, which was of concern to Arab
governments, the U.S. should realize that the "Arab Street"
considers Iranian leaders to be heroes.
¶14. (C) Noting that Russia was watching events in Iran

closely, Lavrov said Moscow would be prepared to undertake
the "dual-track approach," first offering incentives to Iran,
but keeping in reserve measures within the Agreed Framework.
The Administration's new approach "give us a much better
chance than we had in the past. We will do everything we can
to make it work," Lavrov said.
¶15. (C) Senator Nelson said he was encouraged by the FM's

Cable Viewer
remarks, noting that it might be possible to consider

cooperating on use of Russia's radars at Gabala and Armavir.
He said he hoped Lavrov was right that Iran would be deterred
from building a nuclear weapon, but he was skeptical. The
best deterrence might be for the U.S. and Russia to cooperate
on MD.
S-300 Sales
-----------
¶16. (S) Senator Levin said that Russia had taken a practical
and pragmatic step with the suspension of the sale of S-300
missiles to Iran, Senator Levin said. This helped make
Israel less nervous, and sent a message to Iran that the U.S.
and Russia were working more closely together on Iran issues.
Lavrov acknowledged that Russia was not supplying the system
"for the moment," but reiterated the usual mantra that
Russia's S-300 contract with Iran did not violate any
international or national laws or arms control regimes, and
that the S-300's were a defensive system only. He added that
nothing Russia had sold Iran had been used against anyone,
whereas U.S. weapons provided to Georgia had been used
MOSCOW 00001111 004 OF 005
against Russian soldiers. This did not mean the U.S. did not
have the right to sell weapons to Georgia, but Moscow did not
want a repeat of the August 2008 conflict. Overall, he said,
the Iranians had legitimate security concerns. They had been
attacked more than once by their neighbors, and saw
Pakistan's nuclear status as "competition for regional
leadership."
¶17. (S) In a follow-on meeting with DFM Ryabkov, Senator

Levin asked whether Iran believed the S-300 sale was canceled
or just suspended. Ryabkov replied that a contract existed,
and it was impossible to break a contract without
consequences. He repeated that Moscow had taken U.S. and
Israeli concerns into account, and at present Russia was not
providing any components of the system to Teheran. Thus, it
was "obvious the degree to which Iran was dissatisfied with
this," he said. But, the contract was not canceled, it was
merely "frozen," Ryabkov stressed. He argued that "the less
we hear from Washington about this, the better."
Afghanistan/Pakistan
--------------------
¶18. (C) Senator Collins expressed appreciation for Russia's

allowing transit of non-lethal equipment to ISAF in
Afghanistan, and asked how the U.S. and Russia could work

Cable Viewer
together to counter terrorism in Afghanistan and Pakistan.

Lavrov said Pakistan was a place were "a lot of problems
start for Afghanistan," and questioned the term "moderate
Taliban." He said the people on the UNSCR 1267 Committee
list should be "blacklisted for as long as possible," but for
anyone else, as long as they renounced terrorism, cooperated
with the Kabul government, and refrained from extremist
activity, it would be all right to deal with them.
Ryabkov Meeting
---------------
¶19. (C) In a follow-up meeting with DFM Ryabkov immediately

afterwards, Ryabkov cited the non-paper Lavrov had given the
Secretary in the Hague on March 31, and said there was
already a good basis to cooperate with the U.S. on MD.
Progress had been made in the NATO Russia Council on theater
missile defense, and Moscow believed there was more that
could be done there. But he reiterated Lavrov's position
that bilateral discussions would need to start from scratch.
He disagreed with Senator Levin's statement that the system
could not have a significant impact on Russia's nuclear
capabilities. He noted that Russia was more concerned about
the radar than the interceptor sites, because the former
could see the location of Russia's strategic forces, but even
with the interceptors, nobody could predict what would be at
those sites in 10 years' time. In response to Senator's
Levin's asking whether the deployments couldn't be limited by
an agreement, Ryabkov acknowledged that was a possibility,
but stressed that the radar could still be used with other
U.S. MD assets. The sites in Poland and the Czech Republic
were part of a global MD architecture, which, when linked
together, could almost "knock Russia out."
¶20. (C) Ryabkov stressed that while the U.S. and Russia were
not adversaries now, "intentions could change," whereas
"capabilities" were much harder to change. He noted that the
countries in eastern Europe saw the 3rd site as more of a
geo-political issue, bringing them closer to the West, than
as a response to a potential threat from Iran. "We are not
in a zero-sum game and we do not want to use your possibly
legitimate security concern as a geo-political pawn," Ryabkov
argued. Noting a link to the post-START negotiations,
Ryabkov said the greater the reductions in number of warheads
each side could possess, the more strategically important MD
became. He added that it would be politically difficult for
Russia to join a U.S. MD effort that included sites in Poland
and the Czech Republic. If the U.S. intended to pursue sites
in Europe, they should be further west and south, so as to
diminish the effect on Russian capabilities.
¶21. (C) In response to Senator Levin's question whether it

Cable Viewer
would be possible to develop a joint radar system with

Russian radars at Gabala, Armavir, and Moscow, connected to
U.S. AEGIS and THAAD systems, Ryabkov responded that he had
not considered such an idea before and would need to think
about it. Such a system, he noted, would become strategic,
and would lack the X-band capability of the radar proposed
MOSCOW 00001111 005 OF 005
for the Czech Republic, since all the systems cited were
early-warning radars only, but it could be an option.
¶22. (C) Ryabkov said Russia hoped it would be possible to

have a "meaningful dialogue" with Iran, and noted that
President Obama's remarks had had a strong impact in Teheran
and the Arab world. But it was still difficult to predict
how Teheran would react. He characterized the P5-plus 1
(E3-plus-3) statement as "very promising," but claimed
experience showed Iran would not make concessions under
pressure. He emphasized that it was "very clear that no one
can deliver Iran to the U.S., except the U.S. itself."
Civilian Space Cooperation

--------------------------
¶23. (C) In response to Senator Nelson's question about

prospects for increased civilian space cooperation and what
would happen when the U.S. was fully dependent on the Soyuz
spacecraft to reach the International Space Station, Ryabkov
said he saw no difficulty with meeting the U.S.'s needs, and
said we should both be forward-leaning. He noted that
RosCosmos had suggested to NASA that Russia cooperate on
development of the U.S.'s new spacecraft, but the idea had
not been pursued. Ryabkov proposed we discuss the issue
further with RosCosmos and said Moscow favored closer
cooperation with the U.S. and Europe in this area. While it
was not linked to MD, the more progress we could make on MD,
the better able we would be to move forward on other issues.
¶24. (U) Codel Levin did not clear this cable.

BEYRLE

Cable Viewer
Check our Reddit
Twitter this
Digg this page
Viewing cable 09MOSCOW1273, ITALIAN-RUSSIAN RELATIONS (C-RE8-

02675)
subject.
Discussing cables

2009-05-20 2010-12-02 Embassy
09MOSCOW1273 SECRET//NOFORN
05:05 14:02 Moscow

Cable Viewer
VZCZCXRO8610
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV
DE RUEHMO #1273/01 1400530
ZNY SSSSS ZZH
P 200530Z MAY 09
FM AMEMBASSY MOSCOW
RUEHZL/EUROPEAN POLITICAL COLLECTIVE

NOFORN
SIPDIS
DEPT FOR INR/I
EO 12958 DECL: 05/19/2019

TAGS PREL, PGOV, ENRG, EPET, IT, RS
SUBJECT: ITALIAN-RUSSIAN RELATIONS (C-RE8-02675)
REF: A. 08 STATE 134386

¶B. MOSCOW 572
Classified By: DCM Eric Rubin for reasons 1.4 (b) and (d).
Summary
-------
¶1. (S/NF) Economic ties, especially long-term gas contracts, are

a pillar of Russia-Italy relations and affect Italy’s policies
toward Russia. Italian gas company ENI and Russian Gazprom have
supply commitments in place until 2035, as well as a joint-
construction agreement for the South Stream pipeline. ENI’s
company representative is often called Italy’s second ambassador
to Russia. The personal relationship between Prime Ministers
Vladimir Putin and Silvio Berlusconi is the other key element of
Russia-Italy relations, with Putin’s family spending long visits
at the Berlusconi family mansion in Sardinia at Berlusconi’s
expense. Italian diplomats enjoy excellent access to Russian
officials. Should Italy stop seeking to moderate European states’
Russian policies, the GOR would likely need to alter its
political calculus. End Summary.

Cable Viewer
Economics affects politics

--------------------------
¶2. (C) Russia obtains significant economic benefits from Italy,

gaining access to its equipment and technology, its stable market
for gas and oil, and its highly desired consumer goods. In
return, Russia provides Italy good offices for access to Central
Asian supplies of gas and consumer markets. Italian companies
have also looked to invest in Russia’s aviation sector and
electricity generation, although the economic crisis put many of
these efforts on hold.
¶3. (C) However, the economic interdependency does not come

without other costs. Italian Embassy First Secretary Lorenzo
Fanara told us that the countries’ economic ties were strong
enough to affect Italy’s political stance toward Russia. He said
Italian leaders, politicians, and businessmen would always be
“careful” in dealing with Russia, as Italy exported to Russia
over 10 billion Euros worth of goods annually, most of it
produced by small and medium-sized companies. “Russia is simply
too important of an economic partner for us,” Fanara explained.
While the GOI understood the shortcomings of the Russian
government (read: adherence to democratic values and freedoms),
it could not afford to be too harsh in its criticism.
Deep ties on gas

----------------
¶4. (C) The crown jewels of Italy’s business interests with

Russia are ENI’s gas contracts with Gazprom through 2035 and its
50-50 partnership with Gazprom in the South Stream pipeline
project. The mo~97@Q5OQg

Cable Viewer
Twitter this
Digg this page
Viewing cable 09MOSCOW1488, ISRAELI FM LIEBERMAN IN MOSCOW




Discussing cables

2009-06-05 2010-11-28 Embassy
13:01 18:06 Moscow
VZCZCXRO1697
PP RUEHBC RUEHDBU RUEHDE RUEHDIR RUEHKUK RUEHROV RUEHTRO
DE RUEHMO #1488/01 1561306
ZNY CCCCC ZZH
P 051306Z JUN 09
FM AMEMBASSY MOSCOW
INFO RUEHXK/ARAB ISRAELI COLLECTIVE
RUCNCIS/CIS COLLECTIVE

Cable Viewer
RUCNIRA/IRAN COLLECTIVE
RUEHZG/NATO EU COLLECTIVE
SIPDIS
E.O. 12958: DECL: 06/05/2019

TAGS: PGOV PREL IR IS SY GG RS
SUBJECT: ISRAELI FM LIEBERMAN IN MOSCOW
Classified By: Political M/C Alice G. Wells for reasons 1.4 (b/
d).
¶1. (C) Summary: Israeli FM Lieberman's June 2-3 visit to

Russia appears not to have broken new ground diplomatically,
but cemented Moscow's impression that the Russian-speaking
Lieberman is one of their own. The trip included meetings
with Medvedev and Putin, as well as a lengthy discussion with
FM Lavrov, during which Lieberman indicated that Israel was
not considering a military strike on Iran. Both sides agreed
to hold off on scheduling the Moscow ME conference until
after President Obama's visit to Moscow, and Lavrov quizzed
Lieberman on a possible U.S. plan to bring together Israeli
and Palestinian leaders. Lieberman rebuffed Lavrov's calls
for Israel to ease the pressure on Gaza and halt settlement
expansion, while Lavrov agreed to consider Lieberman's
request for Russian officials to visit the Israeli soldier
held by Hamas. Lavrov said that "nothing new" could happen
on Iran until the U.S. opened its dialogue with Tehran, and
repeated Russian concerns about the need to reach a
negotiated settlement with this "important neighbor." He
reiterated that Russia had not transferred S-300s to Iran,
but also had to consider its contract to provide the missiles
to Tehran. Lavrov thanked Israel for limiting military sales
to Georgia, but thought other countries were supplying
offensive weapons to Tiblisi, which could be emboldened to
start "another adventure." The FMs discussed expanding
bilateral economic ties, and Lavrov raised Russian concern
that Israel was partaking in "historical revisionism" that
sought to blame Russia for the Ukrainian famine of the 1930s.
End summary.
Behaved Like an Old Friend

--------------------------
¶2. (C) Israeli DCM Yuval Fuchs told us that FM Lieberman's

June 2-3 visit to Russia ran the gamut of international and
bilateral issues, from the peace process to the payment of
Soviet-era pensions to Russian speakers living in Israel.

Cable Viewer
His visit centered upon a two-hour June 2 meeting with FM

Lavrov that Fuchs characterized as a standard presentation of
views, during which "nothing breathtaking" was said.
Lieberman had a hectic day that began with a meeting at
Medvedev's home on the outskirts of Moscow, then the Lavrov
meeting at the MFA, a flight to St. Petersburg on a chartered
plane to see Putin, and dinner with Lavrov upon returning to
Moscow. On June 3, Lieberman had breakfast with former FM
Igor Ivanov (a personal friend), meetings with the heads of
the Duma and Federation Council international affairs
committees, discussions with Russian Jewish leaders, and a
press conference. He then departed Moscow for Minsk.
¶3. (C) Fuchs explained that Lieberman conducted his meetings

in Russian, shared stories about Moscow, and smoked, creating
a comfortable atmosphere with his Russian interlocutors. The
Israeli FM "behaved like an old friend" commented Fuchs, who
thought that the Russians acted as if they already knew him,
although it was too early to say whether this personal
diplomacy would have a measurable effect on already strong
Russia-Israel relations.
Lavrov-Lieberman
----------------
¶4. (C) Fuchs said that during the meeting with Lavrov, the
GOR's planned Moscow ME conference was not a central topic
for either side. Lieberman stressed the importance of
coordinating such efforts with the U.S., and said it would
not be appropriate to set the timing of a conference until
after President Obama's visit to Moscow. Lavrov agreed, and
said that Moscow did not want to hold a conference that would
not produce results. Lavrov asked Lieberman if Israel was
aware of an idea supposedly floated by S/E Mitchell to bring
together Israeli and Palestinian leaders; Lieberman said no.
¶5. (C) Lavrov pressed Israel to open checkpoints into Gaza,
and suggested posting international monitors to allay Israeli
concerns regarding smuggling. When Lavrov argued that Hamas
had stuck by the Gaza cease-fire, Lieberman retorted that
Hamas would break the cease-fire when it believed doing so
suited its needs. Lavrov also pressed Israel to freeze the
settlements, leading Lieberman to respond that "life goes on"
and settlement expansion was necessary to accommodate growing
communities.
¶6. (C) Fuchs said that Lavrov criticized the U.S. on several
fronts, telling Lieberman that the U.S. invasion of Iraq was
a "present" to Iran, and the U.S. decision to isolate Syria
was a "setback" for a comprehensive ME settlement.
Furthermore, the U.S. failure to "listen" to Russia, which

Cable Viewer
MOSCOW 00001488 002 OF 002
advised against Palestinian elections, had allowed Hamas to

come to power and eventually take over Gaza, thereby
strengthening Iran's position in the region.
Syria
-----
¶7. (C) Lavrov thought that the Turkish-led negotiations

between Israel and Syria had been positive, and said that
during his recent visit to Damascus, the Syrians indicated
that they were ready to renew talks either through Turkey or
Russia so long as they would include the future of the Golan
Heights. Lavrov said that he raised with Hamas leaders the
need to allow visits to captured IDF soldier Gilad Shalit.
Lieberman asked if Russian officials could visit Shalit, and
Lavrov directed DFM Saltanov to explore this possibility.
Iran
----
¶8. (C) Lavrov predicted that "nothing new" would happen with
Iran until after the U.S. began its dialogue with Tehran,
although he thought there was a better chance to get a "clear
answer" from Iran on P5 1 proposals under the current U.S.
Administration. He reiterated that Russia did not believe
there existed hard evidence that Iran's nuclear program had a
military dimension, and thought it transparent enough to
detect whether resources were directed to military uses.
¶9. (C) Lavrov expressed Russian interest in reaching a
negotiated solution to the crisis surrounding Iran's nuclear
program, and the need for the West to normalize relations
with Tehran, a close Russian neighbor with which it shared
the Caspian and its resources. He raised Russian concern
that an Israeli attack on Iran would cause instability in the
region and an influx of refugees into the Caucasus. Fuchs
said that Lieberman responded that Israel "was not talking
about such a response" and understood that an attack would
cause a "chain reaction" within the region. Lieberman made
similar statements suggesting that Israel was not considering
attacking Iran during his press conference.
¶10. (C) Lavrov reiterated that Russia and Iran had signed a
deal to provide S-300s, but that Russia had not transferred
any weapons. The GOR did not intend to provide regionally
destabilizing weapons, but also had to take into account how
it would be perceived by others if Moscow failed to fulfill
its contract with Tehran.

Cable Viewer
Georgia
-------
¶11. (C) Lavrov expressed Russian appreciation for Israeli

steps to limit arms sales to Georgia to defensive weapons,
but raised concern that other countries were supplying
offensive weapons. He was also concerned that the recent
military exercises Georgia conducted with NATO might push
Tiblisi to undertake "another adventure".
Bilateral Issues
----------------
¶12. (C) Fuchs said that much of the discussion between Lavrov
and Lieberman focused on expanding bilateral ties, especially
in the economic sphere. They also touched upon parochial
issues of concern to Lieberman and his constituents, such as
the payment of pensions owed by the Soviet Union and Russia
to Russian-speaking Israelis.
¶13. (C) Lavrov raised Russian concern with "historical

revisionism" regarding the Soviet Era and Second World War,
which, he said, was particularly acute in Eastern Europe but
was also present in Israel. He cited Israel's official
recognition of the Holodomor, the 1930s famine that occurred
in Ukraine. Lieberman explained that by recognizing this
tragedy, Israel had not said Russia was guilty of causing it,
nor that it was an act of genocide.
BEYRLE

Cable Viewer
Twitter this
Digg this page
Viewing cable 09MOSCOW1562, PUTIN, PIKALEVO, AND THE FAILURE OF THE

POWER



Discussing cables

2009-06-15 2010-12-01 Embassy
11:11 21:09 Moscow
VZCZCXRO8748
PP RUEHDBU
DE RUEHMO #1562/01 1661118
ZNY CCCCC ZZH
P 151118Z JUN 09
FM AMEMBASSY MOSCOW

Cable Viewer

SIPDIS
E.O. 12958: DECL: 06/15/2018

SUBJECT: PUTIN, PIKALEVO, AND THE FAILURE OF THE POWER
VERTICAL
REF: A. MOSCOW 1538

¶B. ST PETERSBURG 00068
¶C. MOSCOW 00180
¶1. (C) Summary. The events two weeks ago in the northwestern
town of Pikalevo, in which frustrated workers in three small,
idled plants blocked a federal highway to draw attention to
their plight, demonstrated the failures of Russia's "vertical
of power" and gave insight into the balance of power within
the elite (Ref B). That the impasse required the involvement
of Prime Minister Putin -- the man "responsible for
everything" in Russia -- illustrated the weakness of the
federal system, in which poorly connected governors have few
levers to influence the Moscow-based financial industrial
groups close to the Kremlin. Moreover, none of the
institutions designed to protect citizen interests
functioned: labor unions, political parties, or even state
institutions like the Federal Anti-Monopoly Service could not
bring about a solution (even after President Medvedev
reportedly told the Leningrad Oblast Governor Serdyukov to
fix the problem in March). Experts are divided on the logic
behind Putin's decision to make a public spectacle out of
Pikalevo, but nearly all see his involvement after an
independent demonstration by ordinary citizens as a likely
catalyst for more localized protests by other dissatisfied
groups, seeking to attract the Prime Minister's attention in
the coming months. End Summary.
The System Failed

-----------------
¶2. (C) The economic crisis is testing the "Putin system" of

administration, established during 8-years of strong economic
growth to establish central control over the county and
maintain socio-economic stability. The points of pressure are
found in widely dispersed "one-company towns" across Russia,
where less efficient and less advanced companies,

Cable Viewer
particularly in metallurgy and machine building, are failing.

As such, the chances of localized protests -- a "bunt" of
frustrated workers -- are increasing, potentially creating a
crisis of confidence within the tandem.
¶3. (C) The Pikalevo situation highlighted the weakness of

Russia's federal structure. After Putin's reforms, governors
serve at Moscow's pleasure and are judged less by their
effectiveness as leaders or ability to solve local problems
than by their resolute support for central authorities
(demonstrated in their management of regional elections to
secure the party of power, United Russia) and their ability
to maintain political and social stability. According to
XXXXXXXXXXXX, political and tax reforms over
the past years have curtailed the governors' influence
over the budget and reduced their authority to make
decisions without Moscow's approval.
Economic prosperity, fueled by high energy prices, helped to
mask the weakening of regional leadership; the crisis had
made it more acute.
¶4. (C) The case with Leningrad Oblast Governor Serdyukov

in connection with Pikalevo illustrates the problem of
ineffective regional leadership. XXXXXXXXXXXX blamed
the Serdyukov's incompetence and the local mayor's
"unprofessionalism" for allowing the problem to fester.
XXXXXXXXXXXX had a more positive assessment
of Serdyukov, but noted that a "second tier" governor had no
ability to tell the well-connected Deripaska what to do –
- only the heavyweights had sufficient authority to challenge
members of the tandem's inner circle. No matter what the
assessment of Serdyukov "the man," his loyalties remained
primarily tied to keeping Moscow's favor, leading him to cover
over the deteriorating situation in Pikalevo by emphasizing
new investment projects, like the Nissan factory that Putin
opened on June 2.
¶5. (C) XXXXXXXXXXXX also has identified a second element

that led to Pikalevo: a crisis of dialogue between the
political
leadership (vlast) and society, in which any attempt to draw
attention to serious problems are treated as a threat to the
system and the regime. XXXXXXXXXXXX
noted the fate of Yuriy Onoprienko, the Speaker of
the Khabarovsk Kray legislature, who was fired by United
Russia after deputies there sent a letter to Putin requesting
that tariffs for energy not be increased because of the
economic crisis. Similarly, XXXXXXXXXXXX drew the ire
of the pro-Kremlin press and almost faced charges of
"extremism" XXXXXXXXXXXX. Now, he and others who have
criticized the tandem's anti-crisis package are finding

Cable Viewer
MOSCOW 00001562 002 OF 003
themselves vindicated, although without any recognition from

the authorities. The regime has also shown little tolerance
for criticism from society; last December Moscow-based OMON
police forces used force to dispel protests in Vladivostok
against increased tariffs on imported automobiles. Deputy
Prime Minister Igor Sechin dismissed the protests as the
actions of "scoundrels" while United Russia Duma officials
insinuated that the presence of Japanese flags by the
protesters signaled instigation from overseas (Ref C).
¶6. (C) Ultimately, commentators argue the crisis at Pikalevo

resulted from the shortcomings of the tandem's crisis plan,
which emphasizes maintaining employment (even with
substantially reduced salaries) over accepting the pain of
economic restructuring of inefficient and unprofitable
enterprises. XXXXXXXXXXXX told us "the factories should be
closed" and he admitted that Putin's solution does not solve
the problem of a lack of demand for aluminum -- the catalyst
behind the plants' closure. Thus far, the administration's
response has been to demand more action on the part of
regional and local leaders to follow through with the plans
to maintain employment and stop wage arrears.
¶7. (C) After Pikalevo, the central leadership made no

reassessment of its strategy, but instead used the whip to
put more pressure on regional leaders to follow through with
the "stability" agenda. Medvedev on June 10 threatened
regional leaders with dismissal if they fail to get wage
arrears and unemployment under control -- telling them to
"stop hiding under the table" and take charge of negotiating
with industries and workers' collectives. Kremlin ideologue
Vladislav Surkov told a conference of municipal heads that
government at all levels should become "more open" and
engaged in dialogue with society. However, as
XXXXXXXXXXXX explained to us, this anti-crisis policy
rests on a fragile social compromise, in which businesses keep
workers on the books, albeit with reduced pay and hours;
local and regional elites trumpet low unemployment; and
the populace patiently accepts the cuts in the hopes of
improved wages "after the crisis." As in the Pikalevo case,
that comprise can break down quickly if an owner's fears
about consequences for letting arrears pile up or firing
staff are less than the possible gains for letting uneconomic
enterprises collapse. Ordering governors to be more assertive
does little to provide them political power to actually follow
through on the assignment, especially against powerful
oligarchs.
Large and in Charge

Cable Viewer
-------------------
¶8. (C) Putin's intervention in Pikalevo also raised questions

about balance of power within the tandem. XXXXXXXXXXXX
asked why Putin, and not Medvedev, was dispatched to the town
an issue that many here are puzzling over. Some argue,
XXXXXXXXXXXX, that the showdown between Putin and Oleg
Deripaska was staged political theater. Since the money to revive
the
BazelTsement came through government loans in an agreement
between the two before the visit, XXXXXXXXXXXX saw no reason
for the Prime Minister to go to Pikalevo except to show the
masses
his ability to battle the hated oligarchs. (XXXXXXXXXXXX also
claimed that the proposal to nationalize the three plants in
Pikalevo
was a conspiracy between Deripaska and the two United Russia
deputies who drafted the proposal, since Deripaska would have
loved to
unload the debt-ridden and inefficient firm on the taxpayers.)
In an
earlier conversation with Embassy, XXXXXXXXXXXX had argued
that he saw Medvedev as confidently in control and serving as
"the"
President of Russia, suggesting that he sees Putin's involvement
as a
way of asserting his continued political importance.
¶9. (C) XXXXXXXXXXXX's argument runs against the conventional

wisdom that Putin remains the fulcrum of power in the tandem.
Others explained the Prime Minister's intervention as another
illustration of Putin's continued position as the arbiter
amongst the Kremlin clans. Indeed, Medvedev had given
Serdyukov clear instructions to resolve the impasse over
BazelTsement in March, but did not follow through to see that
his instructions were implemented. We do not know if Medvedev
himself directed Putin to take action in Pikalevo, or was
even apprised of the Prime Minister's intentions. Whatever
the case behind the scenes, Putin's intervention provided a
clear signal to the elite and society that he remains the
tandem's decision implementer. As XXXXXXXXXXXX
described it, Putin's trip to Pikalevo showed that "he's the
tsar, he
decides all problems."
¶10. (C) The laurels of the "tsar" come with heavy

responsibility and nearly all independent observers agree
that Putin's intervention will have the likely consequence of
MOSCOW 00001562 003 OF 003

Cable Viewer
more localized protests. The success of the Pikalevo workers'

highway blockade provides a model for other disgruntled or
frustrated workers in other "one-company towns" to attract
top-level attention to their problems. Medvedev's caution to
the governors June 10 that the center will no longer send
"someone" to resolve local issues had far less flash than
Putin's actions on June 4.
Comment
-------
¶11. (C) Putin's Pikalevo intervention, followed by his

surprise announcement that Russia would drop its independent
bid for WTO accession in lieu of a joint bid with Kazakhstan
and Belarus (Ref A), has put the Prime Minister in the
spotlight at the expense of Medvedev. Medvedev appears to be
playing "catch up" through his tough talk to the PolPreds
(his representatives to regional blocs) on June 10 and a
photo op sighting down the barrel of a sniper scope in
Makachkala (after the murder of the head of the local
Internal Affairs Minister). Pikalevo served to confirm the
stereotypes about the two men -- Medvedev is a man of words,
hobnobbing with Western businessmen in St. Petersburg; Putin
is the man of action, setting the oligarchs straight in the
provinces. Neither appears to see fully the systemic problems
inherent in the Putin system, but Medvedev at a minimum seems
more open to hearing a broader range of criticism. Putin
apparently retains his conspiratorial worldview, even
muttering about the Pikalevo protest being the result of
forces colluding to stop him from coming to the town. If the
situation deteriorates in the coming months with a surge of
localized protest, Medvedev may be in a better position to
promote a reform agenda that tackles the underlying issues,
rather that papering over problems with a diminishing pot of
government money.
BEYRLE
..

Cable Viewer
Twitter this
Digg this page
Viewing cable 09MOSCOW1591, IMPLICATIONS OF REARMING GEORGIA FOR U.S.-

RUSSIAN



Discussing cables

2009-06-17 2010-12-01 Embassy
14:02 21:09 Moscow
VZCZCXRO1322
OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR
DE RUEHMO #1591/01 1681409
ZNY CCCCC ZZH
O 171409Z JUN 09
FM AMEMBASSY MOSCOW

Cable Viewer

RUEHZL/EUROPEAN POLITICAL COLLECTIVE IMMEDIATE
SIPDIS
E.O. 12958: DECL: 06/10/2019

TAGS: PREL MARR PGOV RS GG
SUBJECT: IMPLICATIONS OF REARMING GEORGIA FOR U.S.-RUSSIAN
"RESET"
REF: A. MOSCOW 1225

¶B. MOSCOW 0840
Classified By: Ambassador John R. Beyrle: Reasons 1.4 (b, d).
¶1. (C) Summary: A decision to move towards a more robust

military relationship with Georgia will imperil our efforts
to re-start relations with Russia, if it is not carefully
calibrated and deployed. While Medvedev understands the
strategic and personal benefits of crafting a productive
partnership with the U.S., this impulse is trumped by the
GOR's "absolute" priority placed on expanding Russian
influence in the Eurasian neighborhood, preventing NATO
enlargement, and demonstrating Russia's great power status.
The Russian political class and populace is united behind
these principles, with the August war confirming for the
leadership that the international community lacks the levers
to coerce a change in Russian behavior. Russian criticism of
PfP exercises was both sincere -- anger over the "business as
usual" approach with Saakashvili -- and tactical, designed to
raise the costs of CIS cooperation with the West, but was not
matched by a change in military posture. However, given
consistent warnings over the consequences of weapons sales to
Georgia, we believe a lethal military supply relationship
with Tbilisi would come at the cost of advancing Georgia's
territorial integrity, and could lessen Russian restraint on
weapons transfers to Iran. We believe that keeping the focus
on Georgia's economic and democratic development, while
continuing our military cooperation with Tbilisi through
transparent PfP programming with European partners, and
non-lethal bilateral mil-mil training and assistance, is the
only viable -- if very long-term -- strategy to induce better
Russian behavior and restore Georgian territorial integrity.
Critical to this effort will be building ballast in a
U.S.-Russian relationship that serves as a break on Russia's
worst instincts. End Summary
Showdown Over Georgia?

Cable Viewer
----------------------
¶2. (C) If not carefully calibrated and deployed, a decision

to move towards a more robust military relationship with
Georgia has the very real potential to trigger a dispute on a
set of issues that are both neuralgic and strategic for the
Russian political and military establishment, endangering the
Administration's effort to undertake a fresh start with
Moscow. While Medvedev appears seized with taking charge of
the U.S.-Russian account and placing it on a new footing
during the July summit, this policy impulse will be
subordinate to Russia's "strategic interests" in its Eurasian
neighborhood, as defined by both Medvedev and Putin. Russian
intransigence on the UNOMIG rollover is a conspicuous
illustration of this. We cannot accept this Russian
calculus, but we need to understand what drives the Kremlin
and White House:
-- Russia places an "absolute" priority on expanding its

influence and deepening its integration with neighboring
states, as part of a self-conscious policy to combat the
West's "creep" towards its borders (ref a). Inevitably, the
question of Russia's status in the Eurasian "neighborhood,"
and the presumed zero-sum competition for influence along
Russia's borders, will remain our most contentious bilateral
issue and the likeliest stumbling block to improved
U.S.-Russian relations.
-- Russia opposes any further enlargement of NATO. The

August war in Georgia signaled Moscow's readiness to expend
materiel and men to achieve this goal, even at the cost of
international opprobrium. The fact that NATO membership for
both Georgia and Ukraine is not a front burner priority has
not tempered Moscow's stance, since the Russian leadership
sees this as a temporary reprieve, brought about by European
reservations and not by a change in policy by the Obama
Administration.
-- Absent a standstill agreement on NATO, which Medvedev

hopes to achieve through discussions over a new European
Security Treaty, Russia presumes that we seek its strategic
neutering. Our principled rejection of a Russian sphere of
influence is read here as a denial of Russia's status as a
great power, and another example of U.S. "double standards,"
rather than a repudiation of a Warsaw Pact mentality.
-- Russia judges that we lack the bilateral or multilateral

levers to coerce it into moderating its stance on Georgia or
reversing its recognition of the conflict territories.
Moscow assumes that we have too many strategic interests in
common to credibly threaten Russia with a cut-off in
relations -- a move that Europe (both old and new) never

Cable Viewer
MOSCOW 00001591 002 OF 003
seriously contemplated in the wake of the Georgian war.
-- Russian leaders enjoy a policy carte blanche on Georgia,

with respect to domestic public opinion. Polls consistently
show that Russians overwhelmingly welcome Moscow's resurgent
foreign policy, revile Saakashvili, and blame Euro-Atlantic
institutions for Moscow's worsening relations with former
republics and Warsaw Pact partners. There is absolutely no
difference between Medvedev and Putin when it comes to
Georgia.
Russian Warnings Over Mil-Mil Relations

---------------------------------------
¶3. (C) Russia has used the previously scheduled Cooperative

Longbow/Cooperative Lancer PfP exercises and U.S./NATO
discussions of Georgian military reform to hint at a
political price tag for continued cultivation of Georgia as a
NATO aspirant. While Russian Ambassador to NATO Rogozin's
characterization of the exercises as "an absurdity and
madness" were discounted in NATO circles, he accurately
channeled Moscow's anger over what was seen as a "business as
usual" policy towards Saakashvili, as well as Moscow's
strategy of raising the potential costs of participation by
other CIS states. Medvedev labeled the exercises
"muscle-flexing," an "outright provocation," and "a mistaken
and dangerous decision," while Putin questioned the "reset"
in U.S.-Russian relations, pointing to the exercises as a
"signal in a different direction." Even mild-mannered DFM
Ryabkov fulminated publicly against the "cheap and
unconvincing arguments" used to justify PfP. Pro-Kremlin and
opposition politicians emphasized that a "return to last
August" or a "new Cold War" might flow from a continued NATO
embrace of Tbilisi. Despite the harsh rhetoric, however,
Russia did not place its troops on alert during the
exercises, which proceeded smoothly.
¶4. (C) When it comes to weapons sales to Tbilisi, Russian

actions have been harsher. For those few Russian officials
willing to believe that the U.S. did not directly goad
Georgia into attacking, it is an article of faith that
Georgia's military relationship with the U.S. triggered
Saakashvili's fateful miscalculation on August 8. While
accusing Georgia of 30-fold increases in military spending
(at 7-8 percent of GDP), in addition to illicit purchases
from Ukrainian and Israeli middlemen, and an overconfidence
spawned by U.S. assurances of support, the GOR called for an
arms embargo against Georgia in the war's aftermath.
Invoking OSCE and UN conventions against the provision of

Cable Viewer
offensive weapons to conflict zones, Medvedev then

promulgated a January presidential decree allowing for
unilateral sanctions against countries that assist Tbilisi in
its "remilitarization." Both Medvedev and Putin appear to
believe that the U.S. already has supplied Tbilisi
surreptitiously with arms, which illustrates the invidious
role, as well as dominance, of the security services in
running Russian policy in the Caucasus.
A Better Focus: Economy, CBMS, and PfP

--------------------------------------
¶5. (C) From our perspective, the challenge is to

demonstrate that the U.S. will protect its legitimate
interests in the Caucasus -- including support for Georgian
sovereignty, territorial integrity and the democratically
elected government of Georgia -- without triggering a
tit-for-tat military escalation that we cannot win, but that
Georgia can surely lose. From our vantage point, a
burgeoning military supply relationship with Georgia is more
of a liability for Georgia than a benefit. It would do
nothing to secure a long-term resolution of Abkhazia and
South Ossetia, allowing Russia to "justify" its military
buildup in the conflict territories, increasing the
insecurities of the Abkhaz and South Ossetian populations
already distrustful of Saakashvili, and driving the
separatist leaders further into Moscow's arms. It would
almost certainly raise the temperature, rather than
maintaining the unsatisfactory status quo long enough for
economic development and confidence-building measures to chip
away at the current hostile standoff. The ramifications of a
policy clash on weapons sales could also be felt elsewhere,
with Moscow seizing a pretext to move forward on the delivery
of S-300s to Iran.
¶6. (C) As we have argued separately (ref b), the U.S. will
be most effective in countering Russian actions by acting in
concert with Europe to help Georgia demonstrate to the Abkhaz
and South Ossetians that autonomy with Tbilisi is better than
submission to Russia. Russian corruption, heavy-handedness
and reliance on criminalized local leaders ultimately will
MOSCOW 00001591 003 OF 003
play to Georgia's advantage. While Georgia cannot reconquer

its lost territory by force, it can establish itself as a
democratically vibrant and economically successful model for
the region. By keeping the international focus on economic
assistance to Tbilisi and on creating credible international
monitoring regimes, we can create the time and space to
intensify cooperation with Russia in other areas of strategic

Cable Viewer
interest, adding ballast to the U.S.-Russian relationship

that could make Moscow think twice about exacerbating
tensions in the Caucasus.
¶7. (C) This is not to say that the U.S. should be

constrained in providing bilateral non-lethal military
assistance, training, or other equipment clearly directed at
assisting Georgia's basic requirements to control its
borders, maintain law and order and counter terrorism. In
addition, we believe that PfP exercises and programs should
be pursued as part of the standard NATO toolbox for
cooperation with non-member states, notwithstanding Russian
rhetorical umbrage. The value of building Georgian capacity
for international peacekeeping, counter-narcotics,
civil-military emergency preparedness, and anti-terrorism
operations is obvious. PfP has the advantage of greater
transparency and reinforcing a common U.S.-European approach
to Georgia; conceivably, when relations stabilize, Russia
could be included as an observer. While Russian forces will
remain concentrated in the neighboring territories for the
near-term, our goal of securing a Russian drawdown and then
departure will not be accomplished through a U.S. military
sales relationship or lethal training program. Instead, we
should hold Medvedev accountable to the principles of his
European Security Treaty initiative, which are based on
respect for territorial integrity and sovereignty.
Comment: U.S.-Russia Relations Matter

-------------------------------------
¶8. (C) We in no way accede to Russian redlines by

acknowledging that Georgia could never win a military
confrontation with Russia, and should not be encouraged to
pursue a strategy that focuses on military force as the
underpinning to a stronger, more stable country. We
recognize that our suggested approach would be deeply
dissatisfying to Saakashvili, but we see no short-term fix to
the generational estrangement triggered by the August war and
no way to neutralize the advantages of geography, size, and
capabilities enjoyed by Russia. Instead, consistent and
coordinated initiatives by the U.S. and Europe to assist
Georgia, implement monitoring regimes, and persuade Russia to
engage credibly will be better advanced in an environment
where the U.S. and Russia are not in a hostile standoff. Our
assessment is that if we say "yes" to a significant military
relationship with Tbilisi, Russia will say "no" to any
medium-term diminution in tensions, and feel less constrained
absent reverting to more active opposition to critical U.S.
strategic interests.
BEYRLE

Cable Viewer
Twitter this
Digg this page
Viewing cable 09MOSCOW2354, MEDVEDEV'S CALL FOR REFORM: ANYONE

LISTENING?



Discussing cables

2009-09-14 2010-12-01 Embassy
15:03 21:09 Moscow
VZCZCXRO5097
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSL RUEHSR
DE RUEHMO #2354/01 2571501
ZNY CCCCC ZZH
P 141501Z SEP 09
FM AMEMBASSY MOSCOW

Cable Viewer

RUEKJCS/JOINT STAFF WASHDC PRIORITY
SIPDIS
E.O. 12958: DECL: 09/14/2019

TAGS: PGOV PREL PHUM PINR ECON EFIN RS
SUBJECT: MEDVEDEV'S CALL FOR REFORM: ANYONE LISTENING?
Classified By: Ambassador John R. Beyrle; reasons 1.4(b/d).
¶1. (C) Summary: President Medvedev's article "Russia

Forward," released on the Internet with little fanfare
September 10, launched a vociferous debate among politicians
and analysts about the feasibility and probability of the
kinds of reforms needed to implement his vision for a more
diverse economy, healthier population and engaged citizenry.
It also launched the fall political season, fueling
speculation of divisions within the tandem and jockeying for
position before 2012 elections. The article is not so much a
break with the Putin past, as an attempt to moderate its
excesses. Regardless of who wrote it, Medvedev has now
linked his political fortunes to realizing its vision. End
Summary.
¶2. (C) In a lengthy essay entitled "Russia Forward," first
released mid-day September 10 on the liberal Gazeta.ru
Internet website, and later posted to the Kremlin's website,
President Medvedev described a litany of ills that plague
Russia: reliance on the export of raw materials as the
primary source of national income; the decrepit state of
infrastructure; the cancer of corruption; and the weaknesses
of civil society and the institutions meant to channel
citizen participation in government. It is a bluntly
pessimistic assessment, combined with a vague call to action
and an appeal to the public to support him in combating these
ills and to rally, as they did in World War II, to defeat
these new enemies that threaten their country's and
children's future. Medvedev focuses on the imperatives of
modernization, of economic diversification and of the
involvement of an active, engaged citizenry, in fighting
corruption. He is unusually pointed in identifying an
"ensconced group of corrupt officials and do-nothing
entrepreneurs" as the chief source of these problems. The
article presents no solutions to the maladies outlined.

Cable Viewer
Medvedev is fact eschews the more liberal path of the 1990's,

repeating oft-used complaints against the "liberals" who
brought political chaos and economic and financial
destitution to Russia by the end of that decade.
Reactions - Call for Action? Plea for Sympathy?

--------------------------------------------- --
¶3. (C) Medvedev succeeded, if in doing nothing else, in

giving political commentators ample material for policy - and
political analysis. His manifesto answered the call of many
elites who had been demanding a strong declaration of
presidential views on the present situation. Others are
connecting this article with his previous declarations,
noting that, as in the past, the rhetoric comes without any
concrete proposals for resolving these issues.
¶4. (C) Speculation began immediately as to the author of the

text. Some credit Medvedev with writing much of the article
himself, noting that it elaborates on themes he has been
publicly stressing during his presidency - his famous (if
dormant) four "I's," the fight against corruption, poor
infrastructure (roads, health care, etc.), demographic
problems and the need for citizen participation. Some have
focused on this exposition as a not-so-veiled critique of the
Putin years - building on Medvedev's earlier comments after
the dam disaster about the country lagging technologically.
However, others see in the text the hand of Vladislav Surkov,
Kremlin architect of Russia's "sovereign" democracy. Most of
the article's main themes - Russia's backwardness, the
do-nothing entrepreneurs, high-tech as an economic salvation
- were previewed by Surkov in a July 28 discussion with
Ambassador. The appeal for greater public involvement in the
managed, strictly-defined institutions created by Surkov
could only have been promoted by the "Grey Cardinal" himself.
¶5. (C) For the most part reaction among leading political
commentators - on editorial pages of major newspapers, on the
radio talk show circuit and on the plethora of
politically-oriented blogs - has been politely welcoming of
Medvedev's intentions, but critical of the clear disconnect
between his stated ideals, and the very different reality
which he plays a role in sustaining. XXXXXXXXXXXX
described Medvedev's perspective as a "Soviet way of looking
at things;" the reality, and what those in power paint as the
reality, do not correspond. XXXXXXXXXXXX argued
that it was hypocritical of Medvedev to talk about political
competition when in Moscow opposition parties are denied
the right to participate in elections. He belittled the calls for
political engagement by citizens in the current Putin-made
MOSCOW 00002354 002 OF 003

Cable Viewer
system - of which Medvedev is a direct beneficiary - a system

that has in fact dismantled pluralism and restricted
political involvement.
¶6. (C) XXXXXXXXXXXX emphasized that the article is a trial

balloon for Medvedev's annual address to the nation (poslanie),
planned for late October or early November. It was reported
weeks
ago that Medvedev and a team of consultants had already begun
work on a draft during summer holidays in Sochi. While his
2008 poslanie centered on political reform, his 2009 address
is said to focus on economic reforms. XXXXXXXXXXXX
charged that the article - perhaps one basis for the poslanie -
is an
appeal for ideas, but not a clear call to liberals trumpeting
their goals and aspirations. Rather, it charts a middle
course, and will be used by both liberals and conservatives
for their own purposes. It is a political document, intended
not to advance the goals he speaks of, but to bolster his
position among both camps. XXXXXXXXXXXX criticized the
article for not having outlined solutions and for its sharp
rejection of any constructive lessons that could be gleaned
from the so-called liberal ways of the 1990's and be applied to
address Russia's problems of today.
Medvedev in 2012? Tandem Tensions?

----------------------------------
¶7. (C) XXXXXXXXXXXX has warmed to giving him the benefit

of the doubt in recent months, told us that he appreciated the
sentiments that motivated the article, but was frustrated
that there was no plan outlined for action. XXXXXXXXXXXX
argued that the kind of development envisioned by Medvedev
is hindered by an alliance between business and government
bureaucracy - business pays off the bureaucracy and bureaucracy
defends business from real competition. Until that bond is
broken,
real economic reform based on innovation will be impossible.
Medvedev's indictment of the judicial system was also on
target, he told us, but would require a long-term commitment
to fighting entrenched interests if it is to be reformed.
¶8. (C) XXXXXXXXXXXX called the article's ideas "Putin 2.0,"

modifications to the general principles that have guided Russia
over the past decade, but not a rejection of them. Combined
with Putin once again publicly toying with the idea of running
for president in 2012, Medvedev's article revives speculation
that the two leaders do not see eye-to-eye on major issues,
and that should Medvedev not build momentum for the
changes he espouses, Putin may step forward to present a status
quo platform more to the liking of the oligarchs and possibly

Cable Viewer
more appealing to average citizens. While the Internet is

abuzz with commentary on the article, state-run television
has accorded it minimal coverage, focusing more on Putin's
annual performance before the Valdai Group.
¶9. (C) Kremlin-sanctioned opposition political parties (KPRF,

LDPR, Just Russia and Right Cause) issued mildly supportive
statements about the President's appeal for national
dialogue, though KPRF Deputy Chairman Melnikov argued that
the call will fall on deaf ears given that "the state has
worked hard to switch off the peoples' minds in recent
years." Yabloko leadership issued a scathing rebuke, calling
the article nothing but empty words when judged against
Medvedev's ineffectiveness in defending basic freedoms and
democracy during his presidency.
Where to from Here?

-------------------
¶10. (C) While the initial disappointment over the absence of

concrete proposals may be understandable, Medvedev himself
cautioned that change would be evolutionary, not
revolutionary. Taken with the results of a recent Levada
poll that shows regional leaders more disposed toward Putin,
Medvedev may be taking a slow approach, connecting with his
"base" - urbanites, better-educated elites and the
Internet-connected middle class - seeking their support for
processes which will have benefits not for them, but for
their children. Having responded to the growing uneasiness
among his "base" that he had not yet used his "bully pulpit"
enough to put forward an agenda to correct the political
deterioration and economically-myopic policies of the Putin
years (fixated on the export of raw materials), Medvedev has
sparked a national debate - at least among those with access
MOSCOW 00002354 003 OF 003
to the Internet (33 percent of Russians). Given that Putin's

support is the main source of Medvedev's hold on power, it is
hard to imagine that the article could have been released
without general agreement with its content by Putin himself.
Whoever wrote the actual article, it is a first-person
Medvedev document, and his political credibility depends on
follow-through -- with citizens, in his poslanie and in
taking on entrenched bureaucratic and business interests.
Beyrle

Cable Viewer
Twitter this
Digg this page
Viewing cable 09MOSCOW2366, RUSSIAN ILLEGAL LOGGING - AN OPPORTUNITY TO

ENGAGE



Discussing cables

2009-09-15 2010-12-01 UNCLASSIFIED//FOR Embassy
09MOSCOW2366
11:11 21:09 OFFICIAL USE ONLY Moscow
VZCZCXRO5832
PP RUEHAST RUEHDH RUEHHM RUEHLN RUEHMA RUEHPB RUEHPOD RUEHSL
RUEHTM
RUEHTRO

Cable Viewer
DE RUEHMO #2366/01 2581150

ZNR UUUUU ZZH
P 151150Z SEP 09
FM AMEMBASSY MOSCOW
INFO RUEHYG/AMCONSUL YEKATERINBURG 3699
RUEHVK/AMCONSUL VLADIVOSTOK 3346
RUEHLN/AMCONSUL ST PETERSBURG 5468
RUEHCP/AMEMBASSY COPENHAGEN 1679
RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
RUEAEPA/HQ EPA WASHDC
RUEHC/DEPT OF INTERIOR WASHDC
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE WASHDC
UNCLAS SECTION 01 OF 04 MOSCOW 002366

AIDAC STATE FOR USAID/E&E
STATE FOR OES/STC, OES/PCI, EUR/ACE, EUR/RUS, EUR/PGI
INTERIOR PLEASE PASS TO USFWS
USDA PLEASE PASS TO U.S. FOREST SERVICE - LARA PETERSON
COPENHAGEN FOR ERIK HALL
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: SENV EAGR KGHG EAID KCRM SOCI PREL RS

SUBJECT: RUSSIAN ILLEGAL LOGGING - AN OPPORTUNITY TO ENGAGE
REF: Vladivostok 5
Moscow 00002366 001.2 of 004
Sensitive but unclassified -- please protect accordingly.
¶1. (SBU) SUMMARY: The USG has an opportunity to work with Russia
to
combat illegal logging, and increasing reasons to do so. Russia
contains more of the world's forested area than any other country
--
approximately 20 percent -- and between 10 and 30 percent of wood
is
harvested illegally. Illegal logging leads to environmental
degradation, exacerbates global climate change, and disrupts trade
and local economies. Russia's illegal logging problem is magnified
by systemic flaws in the forest management system and an
inadequate

Cable Viewer
legal framework, many stemming from the new Forest Code of 2006.
The U.S. Forest Service (USFS) has worked with some Russian
regional
governments to combat illegal logging. There are several new
opportunities for cooperation on this issue, including the planned
new Protocol of Intent between the USFS and the Russian Federal
Forestry Agency, as well as the Embassy's proposal for $200,000 in
FY2008 performance funds to address illegal logging. END SUMMARY.
Russia's Forests - World's Largest and Most Degraded

--------------------------------------------- -------
¶2. (U) Russia contains approximately 22 percent of the world's

forested area, more than any other country. (NOTE: Second-place
Brazil has 16 percent. END NOTE.) Russia's boreal forests are the
Earth's largest forested region. Russia has more than 55 percent
of
the world's conifers, which comprise over 21 percent of the
world's
growing stock, and 11 percent of the world's live forest biomass.
Russia's over 887 million hectares of forest and woodland cover 52
percent of its land area -- equivalent to about 95 percent of the
area of the United States, including Alaska. Boreal forests make
up
about one-third of the world's forested area and one-third of the
world's stored carbon. Together, Russia and the United States have
two-thirds of the world's boreal forests. This broad band of mixed
coniferous and deciduous trees stretches across northern North
America, Europe and Asia, with taiga along its northern edge
meeting
Arctic tundra.
¶3. (U) Russia's forests are vital economic, biodiversity,
cultural,
and climate change assets. And as in many countries, they are
under
increasing threat from illegal logging, unsustainable forestry
practices, and forest fires. Illegal logging reduces the forests'
carbon uptake; it is estimated that forest fires and illegal
logging
contribute 5-15 percent of Russian greenhouse gas emissions. An
August 25, 2009, ScienceDaily press release characterized Russian
boreal forest as the world's most degraded and least intact and
found that it has suffered the greatest decline in the last few
decades.
A Quarter of Russia's Logging Illegal?

--------------------------------------
¶4. (SBU) Estimates vary as to the amount of illegal logging. In

April 2008, the Environment News Service quoted Ministry of
Natural

Cable Viewer
Resources and Ecology (MNRE) Deputy Head Semyon Levi estimating

that
10 percent of Russian timber is illegally harvested. Greenpeace
Russia estimates are between 20 and 30 percent. In some regions,
it
is estimated that up to half of the timber is being harvested
illegally. There are three types of illegal logging in Russia:
-- unauthorized commercial logging operations;
-- legitimate commercial operations that illegally augment their

harvest by cutting timber outside of authorized zones; and
-- non-commercial harvesting by locals for fuel, construction, and

other personal uses.
¶5. (U) Powerful organized crime groups are involved in illegal

commercial logging, abetted by local corruption. Poachers and
organized crime groups even set fire to woodlands to facilitate
illegal logging, later securing the contracts to clear the burned
areas.
¶6. (SBU) There are strong economic incentives for illegal

logging,
particularly in border regions close to foreign markets. But the
Moscow 00002366 002.2 of 004
extent of illegal logging is driven primarily by systemic

weaknesses
in Russia's forest management practices. In 2006, Russia
introduced
a new forest code intended to encourage sustainable forest use by
large corporations. Instead, forestry experts have told us, the
new
code decimated forest protection. It decentralized forest
management by moving forestry administration from federal to
regional authorities, assigned the responsibility for forestry
infrastructure and reforestation to lessee logging companies, and
did away with the federally employed cadre of forest rangers that
once enforced a standardized set of federal regulations. Forestry
management is now subject to the vagaries of regional budgets and
governments.
¶7. (SBU) Illegal logging is also aggravated by the lack of

effective
prosecution. Prosecution is hindered by the absence of an
effective
timber tracking system to establish a chain of custody for every
tree that is cut. Once trees are cut and loaded onto trucks,
internal customs officials and forestry inspectors have no way of

Cable Viewer
knowing the exact origin of the timber. Weak enforcement and

monitoring is also a problem, with the number of forest rangers
reduced dramatically by the new forest code. In one region, the
number of rangers was reduced from 200-300 to only three. Some law
enforcement officials claim that another obstacle is the poorly
written, vague body of laws that demand a standard of proof that
is
extremely difficult to achieve. A police official in the Ivanovo
region told the English-language daily "Moscow Times" that
prosecuting illegal loggers is nearly impossible because, unless
the
loggers are caught in the act, they can show lease documents from
anywhere in Russia and claim that they are simply transporting the
timber. This inadequate legal framework raises concern that
persons
caught logging illegally cannot be prosecuted in a timely and
effective manner, which the U.S. Forest Service asserts is
critical
to effective forest management.
¶8. (SBU) China is the primary market for illegal Russian timber,
much of which reaches the United States as finished products. A
long investigative report in "The New Yorker" reported in October
2008 that the greatest traffic in illicit wood is thought to be
from
Russia to China. Commercial illegal logging for export to China is
concentrated in the Far East border regions. According to a 2007
U.S. Forest Service report, 20-50 percent of timber harvested in
the
Krasnoyarsk region is illegal, with most sent to China. In January
2009, authorities caught a Chinese company attempting to export
4,000 cubic meters of oak and ash valued at 2 million dollars from
Primorye using fake export documents. Two officers of the
Khabarovsk Regional Service for Economic Crimes detained in 2007
were ultimately found guilty of aiding Chinese and Russian
companies
in illegally harvesting and exporting Russian timber. Given the
high percentage of illegally harvested timber, it is particularly
worrisome for the United States that 50 percent of soft wood and
90
percent of hardwood harvested in the Russian Far East and Siberia
ends up in the United States as finished goods after being
processed
in China, according to Denis Smirnov, coordinator of the World
Wildlife Fund's forestry program in Primorye (reftel).
Growing Attention to Illegal Logging

------------------------------------
¶9. (SBU) The Russian government and local communities are

increasingly aware of the effects of illegal logging. We are
slowly

Cable Viewer
seeing an increase in activities to promote sustainable forestry

and
to stop illegal logging.
-- FLEG Commitments: In the St. Petersburg Ministerial Declaration

at the 2005 Europe and North Asia Forest Law Enforcement and
Governance conference (ENA FLEG), 44 governments, including Russia
and the United States, expressed their intent to take action to
improve forest governance and combat illegal logging and
associated
forest crimes. The Declaration includes an Indicative List of
Actions to implement the declaration and calls for a second
Ministerial within 5 years to assess progress made and decide on
further actions needed.
-- Plans for a National Timber Tracking System: In April 2009,

Alexei Savinov, head of the Ministry of Agriculture's Federal
Forestry Agency, announced that by 2011 Russia will have
introduced
an integrated system to control timber circulation and decrease
Moscow 00002366 003.2 of 004
illegal logging. With support from the U.S. Forest Service and
USAID, Krasnoyarsk Authorities in 2008 sought funding from the
Ministry of Natural Resources to introduce a timber tracking
system.
(NOTE: At that time the Forestry Agency was under the umbrella of
the Ministry of Natural Resources; now it is under the Ministry of
Agriculture. END NOTE.) Krasnoyarsk, in Central Siberia, is
Russia's second largest administrative territory, producing
one-fifth of Russia's total timber output. According to USFS
estimates, 20-50 percent of Krasnoyarsk's timber is harvested
illegally. The lack of federal funding and subsequent personnel
changes in both the Russian Federal Forest Agency and in the
Krasnoyarsk administration have so far stymied introduction of
this
pilot chain-of-custody system.
-- Increased Domestic Timber Processing: Both President Medvedev

and Prime Minister Putin have endorsed the development of timber
processing as a national goal. Although their support is driven
mainly by economic concerns -- creating jobs and developing local
industry by exporting finished products instead of raw wood --
creating timber processing facilities in Russia could help reduce
illegal logging. By expanding local processing capacity, Russia
would reduce the incentive to export illegally harvested raw
timber
to other countries for processing, though mechanisms will have to
be
put in place to ensure any illegally harvested raw timber is not
instead simply processed directly in Russia itself. Officials in

Cable Viewer
Tomsk informed us that they are facilitating the establishment of

Chinese wood processing facilities in the region, which they noted
might discourage the export of illegal wood. As part of the
government's goal to increase domestic wood processing they have
gradually increased the export tariffs on logs. On April 1, 2008,
the tariff increased to 25 percent, but not less than 15 euros,
and
as of January 1, 2010, up to 80 percent, but not less than 50
euros,
making the cost of importing unprocessed logs from Russia
prohibitive.
-- Civil Society Activity: Local residents in Primorye, frustrated

by the inaction of police and local authorities, often stage
protests to attract attention to illegal logging. WWF and other
environmental NGOs support their efforts. Residents of
Melnichnoye,
a village north of Vladivostok, staged a summer 2008 protest
against
"sanitary cutting," whereby logging companies supposedly harvest
dead trees and clean woodlands after fires (reftel). In fact,
according to villagers, loggers cut down healthy trees and leave
behind wastelands instead of protected forests.
¶10. (SBU) Organized crime is a serious threat to civilian

environmental activists in illegal logging locales. According to
WWF and nature preserve workers in the Russian Far East, the local
"forest mafia," a group engaged in illegal timber operations, has
openly declared war on those working to preserve forests and
enforce
environmental laws. The house of Yuriy Bersenev, a WWF project
coordinator who works to safeguard protected nature preserves, was
set on fire by unknown perpetrators in the winter of 2009. This
incident came on the heels of two earlier attempts to intimidate
WWF
staff in Primorye in December 2008, including another case of
arson
(ref A). Yuriy Bersenev attributes the current drastic situation
to
the weakness of national forest legislation and the rampancy of
corruption in the Russian Far East, USFS is beginning work on a
$200,000 performance fund project to create linkages between NGOs,
law enforcement, business, wardens, and regional officials to
reduce
illegal logging.
-- Lacey Act: The Lacey Act amendments of 2008 expanded the

statute's anti-trafficking protections for the purpose of
combating
illegal logging. The act now covers timber illegally harvested in
the country of origin and brought into the United States, either
directly or through manufactured products. The reinforced Lacey

Cable Viewer
Act
has prompted large timber-product importers such as Wal-Mart to
reexamine their supply chains to ensure compliance. Consequently,
the Lacey Act puts significant pressure on regional governments in
Russia to fight illegal logging at the risk of losing the business
and contacts so valuable to their economies. With the Lacey Act
calling attention to the international trade in illegal timber,
Russian and Chinese businesses are more conscious of the need to
prove legality to American companies, leading them to seek
official
logging permits from the Federal Forestry Agency. xxxxx
COMMENT: Potential for Expanded Cooperation

-------------------------------------------
¶11. (SBU) The United States and Russia have a number of

opportunities to work bilaterally and multilaterally in the coming
year to stem illegal logging:
-- A new protocol of intent between USFS and USAID, jointly, and

the
Russian Federal Forestry Agency, will be signed in the next few
months. The POI addresses several forestry issues, including
illegal
logging. It can help spur policy dialogue and exchange of best
practices on implementing environmental regulations, promoting
sustainable forestry practices, engaging civil society, and
expanding environmental education. It should also assist in
reducing
the number and extent of fires through increasing the forest
managers' monitoring capacities. USFS specialists are attending an
October workshop in Khabarovsk, which they see as a valuable
stepping stone in the larger illegal logging project.
-- Russia took the initiative to host the 2005 FLEG conference,

and
the U.S. has played a critical role as organizer in the program.
With a planned assessment of progress in 2010, the United States
has
an opportunity to become more involved.
-- The U.S. can also cooperate with Russian law enforcement to

help
expand its capacity to investigate the causes of illegal logging
and
forest fires and their connection to organized criminal groups.
¶12. (SBU) One possible model for cooperation is the May 2008
U.S.-China Memorandum of Understanding on Illegal Logging and
Associated Trade. A similar agreement with Russia, which could
even
involve China as a third party, might facilitate cooperation among

Cable Viewer
the three countries to strengthen forest law enforcement and

governance.
Beyrle

Cable Viewer
Twitter this
Digg this page
Viewing cable 09MOSCOW2529, ASD/ISA VERSHBOW'S SEPTEMBER 30 VISIT TO

MOSCOW:



Discussing cables

2009-10-06 2010-11-28 Embassy
14:02 18:06 Moscow
VZCZCXYZ0000
PP RUEHWEB
DE RUEHMO #2529/01 2791432

ZNY CCCCC ZZH
P 061432Z OCT 09 ZDK
FM AMEMBASSY MOSCOW

Cable Viewer
TO RUEKJCS/JOINT STAFF WASHDC PRIORITY

RUEHC/SECSTATE WASHDC PRIORITY 4996
RUEHZG/NATO EU COLLECTIVE PRIORITY
SIPDIS
E.O. 12958: DECL: 10/05/2019

TAGS: PREL PGOV MARR RS IR AF UP GG
SUBJECT: ASD/ISA VERSHBOW'S SEPTEMBER 30 VISIT TO MOSCOW:
BILATERAL COOPERATION, IRAN, AFGHANISTAN, MISSILE DEFENSE,
MILITARY/DEFENSE COOPERATION
Classified By: Political Minister Counselor Susan Elliott for

reasons 1.4 (b), (d)
¶1. (C) SUMMARY: During consultations with GOR officials on

September 30, Assistant Secretary of Defense (ASD) for
International Security Affairs Alexander Vershbow discussed
ways to implement bilateral cooperation in a number of key
areas of mutual interest. Both sides praised progress since
the "reset" in U.S.-Russian relations during the first
Obama-Medvedev meetings, though both agreed that concrete
actions are necessary to realize true cooperation. ASD
Vershbow emphasized that the reset needs to be reciprocal and
noted that Iran would be a critical test case. Both sides
expressed interest in further cooperation on Afghanistan,
especially in the sphere of counternarcotics. While the
Administration's missile defense announcement has met with a
generally positive reaction in the Russian media, Duma and
Security Council representatives made clear they had
questions about the later phases of the new U.S. plan and
questioned whether the U.S. would be prepared for cooperation
going beyond information exchange. Russian interlocutors
acknowledged the dangers posed by Iran's nuclear program, but
stressed Moscow's skepticism about sanctions. Throughout the
meetings, ASD Vershbow emphasized that Russia's efforts to
assert a regional sphere of influence posed a threat to the
reset in bilateral relations, and reiterated the U.S.
commitment to the sovereignty, independence, and territorial
integrity of Georgia, Ukraine and other partners in the
region. END SUMMARY.
¶2. (C) OVERVIEW OF MEETINGS: ASD Vershbow met with the

following GOR officials: Viktor Mikhaylovich Zavarzin
(Defense Committee Chairman of the State Duma), Aleksandr A.
Gorbunov (Chief of the Main Directorate for International

Cable Viewer
Military Cooperation of the Ministry of Defense), General

Yuriy Nikolayevich Baluyevskiy (Deputy Secretary of the
Security Council and former Chief of Defense), Aleksey
Nikolayevich Borodavkin (Deputy Minister of Foreign Affairs),
and Grigoriy Borisovich Karasin (First Deputy Minister of
Foreign Affairs and State Secretary). He also met informally
with academic experts and pundits and gave an interview to
Interfax.
--------------------------------------------- ---
U.S.-RUSSIAN COOPERATION -- WORDS ARE NOT ENOUGH
--------------------------------------------- ---
¶3. (C) At all meetings, ASD Vershbow and his Russian

interlocutors noted that U.S.-Russia relations since the
"reset" have been moving in the right direction, with
opportunities for increased bilateral cooperation in areas of
mutual interest. The Bilateral Presidential Commission and
associated working groups will be useful to inject momentum
into our work. However, ASD Vershbow stressed that words
alone or mere information exchanges are not enough, and the
reset must be reciprocal. Both sides need to take action to
implement agreements already concluded and to pave the way
for additional areas of work and to identify concrete
projects for cooperation. Mechanisms for enabling these
efforts need to be established (e.g., the Ministry of Defense
is currently undergoing a major organizational reform, which
has hampered efforts for implementing the previously approved
2009 military-to-military work plan, and both sides need to
ensure that planned events are conducted).
¶4. (C) ASD Vershbow agreed that next steps must be taken in
other areas where we have agreed to cooperate previously
(e.g., implementing a ballistic missile joint threat
assessment, a Joint Data Exchange Center, and the lethal
transit overflight in support of efforts in Afghanistan that
was agreed to at the July summit). The U.S. and Russia must
be united in addressing common threats, such as the nuclear
and ballistic missile programs of Iran and North Korea.
¶5. (C) During his meeting with MOD International Military

Cooperation Chief Gorbunov, ASD Vershbow emphasized that
transparency should be a major aspect of cooperation.
Vershbow observed that DoD has been very open with the
Russians about sensitive issues. For example, DoD has shared
information about efforts to help prepare Georgian troops for
deployment to Afghanistan in support of ISAF efforts;
however, the Russians have not reciprocated in this vein
(e.g., their Zapad 2009 and Ladoga exercises).
¶6. (C) Both Duma Defense Committee Chair Zavarzin and

Security Council Deputy Secretary Baluyevskiy stressed that

Cable Viewer
they are ready to work on all areas of mutual interest on the

BILATERAL COOPERATION, IRAN, AFGHANISTAN, MISSILE DEFENSE,
MILITARY/DEFENSE COOPERATION
condition that Russia's voice be heard. In particular,

Zavarzin cited the NATO-Russia Permanent Joint Council
(1997-2002) in which Russia claims its views were ignored,
the NATO-Russia Council (the PJC's successor) in which Russia
"still did not have a full say," and Russia's interest in
working on anti-missile defense since 2000 which "did not pan
out." ASD Vershbow acknowledged that both NATO and Russia
bore responsibility for areas where cooperation was not
successful, but suggested that we need to look ahead rather
than debate the past.
--------------------------------------------- ------
RUSSIAN DEFENSE MINISTRY REFORM POSES CHALLENGES TO
MIL-TO-MIL COOPERATION
--------------------------------------------- ------
¶7. (C) The Russian Ministry of Defense (MOD) is in the midst

of major reform. International Military Cooperation Chief
Gorbunov described the main goal of the reform as the
creation of the "most effective military force in the world,"
despite existing limitations (e.g., demographics, large
landmass and borders, resources, and various threats along
the borders). He identified two distinct processes as part
of the reform -- building of the armed forces and control of
the forces. Today, Russia is focusing on building the
forces, including a large influx of civilian personnel in
management and specialist roles, improving pay/benefits of
service members, improving quality of equipment, and trying
to change decision-making processes at all levels. Gorbunov
emphasized that these changes are intended to make Russia a
strong competitor, but also a reliable partner.
¶8. (C) Gorbunov explained that the reform process is having

a significant impact on the Main Directorate for
International Military Cooperation (GUMVS) at the MOD. The
Foreign Liaison Directorate (UVS) is being closed on October
1, and a new International Liaison Directorate is being
created. Because of these changes, correspondence will be
slow over the next six weeks or so, which will impact the
Attache Corps in Moscow. Gorbunov offered his personal
assistance during this period.
¶9. (C) ASD Vershbow raised the Bilateral Defense

Consultations (BDC) which the U.S. had proposed for November,
and suggested the possibility of a broader dialogue between
the MOD and DoD on policy and strategy issues to complement
State-MFA exchanges. Vershbow explained that DoD's proposed
BDC topics (including confidence-building measures and

Cable Viewer
transparency, risk reduction and notification procedures,

expanded military technical cooperation, etc.) were carefully
considered, but we welcomed Russia's suggestions for
additional topics. Gorbunov responded that the MoD agrees
with the general notion of the BDC, but stipulated that the
General Staff needs to identify the right experts to address
topics to be discussed, and they plan to propose other topics
for consideration. He gave no indication as to when a
response would be provided.
--------------------------------------------- --------------
AFGHANISTAN: NARCO-TRAFFICKING, TERRORISM, ILLICIT FINANCE

--------------------------------------------- --------------
¶10. (C) ASD Vershbow's meetings with Deputy Foreign Minister

Borodavkin and MOD International Cooperation Chief Gorbunov
particularly focused on Afghanistan. Borodavkin mentioned
that Russia views Afghanistan not only as a threat, but as an
opportunity for cooperation with the U.S. and other countries
(e.g., NATO), and suggested that ISAF could play an important
role in fighting illegal drug trafficking. He recalled that
the U.S. and NATO had participated in the March 2009
conference held in Moscow at which counternarcotics was a top
priority.
¶11. (C) When asked by Borodavkin about whether more U.S.

troops will be sent to Afghanistan, ASD Vershbow explained
that General McChrystal's assessment is being reviewed at the
highest levels. He noted that while the situation in
Afghanistan has not gone as well as hoped over the past six
months, the U.S. cannot allow the Taliban to regain control.
Expansion and training of the Afghan National Security Forces
(ANSF), improving governance, and economic assistance are all
still essential components of the U.S. strategy in
Afghanistan and we will continue to seek cooperation in these
areas.
¶12. (C) Borodavkin introduced a number of proposals for

increased Russian contribution. He said that Russia would
like to launch cooperation with the U.S. on the economic
rehabilitation of Afghanistan and referred to a clause in the
July Summit Joint Statement that without economic
improvement, terrorism and other threats cannot be
eliminated. Borodavkin suggested tripartite cooperation
(Russia-U.S.-Afghanistan) to reconstruct the Soviet-era
Salang Tunnel to provide a much needed reliable
transportation route. The Russians have already undertaken a
technical study on this project and Borodavkin said that with
adequate resources, it would be a useful cooperative effort.
(Note: Borodavkin's staff confirmed that the MFA has
submitted a proposal to the State Department on the Salang

Cable Viewer
Tunnel.)
¶13. (C) Russia considers narco-trafficking to be its highest

priority vis-a-vis Afghanistan. Borodavkin said Russia is
ready to help the Afghan National Police (ANP) and Interior
Ministry in these efforts. He noted that Russia is already
providing counternarcotics training to the Afghans at the
Domodedovo Center, and mentioned Russian counter-narcotics
chief Ivanov's statement that he is ready to provide
increased assistance on bilateral and multilateral levels
such as NATO and the OSCE. Both Borodovkin and Vershbow
agreed that while the U.S. and Russia are currently working
together on this and the related issue of threat financing
through the Bilateral Presidential Commission, we need to
address these problems more forcefully. Illicit financing
has been raised at Shanghai Cooperation Organization (SCO)
and OSCE meetings, offering one area of possible cooperation.
¶14. (C) At his meetings at the MOD and MFA, ASD Vershbow
expressed appreciation for Russia's expression of interest in
providing weapons and equipment to the ANSF, and requested
that any such help be made in the form of donations with no
fees attached, as those charges would have to be paid for by
the U.S. He underscored that some of the equipment/weapon
donation requests provided to Russia are intended to support
counter-narcotics efforts, so the U.S. hopes Russia will be
able to provide this support. ASD Vershbow also asked that
Russia work with the Combined Security Transition Command -
Afghanistan (CSTC-A) to ensure that ANSF priority
requirements are met and provided a list of requirements.
¶15. (C) Borodavkin said that Russia will be able to supply

limited numbers of weapons to the ANP as aid and will
consider selling more weapons to the ANP and the Afghan
National Army (ANA). He also expressed concern that there
are unlicensed (counterfeit) Russian weapons on the market,
which are of inferior quality. Gorbunov explained that
donating equipment and weapons to Afghanistan is a
presidential decision, which would entail President Medvedev
asking the military services to donate items from current
stocks.
¶16. (C) Borodavkin also asked ASD Vershbow's perspectives on

the European proposal for a conference on Afghanistan after
the new Afghan government is established. ASD Vershbow said
the U.S. saw merit in this idea as a means of seeking
additional international support for Afghanistan, but noted
that the timing of the initiative will depend on
Afghanistan's domestic politics; given the problems with the
Presidential elections, conditions were not yet right.

Cable Viewer
¶17. (C) Borodavkin mentioned the work of the Afghanistan

sub-working group under the Bilateral Presidential Commission
and stated that the Foreign Ministry is hoping that Amb.
Holbrooke can reschedule his planned visit to Moscow.
Borodavkin requested that ASD Vershbow pass on the invitation
to Amb. Holbrooke.
¶18. (C) ASD Vershbow also raised the lethal transit

agreement signed at the July summit in his meetings with
Gorbunov, Borodavkin, and Zavarzin. He underscored the
importance of a timely Duma decision now that the General
Authorization has been delivered. ASD Vershbow expressed
hopes that the inaugural flight of the agreement could take
place prior to Secretary of State Clinton's visit to Moscow
on October 12-14. Zavarzin thought the Duma would approve
the agreement without any problem; Borodavkin confirmed that
the Ministry of Foreign Affairs is working on the request,
but warned that they do not have the sole voice on this
matter.
---------------------------------------------
MISSILE DEFENSE DECISION: NEITHER CONCESSION
NOR THREAT TO RUSSIA

---------------------------------------------
¶19. (C) ASD Vershbow discussed the recent U.S. missile

defense decision during each of his consultations. In his
meeting with Duma Defense Committee Chairman Zavarzin, ASD
Vershbow observed that the Russian press may have been overly
positive in its assessment of the September 17 announcement,
focusing on the cancellation of the Program of Record rather
than the new MD architecture. While the new phased adaptive
approach to MD does not pose a threat to Russia, there will
likely continue to be missile defense elements in
central-eastern Europe, with an SM-3 site in Poland if the
Government of Poland agrees. However, the physical
characteristics of the new system are different from the old,
and the U.S. believes Russia has no basis for concern that
the system could threaten its strategic forces. The new
architecture will be more effective and be able to provide
protection to vulnerable parts of Europe more quickly.
Vershbow emphasized that the U.S. intends to be open about
the new architecture, citing information available through
congressional testimony and other open sources. The U.S. aim
is to make this a project for NATO because the system is
designed to protect all of NATO's territory (starting in
southeastern Europe, where the current threat is, but
eventually covering all of NATO).
¶20. (C) ASD Vershbow affirmed the U.S. also views missile

Cable Viewer
defense as an opportunity for cooperation with Russia against

a common threat, noting Secretary of Defense Gates' support
for cooperation on missile defense. Vershbow emphasized to
Zavarzin and Security Council Deputy Secretary Baluyevskiy
that we should begin by implementing the Joint Data Exchange
Center (JDEC), on which the Russians had postponed a decision
until after the U.S. missile defense announcement. Vershbow
told Zavarzin and Baluyevskiy that linking radars could
follow, which could then lead to broader areas of cooperation
that could be implemented either bilaterally or within the
NATO-Russia Council (NRC) framework. He suggested that U.S.
and Russian experts explore concrete ways to implement
military technical cooperation, noting that such cooperation
would be mutually beneficial and would send a strong signal
to Iran that could help in resolving the nuclear issue.
¶21. (C) Zavarzin acknowledged that the Russian political

elite has no illusions about missile defense and understands
this was a U.S. decision with no quid pro quo expected from
Russia. Security Council Deputy Secretary Baluyevskiy noted
that the system's planned capability to intercept ICBMs does
raise some of the same concerns Russia has had before.
Zavarzin agreed that we need to identify specific projects to
work on together, but that Russia wants to ensure its voice
will be heard. Both Zavarzin and Baluyevskiy stressed the
need to develop bilateral cooperation methods, potentially by
linking existing U.S. and Russian early warning systems to
gather and share information about threats. They also asked
whether the U.S. was prepared to go even farther, to include
joint technology projects, which would of greater interest to
Russia than information exchange.
---------------------------
U.S.-RUSSIAN UNITY ON IRAN?
---------------------------
¶22. (C) ASD Vershbow discussed the serious test that Iran's
nuclear program will pose to both Russia and the U.S. in the
coming months, noting that our interests coincide in many
ways, even if they are not identical. The U.S., he stated,
wants to see if diplomacy can succeed, but we need to be
realistic and be prepared for tougher measures if diplomacy
fails. Citing the recently exposed covert nuclear facility
and the recent missile tests, Vershbow described the
situation as urgent, and said that the U.S. was encouraged by
President Medvedev's recent comment that sanctions might
become necessary.
¶23. (C) ASD Vershbow mentioned that the Islamic world is

very concerned about Iran's nuclear program (e.g., several of
its Arab neighbors have asked the U.S. for Patriot missiles
and other measures to protect them against Iranian attack).

Cable Viewer
The ability of the U.S. and Russia to work together on the

Iran challenge over the next few months will be just as
important as our work on missile defense will be over the
next few years. ASD Vershbow stressed that if we fail to
stop Iran's pursuit of nuclear weapons, we could have a
"volatile, possibly explosive," situation in the Middle East.
¶24. (C) In their respective meetings, Duma Defense Committee

Chairman Zavarzin and Security Council Deputy Secretary
Baluyevskiy agreed that Iran is a concern, but said that
Russia continues to work closely with them and that sanctions
cannot be pursued until after diplomatic efforts have been
made. Deputy Foreign Minister Borodavkin expressed concern
that sanctions could be ineffective (citing past experience
in Iraq) and could have a negative impact on the wider
Islamic world.
----------------------------------------
RUSSIA'S "SPHERE OF PRIVILEGED INTEREST"
----------------------------------------
¶25. (C) ASD Vershbow stated in several meetings that our

interaction in the post-Soviet space continues to be a
sensitive issue and, if not handled carefully, could
undermine recent gains in bilateral relations. In this
regard, President Medvedev's proposed amendment to the law on
use of Russian forces overseas has raised many questions.
Duma Defense Committee Chairman Zavarzin said that Russia
will not interfere with the U.S. as it engages with nations
in the region, and that there is no cause for concern
regarding the legislation about use of Russian forces -- it
is intended to protect Russian citizens living in those
countries and that other countries have similar provisions.
¶26. (C) UKRAINE: ASD Vershbow spoke of his visit to Ukraine
immediately preceding his arrival in Moscow, and cited
Ukrainian concerns about Russian respect for Ukraine's
sovereignty and borders. Vershbow stated that the U.S.
continues to support the 1994 Budapest Memorandum on Security
Assurances and Ukraine's freedom to choose its security
relationships, and encourages Russia to reaffirm its
adherence as well. He suggested that President Medvedev's
open letter to Ukraine had been counter-productive. The U.S.
favors close and mutually beneficial Russian-Ukrainian
relations -- this is not a zero-sum game.
¶27. (C) Deputy Foreign Minister Karasin said that Ukraine is

Russia's closest neighbor, and is a "key partner" in
international activities. Russia is not trying to influence
Ukraine, but wants a stable Ukraine and a secure
neighborhood. He also said that Russia cannot ignore

Cable Viewer
attempts to depict it as a major threat to Ukraine. Foreign

Minister Lavrov will be visiting Ukraine this week to meet
with Ukrainian Acting Foreign Minister Khandogiy and there
even is a possibility that Medvedev and Ukrainian President
Yushchenko will meet at a summit of CIS countries shortly
after that. Karasin said that Russia wants to deal with
Ukraine in a normal way and that Ukrainian citizens are the
ones to decide what they want.
¶28. (C) GEORGIA: Security Council Deputy Secretary

Baluyevskiy, Zavarzin, and Karasin asked why the U.S. is
providing military assistance to Georgia when it threatens
stability in the Caucasus region. This causes concern and
Russia cannot allow renewed aggression against Abkhazia and
South Ossetia. ASD Vershbow explained that as a matter of
principle, the U.S. will help Georgia protect its sovereignty
and independence, but stated that the U.S. is not rearming
Georgia, as Russia has repeatedly alleged. Since the August
2008 war, there has been no U.S. lethal assistance to
Georgia; DoD funds were transferred to the State Department
for humanitarian purposes. In the short term, the U.S. is
proceeding with great care and focusing on training,
education, and helping prepare Georgia to participate in
Afghanistan under the command of U.S. Forces. At the same
time, Georgia is a sovereign state with the right to
self-defense. We do not accept any arms embargo, and we may
provide weapons to Georgia in the future.
¶29. (C) Zavarzin made a point of saying that Russia does not
dispute Georgia's sovereignty, but it cannot allow new acts
of aggression; a regional consensus is necessary. Karasin
said that, in Russia's view, the current Georgian leadership
is irresponsible. ASD Vershbow reiterated that the U.S. had
made clear to Georgia that there is no military option
regarding Abkhazia and South Ossetia and that the Georgians
need to take a long view on reintegration of the territories.
Karasin noted some successes in repairing relations since
last August, including the Geneva talks that enable the
Georgians to talk directly to the Abkhaz and Ossetians.
Vershbow said that stability in the Caucasus and creating
conditions to help improve Georgian-Russian relations is very
important to the U.S.
¶30. (C) Karasin mentioned the EU independent report on the

August 2008 conflict in Georgia, which had just been released
on the afternoon of September 30. ASD Vershbow mentioned
that he looked forward to reading the report and stressed
that even if we do not agree completely on the report's
findings, we need to look ahead and promote stability in the
region, including an international presence in the
territories. Karasin said that international presence in

Cable Viewer
Abkhazia and South Ossetia must be discussed with the Abkhaz

and the Ossetians (not the Russians). Russia has "bilateral
agreements" with them, and Russian border guards are
protecting them to help restore stability.
¶31. (C) Karasin asked whether the U.S. intends to establish

a military presence in Georgia by contributing personnel to
the EU Monitoring Mission (EUMM). This would be a serious
problem for Russia, as they believe it would send the wrong
message to President Saakashvili that he could use force
again. ASD Vershbow said there has been lots of speculation
on this subject that was not based on fact. If the EUMM did
make such a request in the future, the U.S. would consider
it, but this would likely involve civilian monitors.
Vershbow added that Russia needs to fully withdraw its forces
from positions beyond the line of the outbreak of hostility,
per the Medvedev-Sarkozy agreement, since this non-compliance
was a continuing source of tension. Karasin insisted that
Russia was in compliance, while acknowledging that the U.S.

does not see it that way.
------------
OTHER ISSUES
------------
¶32. (C) EUROPEAN SECURITY TREATY: In response to

Baluyevskiy's inquiry about President Medvedev's proposed
European Security Treaty, ASD Vershbow acknowledged there
could be ways to improve the effectiveness of existing
conflict-prevention mechanisms, but that the U.S. and most of
our allies did not see a need for new structures or a new
treaty. However, the U.S. is ready to engage with Russia on
this issue in the Corfu process and other fora.
¶33. (C) CENTRAL ASIA: Karasin inquired about the Manas
Transit Center and the numbers of U.S. military personnel
that would be deployed under the new arrangement. ASD
Vershbow said that he did not have precise figures. However,
in contrast with the previous agreement, security for the
facility is now being provided by the Kyrgyz, which reduced
the U.S. presence somewhat.
¶34. (U) ASD Vershbow has cleared this cable.

Beyrle

Cable Viewer
Twitter this
Digg this page
Viewing cable 09MOSCOW2531, MEDVEDEV, PUTIN, AND RUSSIA'S IRAN POLICY




Discussing cables

2009-10-06 2010-11-28 Embassy
15:03 18:06 Moscow
VZCZCXYZ2640
OO RUEHWEB
DE RUEHMO #2531/01 2791535

ZNY CCCCC ZZH
O 061535Z OCT 09
FM AMEMBASSY MOSCOW

Cable Viewer

RUEHGV/USMISSION GENEVA IMMEDIATE 5383
SIPDIS
E.O. 12958: DECL: 10/06/2019

TAGS: PGOV PREL RS IR
SUBJECT: MEDVEDEV, PUTIN, AND RUSSIA'S IRAN POLICY
Classified By: Ambassador John Beyrle for reasons 1.4 (b)

and (d).
¶1. (C) SUMMARY: Despite Russian President Medvedev's

September 24 remarks that sanctions against Iran might be
necessary, other government officials and experts here
caution that Russia will remain, for the time being,
reluctant to pursue a tougher line against Tehran. The
consensus among the Russian political elite is that
maintaining a dialogue with the Iranians and exhausting
diplomatic avenues is preferable to imposing sanctions in the
near term. While Medvedev as president is responsible for
controlling arms and nuclear technology transfers, Prime
Minister Putin remains closely identified with decisions on
Iran policy, including the sale of civilian nuclear
technology and weapons, which provides a boost to powerful
state enterprises. According to Deputy FM Ryabkov, Putin's
relative silence on Iran since Medvedev's statements does not
signal any difference between them on sanctions. End
Summary.
Medvedev on Sanctions: Few Official Echoes

------------------------------------------
¶2. (C) Russian Government officials, including Prime Minister

Putin, have not yet echoed President Medvedev's public
statement that Russia would consider the imposition of
sanctions on Iran if the world community ran out of other
options. Asked about Russian views on the Qom revelation in
New York September 25, FM Lavrov adopted a strikingly softer
tone than in the just released Kremlin statement. He noted
that Iran had acted positively by notifying the IAEA about
its plans to construct a new nuclear facility, and complained
that some of Russia's "partner countries" in the P5-plus-1
had not shared information about the Qom facility earlier.
Lavrov stressed that Iran's cooperation with the world

Cable Viewer
community as a member of the NPT with non-nuclear status

could prove the peaceful nature of its nuclear program.
¶3. (C) Before the most recent P5-plus-1 meeting in Geneva, PM

Putin said that Russia would not support "significant"
changes to its approach on Iran. Ariel Cohen, a senior
fellow at the Heritage Foundation, said Putin and Lavrov told
him in early September that they are opposed to tougher
sanctions and the use of force against Iran. Russian Deputy
Foreign Minster Sergei Ryabkov said September 29 that Iran's
recent proposals presented a "broad field for dialogue."
Ryabkov added that whether sanctions against Iran might
become inevitable was a "completely separate issue, one that
we are not yet ready to address." He stressed Russia's
position was to do everything possible to find a "diplomatic,
political solution to the Iranian nuclear problem."
¶4. (SBU) While expressing concern over Iran's missile

program, Russian Ambassador to NATO Dmitriy Rogozin stressed
September 29 that Russia preferred political dialogue over
tough measures that could trigger an "arms race in the
region." Russian Ambassador to the United States Sergey
Kislyak said September 24 that sanctions were not the way to
resolve the problem; rather, the point was how to find a
"political solution that would eliminate this problem." The
priority was to "start a serious dialogue with our Iranian
partners in seeking a way out of the situation."
¶5. (C) Russia's message to domestic audiences also remains

unchanged. Despite Medvedev's carefully worded comments on
sanctions in New York (called by one analyst here "a jewel of
diplomatic casuistry"), even prominent Russians with ties to
the Kremlin's domestic propaganda machine believe Russian
support for Western sanctions is highly unlikely. Medvedev
advisor Gleb Pavlovskiy, President of the Effective Policy
Foundation, and Maksim Shevchenko, President of the Russian
World Foundation, even spoke in favor of completing Russia's
frozen S-300 surface-to-air missile deal with Iran.
Interpreting Putin's Silence

----------------------------
¶6. (C) PM Putin's lack of public comment on the possibility

of Iran sanctions after President Medvedev's public statement
does not indicate disagreement between them on Iran, DFM
Ryabkov told Ambassador Beyrle October 3. Ryabkov repeated
his comments, made in Geneva during P5-plus-1 talks, that
Russia had not ruled out the possibility of sanctions, but
would begin to contemplate them only as an absolute last
resort.
¶7. (C) Most political commentators and analysts here have

Cable Viewer
been echoing the same statements. Tatyana Stanovaya of the

Center for Political Technologies thought that Medvedev's
seemingly more positive statement indicates no real
rapprochement with the U.S. on Iran. Rather, she said, his
words are carefully calibrated to indicate a welcoming of
U.S. willingness to use the P5-plus-1 format and engage in
actual discussions with Iranian officials.
¶8. (C) Nevertheless, Medvedev's New York comments and the

September 25 Kremlin statement mark a definite toughening of
Russian rhetoric on Iran. Pravoe Delo co-Chairman Georgiy
Bovt told us October 5 that Medvedev's use of the word
"sanctions" represents a policy change. Boyt cautioned that
Medvedev's words would probably resonate with only a distinct
minority of Russian society. He believes it will be hard for
Medvedev to sell Iran sanctions to the Russian bureaucracy
without the full support of Putin. At the Sochi Economic
Forum, Putin blasted the U.S. for not allowing the export of
certain high technology to Russia. Boyt thinks Russia might
ask for an easing of these restrictions in exchange for
supporting sanctions.
Sanctions: Economic Implications

--------------------------------
¶9. (C) Despite Medvedev's presidential authority over arms

transfers, Putin undoubtedly retains a critical, if not
decisive role over an issue with such significant domestic
economic implications as the transfer of nuclear technology
and armaments to Iran. Russia and Iran currently have
limited military cooperation, so the effect of any lost
revenue from arms sales to Iran would be small. While the
sale of S-300s to Iran, for example, would only net Russia
from USD 750 million to USD one billion, future military
sales could be considerably larger.
¶10. (C) Several years ago Iran was a stable source of hard
currency and this cash flow helped Russia preserve its
nuclear construction sector. The importance of Russia's
trade with Iran has decreased, but Russian exports to Iran
last year still exceeded USD 3 billion. In the currently
depressed Russian economy, that is not an insignificant
amount. In addition, great potential for future economic
gain to Russia exists via civilian nuclear technology sales
and increased military cooperation.
¶11. (C) As the world's largest exporter of oil and gas,

Russia also benefits significantly from the "instability
premium" embedded in world oil prices due to tensions with
Iran. Even a USD 5 per barrel instability premium would net
Russia almost USD 9 billion per year for oil and
approximately USD 2-4 billion from its gas exports. Finally,

Cable Viewer
given Iran's position as the second largest owner of gas

reserves, Russia's gas sector clearly benefits from the lack
of international investment in the development of Iran's
natural gas sector.
Life without Iran

-----------------
¶12. (C) Russia could profit from alternatives to its

continued support for Iran. For example, news reports
indicate that Saudi Arabia has offered to purchase the
Russian S-400 system for USD two billion in an effort to
force Moscow to back out of the S-300 deal with Iran.
Medvedev cited Arab League concerns about Russia's close
relationship with Iran when he stated that Russia's stance on
Iran might be changing.
¶13. (C) Israel also is clearly pushing Russia to take a

firmer stance towards Tehran, in light of recent press
reports that PM Netanyahu personally delivered a list of
Russian scientists who contributed to Iran's nuclear program.
Conversations with Israeli diplomats in Moscow indicate that
Israel believes there may be even more to Iran's program than
is now known to the GOR and Russian decision makers. They
hint that Israeli disclosures on Russian participation could
force Moscow into taking a harder line.
COMMENT
-------
¶14. (C) Success in moving Russia to support tougher actions

against Iran will require a coordinated strategy involving
our friends and allies, including Israel and Saudi Arabia.
The strategy may need to include the continuation of
diplomatic efforts like the P5-plus-1 process and perhaps
include new ways of engaging in dialogue with Iran. A
strategy created by a broad international consensus must
offer Moscow a series of options that will challenge the
stubborn mentality here that instinctively opposes common
cause with the West on Iran. Sanctions would have a major
impact on the Russian economy, and especially to the domestic
constituencies like RosOboronexport and RosAtom. The fact
that the economy and these key state-controlled enterprises
are part of Putin's portfolio only reinforces the certainty
that he will remain the key decision maker on any imposition
of sanctions. Key to the GOR's calculations would be any
politically salable alternatives that benefit them both
economically and politically. End comment.
Beyrle

Cable Viewer
Check our Reddit
Twitter this
Digg this page
Viewing cable 09MOSCOW2688, IS STALIN’S GHOST A THREAT TO

ACADEMIC FREEDOM?
subject.
Discussing cables

2009-10-30 2010-12-02 Embassy
11:11 19:07 Moscow

Cable Viewer
VZCZCXRO4612
RR RUEHDBU
DE RUEHMO #2688/01 3031153
ZNY CCCCC ZZH
R 301153Z OCT 09
FM AMEMBASSY MOSCOW
SIPDIS
EO 12958 DECL: 10/26/2019

TAGS PGOV, PHUM, KDEM, RS
SUBJECT: IS STALIN’S GHOST A THREAT TO ACADEMIC FREEDOM?
REF: A) MOSCOW 2586 B) MOSCOW 1349
Classified By: Pol Min Counselor Susan Elliott for reason 1.4 (d)
¶1. (C) Summary: Efforts to sanitize Stalin’s role in Soviet

history may be potentially damaging to academic freedom and
linked to GOR efforts to increase authoritarian rule. Although
some recent incidents have caused concern among human rights
monitors, thus far GOR efforts to enlist academics to help oppose
“falsification of history” have not been strongly enforced. GOR
rhetoric on the subject appears largely aimed at scoring
political points in arguments with foreign countries. End Summary.
Stalin’s ghost haunts the Metro

-------------------------------
¶2. (SBU) The specter of Joseph Stalin continues to haunt post-

Soviet Russia, as the GOR and average Russians alike struggle to
reconcile their pride in past Soviet glories with the harsh fact
that the Soviet system, especially under Stalin, destroyed the
lives of millions of its citizens. This uneasy and ambivalent
relationship with the past is further complicated by a GOR policy
of occasionally exploiting nationalistic emotions about Soviet
history -- especially the Soviet victory over the Nazis -- to

Cable Viewer
buttress support for its own, modern brand of authoritarianism

(ref A). The latest dispute flared up after Moscow City Hall
announced on October 27 that it would add Lenin’s name to artwork
in the Kurskaya Metro station which, since August, has carried a
restored verse from the 1944 version of the Soviet anthem
praising Stalin. Moscow’s chief architect, Aleksandr Kuzmin, told
local media that he wanted to “return Kurskaya to its original
appearance,” which would include a monument to Stalin. An article
in the daily Komsomolskaya Pravda, a paper not always known for
liberal opposition, noted wryly that if the goal was to return
things to their original appearance, it might be necessary to
blanket the entire city with Stalin’s image, as authorities had
done during the height of Stalin’s totalitarian reign of terror.
Moscow Mayor Yuriy Luzhkov told Interfax October 28 that the city
had no intention of placing a Stalin statue in the Metro, and the
Moscow Patriarchate criticized the idea of “Stalinist symbols” in
the Metro, calling it “divisive.”
Academic freedom under threat?

------------------------------
¶3. (C) GOR efforts to sanitize Soviet history have continued

throughout the year, and have the potential to reach into
numerous walks of life and hence to encroach upon academic
freedom. In May, the Kremlin announced that it had formed a
“Commission to Oppose Historical Falsification,” and its state
Duma supporters introduced legislation to defend Russia’s honor
in any discussion of World War II and the subsequent creation of
the Soviet Union (ref B). Less than a month later, in June,
XXXXXXXXXXXX leaked to us an email allegedly from V.A. Tishkov,
the Chief of the History Section of RAN, politely “requesting”
all faculty to present him with information in connection with
the GOR’s May announcement. The information requested included a
list of sources of possible “falsification” in their field of
study, and information about activity among their students
promoting the spread of “falsification” or of “concepts damaging
to Russia’s interests.” More recently, on October 14, the Moscow
Times reported that the German government had written a letter to
President Medvedev complaining about an investigation into an
Arkhangelsk historian, Mikhail Suprun, for “violating privacy
rights” by researching deportations of Soviet Germans under
Stalin. The police official who gave Suprun access to the
archives is also accused of “abuse of office,” while Suprun could
receive up to four years in prison, and has had what he called “a

Cable Viewer
lifetime’s work” on computers and research data confiscated by

the Federal Security Service (FSB).
¶4. (C) XXXXXXXXXXXX told us that she personally knew professors

at academic institutions in Moscow who had received such memos
during the summer, including memos asking them to “identify
falsifiers.” She added that the Foreign Intelligence Service also
has a presence at RAN. Discussing this potentially disturbing
trend, XXXXXXXXXXXX also alluded to the “unpleasant rewrites”
found in officially sanctioned textbooks which whitewash Stalin’s
role in the country’s history. While acknowledging the existence
of “a broad variety” of history books (approximately 24
schoolbooks on history are available in bookstores), XXXXXXXXXXXX
noted that the official version outnumbers the others by 250,000
books to approximately 10-15,000. Furthermore, in Russia as in
the U.S., parents do not buy their children’s history books, but
rather the schools order them, which XXXXXXXXXXXX said makes the
MOSCOW 00002688 002 OF 003
choice “pre-determined.” On October 24, the liberal Daily Journal
reported the release of the latest in a long line of history
textbooks rehabilitating Stalin; this one, ironically produced by
the “Enlightenment” publishing company, denies the existence of
totalitarianism in the USSR. The article noted that every time
someone brings up the topic of history, it engendered a furious
on-line debate.
¶6. (C) XXXXXXXXXXXX told us that a “virtual war” has flared up

between pro-Kremlin and anti-Kremlin bloggers every time someone
published papers on the Internet that they received from state
archives 15 years ago detailing Soviet human rights abuses. The
papers date back 15 years, XXXXXXXXXXXX explained, because now,
“as in Soviet times,” people need to complete special
applications to receive permission to read such documents. A
brief window opened after the fall of the Soviet Union, and just
as quickly closed again.
The past is not dead; it is not even past

-----------------------------------------
¶7. (C) For XXXXXXXXXXXX, such debates tell as much about the
present as they do about the past. He believes that the GOR is
“trying to create a newly obedient society,” which “as in
Orwell,” only knows history from a standpoint beneficial to the
authorities. According to XXXXXXXXXXXX, “when the power structure

Cable Viewer
talks about falsification, they are simply attempting to hide

part of history.” He added that knowledge of the real history
carries significant power. He was struck by the “shock” of people
who learned historical facts, because “sometimes just one fact
can overturn a person’s whole world view.” For example,
XXXXXXXXXXXX daughter, who studied in the USSR and teaches
history in high school, upon learning that XXXXXXXXXXXX
grandfather had been killed in the 1937 purges, talked of little
else for several years afterward. According to XXXXXXXXXXX, “the
Kremlin fears people learning about past atrocities and crimes,”
and hence “tries to manipulate people’s consciousness.”
XXXXXXXXXXX added that he understands the GOR’s policy, because
“if people knew the extent of Soviet crimes,” the Kremlin would
not be able to control the populace. XXXXXXXXXXXX expressed a
similar view, saying that the GOR prefers to present itself as
“infallible, making only correct decisions,” and that discussions
about Stalin’s misdeeds might lead to unwanted questions for
today’s government.
¶8. (C) XXXXXXXXXXX said he suspected that at least some of the

pro-Kremlin bloggers who participate in these historical debates
were professionals in the pay of the GOR (and perhaps special
services). This notion may not be so far-fetched. On October 21,
Interfax reported that a supposedly private citizen named Mikhail
Baranov had launched an Internet portal called “Runivers” to
fight “falsification of history” by creating a historical and
cultural electronic encyclopedia and library. The article
describes Baranov’s organization as “non-commercial,” and does
not indicate from where -- during these economically tight times
-- it receives its funding. However, a State Duma deputy who is a
member of the Runivers board, Vladimir Medinskiy, lamented to
Interfax that “Russia does not have an institution that would be
dealing in historical propaganda, which is why we are losing in
the war aimed to falsify Russian history.”
A “wink” is the easiest response to GOR directives

--------------------------------------------- -----
¶9. (C) The fact that Russia currently lacks such a “historical
propaganda” institution has thus far prevented any widespread
attacks on academic freedom in the name of “anti-falsification.”
XXXXXXXXXXXX, told us October 27 that he had heard no reports
from any of his MGU colleagues of any pressure on them to present
teaching materials or name names in order to ferret out

Cable Viewer
“falsification.” He attributed this at least in part to the fact

that, in contrast to neighboring Belarus, Russia has no
Ideological Department which examines all teaching materials in
schools and universities. XXXXXXXXXXXX also cautioned against
leaping to Orwellian conclusions, reminding us not to
“underestimate the cynicism” involved in administrative requests
like the one at RAN. “Everyone knows how to take such requests,”
she said; the request from the government is “ugly,” but unlike
in Soviet times, when professors all depended upon the government
for their currently there is no way to enforce such decrees. As a
result, according to XXXXXXXXXXXX, “people wink”; the
administrators, while passing along the government’s request,
make it clear to their subordinates that they themselves do not
support it. XXXXXXXXXXXX pointed out that many historians may be
outraged at the government’s heavy-handedness and its “real
falsification of history,” but they don’t see themselves as a
unified force.
MOSCOW 00002688 003 OF 003
The simplest response is to use the power of inertia, and to
stonewall passively.
Goal of GOR rhetoric: score political points at home

--------------------------------------------- -------
¶10. (C) For the GOR’s part, it held a session of its Commission
during the summer, and its director claimed that participants
were “not here to censor, but simply to oppose” perceived
attempts by other countries to gain at Russia’s expense on the
geopolitical scene. Although the stated focus is on international
disputes, the GOR’s primary audience for its hardline stance is
domestic. Rhetoric defending Russia’s honor on the international
stage scores easy political points for the GOR at home. (Note:
This occasionally results in some fancy footwork, as when Putin
visited Poland on the anniversary of the Molotov-Ribbentrop Pact,
and wrote a conciliatory article for his Polish audience, which
-- according to Lipman, by GOR design -- received scant coverage
in Russian media. End Note.) As XXXXXXXXXXXX said, “there is a
lot of vagueness about the past, but World War II is the one
thing everyone in Russia accepts, both liberal and conservative;
the narrative is that Germany attacked, and we won.” That Stalin
continues to have a following, 56 years after his death, is
undeniable. After Aleksandr Prokhanov, editor-in-chief of the
ultranationalist paper Zavtra, praised Stalin on the “Honest
Monday” political talk show on Gazprom-owned NTV, television

Cable Viewer
audience members were invited to phone in their opinions. Of

those who participated, 61 percent called Stalin a hero, 32
percent an enemy, and 7 percent “a great, effective manager.”
Comment
-------
¶11. (C) Recent reports of the death of academic freedom in

Russia are greatly exaggerated. GOR leaders have shown that they
are willing to adopt nationalistic postures when it buttresses
their popular support, but attempts to dictate academic terms
thus far appear half-hearted. The GOR is no doubt telling the
truth when it claims to place greater focus on external quarrels
about its past than on domestic debates. It is undeniable that
nationalists continue to link Russia’s past greatness with its
past political system, which showed disdain for the value of
individual human life and for freedom of expression, and that
this approach places these fundamental freedoms under threat.
However, there remain enough Russians both in and out of the
government who question the nationalists’ logic and strive to
keep the memory of Stalin’s victims alive. In the meantime, the
GOR occasionally remembers to name a street after Aleksandr
Solzhenitsyn just to make sure that nobody confuses them with the
Soviets. When discussing this issue, Russians frequently refer to
the poet Anna Akhmatova, who, when Khrushchev opened the doors to
Stalin’s prisons, wrote that the half of Russia who had
imprisoned the other half would now come face to face with its
victims. Since according to a recent Levada poll, 27 percent of
current Russians have relatives who perished under Stalin’s rule,
that “other half” is not going away any time soon. Beyrle

Cable Viewer
Twitter this
Digg this page
Viewing cable 09MOSCOW2723, INTEL'S CRYPTO IMPORTATION WAIVER: LESS

THAN A



Discussing cables

2009-11-03 2010-12-01 Embassy
13:01 21:09 Moscow
VZCZCXRO7314
RR RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSL RUEHSR
DE RUEHMO #2723/01 3071356
ZNY CCCCC ZZH
R 031356Z NOV 09
FM AMEMBASSY MOSCOW

Cable Viewer
INFO RUEHXE/EASTERN EUROPEAN POSTS COLLECTIVE

RUEHGV/USMISSION GENEVA 5432
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEHAAA/WHITE HOUSE WASHDC
SIPDIS
WHITE HOUSE ALSO FOR USTR: WILSON, HAFNER

GENEVA FOR WTO REPS
COMMERCE FOR MEDWARDS
E.O. 12958: DECL: 11/04/2019

TAGS: ETRD EINV ECON PREL RS WTO
SUBJECT: INTEL'S CRYPTO IMPORTATION WAIVER: LESS THAN A
BREAKTHROUGH
Classified By: Ambassador John Beyrle, Reasons 1.4 b&d.
¶1. (C) Summary: Intel representatives recently briefed us on

the waiver it received to import 1,000 encrypted platforms
for the development of software. Intel was able to by-pass
the cumbersome licensing process by engaging in high-level
lobbying and capitalizing on Russia's desire to become a
"knowledge-based" economy. Contrary to recent Russian
statements, this waiver does not appear to represent a
breakthrough in the importation of commercial products with
cryptographic content. Russia continues to operate under the
old regulations; proposed new regulations do not meet the
terms of the 2006 U.S.- Russia side agreement on
cryptography. End Summary.
¶2. (C) On October 28 Emboffs met with XXXXXXXXXXXX

XXXXXXXXXXXX to discuss Intel's recent waiver on importing
cryptographic goods. Intel believes this breakthrough is one
that other IT companies could piggy-back on. XXXXXXXXXXXX stated
that the waiver allows Intel to import 1,000 development kits
containing encrypted platforms necessary to design and
develop software. The waiver allows the importation without
the required laboratory analysis and approval by the Federal
Security Bureau (FSB). However, the waiver allows only 1,000
units to be imported; if Intel needs to import more, they
need to request a new waiver. The waiver applies to only one
specific customs code (item), with no variations. As well,
these cryptographic items can only be used in R&D; they
cannot appear on the commercial market. Once Intel is
finished with the platforms they must be submitted to a
designated state-run industrial waste disposal company for
their destruction.

Cable Viewer
----------
Background
----------
¶3. (C) In 2006 Russia signed a side agreement to its WTO
bilateral Working Party Agreement with the U.S. in which
Russia agreed to streamline and simplify its procedures for
the importation of items containing cryptographic
information. Nearly three years later, progress in meeting
the terms of this agreement has been slow and its results
minimal. Russia's proposed new regulations do not meet the
terms laid out in the side agreement or in WTO regulations.
To date, companies still must follow the existing cumbersome
rules in applying for permission to import items containing
any level of cryptographic information, including cell
phones. This permission request usually involves submitting
samples of the item to an FSB approved laboratory for
analysis, raising concerns about the violation of
intellectual property through reverse engineering. So far,
U.S. firms have not voiced major concern over this last
issue; rather, their focus has been on the time consuming
process for the importation of crypto-related products.
Current procedures take six months to complete and must be
done for each shipment.
------------------------------
What It Took to Get the Waiver
------------------------------
¶4. (C) In order to get the waiver, Intel capitalized on the
GOR's desire to develop Russia as a knowledge-based economy.
Several high-level Intel officers, including CEO Craig
Barrett, and other officials, such as American Chamber of
Commerce President Andrew Somers, highlighted to their GOR
interlocutors, including President Medvedev, the role Intel
plays in employing over 1,000 Russian engineers. Intel's
advocates emphasized that if Intel could not quickly import
these development kits, there would be no programming work
available and Intel would have to lay off over 200 engineers.
In addition, R&D work in Russia would have to move to India
or China. This high-level lobbying secured Intel a meeting
with key FSB officials to explain its needs. Intel was able
to demonstrate the reasonableness of its request and, as a
result, by-passed the current extensive licensing
requirement.
----------------------------------------
But It Does Not Solve the Crypto Problem
----------------------------------------
¶5. (C) XXXXXXXXXXXX highlighted however, that this breakthrough
does not apply to Intel's commercial products. He stated
that Intel is currently evaluating options for approaching

Cable Viewer
MOSCOW 00002723 002 OF 002
the GOR on how to expedite importation of cryptographic

commercial products, a significant source of Intel's sales
revenue. The procedures that Russia agreed to change in 2006
remain in place three years later. Recently proposed new
regulations do not appear to significantly reduce the need to
apply for permission for each shipment of goods with
cryptographic components.
¶6. (C) During a July visit, USTR Russia and Eurasia Director
Elizabeth Hafner raised concerns with the FSB and the
Ministry of Economic Development (MED), that the proposed new
regulations, if implemented without revision, would set up
Russia to be in violation of WTO regulations from the moment
of its accession. MED understood the situation, but felt
that it might be more effective to implement the new
procedures, see where there are problems and fix them as they
appear. To date, we have not seen a more recent version of
the proposed new regulations for the importation of
cryptographic goods to see if the FSB took USG comments under
advisement.
-------
Comment
-------
¶7. (C) During several recent high-level meetings between U.S.
and Russian interlocutors, the Russians have highlighted the
Intel waiver as a major breakthrough in Russia's trade regime
dealing with cryptographic goods, and thus a step forward on
their WTO to-do list. The information from Intel, however,
indicates this is a specific, limited waiver only for use in
R&D. While this does demonstrate some limited flexibility on
the part of the FSB - and thus a step forward ), whether
other U.S. companies can receive similar waivers remains to
be seen. Additional GOR actions will be required to
streamline Russia's procedures for the importation of
cryptographic goods for commercial sale. Russia continues to
lag in the timetables and provisions it agreed to in the 2006
side-agreement on cryptology. Embassy will follow-up with
the FSB and MED officials, to urge implementation of the 2006
side-agreement, especially with regard to commercial goods.
Beyrle

Cable Viewer
Twitter this
Digg this page
Viewing cable 09MOSCOW2734, RUSSIA: MOVING BEYOND BILATERAL ISSUES,

MILIBAND



Discussing cables

2009-11-05 2010-12-01 Embassy
17:05 23:11 Moscow
VZCZCXRO0259
PP RUEHBC RUEHDBU RUEHDE RUEHDIR RUEHFL RUEHKUK RUEHKW RUEHLA
RUEHNP
RUEHROV RUEHSL RUEHSR RUEHTRO
DE RUEHMO #2734/01 3091741
ZNY CCCCC ZZH
P 051741Z NOV 09

Cable Viewer
FM AMEMBASSY MOSCOW
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUCNIRA/IRAN COLLECTIVE PRIORITY
SIPDIS
EO 12958 DECL: 11/04/2019

TAGS PREL, PGOV, ETRD, SENV, IR, AF, UK, RS
SUBJECT: RUSSIA: MOVING BEYOND BILATERAL ISSUES, MILIBAND
REOPENED DIALOGUE
Classified By: Political MC Susan M. Elliott for reasons 1.4 (b)

and (d ).
Summary
-------
¶1. (C) During Foreign Secretary Miliband’s November 1-2 visit,

he put an end to the “period of standoff,” but had little
concrete to show for his visit. In pushing a new framework for
cooperation, he set aside the most contentious issues and focused
primarily on the international agenda during his meetings with
Russian FM Lavrov -- START Follow-on, Iran, Afghanistan, Middle
East peace, and non-proliferation -- resulting in three joint
statements. Miliband also met with Gorbachev and Russian business
leaders and political notables. Moscow had some lingering
hesitancy, with Medvedev and Putin declining meetings, due in
part to concerns based on previous interaction between Lavrov and
Miliband, and a desire to avoid giving Miliband a success that he
could use in a potential run to head EU foreign policy. End
Summary.
Ending the “Period of Standoff”

-------------------------------
¶2. (C) On November 1-2, British Foreign Secretary David Miliband

ended the five-year hiatus in bilateral visits. In his
discussions with Russian FM Sergey Lavrov, Miliband was able to
set a new pattern for addressing contentious bilateral issues in
the future, while forging ahead on the international agenda.
While the Russian press has hailed this as a “reset,” it comes
after the slow build up of bilateral contacts at all levels, and
is therefore less of a breakthrough than a symbolic final hurdle.
¶3. (C) While the visit succeeded in reestablishing constructive

dialogue, President Medvedev and PM Putin had rebuffed British
Embassy feelers for meetings with the Foreign Secretary.

Cable Viewer
According to British diplomats, the Russians were unsure that the

visit wasn’t going to be another round of “slapping them around
the face.” The diplomats also credited Medvedev as the driving
force in ending the “period of standoff.”
¶4. (C) During his two-day stay, Miliband dined with Lavrov on
Sunday, followed on Monday by working meetings with Lavrov and
First Deputy PM Igor Shuvalov. Miliband also met with Mikhail
Gorbachev, lunched with select eminent politicians and held
separate round-tables with Russian NGOs and the British business
community (including TNK-BP). Miliband and Lavrov issued three
joint statements regarding the 2010 Review Conference for Nuclear
Non-Proliferation Treaty (NPT), Afghanistan, and the Middle East
Peace Process (MEPP).
International Agenda
--------------------
¶5. (C) START Follow-On: Lavrov was reportedly upbeat regarding

START follow-on negotiations. According to British diplomats,
Lavrov said the key issues involved conventional weapons on
ICBMs, verification, and the “numbers gap,” which was being
narrowed. Following this treaty, Lavrov suggested multilateral
negotiations on further reductions involving the P5, the D3
(Israel, India, Pakistan) as well as “dormant” nuclear powers
such as Japan. He also called for close Russian-British
cooperation across the arms-control agenda: the NPT,
Comprehensive Test Ban Treaty and Fissile Material Cut-off
Treaty. CFE was not discussed. The sides issued a joint statement
on the NPT, calling for efforts to ensure the 2010 review
conference reinvigorated and strengthened it, and noting that an
“agreement before the end of the year on a new legally binding
treaty to further reduce Russian and U.S. strategic offensive
weapons will be a major contribution to this shared endeavor.”
The statement also said that both sides were committed to
“ensuring the IAEA has the necessary authority and capacity to
assure compliance with non-proliferation obligations.”
¶6. (C) Iran: Lavrov claimed Russia had no prior knowledge of the
Qom facility and said the S300 deal was in a “holding pattern.”
Regarding the IAEA negotiations, Lavrov agreed with Miliband’s
call for continued unity among the 5 plus 1 group and was ready
to discuss the substance of a “freeze for freeze” deal. According
to British diplomats, Lavrov was slippery about sanctions, saying
“we’re ready to consider applying sanctions if necessary, but
it’s too early.” Lavrov reportedly added that if sanctions are
agreed at the UNSC, there shouldn’t be additional unilateral
sanctions and sanctions should be limited to “officials” and the
nuclear program.
MOSCOW 00002734 002 OF 003
¶7. (C) Afghanistan: Lavrov conveyed that Russia wanted NATO to

Cable Viewer
stay and to succeed. He made the usual pitch for formal CSTO
consultations with NATO and for Russia to have a seat at the
table of “troop contributing” countries. In the joint statement,
the sides condemned the Taliban’s attempts to disrupt the Afghan
electoral process and destabilize the country. The statement
“noted” the Afghan government’s attempts to reintegrate former
fighters, but said that the two governments remained committed to
UNSCR 1267. The UK and Russia also made a non-specific commitment
to explore opportunities for cooperation in counter-narcotics,
which British diplomats said will be pursued at the working level.
¶8. (C) MEPP: The joint statement urged “Israel to immediately

end all settlement activities, including in East Jerusalem, and
to allow access to the Gaza Strip.” The statement also endorsed
the work of the U.S. and the Quartet and restated support for the
Russian Moscow conference proposal. British diplomats, however,
said that it was clear GOR officials knew the conference would
not happen soon.
¶9. (C) NATO/European Security: Miliband reaffirmed that Georgia

and Ukraine remained on the NATO membership track and rejected
Russia’s concept of a “sphere of privileged interests.” Lavrov
was on the defensive and sought to redefine privileged interests
to mean closer bilateral relations, which Russia sought to
develop with a range of countries, not just those in the CIS.
Miliband rebuffed Lavrov’s calls for a new European security
treaty, saying he understood Russia feels uncomfortable but that
it was too early for a new treaty; he urged Russia to work this
through the OSCE’s “Corfu process.”
¶10. (C) WTO/Climate Change: Deputy PM Igor Shuvalov told

Miliband that he had offered the U.S. a return to the bilateral
negotiating track to facilitate Russis’s WTO accession. Shuvalov
proposed this during his September visit to Washington, but
claimed that the U.S. refused. Miliband lobbied Shuvalov to
increase Russia’s carbon-reduction commitments from its current
offer of 15 percent by 2020. Shuvalov said the Russian position
was not cast in stone, but the GOR did not want to be tied to
targets that would then restrict the expected surge in Russia’s
economic growth in the coming decade.
Bilateral Issues
----------------
¶11. (C) In addition to the joint statements, some progress was

made on bilateral economic ties. Foremost was the November 5
visit of Finance Minister Aleksey Kudrin to London as part of the
bilateral financial working group, during which Kudrin is
expected to pitch the sale of Eurobonds to fill part of Russia’s
projected 2010 budget deficit. The sides had to “agree to
disagree” on the more thorny bilateral issues that have poisoned
the relationship for the past five years: the British extradition

Cable Viewer
request for Andrey Lugovoi related to the murder of former FSB

officer Aleksadr Litvenenko (Nov. 1 was the third anniversary of
the murder), and Russian extradition requests for Russian tycoon
Boris Berezovskiy and Chechen leader Akhmed Zakayev. Lingering in
the background were the tit-for-tat expulsions of British and
Russian diplomats over the “rock incident,” the closure of the
British Council’s offices in St. Petersburg and Yekaterinburg,
the handling of the TNK-BP management dispute, and the prior
harassment of British diplomats by Nashi youth activists at the
presumed behest of Russian officials. That said, British
diplomats noted that Lavrov and Miliband agreed to step up
cultural relations (especially in 2011) to make up for the
decrease in British Council programs. British diplomats believed
that there was an understanding that the British Council would
take the lead in these activities, but the technicalities were
not discussed.
Comment
-------
¶12. (C) While Russia and the UK found some common ground during
Miliband’s visit, there was a lingering hesitancy on the Russian
side, demonstrated by the lack of solid deliverables and the
unavailability of the tandem, Putin and Medvedev. The GOR could
have gone further in offering the UK transit (either land or air)
to support British operations in Afghanistan, but hedged.
Although Miliband’s visit followed many working-level and even
senior-level meetings on the sidelines of international
conferences, it was clear that the GOR lowered expectations in
the event the tone of the visit returned to that following the
2008 Georgian-Russian war. The Russian press added into the mix
the possibility that
MOSCOW 00002734 003 OF 003
Miliband was in Moscow to demonstrate that he could talk to “even
the most difficult of partners,” thereby burnishing his
credentials for a future post with the EU. If that was the case,
the GOR has done little to assist him. Beyrle

Cable Viewer
Twitter this
Digg this page
Viewing cable 09MOSCOW2747, RUSSIA: POLISH PM SIKORSKI REOPENS OLD

FIGHTS



Discussing cables

2009-11-06 2010-12-01 SECRET// Embassy
09MOSCOW2747
VZCZCXRO1348
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSL
DE RUEHMO #2747 3101436
ZNY SSSSS ZZH
P 061436Z NOV 09
FM AMEMBASSY MOSCOW

Cable Viewer
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

RUEHZG/NATO EU COLLECTIVE
S E C R E T MOSCOW 002747
SIPDIS
NOFORN
E.O. 12958: DECL: 11/05/2019

TAGS: PREL PGOV PL RS
SUBJECT: RUSSIA: POLISH PM SIKORSKI REOPENS OLD FIGHTS
REF: A. MOSCOW 1397

¶B. MOSCOW 2240
¶C. MOSCOW 642
¶D. WARSAW 1122
Classified By: Political MC Susan M. Elliott for reasons 1.4 (b)

and (d
).
¶1. (SBU) Russian media and officials are concerned with

Polish FM Radoslaw Sikorski's November 4 comments to the
Center for Strategic and International Studies in Washington.
In particular, they noted Sikorski's request for U.S. forces
on the ground in Poland to "protect against Russian
aggression" and his characterization that the recent
"Zapad-2009" exercises were directed against Poland. Some
Russian officials were quick to point out that Sikorski's
comments undermined not only improved Polish relations (Ref A
and B), but harmed Russian-U.S. and Russian-NATO relations as
well.
¶2. (SBU) While the Russian MFA has not yet issued a formal
statement, FM Sergey Lavrov told the press that he did not
believe that Sikorski had actually made the remarks. Lavrov
commented, however, that if proved true, "it throws me into
deep astonishment because we had talked in a detailed manner
about the problems that needed to be addressed in the context
of European security." Russian Permanent Representative to
NATO Dmitry Rogozin called Sikorski's remarks "absurd" and a
u-turn in Polish policy toward Russia and its engagement with
NATO and Europe. Duma International Relations Committee
Chair Konstantin Kosachev told the press that Sikorski's
statements "directly contradicted" the improvement in
Russia-U.S. and Russia-NATO relations.
¶3. (S/NF) Unfortunately, the Polish government had seeded

some of this Russian response through their sponsorship of

Cable Viewer
and statements in support of the EU's Eastern Partnership

Initiative (Ref C) and show of support to Georgia during the
2008 Russia-Georgia War. Further, the Polish MFA has
established a Bureau of European Security, which Polish
diplomats jokingly refer to as the "Office of Threats from
the East." According to XXXXXXXXXXXX diplomat XXXXXXXXXXXX
(PROTECT), who was recruited to work in this bureau while
serving in Moscow, the Russian MFA threw this new moniker
back at him during a meeting. XXXXXXXXXXXX claimed to us that the
only way the MFA could have known about the reference was to
have been listening in on his phone conversations with Warsaw
while he was interviewing for the job.
¶4. (C) Comment: The GOR will take some time to digest
Sikorski's comments, and evaluate whether or not to alter the
current positive trend in bilateral relations. Russia has
many levers, including delaying the approval of a pending gas
deal (Ref D). Sikorski has given anti-western elements in
Russia ammunition against improved Russian relations with
NATO and even with the U.S.
Beyrle

Cable Viewer
Twitter this
Digg this page
Viewing cable 09MOSCOW2749, SCENESETTER FOR VISIT OF FBI DIRECTOR

MUELLER TO



Discussing cables

2009-11-09 2010-12-01 Embassy
05:05 21:09 Moscow
VZCZCXYZ0000
OO RUEHWEB
DE RUEHMO #2749/01 3130518

ZNY CCCCC ZZH
O 090518Z NOV 09
FM AMEMBASSY MOSCOW

Cable Viewer
TO RHMFISS/FBI WASHINGTON DC IMMEDIATE

RUEHC/SECSTATE WASHDC IMMEDIATE 5334
INFO RUEAIIA/CIA WASHDC IMMEDIATE
SIPDIS
FBI FOR DIRECTOR MUELLER FROM AMBASSADOR BEYRLE
E.O. 12958: DECL: 11/05/2019

TAGS: KJUS PINS PREL PTER SOCI RS
SUBJECT: SCENESETTER FOR VISIT OF FBI DIRECTOR MUELLER TO
MOSCOW, NOVEMBER 15-17, 2009
Classified By: AMBASSADOR JOHN BEYRLE, REASONS 1.4 (B), (C), (D),
AND (
F)
¶1. (C) Summary. Director Mueller: Your engagement with

Russia's top law enforcement and security service officials
is a tangible sign that U.S.-Russian relations are improving
markedly after hitting bottom in the summer of 2008. Recent
visits by President Obama and Secretary Clinton have
demonstrated to the Russians that we take their concerns
seriously and have produced more positive momentum in our
bilateral ties than I have seen in over a decade. The
Bilateral Presidential Commission (BPC) will play a key role
in building confidence and giving us regular contact with key
elements of the GOR bureaucracy, including the often
obstructionist law-enforcement organs. The BPC can
strengthen joint efforts to combat terrorism, organized crime
and other shared concerns.
¶2. (C) Summary continued. You should harbor no illusions

about your counterparts: FSB Director Aleksandr Bortnikov,
SVR Director Mikhail Fradkov, and Internal Affairs Minister
Rashid Nurgaliyev represent institutions that feel threatened
-- ideologically and materially -- by the "reset" in our
relations. At the same time, they appreciate the benefits
that cooperation with the U.S. provides, not only in
achieving their assigned missions, but also in enhancing
their country's position internationally. End Summary.
Domestic Political Context

--------------------------
¶3. (C) After almost two years of tandem leadership, President

Medvedev and Prime Minister Putin govern based on a
still-evolving division of labor. Medvedev, the junior

Cable Viewer
partner, has been a steady advocate of modernization --

economic, political and technological. Constitutionally, he
has the lead in foreign policy, but makes no major decisions
without some form of consultation with Putin, most of which
is obscure to the outside world. In addition to governing
behind the scenes, Putin has been visible in tackling recent
crises such as the conflict with Georgia, gas supply
negotiations with Ukraine, and localized unrest due to the
economic crisis. Although there is evidence that their
closest advisors spar privately over policies and personnel
matters, the two leaders appear united and project complete
ease with one another in the media. Medvedev has yet to make
major changes to the senior staff he inherited from Putin.
Putin remains more popular than Medvedev.
Three Skeptics
--------------
¶4. (C) Russia's recent economic problems and uncertainty

about the future of the Medvedev-Putin "tandem" have
reinforced long-standing elite divisions between the
"siloviki" (officials from the security and intelligence
services) and the modernizers. Your interlocutors are leading
representatives of the siloviki; they are Putin proteges who
believe a strong state exercising effective political and
economic control is the answer to most problems. They
advocate tightening the screws against domestic opposition
and their alleged external supporters -- principally the U.S.
and its Western allies. The modernizers recognize that
Russia's future depends on integration with the world economy
and that confronting some of the country's most stubborn
problems -- such as corruption -- requires transparency and
the impartial application of the law.
¶5. (C) The security services are skeptical about the West's
motivations and are the most influential opponents of the
engagement agenda. Bortnikov, Fradkov, and Nurgaliyev tend
toward a Cold War mentality, which sees the U.S. and its
allies intent on undermining Russia -- and they have made
public accusations to that effect. None of them is within the
"inner circle" of Kremlin decision-making, but instead enjoy
the reflected power of their sponsors and allies. According
to one expert, Fradkov and Bortnikov share a background in
dealing with economic issues -- working behind the scenes to
check the influence of Russia's powerful business magnates
and advance the interests of their allies. Fradkov, a former
prime minister under Putin who allegedly worked for Soviet
intelligence in the 1970s in brokering arms sales to India,
has a mandate to protect the interests of Russian companies
abroad. Fradkov works closely with the powerful state
corporations and has ties to the influential First Deputy
Prime Minister Igor Sechin. Bortnikov spent his entire career

Cable Viewer
in the FSB working on economic issues, including a stint as

head of the FSB Economic Security Service. In that role
Bortnikov worked on the government's campaign against the

oligarchs. Many consider Bortnikov as the protege of his
predecessor, Nikolay Patrushev, now the Secretary of the
Security Council, and also indirectly allied with Sechin. Of
the three, only Fradkov has any real experience in foreign
relations gained during his tenure as Russian Ambassador to
the EU from 2003-2004 and his work in the Ministry of Foreign
Trade during the 1990s.
¶6. (C) Nevertheless, there are indications that they value

work with other services on specific issues of mutual
interest. Perhaps most telling, Nurgaliyev has supported
cooperative relationships with his counterparts around the
globe, demonstrated by his personal efforts to secure an
INTERPOL training center in Moscow, and he has been a good
partner for the U.S. in its efforts to protect intellectual
property rights. Moreover, Nurgaliyev has openly lamented the
culture of corruption with Russia's law enforcement system
and has been a strong supporter of Medvedev's well-publicized
campaign against corruption.
State Security
--------------
¶7. (C) Despite the changes since the collapse of the Soviet
Union, Russia's security services more closely resemble the
model of the Czarist-era Okhrana (secret police) than Western
law-enforcement institutions. State security remains the
services' primary responsibility and all three organizations
devote considerable attention and resources to
counter-intelligence and domestic intelligence work. While
the FSB and MVD nominally share the FBI's responsibilities --
criminal prosecution, organized crime, and counter-terrorism
-- they are also fully immersed in Russia's political
battles. Political factors determine the services'
enthusiasm for pursuing investigations and independent
analysts believe individuals within the security services are
linked with organized crime.
¶8. (C) Russian security service leaders play a far more open
political role than their counterparts in the West. Your
three interlocutors accrue political power in the Russian
system by using the legal system against political enemies --
turning the courts into weapons of political warfare rather
than independent arbiters. They control large numbers of men
and resources -- the MVD alone has more than 190,000 soldiers
in its internal security divisions. Despite their similar
outlook and background, they are often competitors for
influence against each other -- with shadowy conflicts

Cable Viewer
occasionally bubbling to the surface.
Regional Unrest
---------------
¶9. (C) After the "color" revolutions in Georgia and Ukraine,

Russian security services stepped up their efforts against
the U.S. and other Western powers, whom they blame for
inciting the protests and overthrowing the governments in
Tbilisi and Kyiv. Their officers maintain constant vigilance
against the U.S. government representatives through active
surveillance and they have sought to stifle U.S. humanitarian
programs in the North Caucasus. MVD forces harass and
intimidate political opposition protests while
"investigations" against Western-supported NGOs for trumped
up charges (like using pirated software) have hindered the
work that those organizations seek to accomplish.
¶10. (C) Concern about potential social unrest associated with

the recent economic crisis provided justification for the
security services' push earlier this year to eliminate jury
trials and to broaden the definition of "treason" to include
the organization of protests against the government; the
former became a law, while Medvedev withdrew the treason law
for revision. In December, the MVD deployed special "OMON"
forces in Vladivostok against demonstrators protesting new
taxes on imported automobiles, key economic sector in that
region. They have shelved plans to reduce the number of MVD
internal troops, ostensibly to retain a security force for
the 2014 Olympic Games in Sochi.
¶11. (C) The marked deterioration of security in the North

Caucasus over the past three months has alarmed regional and
national leaders. The car bomb that nearly killed Yunus-bek
Yevkurov, President of the Republic of Ingushetia, has
dampened the initial optimism that Yevkurov could bring
ethnic and religious groups together. The continued threat of
separatism, extremism, and terrorism -- particularly in the
North Caucasus -- is a priority issue for the security
services. Ethnic conflict and social unrest continue to

simmer in Ingushetia, Dagestan, and other republics in the
troubled Caucasus region. The MVD has more than 15,000
soldiers stationed in Chechnya, an additional regiment in
Ingushetia, and has created three "special forces" (spetznaz)
counter-terrorism units in Moscow, Smolensk, and Chelyabinsk.
A Challenging Relationship
--------------------------
¶12. (C) While portions of the FSB are working cooperatively

with US law enforcement, some sections, particularly those

Cable Viewer
dealing with counterintelligence, are not. Harassing

activity against all embassy personnel has spiked in the past
several months to a level not seen in many years. Embassy
personnel have suffered personally slanderous and falsely
prurient attacks in the media. Family members have been the
victims of psychologically terrifying assertions that their
USG employee spouses had met accidental deaths. Home
intrusions have become far more commonplace and bold, and
activity against our locally engaged Russian staff continues
at a record pace. We have no doubt that this activity
originates in the FSB. Counterintelligence challenges remain
a hallmark of service at Embassy Moscow. This fact is
unlikely to change in the medium term.
¶13. (C) Despite the challenges of working with our Russian

counterparts, your visit takes place in the context of strong
Kremlin backing and a climate of renewed opportunity. Since
your 2004 trip to Russia, the success of joint investigation
programs with the MVD and FSB on organized crime,
counter-terrorism, and cybercrime has demonstrated the
potential gains that a cooperative relationship can provide.
It is premature to say we have reached a turning point in
overcoming security service suspicions about U.S. intentions,
but the vigor in which the FSB has pursued your visit
(including covering the cost of the over flight and airport
landing fees) shows a definite thaw after last year's war in
Georgia. At a minimum, we can expect the Russian side to
welcome your continued advocacy for the Joint FBI-MVD working
group on organized crime, efforts to work together to fight
cybercrime, and other cooperative projects. We also expect
them to be receptive to a renewed invitation for a law
enforcement officer to attend the FBI's National Academy at
Quantico.
Beyrle

Cable Viewer
Twitter this
Digg this page
Viewing cable 09MOSCOW2754, INFORMATION ON SECURITY DIALOGUE WITH

RUSSIA



Discussing cables

2009-11-09 2010-12-01 Embassy
15:03 21:09 Moscow
VZCZCXRO3482
RR RUEHDBU
DE RUEHMO #2754/01 3131546
ZNY CCCCC ZZH
R 091546Z NOV 09
FM AMEMBASSY MOSCOW

Cable Viewer

RUEKJCS/SECDEF WASHDC
RUEKDIA/DIA WASHDC
RUEAIIA/CIA WASHDC
RHEHNSC/NSC WASHDC
SIPDIS
DEPARTMENT FOR PM, EUR
E.O. 12958: DECL: 11/09/2019

TAGS: PGOV PREL MARR
SUBJECT: INFORMATION ON SECURITY DIALOGUE WITH RUSSIA
REF: STATE 112900
Classified By: Political M/C Susan M. Elliott for reasons 1.4 (b)
and (
d).
¶1. (SBU) The USG and GOR have four existing, formal
mechanisms for conducting security dialogues with the Russian
Federation; all four are scheduled yearly.
1) Joint Staff Talks (JSTs): This event is hosted annually

by U.S. Joint Staff J-5 or the GOR Chief of the Main OPS
Directorate on a rotational basis. The agenda is dynamic,
but is typically focused on international military/security
issues, mil-to-mil (M2M) cooperation, and transparency as
nominated by the respective sides.
2) Bilateral Defense Consultations (BDCs): Hosted by ASD/ISA

and the Director of International Relations, Russian MoD on a
rotational basis. Agenda is more policy and pol-mil
oriented, but it is subject to items nominated by the
respective sides.
3) General Officer/Flag Officer Discussions (GO/FO):

Alternatively hosted by EUCOM J5 and GOR MoD equivalent;
agenda is more narrowly focused on AOR issues and developing
direction for construction of the bilateral workplan (WP).
4) US-GOR Colonels Working Group (CWG): Objective is to

discuss and nominate events for the following year's WP. In
practice, they meet more than once per year, alternating
sites between Stuttgart and Moscow.
¶2. (SBU) In addition, as a result of the Presidential summit

Cable Viewer
in Moscow in July, the Presidents directed their respective

senior military officers to establish a military-to-military
working group under the auspices of the Bilateral
Presidential Commission. The primary objective of this group
will be to enhance military cooperation consistent with the
Presidents' broader cooperative agenda.
¶3. (SBU) In practice, CJSC and CHOD will conduct 2-3 day
counterpart visits every other year, with discussion agendas
and visit venues to be determined by the respective sides.
Ad hoc engagements vary, based upon interests of the
respective sides. In the past these have included:
--STRATCOM-Strategic Rocket Forces;
--U.S. Air Forces Europe-GOR Air Force;
--NORTHCOM/NORAD-RF Air Force;
-Incidents at sea/Main Navy Staff talks between U.S. and

Russia;
-GO/FO delegation exchanges between EUCOM Component Commands

and elements of the Russian Armed Forces.
¶4. (SBU) We believe dialogue was first established by mutual

consent in the late 1980s. The frequency of these meetings
has been determined by informal understanding.
¶5. (SBU) The most recent CJCS-CHOD security dialogue meeting

came when the CJCS came to Moscow July 6-9. No set schedule
determines the frequency of such meetings, but the event is
placed on the WP and dates are left to respective sides to
negotiate. The next scheduled meetings are:
--JSTs: December 14-18;
--BDCs: Although featured as an event on the 2009 WP, they

will probably not be executed this year due to ongoing
military reforms and personnel shifts within GOR MoD;
--GO/FO Consultations: TBD;
--CWG: November 17-19;
--INCSEA/Main Navy Staff Talks: December 10-11 in Moscow.
¶6. (SBU) The USG and GOR expect officers to meet with their
rank/position equivalents.
¶7. (C/NF) While useful and meaningful exchanges do take place

during the contacts discussed above, a number of challenges

Cable Viewer
MOSCOW 00002754 002 OF 002
in effecting real, substantive and ongoing

Military-to-Military (M2M) dialogues exist. These challenges
include:
1) Lack of Russian transparency and reciprocity: The GOR MoD

has not changed its modus operandi for information exchange
nor routine dialoguing since the end of the Cold War. For
example, Russian delegations routinely refuse to share their
briefing materials with us, even when presented with formal
requests for these materials. Representatives of the GOR MoD
are closely monitored by their Military Intelligence (GRU)
handlers, and are loathe to engage in any dialogues outside
of tightly controlled statements recited from prepared texts.
While U.S. hosts will often invite Russian MoD delegations
to different bases for tours and exchanges, U.S. delegations
are rarely afforded visits anywhere but dedicated conference
facilities at MoD HQ in Moscow. Access to Russian academic
institutions is particularly problematic. Visiting U.S.
delegations from Senior Service Schools are afforded, at
best, a one-hour visit at MoD HQ to meet with a single
representative of the GOR MoD External Liaison Division.
Despite deliberate U.S. transparency regarding its actions in
Russia's "near abroad," the Russian MoD is loathe to provide
information about its activities. A recent example occurred
over the last six months: while the US provided information
to Russia concerning our limited training activities with the
Georgian Armed Forces, Russia provided no information
regarding a series of Collective Security Treaty Organization
exercises occurring in Belarus and Kazakhstan involving some
12,000 Russian troops.
2) Coordinating DoD Relations with Russia: Russia was

integrated into the EUCOM AOR as a result of the publication
of the 2002 Unified Command Plan (UCP). Russia, however,
resents the "delegation" of its relations to a "regional
command" and refuses to interract with EUCOM on a continuing,
formal basis. DoD efforts to date have managed to gain some
recognition by Russia of EUCOM's role in the M2M
relationship. For example, Russia has not accepted
initiatives to conduct a COM EUCOM-CHOD exchange. Efforts
need to continue along these lines to formalize the
relationship.
3) Lack of Continuity/Followup: While exchanges with the

Russians have been executed according to the U.S.-Russia
Bilateral Workplan (WP), they have suffered from a lack of
continuity. This is often characterized by a lack of
formally acknowledged minute and action items. In many ways,
every meeting therefore is similar to a "restart" of a new
forum, rather than a continuation of an extablished venue

Cable Viewer
with review of previous business, followup actions, etc.

Beyrle

Cable Viewer
Twitter this
Digg this page
Viewing cable 09MOSCOW2823, EXPERTS REMAIN SKEPTICAL OF GOR'S ABILITY TO




Discussing cables

2009-11-19 2010-12-01 Embassy
15:03 21:09 Moscow
VZCZCXRO2819
OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSL RUEHSR
DE RUEHMO #2823/01 3231507
ZNY CCCCC ZZH
O 191507Z NOV 09
FM AMEMBASSY MOSCOW

Cable Viewer
RHEHNSC/NSC WASHDC
SIPDIS
STATE FOR EUR/RUS, EEB

NSC FOR MCFAUL
E.O. 12958: DECL: 11/18/2019

TAGS: ECON PGOV PINR RS
SUBJECT: EXPERTS REMAIN SKEPTICAL OF GOR'S ABILITY TO
REDUCE CORRUPTION
REF: A. 08 MOSCOW 3775

¶B. 08 MOSCOW 3363
¶C. MOSCOW 1450
Classified By: Econ MC Matthias Mitman for reasons 1.4 (b. and d.)
-------
Summary
-------
¶1. (C) In a nod to President Medvedev's 2008 anti-corruption

legislation, Transparency International's Corruption
Perceptions Index ranked Russia at 146, up one spot from its
2008 147th ranking. This general lack of progress confirms
what analysts have told us. Corruption in Russia remains a
serious problem, despite Medvedev's public denouncements and
efforts to reduce it. This presents a quandary for the GOR
as it decides how to proceed. Dramatic steps might threaten
the status quo, yet gradual steps so far have been
ineffective. End Summary.
-------------------------------------
Russia's Corruption Rankings Stagnate
-------------------------------------
¶2. (SBU) Transparency International released its 2009

Corruption Perceptions Index on 17 November. Russia was
ranked at 146 (it was ranked at 147 in 2008), which
Transparency International said reflected a "mildly positive"
response to Medvedev's 2008 anti-corruption legislation.
Russia's 2009 rank, however, is still below its 2007 rank
(143) and far below its 2006 rank (121). These results echo
the World Bank's Worldwide Governance Indicators, with
Russia's rankings on "control of corruption" showing a steady
annual decline since 2005.

Cable Viewer
¶3. (SBU) President Medvedev has repeatedly stated that

corruption is endemic to Russia and has made fighting it a
signature issue for his presidency. He has highlighted
consistently the damage corruption has done to Russia, most
recently in both his high-profile "Forward Russia" article in
September and his 12 November address to the Federal
Assembly. Beyond the anti-corruption legislation promulgated
last year, however, few practical steps have been implemented.
--------------------
Elite Losing Control
--------------------
¶4. (C) Furthermore, there is growing consensus among

analysts that even if the power elite wants to tackle
corruption, the economic crisis has exacerbated tendencies
towards unmanageability of corruption within the power
vertical. XXXXXXXXXXXX
XXXXXXXXXXXX, told us that the GOR may have waited
too long. XXXXXXXXXXXX said that a few years ago, when only
millions had been "stolen" from the Russian people (as
opposed to today's billions), the GOR could have acted and
not sparked public outrage. XXXXXXXXXXXX said that the crisis had
made the GOR's task more difficult and the scope of
corruption has become unmanageable. As the crisis reduced
the size of the pot and the anti-corruption rhetoric
increased, some Russians felt that they had best grab as much
as they could while the going was good. XXXXXXXXXXXX
XXXXXXXXXXXX, noted that the tendency of
corruption to evade control by the GOR was not new. In 2006
-- at the height of Putin's control in a booming economy --
it was rumored within the Presidential Administration that as
many as 60 percent of his orders were not being followed.
--------------------------------------------- ---
Do Changes At Interior Ministry Signal Progress?
--------------------------------------------- ---
¶5. (C) XXXXXXXXXXXX noted that Minister of Interior Rashid

Nurgaliev had recently fired or brought charges against a
number of relatively low-ranking law enforcement officials
for corruption. XXXXXXXXXXXX stated though, that it was too soon
to
judge whether this activity reflected real change. XXXXXXXXXXXX
XXXXXXXXXXXX, argued that Nurgaliev's actions were not
meaningful. He stated that action was required from higher
up the power vertical and needed to affect the strata that
average Russians would consider "untouchable".
-----------------------------------
MOSCOW 00002823 002 OF 002

Cable Viewer
Can Russia's Trajectory Be Changed?

-----------------------------------
¶6. (C) XXXXXXXXXXXX

XXXXXXXXXXXX, said that only a "revolution" could change Russia's
current trajectory. He argued that the system had become too
sclerotic and too beneficial for too many to allow for
change. XXXXXXXXXXXX noted that corruption had even become a
positive factor for a substantial portion of society. By
taking merit out of the equation for success, it was simply
easier to pay for entrance to a university, for a contract,
etc. XXXXXXXXXXXX, who has made a fortune in Russia's
casino business, told us forthrightly that the "levels of
corruption in business were worse than we could imagine" and
that, after working here for over 15 years and witnessing
first-hand the behavior of GOR officials at all levels, he
could not imagine the system changing.
-------
Comment
-------
¶7. (C) Corruption in Russia remains pervasive and

deep-rooted. While Medvedev's anti-corruption rhetoric is a
step in the right direction, we have yet to see significant
implementation of new measures. Russians appear to accept
current levels of corruption and seem inclined to pay up or
emigrate, rather than protest. Neither have Russians reacted
to the sight of the connected few continuing to indulge in
luxurious lifestyles as the economic recession continues to
leave most Russians worse off than they were two to three
years ago. Nonetheless, the commentary on the GOR's
increasing inability to manage the scope of corruption bodes
ill for its stated effort to enhance corporate governance and
investor confidence.
Beyrle

Cable Viewer
Twitter this
Digg this page
Viewing cable 09MOSCOW2903, SCENESETTER FOR VISIT OF UNDER SECRETARY

ROBERT



Discussing cables

2009-11-27 2010-12-01 Embassy
14:02 21:09 Moscow
VZCZCXYZ0000
RR RUEHWEB
DE RUEHMO #2903/01 3311459

ZNY CCCCC ZZH
R 271459Z NOV 09
FM AMEMBASSY MOSCOW

Cable Viewer
TO SECSTATE WASHDC 5534
SIPDIS
DEPARTMENT FOR UNDER SECRETARY HORMATS
E.O. 12958: DECL: 11/27/2019

TAGS: ECON ETRD EAGR PREL PGOV RS
SUBJECT: SCENESETTER FOR VISIT OF UNDER SECRETARY ROBERT
HORMATS
Classified By: Ambassador John Beyrle, Reason 1.4 (b) and (d)
Summary
-------
¶1. (C) Your visit to Moscow provides an opportunity to

strengthen bilateral economic relations at a time when both
our economies are beginning to show signs of recovery
following an extremely difficult year. Because our economic
relations with Russia were relatively stable even prior to
the political "reset" we've seen this year, we are
well-positioned to press for progress on a few key issues,
including Russia's WTO accession, agricultural trade and
intellectual property rights, where more work is needed. End
Summary.
U.S.-Russian Relations
----------------------
¶2. (C) Four meetings this year between Presidents Obama and
Medvedev, including the President's July visit to Moscow, and
Secretary Clinton's numerous discussions with Foreign
Minister Lavrov have given impetus to real change in our
bilateral relations. Addressing the ruling United Russia
party congress November 21, President Medvedev even used the
phrase "reset" - heretofore reserved for issues involving the
U.S. and Russia - and called for an "economic reset" as well.
We want to see this will applied not just to the
modernization that Medvedev is advocating for Russia itself,
but to its interaction with foreign investors and integration
into global financial institutions, all of which force
reforms deeper into the system. The challenge, as always, is
to translate rhetoric into specific decisions and joint
actions.
¶3. (C) For the first time in years, we have structure in the
relationship to do this. The Obama-Medvedev Commission has
four working groups--business development and economic

Cable Viewer
relations, energy, nuclear energy, and agriculture--with a

remit to broaden the economic base of interaction between us.
The Commission will give us regular, focused interaction
with influential centers of Russia's business and economic
decision-making. In early contacts, some Russian
participants in the working groups have shown a preference
fro form over substance, though. We need to continue to set a
higher standard. The Commission needs to produce results,
not reports, and decisions, not dialogue.
Global Economic Crisis And Russia's Response

--------------------------------------------
¶4. (C) The global economic crisis hit Russia particularly

hard, as the economy remains heavily dependent on commodities
exports (primarily oil and gas) for growth, and on foreign
capital for investment. The abrupt drop in the price of oil
combined with a decline in foreign investment strained the
Russian economy, beginning in mid-2008. Throughout the
following twelve-month period, Russian industrial production
plummeted, with double-digit declines in month-on-month
production occurring on a regular basis. Key sectors such as
steel and automobiles were hit particularly hard, with
Russian domestic automobile production declining by over 50%
in the first half of 2009. The industrial sector,
particularly the single-company towns, was hard hit, with
unemployment remaining at an unprecedented high. Predictions
for 2009 GDP decline grew from 3% early in the year, to the
current estimates of 7.5%.
¶5. (C) At the beginning of the crisis, the Russian government

held the third largest quantity of reserves internationally
and relatively little sovereign debt. Thus, the GOR was much
better positioned to react than many other countries. The
GOR burned through a third of these reserves (an estimated
$200 billion) to slow the decline of the ruble. The GOR also
provided large infusions of capital into the domestic
financial sector in an effort to keep stressed banks afloat.
In addition, the Russian government instituted a series of
"temporary crisis measures," including tariff increases and
other import restrictions, in an effort to protect domestic
production in key sectors and increase demand.
¶6. (C) While these measures were successful in staving off a

complete collapse of the financial sector a la 1998, they
have come at a price. Official Russian reserves are
significantly lower than at the start of the crisis and we
expect the GOR will be required to borrow, including on
international markets, in order to cover its expected federal
budget deficit in 2010. Also, while the infusions of cash
into the financial system prevented a total meltdown, banks
used much of the funding to make provisions for

Cable Viewer
non-performing loans and other distressed assets. The

infusions of cash did not result in a resumption of lending,
and domestic financing remains hard to come by, constraining
efforts to stimulate the real economy.
¶7. (C) The tariff and other trade barriers did slow imports
during the first half of 2009, but the reduced competition
did not appear to do much to help domestic producers.
Domestic demand, particularly in the automotive and real
estate sectors, remains extremely weak. The GOR has pushed
companies to retain workers during the economic downturn, in
an effort to slow unemployment growth and avoid potential
social difficulties. As a result, many companies have used
their limited reserves to continue paying workers and are not
well placed to take advantage of an economic up-turn when it
arrives. That said, Russia appears to have muddled through
the worst of the crisis and, aided by higher oil prices and a
strengthening ruble, GOR officials are now considering how to
encourage a return to strong economic growth.
Key Challenges To Russian Economic Growth

-----------------------------------------
¶8. (C) Dmitriy Medvedev has made a central theme of his

presidency Russia's need to diversify its economy, develop an
innovation economy based on its strong intellectual
resources, integrate itself into the global economy and deal
with the problems created by corruption. While we support
these objectives, we are concerned that progress has been
limited, at best. The recent economic crisis dealt yet
another blow to Russia's limited industrial base. The lack
of domestic financing limits entrepreneurs' efforts to move
into new sectors. Weak enforcement of intellectual property
laws and gaps in key areas, such as protections on encryption
technologies, restrict growth in IT and other innovative
sectors. Russia's on-again, off-again approach to WTO
accession has not only slowed down Russia's own accession
process, but has also made it difficult for others, such as
the U.S. and EU, who are interested in supporting Russia's
accession. Russia's continued tariff and non-tariff
restrictions on agricultural trade also present challenges to
increasing bilateral U.S.-Russia trade, as many U.S.
producers are simply not able to export their products to
Russia. Finally, corruption and "legal nihilism" continue to
plague the Russian governance system; the death in custody of
Russian lawyer Sergey Magnitskiy is only the latest example.
Domestic Political Context

--------------------------
¶9. (C) After a year and a half of tandem leadership of

Cable Viewer
Russia, Medvedev and Putin continue to function based on a

division of labor. The President plays to his strengths of
clear public presentation and a long-range focus on a modern
economy, and underscores his constitutional responsibilities
for foreign policy. His November 12 annual address to the
nation again highlighted and expanded on the theme of
economic modernization, and to a lesser extent political
reform as well. Putin, meanwhile, has built on his image of
a domestic problem solver, employing his trademark
street-wise rhetoric in dressing down oligarchs or critics.
His November 21 address to the annual congress of the United
Russia party (which he heads) reaffirmed public perceptions
of him as the man who is making sure government pays pensions
and salaries. A just-published poll supports this: though
their ratings had been declining, they shot up to 74 and 79
percent, respectively, after their strong performances.
¶10. (C) Although there is evidence that their closest

advisors spar over specific policies and personnel matters,
the two leaders themselves share state-run national media
coverage (to the near-exclusion of other political figures)
and project an aura of ease with one another in public.
Medvedev has yet to make major changes to the senior staff he
inherited from Putin. Putin's prominence in tackling crises
- whether conflict with Georgia, gas supply negotiations with
Ukraine, or localized unrest or frustration due to the
economic crisis - earns him higher public opinion ratings and
elite group allegiance than Medvedev. This, combined with
his suggestions that he might stand for a third presidential
term, all ensure that major decisions are not made without
Putin's approval. The complete national dominance of the
ruling United Russia party under the leadership of Putin,
reinforced through the party's overwhelming, yet tainted
victory in October 11 regional elections, has made it
difficult for opposition parties to function, let alone
capitalize on economic discontent.
Conclusion
----------
¶11. (C) In sum, your visit comes at a promising moment--both

our bilateral relations and our economies are beginning to
move in a more positive direction, but challenges remain. We
encourage you to use your meetings with key Russian
governmental and private interlocutors, as well as with the
American business community, to push for continued dialogue
leading to concrete positive action. We want Russia to
integrate into the global economy, to join the WTO, to
diversify its productive base and to move forward in the
fight against corruption and we stand ready to work with
Russia on these issues. Your meetings with Medvedev's top
economic adviser Dvorkovich and First Deputy Foreign Minister

Cable Viewer
Denisov, in particular, are a chance to move beyond improved

atmospherics and examine in greater depth how we can support
the best of Medvedev's modernization goals--e.g., greater
energy efficiency--in ways that pay dividends to both
economies and broaden the economic base of the relationship.
Beyrle

Cable Viewer
Twitter this
Digg this page
Viewing cable 09MOSCOW2946, PUTIN EXUDES LEADERSHIP DURING FOUR HOUR Q

AND A



Discussing cables

2009-12-04 2010-12-01 Embassy
15:03 23:11 Moscow
VZCZCXRO7908
PP RUEHDBU
DE RUEHMO #2946/01 3381514
ZNY CCCCC ZZH
P 041514Z DEC 09
FM AMEMBASSY MOSCOW

Cable Viewer

RHEHNSC/NSC WASHDC
RUEAIIA/CIA WASHDC
SIPDIS
EO 12958 DECL: 12/04/2018

TAGS PGOV, PREL, PHUM, PINR, ECON, ETRD, KDEM, RS
SUBJECT: PUTIN EXUDES LEADERSHIP DURING FOUR HOUR Q AND A
SESSION
Classified By: DCM Eric S. Rubin; reasons 1.4 (b,d).
¶1. (SBU) Summary: Prime Minister Vladimir Putin displayed

thorough knowledge of the issues facing Russia during a live,
televised question and answer session which highlighted his role
as Russia’s dominant political figure. Most of the questions were
focused on the economic situation and socio-economic issues
(septel), but Putin also repeated his previous statements on his
possible run for President in 2012, and his good relationship
with President Dmitriy Medvedev. Putin also touched both sides of
the coin on Stalin’s legacy, infuriating some opposition
politicians and human rights activists. Putin’s confident
performance in front of millions of Russians showcased his image
as a practical problem-solver and the tandem leader most in touch
with the
Russian people. End Summary.
----------------------------
Question and Answer Dynamics
----------------------------
¶2. (SBU) On December 3 Putin conducted a marathon, four-hour

question and answer session during which he answered 80 questions
from a variety of formats, including studio audience, telephone,
text message, e-mail, and several live video-feeds from across
the country. Putin was well prepared for the session, and his
spokesman, certainly stretching the truth, stated in the days
leading up to the event that Putin had read the “overwhelming
majority” of the 700,000 questions received at that point. By the
end of the session, Putin received over two million questions.
¶3. (SBU) Putin appeared comfortable with the event’s format, and
demonstrated an encyclopedic knowledge of statistics in his
answers. As he has done in the past, Putin stared straight at the
camera, repeated the names of those asking the questions -- some
of whom had met the Prime Minister in the past year -- and
responded directly to their questions. In typical Putin fashion,

Cable Viewer
he rarely showed any emotion and some of his attempts at dead-pan

humor missed the mark. Putin took control of the event towards
the conclusion by personally calling on people in the carefully
screened studio audience and responding to questions he had
reviewed previously. Although some of the questions were not
softballs and did not appear to be scripted, Putin was informed
of the general topics ahead of time and the locations for the
video-feeds.
¶4. (SBU) Putin personally selected a controversial question

about Stalin’s legacy and whether he viewed the former Soviet
leader as good or bad. Putin said that Stalin had achieved some
positive achievements, such as industrialization, but that the
cost was unacceptable and that during Stalin’s reign mass-scale
crimes were committed.
---------------------------------------
Tandem Politics Show Putin Still on Top
---------------------------------------
¶5. (C) Tandem politics stood out as an important issue when

people asked Putin directly about his plans to run for President
in 2012 and his relationship with Medvedev. He answered with the
same standard notions he has used previously, leaving vague his
future plans. Putin responded that he was thinking about running
in 2012, but needed to wait to see what the situation in the
country would be like in a couple years. He noted that, given the
country’s problems, it was better to concentrate on solving them
rather than consume energy on an election campaign. Putin said he
and Medvedev knew each other well, worked well together, and
shared the same principles. Individual experts continue to have
varying opinions on the tandem’s presidential aspirations.
Longtime Kremlin insider Gleb Pavlovskiy stated that Medvedev and
Putin’s vague statements about their 2012 intentions served as a
way to preserve the tandem’s balance and effectiveness, however,
by early 2011 their intentions, according to Pavlovskiy, would
become clear.
¶6. (C) Putin’s excellent performance only added to his

cultivated image as Russia’s dominant national leader and the one
in control of the tandem. XXXXXXXXXXXX said that the event had
strengthened Putin’s political leadership and demonstrated who
was the country’s practical leader, and who was its theoretical
leader. Experts XXXXXXXXXXXX also noted that the event showed
Russians who was able to resolve concrete, socio-economic issues,
such as pensions, jobs, and housing, and who worked on abstract
issues less important to the populace. XXXXXXXXXXXX said that
although the event was routine and scripted, it served its
purpose by portraying Putin in a positive light. Pavlovskiy
called it perhaps the most brilliant performance of Putin’s
entire career.

Cable Viewer
¶7. (C) In contrast, Communist Party Deputy Chairman Ivan

Melnikov told us that the show was nothing more than “psycho-
therapy” for a population worried about salaries, pensions and
housing, which clearly showed Putin’s interest in reclaiming the
presidency. Public Chamber Member Vyacheslav Glazychev, an expert
on “mono-gorod” one-industry towns in Russia, called it “a nice
public relations event and nothing more.” XXXXXXXXXXXX blasted
Putin’s view of Stalin. XXXXXXXXXXXX stated that the Prime
Minister should have made a more straight-forward assessment of
“one of the most terrible criminals in human history.”
¶8. (SBU) A pre-event Levada Center poll emphasized that Russians

saw Putin as the country’s leader, and his “meat and potatoes”
issues as more important. The poll results showed that 28 percent
of respondents named Putin as the one who holds power in Russia,
while 13 percent said Medvedev. Thirty-eight percent of
respondents were likely to watch Putin’s address, whereas 27
percent watched Medvedev’s nationally televised address in
November. Forty-three percent of respondents considered Putin’s
address to be more important, compared to only 16 percent of
Russians who thought Medvedev’s address was more important.
-------
Comment
-------
¶9. (C) Putin’s guarded comments about his participation in the

2012 presidential election have helped him retain his position as
the national leader and elite faction mediator. His comments on
Stalin’s legacy have infuriated long-standing critics like
Gozman, but are extremely unlikely to result in any major,
negative backlash at Putin in Russia. At this point, Putin and
Medvedev’s recent nationally televised addresses only
strengthened the image of a Prime Minister who works on tangible,
bread and butter issues, and a President who focuses on big-
picture issues and strategic thinking. Beyrle

Cable Viewer
Twitter this
Digg this page
Viewing cable 09MOSCOW3010, MOSCOW'S INCREASING FRUSTRATION WITH

TEHRAN



Discussing cables

2009-12-14 2010-11-28 Embassy
15:03 18:06 Moscow
VZCZCXRO5471
PP RUEHBC RUEHDBU RUEHDE RUEHDIR RUEHKUK RUEHTRO
DE RUEHMO #3010/01 3481520
ZNY CCCCC ZZH
P 141520Z DEC 09
FM AMEMBASSY MOSCOW

Cable Viewer

RUCNIRA/IRAN COLLECTIVE
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUCNDT/USMISSION USUN NEW YORK 0540
SIPDIS
E.O. 12958: DECL: 12/14/2019

TAGS: PGOV PREL KNNP IAEA RS IR
SUBJECT: MOSCOW'S INCREASING FRUSTRATION WITH TEHRAN
Classified By: Acting Political M/C David Kostelancik for reasons

1.4 (
b) and (d).
¶1. (C) Summary: Official GOR reports and media have

pronounced the Russian-Iranian relationship healthy and
Minister of Energy's Shmatko's recent visit to Tehran as a
success. Privately, GOR officials and Russian analysts agree
that there are serious tensions in the bilateral relationship
such as the S-300s issue, the Bushehr project and the
possibility of Russia's support of sanctions. They downplay
Moscow's ability to influence Iran, noting competing
interests within Russia that complicate Russian policy
decisions. Iran policy remains a sensitive domestic
question. End Summary
---------------------------
Signaling Iran on Sanctions
---------------------------
¶2. (C) Italian Embassy interlocutors in Moscow reported

that, during his recent visit to Rome, President Medvedev
confided to PM Berlusconi that dealing with Iran lately had
been "frustrating." Medvedev said he was bothered by Iran's
refusal to accept the Tehran Research Reactor (TRR) proposal
and that Iran's reaction showed a lack of trust for Russia.
While Russia did not necessarily agree that sanctions would
be effective, he said, the threat of sanctions could signal
Iran that it was time to change course. Medvedev admitted
that he did not know who was making decisions in Tehran now,
but he was nevertheless optimistic that there was still some
room for negotiation on the TRR proposal.
¶3. (C) Ali Mustafabeily, Deputy for Iran and Afghanistan in

the MFA's Second Asia Department who accompanied Shmatko to
Iran, told us that it was time to pressure Iran. The TRR
proposal was a fair offer, but there was also a deadline that

Cable Viewer
Iran had missed. Commenting that the Iranians were "sly" and
knew how to negotiate, he said that just last week Saeed
Jalili, Secretary of the Islamic Republic of Iran's Supreme
National Security Council, had informed the Russian
Ambassador in Tehran of Iran's new thinking on the TRR
proposal. If the West, including Russia, did not agree to a
plan in which the IAEA would take "possession" of the low
enriched uranium (LEU) while it remained on Iranian soil, it
meant the West did not trust the IAEA. Mustafabeily seemed
exasperated by this thinking. He also reported that Iran had
conferred with (unnamed) other countries and determined that
the enrichment proposed in the TRR proposal could be
completed in five months rather than one year. Mustafabeily
said that Russia could not accomplish this process in five
months, but said it was possible that others could.
¶4. (C) Mustafabeily also remarked that he had met many

members of the Iranian diaspora living in France. Most were
involved in business and kept one foot in France and the
other in Iran. While uniformly critical of the current
Iranian regime, they also unanimously opposed sanctions as a
way to influence Iran. They believed sanctions would only
harm average Iranians, not the elites. Mustafabeily reported
his own private conversations with businessmen in Tehran that
confirmed this opinion.
---------------------------------------
S-300s: Still Yellow Light on Transfer
---------------------------------------
¶5. (C) On the issue of the S-300s, Mustafabeily reported

that the Iranians had strongly criticized delays in the sale.
Specifically, the Iranian Ministers of Trade and Economic
Development summoned Shmatko to discuss the S-300s and
threatened legal action against the GOR to resolve the issue.
According to Mustafabeily, the Iranians reminded Shmatko
that they had already paid a considerable amount towards
delivery of the system and they expected fulfillment of the
contract. While Moscow was not considering a refund, GOR
officials recognized the gravity of the issue and that Tehran
was likely waiting for Russia's decision on sanctions before
carrying out its threat of legal action. Baranov said the
decision on the Russian side would be made at the
Presidential level, implying that the MFA was not involved in
the discussions. He did note that some in the GOR believed
transferring the S-300s to Iran would increase stability in
the region because Iran would feel more secure without
developing nuclear weapons.
-----------------------
Anti-Russian Mood Grows
-----------------------

Cable Viewer
MOSCOW 00003010 002 OF 003
¶6. (C) Interestingly, Mustafabeily noticed an anti-Russian

feeling in Iran, even to include unorchestrated
demonstrations in front of their embassy in Tehran. He
commented that Russia was being criticized by the government
and the elites for being too close to the West and for voting
with Western countries in the IAEA. Simultaneously, the
Iranian opposition was also condemning Russia for working
with the Iranian government. Mustafabeily complained that
the propaganda machine was working at full-speed in Iran.
¶7. (C) Maxim Baranov, Director of the MFA's Iran Desk, said
that Minister of Energy Shmatko's visit to Tehran was a
chance to calm Iran's concerns about delays at the Bushehr
facility and reduce rising tensions in the relationship. He
said that Russia planned to open the Bushehr reactor as soon
as technical tests were completed and that confusion over
dates had led to misstatements in the press. Baranov claimed
that Russia was continuing with technical testing and did not
truly have an expected opening date. Baranov acknowledged
that Shmatko's visit came at a difficult time in the
bilateral relationship, given Russia's recent vote at the
IAEA. He noted that, although Iran was upset about Russia's
decision, Iranians would not directly "criticize a guest in
their home." As could be expected, Iranian officials instead
expressed their disappointment through the media. Baranov
explained Russia's IAEA vote as an effort to signal Iran that
Russia would no longer remain its unconditional supporter.
He indicated that Moscow felt deceived by the Qom site.
Baranov also took the opportunity to call for the U.S. to
consult more closely with Russia on Iran and not limit
discussions to like-minded countries.
¶8. (C) Baranov claimed there was no clear signal coming from
Tehran about if or when Iran would negotiate and who was in
charge. According to Baranov, Russia wanted Iran to
understand that, while IAEA Director El Baradei had always
tried to remain objective, there was no guarantee that the
incoming director would follow this path. El Baradei's
proposal was a favorable deal that might not be available
after he leaves his position. Therefore, Russia was urging
Iran to begin cooperation with the IAEA now on the TRR
proposal. When asked about Prime Minister Putin's recent
statement that Russia had no information about a military
dimension to Iran's nuclear program, Baranov seemed caught
off guard. He confided that backing up such a comment would
be "complicated work."

Cable Viewer
--------------------------------------
Iran's Goal--Capability or Production?
--------------------------------------
¶9. (C) Russian Academy of Sciences Vladimir Yevseyev claimed

that Russia's red line with Iran would be if/when Iran
withdrew from the IAEA because this would demonstrate that
Iran's intention was to build a nuclear weapon. He believed
that, because Iran was hoping to keep the LEU on its
territory and needed an excuse to back away from the IAEA,
its reaction to the vote was calculated and exaggerated.
Nina Mamedova of the Oriental Studies Institute and Zhigun
Yefim of the Middle East Institute agreed that Iran's
reaction was overly emotional. Mamedova claimed that Iran's
reaction and subsequent announcement of plans to build 10
enrichment sites was meant to leave room for bargaining in
the world community. Iran was well known, according to
Mamedova, for adopting harsh positions so there would be room
for retreat. She recalled that six years ago Iran reacted in
the same way to an unfavorable IAEA resolution and threatened
to build 20 nuclear power plants. Then, when Iran realized
that the isolation this decision produced was not helpful, it
renewed cooperation. She predicted that Iran would likely
return to negotiations by early next year but did not know
when exactly.
¶10. (C) Vladimir Sazhin of the Oriental Studies Institute

and commentator for the Voice of Russia claimed that Tehran's
overall goal was completion of the fuel cycle and
infrastructure to produce a nuclear weapon when they needed
it. He did not believe Tehran intended to assemble a weapon.
Merely having the capacity would be enough to satisfy its
need for security and self-aggrandizement. Conversely, both
Mamedova and Yefim believed Iran's goal was to build a
nuclear weapon rather than just develop the capability. They
believed Iran would not feel secure until it had a small
number of nuclear weapons to defend itself against the
"threat" from Israel.
-----------------
Influencing Iran
-----------------
MOSCOW 00003010 003 OF 003
¶11. (C) Although Russia had long considered Iran as a key

element of regional stability, most Russian officials and
analysts agreed that its ability to influence Iran was
minimal and quickly decreasing. Yevseyev pointed out that
Italy and Germany had far greater trade turnover with Iran

Cable Viewer
than Russia did. Similarly, Mamedova lamented that the

bilateral economic relationship was small, even speculating
that rumors circulating about Iran's readiness to start joint
new exploration efforts with Gazprom of possible gas fields
were more likely empty promises meant to convince Russia to
defend Iran's position in the international community.
¶12. (C) A carrot/stick approach was recommended by some

observers. Vladimir Sazhin said that any use of military
force against Iran would cause catastrophe in the region or
even globally. He advocated balanced measures which included
financial support to the oil and gas sector, a treaty between
the P5 1 and Iran on security guarantees, and recognition of
Iran's prominent role in the region. If these failed to
produce positive results, he believed sanctions against the
banking and oil and gas sectors might be effective. Yevseyev
said the international community should remain flexible and
strive for Iran's integration in to the global economic and
political system when Iran demonstrates behaviors that are
more positive. Mamedova said it was critical that sanctions
avoid inflicting suffering on average Iranians because this
would only increase support for Iran's current behavior.
¶13. (C) Comment: The varying perspectives within the Russian

foreign policy establishment reflect competing interests.
From a purely mercantilist standpoint, sanctions against
Iran, particularly its energy sector, would likely translate
into a bump in world oil prices, which would boost annual
revenues for Russia's state-connected energy companies and
the state budget by billions of dollars annually. If
sanctions harm Iran's burgeoning economic relationship with
China, some in Russia might also regard that as a plus. On
the other hand, sanctions could damage Russia's own trade
with Iran, which is modest (Russia currently has a bilateral
trade surplus of about USD 3 billion) but concentrated in the
politically-influential defense and atomic-energy sectors.
Since many high-ranking officials in these agencies also
favor a more adversarial policy towards the West, an
anti-sanctions posture serves them both economically and
ideologically. The status quo is preferable for Russia and
as the decision point approaches Moscow will probably search
for an outcome that changes as little as possible. Given the
stakes for Russia's economy and its relations with the U.S.,
Israel and the EU, this decision will be made by both
Medvedev and Putin, with implications for the domestic and
foreign influence each exerts. End Comment.
Beyrle

Cable Viewer
Twitter this
Digg this page
Viewing cable 09MOSCOW3109, SYSTEMIC REFORMS UNLIKELY WITHIN

MEDVEDEV'S



Discussing cables

2009-12-24 2010-12-01 Embassy
09:09 21:09 Moscow
VZCZCXRO4998
RR RUEHDBU
DE RUEHMO #3109/01 3580930
ZNY CCCCC ZZH

Cable Viewer
R 240930Z DEC 09
FM AMEMBASSY MOSCOW
RHEHNSC/NSC WASHDC
RUEAIIA/CIA WASHDC
SIPDIS
E.O. 12958: DECL: 12/24/2018

TAGS: PGOV PREL PHUM PINR ECON ETRD KDEM RS
SUBJECT: SYSTEMIC REFORMS UNLIKELY WITHIN MEDVEDEV'S
MODERNIZATION AGENDA
REF: MOSCOW 002781
Classified By: ADCM Susan Elliott for reasons 1.4 (b) and (d).
¶1. (C) Summary: President Dmitriy Medvedev's high-profile

campaign to modernize Russia appears designed to give Russia
modest, mostly long-term, economic benefits without altering
the basic economic and political structures that Medvedev
inherited from Prime Minister Vladimir Putin. To the chagrin
of some experts close to the President, the proposed changes
are tactical in nature. If specific measures in Medvedev's
agenda like enforcement of the rule of law, decreasing
corruption, increasing transparency, building basic
infrastructure, and protecting intellectual and property
rights could be implemented, broad based growth could take
place. Medvedev's desire to possibly run for re-election may
be partially responsible for his push to modernize Russia
and, unlike Putin, hold officials accountable for their
actions in the aftermath of recent tragedies. Nonetheless,
Medvedev's modernization drive provides US officials another
potential hook for cooperation. End Summary.
------------------------------------
Modernization Tactical Or Strategic?
------------------------------------
¶2. (SBU) Medvedev's ability to change Russia is based upon

his concept of modernization, which he and Putin have
publicly defined in different ways. During his annual
address to the Federal Assembly on November 12, Medvedev
described modernization as a broad change of mindset and
business practices, with the focus on developing medical,
energy, and information technology, space and
telecommunications systems, and increasing energy efficiency.

Cable Viewer
He described Russia as a multi-party democracy (reftel), and

also said that the country needed "comprehensive
modernization," which would result in a more democratic,
market-oriented, competitive country. Medvedev has continued
publicly to discuss modernization and has met with various
committees, government bodies, and the media to push his
agenda.
¶3. (SBU) In his speech to the United Russia Congress on

November 21, Putin emphasized the economic aspects of
modernization and cited Medvedev's five key areas of focus.
He specifically pointed out the need for modernization of
industrial and defense enterprises, ports, and the pension
system. Putin also noted that Medvedev's call to "overcome
chronic backwardness" and raise the level of Russia's overall
development reflected the mood of all of Russian society.
Putin only mentioned modernization twice during his four hour
televised call-in event on December 3, despite numerous
questions about what the Government would do to improve
Russia's economic situation.
¶4. (C) Medvedev's tactical measures for achieving success in

the five defined areas could be achieved with minimal
structural changes to the economy. Installing individual gas
meters to promote less-wasteful use of fuel, changing to more
energy efficient light bulbs, studying the effect of
decreasing the number of time zones in Russia, and building
more supercomputers could provide short to medium-term
economic benefits. They would not, however, significantly
change the structure of the economy or the murky political
context in which businessmen and investors operate. Some
contacts with whom we spoke have jumped on terms such as
"comprehensive modernization" to suggest, perhaps
optimistically, that modernization would include wholesale
changes to Russia's economic and political systems.
-----------------------------------
Some Prospects for Strategic Reform
-----------------------------------
¶5. (C) Contacts have noted to us that modernization would

lead to some targeted economic improvements, but, with a few
exceptions, have expressed strong doubts about prospects for
systemic reforms. xxxxx said on December 22 that the President
might make
some changes on the edges of the political system, but denied
that Medvedev's reforms would have any major impact on
Russia's political structure, which he said had been
painstakingly formed over the last 15 years. Medvedev might
make some significant reforms in Russia's economic structure,
but would have to "non-violently enforce" modernization on
the business elite, who preferred the status quo and who

Cable Viewer
wanted to avoid making expensive investments.
¶6. (C) xxxxx
Moscow 00003109 002 of 003
told us December 7 that while various groups of elites have

competing views on modernization, it was possible for
Medvedev, with the Government's support, to overcome
bureaucratic inertia and push through broad economic and
political reforms. One key institution for Medvedev was the
Commission on Modernization and Technological Growth of the
Russian Economy, de facto led by First Deputy Presidential
Administration Head Vladislav Surkov. Medvedev, xxxxx
added, wanted to add influential elites to the commission,
and meet with it more often in order to give it authority and
provide an impetus to fulfill his modernization agenda. Some
siloviki, however, such as Rostechnologia's Sergey Chemezov,
have reportedly boycotted the commission.
-------------------------------------
Modernization's Tactical Significance
-------------------------------------
¶7. (C) Other analysts stated that Medvedev had no chance of

changing the economic or political systems because he did not
have the inclination, power, or buy-in of the bureaucracy to
do so. xxxxx told us December 21 that they see little prospect
for systemic reforms within the President's modernization
agenda. xxxxx said that democratic reforms could be
the spark that helped push through additional large-scale
reforms, but he "unfortunately" did not anticipate Medvedev
making any major improvements in the economic or political
spheres. xxxxx told us that modernization was focused on
economic policies and that Medvedev could make some quality
improvements in the economy. xxxxx agreed, however, that
reforms would have to occur within the current political
system because it was an "illusion" to think that the
President could overhaul the political system.
¶8. (C) xxxxx told us

December 17 that Medvedev, who he half-jokingly characterized
as Putin's Minister of Economics and Assistant on Cadre
Policies, had no chance of modernizing Russia.
Modernization, he added, was unlikely to increase Medvedev's
public standing or his ability to increase his team's power.
¶9. (C) Longtime expert on political systems xxxxx said on

December
10 that Medvedev was trying to make some tactical changes,
but had no levers to implement systemic reforms. Russian

Cable Viewer
bureaucracy had watered-down, stalled, or hindered reforms

for hundreds of years, and would be successful in preventing
any broad reforms. xxxxx added that while Medvedev's
reforms sounded nice, the President would never significantly
alter the political system and create a "true" democratic
system. According to xxxxx Medvedev has benefited from the
current political system, and any attempts to change the
system would introduce a level of uncertainty reminiscent of
former Soviet leader Mikhail Gorbachev. xxxxx also noted that the
bureaucracy feared losing
their privileges and would fight change through bureaucratic
measures.
¶10. (C) xxxxx Public Chamber member, xxxxx bluntly stated to

us December 9 that the President was not able to reform the
political system. Medvedev could not implement his
modernization agenda, which xxxxx saw as a positive
program for Russia, because the President lacked the levers
to make systemic reforms, and because of bureaucratic
opposition. xxxxx characterized Medvedev as a
"Manilov," in reference to 19th century author Nikolay
Gogol's fictional character Manilov, who was known, as they
described, for devising grand schemes, but failing to ever
implement them.
--------------------------------------------- ---------
Modernization Only One Part of Medvedev's Future Plans
--------------------------------------------- ---------
¶11. (C) With Russia's presidential campaign season

unofficially starting in about a year, many people with whom
we spoke saw the present as pivotal for Medvedev's future if
he wanted to prove that he could become an independent
political leader. xxxxx said that the President needed to
Moscow 00003109 003 of 003
fulfill his promises, such as modernizing the country, to

show all Russians that he can be relied upon to get things
done. xxxxx said that the key question was when the tandem
would divide, and that modernization was only one part of
Medvedev's case to maintain the reins of power. The
President had made other steps that differentiate his style
from Putin's, such as holding senior regional officials
responsible for their duties in the wake of the club fire in
Perm that killed 150 people and the death of lawyer Sergey
Magnitsky while in pre-trial detention, that might elevate
his case.
-------
Comment

Cable Viewer
-------
¶12. (C) Modernization may not facilitate the structural

changes to the political and economic spheres that some
experts had hoped, but it could be another tool for Medvedev
to demonstrate his leadership and, depending on his
implementation and governing skills, introduce some
uncertainty into the public and elite over his standing.
Medvedev is finally challenging the low expectations and
assessments of many experts after 19 months in office as
Putin's junior partner. Medvedev has also refrained from
challenging Putin's authority, control over day-to-day
economic matters, or respect with the public and siloviki.
Few currently doubt that the tandem member who will occupy
the presidency in 2012 remains Putin's decision, but as the
presidential campaign season approaches the risks and rewards
for deviating from the tandem's stable relationship
substantially increases for significant groups of elites with
an interest in succession politics.
Rubin

Cable Viewer
Twitter this
Digg this page
Viewing cable 09MOSCOW3144, RULE OF LAW LIPSTICK ON A POLITICAL PIG:




Discussing cables

2009-12-30 2010-12-01 Embassy
14:02 21:09 Moscow
VZCZCXYZ0003
RR RUEHWEB
DE RUEHMO #3144/01 3641427

ZNY CCCCC ZZH
R 301427Z DEC 09
FM AMEMBASSY MOSCOW

Cable Viewer

RHEHNSC/NSC WASHDC
SIPDIS
E.O. 12958: DECL: 12/29/2019

TAGS: PREL PGOV PHUM KDEM RS
SUBJECT: RULE OF LAW LIPSTICK ON A POLITICAL PIG:
KHODORKOVSKIY CASE PLODS ALONG
REF: A) MOSCOW 603 B) MOSCOW 1226
Classified By: Pol Minister Counselor Susan Elliott for reason

1.4 (d)
¶1. (C) Summary: The prosecution in the Khodorkovskiy/Lebedev

trial has finished reading its 188 volumes of evidence, and
has moved on to questioning witnesses. An observer for the
International Bar Association stated his belief that the
trial is being conducted fairly. Related events outside of
Russia continue to affect the case. A deposition in a U.S.
court by Price Waterhouse Coopers (PWC) may show that PWC
received GOR pressure to disavow its prior Yukos audits; the
Russian Supreme Court upheld an ECHR ruling that Lebedev's
initial arrest was illegal; and an arbitration court in the
Hague found Russia to be bound by the Energy Charter Treaty,
leaving it open to a large judgment against it and possible
seizure of GOR assets abroad by Yukos shareholders. Despite
the case's wide implications, it continues to be a cause
celebre only for foreigners and a minority of Russians. The
case also shows the great lengths that the GOR is willing to
go in order to place a "rule of law" gloss on a politically
motivated trial. End Summary.
Recent developments
-------------------
¶2. (C) The trial of former Yukos chief Mikhail Khodorkovskiy

and his associate Platon Lebedev continues in Moscow's
Khaminovsky court, having moved from the reading of the
prosecution's evidence -- which comprised 188 volumes and
lasted throughout the summer -- to questioning of the
prosecution's witnesses. Thus far the prosecution has called
31 of its 250 witnesses, meaning that the trial will probably
last until 2012. XXXXXXXXXXXX told us December 23 that he
believes the trial is being
conducted fairly and that Judge Danilkin has been doing
everything in his power to make sure that the defense gets a
fair opportunity to present arguments and challenge the

Cable Viewer
prosecution's evidence.
¶3. (C) Among recent developments in the case, the defense has
been trying to introduce the testimony of a former Price
Waterhouse Coopers (PWC) auditor, who was deposed in
California in August by Khodorkovskiy lawyers. The
prosecution has objected to the introduction of the
deposition into the case, complaining that they had not
received sufficient notice; however, according to Teets, the
Russian Embassy did not inform the head investigator in
Russia until recently. The PWC deposition goes to the heart
of Yukos's guilt or innocence; as Yukos's auditor, it signed
off on Yukos's financial statements from 1994 to 2003, only
to disavow this prior approval in 2007. As XXXXXXXXXXXX noted,
if
the audits were properly withdrawn, this will be a "black
mark" for the defense; if not, it could help the defense, but
would greatly tarnish PWC's international reputation. Teets
said that the content of the deposition had not yet been made
public, but speculated that the auditor had testified that
PWC had been pressured by the Russian government into
withdrawing its prior certifications of Yukos books and
records.
Lebedev ruling and other "international" issues

--------------------------------------------- --
¶4. (SBU) The Yukos battle continues simultaneously both on

domestic and the international fronts, with some concrete
effects on the case's proceedings in Moscow. On December 23,
the Russian Supreme Court ruled that the 2003 decision to
arrest and detain Lebedev was illegal, in keeping with a 2007
ruling by the European Court of Human Rights (ECHR). (Note:
The GOR often loses cases at the ECHR, and its common
practice is to pay the compensation required by the ECHR's
rulings while ignoring the substantive redress of the
systemic problem involved. This decision represents a rare
departure from this practice and signals a potentially
encouraging trend. End Note.) The Supreme Court's ruling
indicated only that the first two months of Lebedev's six
years (to date) of incarceration were illegal, and thus might
be considered only marginally relevant. However, the defense
might use this ruling to argue that the entire conviction was
tainted by the illegal detention and therefore should be
thrown out. Defense lawyers told Radio Free Europe that they
have not yet decided how to proceed, but called the ruling a
"victory," while expressing bewilderment at the Supreme
Court's two-year delay in ruling on the case.
¶5. (SBU) On December 23, Moscow's Basmanny Court issued an

arrest warrant in absentia for former Yukos treasurer Andrey
Leonovich, which Khodorkovskiy's lawyers called a ploy to

Cable Viewer
pressure witnesses, and which will likely further exacerbate

tensions with the UK (where Leonovich now resides) over the
issue of extraditions. This move follows a December 2 ruling
by an international arbitration tribunal in the Hague that
Russia is bound by the Energy Charter Treaty (ECT), thus
requiring the GOR to defend itself against claims from Yukos
shareholders for an estimated 100 billion USD in damages (ref
A). This sum would be the largest arbitration award ever,
representing 10 percent of Russia's GDP, and although
collecting the entire amount would be difficult, it could
allow shareholders to seize state assets outside of Russia.
The ECT ruling could affect, among others, companies such as
Royal Dutch Shell and BP who were forced to renegotiate
contracts on terms favorable to the GOR.
Russians apathetic, but skeptical towards GOR

---------------------------------------------
¶6. (SBU) Given such significant international implications to

the case, and given Khodorkovskiy's former stature, one might
expect a large amount of focus on the Yukos case inside
Russia. However, most Russians continue to pay scant
attention (ref B). According to a December poll by the
Levada Center encompassing 1,600 respondents in 127 cities
and villages, only a little more than one-third of Russians
are following the case (a May Levada poll showed the same
figure for people who were at all aware that the case
existed). The same poll, however, revealed a notable
divergence in public opinion from the "party line" maintained
by Prime Minister Vladimir Putin. In his December 3
televised question and answer session with the public, Putin
defended the legitimacy of Khodorkovskiy's incarceration and
accused Khodorkovskiy of also being a murderer. He also
claimed that all of the earnings from the sale of Yukos were
being funneled into the country's Housing and Utilities Fund.
The Levada poll, however, showed that 65 percent of
respondents did not believe Putin's claim about the Housing
Fund, and 50 percent believed that Putin should be summoned
as a witness in the case.
Khodorkovskiy starting to lose hope

-----------------------------------
¶7. (SBU) Khodorkovskiy and Lebedev have consistently

maintained an upbeat demeanor, frequently smiling and
laughing during the proceedings, and chatting buoyantly with
supporters. Over the course of his imprisonment,
Khodorkovskiy has written a series of philosophical articles
(printed in liberal papers such as Vedomosti) that have
amounted to shadow policy papers of the type that he might
write if he were one of the President's advisors. He had

Cable Viewer
also expressed faith that the Russian court system would

exhibit sufficient fairness and rule of law, and Judge
Danilkin sufficient independence, to acquit him. In recent
months Khodorkovskiy has made pessimistic statements that he
does not expect ever to be freed. By all accounts, in 2003
Khodorkovskiy did not believe he would actually be arrested.
His thinking here seems to following a similar trajectory,
from naive refusal to believe what is happening, to the
gradual sinking in of the reality of his situation.
Comment
-------
¶8. (C) The fact that legal procedures are apparently being
meticulously followed in a case whose motivation is clearly
political may appear paradoxical. It shows the effort that
the GOR is willing to expend in order to save face, in this
case by applying a superficial rule-of-law gloss to a cynical
system where political enemies are eliminated with impunity.
It is not lost on either elite or mainstream Russians that
the GOR has applied a double standard to the illegal
activities of 1990s oligarchs; if it were otherwise,
virtually every other oligarch would be on trial alongside
Khodorkovskiy and Lebedev. There is a widespread
understanding that Khodorkovskiy violated the tacit rules of
the game: if you keep out of politics, you can line your
pockets as much as you desire. Most Russians believe the
Khodorkovskiy trial is politically motivated; they simply do
not care that it is. Human rights activists in general have
an uphill battle in overcoming public apathy and cynicism,
but nowhere more so than in the Khodorkovskiy case. We will
continue to monitor the case as it unfolds.
Rubin

Cable Viewer
ABCDHIJKLMNOPRSTUV
Browse by tag
ABCDEFGHIJKLMNOPQRSTUVWXYZ
Browse by classification
CONFIDENTIAL
CONFIDENTIAL//NOFORN
SECRET
SECRET//NOFORN
UNCLASSIFIED
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Community resources
Check our Reddit
Twitter this
Digg this page
Viewing cable 10MOSCOW266, C/NF) XXXXXXXXXXXX ON ENERGY INTERESTS,


2010-02-05 2010-12-02 CONFIDENTIAL// Embassy
10MOSCOW266
VZCZCXRO7351
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSL RUEHSR
DE RUEHMO #0266/01 0361039
ZNY CCCCC ZZH
P 051039Z FEB 10
FM AMEMBASSY MOSCOW
file:///F|/EWACS/wikileaks/Russia/10MOSCOW266.html (2 of 4)12/5/2010 4:23:58 PM

Cable Viewer

RHEBAAA/DEPT OF ENERGY WASHINGTON DC PRIORITY
SIPDIS
NOFORN
DEPT FOR EUR/RUS, EEB/ESC/IEC GALLOGLY AND GREENSTEIN,

S/EEE MORNINGSTAR, EUR/WE, INR
DOE FOR HEGBURG, EKIMOFF
DOC FOR JBROUGHER
NSC FOR MMCFAUL
EO 12958 DECL: 02/05/2035

TAGS EPET, ENRG, ECON, PREL, PINR, RS, IT
SUBJECT: (C/NF) XXXXXXXXXXXX ON ENERGY INTERESTS,
PUTIN-BERLUSCONI LINK (C-RE9-02730)
REF: A. STATE 8676 B. 09 MOSCOW 1273
Classified By: Econ MC Matthias Mitman for Reasons 1.4 (b/d)
----------------------------
PUTIN-BERLUSCONI DIRECT LINK
----------------------------
¶1. (C/NF) XXXXXXXXXXXX told us during a February 4 lunch that

his Embassy and his Foreign Ministry often only learn of
conversations between PM Berlusconi and PM Putin after the fact,
and with little detail or background. He expressed frustration
about the PMs’ “direct line,” which sometimes leaves the Embassy
in the dark. He said if there is action to be taken, the cabinet
secretary will instruct the Foreign Ministry or the Embassy
without providing any background, and only note that Berlusconi
and Putin had agreed on whatever the action item is. XXXXXXXXXXXX
explained that while the close relationship is not ideal from the
bureaucracy’s perspective and more detrimental than beneficial,
it can be useful at times. He cited the case of the sale to
Gazprom by Italian energy giant ENI of its 20% share in Gazprom’s
oil subsidiary Gazpromneft. He said Gazprom had insisted on
paying far below the market price, but that it ultimately paid
the market price after Berlusconi weighed in with Putin.
------------
ENI AND ENEL
------------
¶2. (C/NF) In response to our comment that ENI’s Moscow

Representative, Ernesto Ferlenghi, won’t meet with us,
XXXXXXXXXXXX said Ferlenghi “for some reason” doesn’t like to

Cable Viewer
meet with foreign diplomats. (Note: We had a very open and

friendly meeting with Ferlenghi about two years ago, but ever
since, he has deflected our requests for a meeting. See also ref
B. End note.) XXXXXXXXXXXX said he believes Ferlenghi may have a
directive from ENI headquarters to refer foreign governments to
ENI’s Rome-based international governmental affairs director.
While [XXXXXXXXXXXX, his cell phone rang -- it was Ferlenghi.
explained that although major projects such as the proposed South
Stream gas pipeline gain the most attention, ENI’s main business
in Russia is “buying gas.”
¶3. (C/NF) XXXXXXXXXXXX said the Italian Embassy is organizing a

visit by a trade and investment delegation to Novy Urengoi, the
Yamal region city that is a project site of Severenergia, an
upstream joint-venture between Gazprom, ENI, and Italy’s Enel.
Gazprom bought a controlling stake in Severenergia from ENI and
Enel, which had set up Severenergia to purchase some of the
assets of the former Yukos oil company at its bankruptcy auction.
XXXXXXXXXXXX said that in addition to its investment in
Severenergia, Enel also has approximately $6 billion invested in
the Russian electricity sector and may raise its investment in
that sector to $9 billion.
------------------------------
SOUTH STREAM AND SAMSUN-CEYHAN
------------------------------
¶4. (C/NF) XXXXXXXXXXXX also noted that ENI XXXXXXXXXXXX and

“we” (presumably the Italian government) have regular contact
with Russian DPM and “Energy Czar” Igor Sechin. XXXXXXXXXXXX said
that lately the discussions relate to an explicit business link
between South Stream and the proposed Samsun-Ceyhan Turkish oil
pipeline, of which ENI is the operating partner. He explained
that ENI, and its Turkish partner (which he said is Turkish PM
Erdogan’s son-in-law) need Russian oil to make Samsun-Ceyhan a
reality, while Gazprom needs Turkish cooperation to move ahead on
South Stream.
-------
COMMENT
-------
¶5. (C/NF) On major issues, it seems that Russian-Italian

MOSCOW 00000266 002 OF 002
economic relations are directed by PMs who have a direct line to
each other as well as control over some of the largest assets of
their respective economies. To whatever end they direct those
assets, it is likely they are not doing so based solely on
commercial or rate-of-return calculations. As our contact himself
acknowledged -- “it seems that everything that happens at the
lower levels is just for show.” Beyrle

Cable Viewer
Twitter this
Digg this page
Viewing cable 10MOSCOW272, PUTIN STILL HOLDING THE REINS FOR 2012
ELECTION



Discussing cables

2010-02-05 2010-12-01 Embassy
15:03 23:11 Moscow
VZCZCXRO7656
RR RUEHDBU
DE RUEHMO #0272/01 0361509
ZNY CCCCC ZZH
R 051509Z FEB 10
FM AMEMBASSY MOSCOW

Cable Viewer

RHEHNSC/NSC WASHDC
RUEAIIA/CIA WASHDC
Friday, 05 February 2010, 15:09

SIPDIS
EO 12958 DECL: 02/05/2019
TAGS PGOV, PREL, PINR, KDEM, RS
SUBJECT: PUTIN STILL HOLDING THE REINS FOR 2012 ELECTION
REF: A. MOSCOW 199 B. MOSCOW 175
Classified By: Political Minister Counselor Susan Elliott for
reasons 1 .4 (b) and (d).
¶1. (C) Summary: While supporters of Russian President Dmitriy
Medvedev are pushing him to establish himself as a stronger
tandem member (ref A), many political experts increasingly
believe that no matter who becomes president in 2012, the road to
the presidency still runs through Prime Minister Vladimir Putin.
Medvedev’s personal relationship with Putin, lack of a party
foundation, and a small pro-Medvedev bureaucratic cadre limit his
ability to be reelected without Putin’s consent. With the
election not until 2012, wildcards such as political instability,
health concerns, or a major economic decline could change the
tandem equation, but experts perceive that no matter whether
Putin, Medvedev, or someone else becomes President in 2012, Putin
will have the final word. End Summary.
----------------------------------
Putin Will Decide 2012, Eventually
----------------------------------
¶2. (C) Experts across the political spectrum continue to
speculate who is most likely to become president in 2012, with
every credible scenario reduced to whether Putin wants to return
to the presidency. Most contacts cite Putin’s desire to control
the political sphere as his main rationale for returning.
Director of the Center for the Study of Elite, United Russia
member, and Kremlin adviser Olga Kryshtanovskaya told us that
Putin was a “hostage to the system he had built.” She told Ekho
Moskvy radio on January 19 that all signs suggested that Putin
would return in 2012. General Director of the Agency for
Political and Economic Communication Dmitriy Orlov told us
January 15 that Putin would “undoubtedly” return as president
because he wanted to remain in control of Russia from the more
prestigious seat in the Kremlin. He had stepped aside in 2008
merely to avoid unsavory comparisons to authoritarian leaders in
Russia’s backyard. XXXXXXXXXXXX told us that Putin often arranged
to have the question of his possible return in 2012 asked in
public formats because he wanted to return to the presidency. He
added that Putin’s KGB background precluded him from trusting
anyone with a no-Putin-strings-attached presidency.
¶3. (C) The vast majority of our contacts suggested that unless

Cable Viewer
Medvedev quickly did something drastic, the decision on 2012

would not be made until shortly before the election. In the lead
up to the previous presidential election in 2008, Putin kept his
decision not to run quiet until the last moment. Delaying the
descision would prevent undermining Medvedev in the public
sphere, or either of them among the elite.
-------------------------------------
Medvedev Avoiding Destabilizing Moves
-------------------------------------
¶4. (C) Medvedev’s unilateral routes to reelection become
narrower as he avoids taking destabilizing steps, such as firing
senior Putin loyalists or changing the political system. This in
turn increases his dependency on Putin to endorse him for another
term. While pundits such as XXXXXXXXXXXX are optimistic that
Medvedev has time to build a large contingent of powerfully
placed supporters, others increasingly view Medvedev’s close
personal relationship with Putin as inhibiting his ability and
inclination to initiate a dispute over control of the bureaucracy
or reform of the political system. To emphasize her view that
Medvedev relies on Putin’s bureaucracy, Kryshtanovskaya said in
her Ekho Moskvy interview that only 2 of the top 75 positions in
government were held by Medvedev loyalists.
¶5. (C) Medvedev’s defense of the current political system and
(widely believed fraudulent) October elections during his January
22 State Council speech (ref B), moreover, disappointed those who
had expected him to set a new course. XXXXXXXXXXXX told us
January 29 that a year ago he thought Medvedev was more likely to
be reelected, but after the State Council speech he viewed Putin
as the frontrunner. The speech had convinced him that Medvedev
had failed to garner elite or popular support away from Putin, or
create a loyal bureaucratic team or political party. XXXXXXXXXXXX
privately told us February 4 that Putin was likely to return as
president because Medvedev had not built the political
institutions necessary for him to be reelected. He gave Medvedev
until the end of 2010 to establish pro-Medvedev political
institutions, but seriously doubted that Medvedev, by way of
First Deputy Presidential Administration Chief Vladislav Surkov,
would overhaul Russia’s political party system.
--------------------------------------------- -
Election Tied to Putin’s Perception of Control
--------------------------------------------- -
¶6. (C) Regardless of his lack of informal levers of power,
Medvedev could return to the presidency if Putin thought that he
could manage Russia from a post other than the presidency.
XXXXXXXXXXXX gave Medvedev a 70 percent chance of being
“reselected” if stability persisted over the next two years. The
decision, she said, was Putin’s, and depended on his perception
of being able to control Russia’s political-economic system and
protect his financial interests. XXXXXXXXXXXX told us that Putin
does not want to return to the Kremlin, but needed to be in a
position of control. He might be able to do that, much like he
has done since 2008, as Prime Minister. Putin, however, needed to

Cable Viewer
ensure that he was positioned to crush anyone who might initiate

de-Putinization, or suggest that Putin had a hand in unsavory
deeds, such as the murder of journalists or the 1999 apartment
bombings.
¶7. (C) While no one with whom we have spoken knows Putin and
Medvedev’s future plans, Medvedev recently responded to a
question on his possible career path. While not indicative of the
future, KROS public relations President and former Presidential
Administration deputy Sergey Zverev told us that he had heard
that a journalist had asked Medvedev an off-the-record
hypothetical question in late January about what position
Medvedev would want if he were no longer President. After
thinking it over for a moment, Medvedev responded Head of the
Constitutional Court or Prime Minister.
--------------------------
Putin in the Driver’s Seat
--------------------------
¶8. (C) Zverev stated that Putin is in total control of the
situation and that he had no other option than to remain in a
position of power, but not necessarily as president. Zverev said
that Putin would be president if he wanted the position. If
Putin wanted Medvedev to be president, then Medvedev would be
president. Medvedev did not necessarily need to have a
bureaucratic team or party support if Putin decided to endorse
Medvedev, because Putin would remain in a position of power where
he could defend his interests and support Medvedev when needed. A
recent joke circulating in Moscow emphasized Zverev’s point:
Medvedev sits in the driver’s seat of a new car, examines the
inside, the instrument panel, and the pedals. He looks around,
but the steering wheel is missing. He turns to Putin and asks:
“Vladimir Vladimirovich, where is the steering wheel?” Putin
pulls a remote control out of his pocket and says, “I’ll be the
one doing the driving.”
--------
Comment:
--------
¶9. (C) Russia’s bicephalous ruling format is not likely to be
permanent based on Russian history and current tandem dynamics.
Medvedev and Putin work well together, but Putin holds most, and
the best, of the cards in the tandem relationship. His return to
the Kremlin is not inevitable, but should things remain stable,
Putin remains in a position to choose himself, Medvedev, or
another person as Russia’s next president. We should continue to
engage where possible with Putin, who will continue to have a
significant say in Russian affairs for the foreseeable future,
regardless of his formal position. Beyrle

Cable Viewer
Twitter this
Digg this page
Viewing cable 10MOSCOW317, THE LUZKHOV DILEMMA




Discussing cables

2010-02-12 2010-12-01 Embassy
10MOSCOW317 SECRET
15:03 21:09 Moscow
VZCZCXRO2697
OO RUEHDBU
DE RUEHMO #0317/01 0431539
ZNY SSSSS ZZH
O 121539Z FEB 10
FM AMEMBASSY MOSCOW

Cable Viewer
RHMFISS/FBI WASHINGTON DC IMMEDIATE

SIPDIS
E.O. 12958: DECL: 02/11/2020

TAGS: PGOV PREL PHUM PINR ECON KDEM KCOR RS
SUBJECT: THE LUZKHOV DILEMMA
Classified By: Ambassador John R. Beyrle. Reason: 1.4 (b), (d).
¶1. (C) Summary: Moscow Mayor Yuriy Luzhkov remains a loyal

member of United Russia, with a reputation for ensuring that
the city has the resources it needs to function smoothly.
Questions increasingly arise regarding Luzhkov's connections
to the criminal world and the impact of these ties on
governance. Luzhkov remains in a solid position due to his
value as a consistent deliverer of votes for the ruling
party. Unfortunately, the shadowy world of corrupt business
practices under Luzhkov continues in Moscow, with corrupt
officials requiring bribes from businesses attempting to
operate in the city. End Summary.
Overview: The Kremlin's Luzhkov Dilemma

---------------------------------------
¶2. (C) Moscow Mayor Yuriy Luzhkov is the embodiment of

political dilemma for the Kremlin. A loyal, founding member
of United Russia and a trusted deliverer of votes and
influence for the ruling party and its leader, Prime Minister
Putin, Luzhkov's connections to Moscow's business community
-- the big and legitimate as well as the marginal and corrupt
-- has enabled him to call for support when he needs it, to
deliver votes for United Russia, or to ensure that the city
has the resources it needs to function smoothly. Luzhkov's
national reputation as the man who governs the ungovernable,
who cleans the streets, keeps the Metro running and maintains
order in Europe's largest metropolis of almost 11 million
people, earns him a certain amount of slack from government
and party leaders. He oversaw what even United Russia
insiders acknowledge was a dirty, compromised election for
the Moscow City Duma in October, and yet received only a slap
on the wrist from President Medvedev.
¶3. (C) Muscovites are increasingly questioning the standard

operating procedures of their chief executive, a man who, as
of 2007, they no longer directly elect. Luzhkov's
connections to the criminal world and the impact that these

Cable Viewer
ties have had on governance and development in Moscow are

increasingly a matter of public discussion. Although Luzhkov
was successful in winning court-ordered damages from
opposition leader Boris Nemtsov for his recent publication
"Luzhkov: An Accounting," Nemtsov and his Solidarity-movement
allies were heartened by the fact that the judge did not
award damages on the basis of the corruption accusations
themselves, but rather on a libel technicality.
¶4. (C) Few believe that Luzhkov will voluntarily relinquish

his post prior to 2012, when the Moscow City Duma must submit
a list of mayoral candidates to Medvedev for his selection.
United Russia will probably call on Luzhkov's political
machine and his genuine public support to deliver votes for
them in the 2011 State Duma elections, as well as the 2012
Presidential contest. With no apparent successor in line,
and with no ambitions beyond remaining mayor, Luzhkov is in a
solid position. The evidence of his involvement -- or at
least association -- with corruption remains significant.
This cable presents that side of Luzhkov -- one that bears
not only on Luzhkov and his handling of local politics, but
on Putin and Medvedev as they move toward the 2012 elections.
Background on Moscow's Criminal World

-------------------------------------
¶5. (C) The Moscow city government's direct links to

criminality have led some to call it "dysfunctional," and to
assert that the government operates more as a kleptocracy
than a government. Criminal elements enjoy a "krysha" (a
term from the criminal/mafia world literally meaning "roof"
or protection) that runs through the police, the Federal
Security Service (FSB), Ministry of Internal Affairs (MVD),
and the prosecutor's office, as well as throughout the Moscow
city government bureaucracy. Analysts identify a
three-tiered structure in Moscow's criminal world. Luzhkov
is at the top. The FSB, MVD, and militia are at the second
level. Finally, ordinary criminals and corrupt inspectors
are at the lowest level. This is an inefficient system in
which criminal groups fill a void in some areas because the
city is not providing some services.
¶6. (C) XXXXXXXXXXXX,

told us that Moscow's ethnic criminal groups do business and
give paybacks. It is the federal headquarters of the
parties, not the criminal groups, who decide who will
participate in politics. XXXXXXXXXXXX argued that the
political parties are the ones with the political clout;
therefore, they have some power over these criminal groups.
MOSCOW 00000317 002 OF 003

Cable Viewer
Crime groups work with municipal bureaucrats, but at a low

level. For example, the Armenians and Georgians were
formerly heavily involved in the gambling business before
city officials closed the gambling facilities. These ethnic
groups needed protection from law enforcement crackdowns, so
they sought cooperation with the municipal bureaucrats. In
such scenarios, crime groups paid the Moscow police for
protection.
Luzhkov's Links to Criminal Figures

-----------------------------------
¶7. (S) XXXXXXXXXXXX

XXXXXXXXXXXX, told us that Luzhkov's wife,
Yelena Baturina, definitely has links to the criminal world,
and particularly to the Solntsevo criminal group (widely
regarded by Russian law enforcement as one of the most
powerful organized crime groups in Russia). According to the
Internet article, "On the Moscow Group," Vladimir
Yevtushenko, the head of the company Sistema, is married to
Natalya Yevtushenko, Baturina's sister. Sistema was created
with Moscow city government-owned shares, and Sistema
initially focused on privatizing the capital's real estate
and gas. Sistema's president, Yevgeny Novitsky, controlled
the Solntsevo criminal gang. Today, Sistema has spun off
into various companies, which implement projects that
typically include 50 percent funding from the Moscow city
government.
¶8. (S) According to XXXXXXXXXXXX, Luzhkov used criminal money to

support his rise to power and has been involved with bribes
and deals regarding lucrative construction contracts
throughout Moscow. XXXXXXXXXXXX told us that Luzhkov's friends
and
associates (including recently deceased crime boss Vyacheslav
Ivankov and reputedly corrupt Duma Deputy Joseph Kobzon) are
"bandits." He told us that he knew this because he formerly
had contacts in these criminal groups, but many of his
contacts have since been killed. XXXXXXXXXXXX said that the
Moscow
government has links to many different criminal groups and it
regularly takes cash bribes from businesses. The people
under Luzhkov maintain these criminal connections. Recently,
ultranationalist LDPR opposition party leader Vladimir
Zhirinovskiy strongly criticized Luzhkov and called for him
to step down, claiming that Luzhkov's government was the
"most criminal" in Russian history. This remarkable
denunciation, carried on state TV flagship Channel One, was
widely seen as an indirect Kremlin rebuke of Luzhkov.
¶9. (S) XXXXXXXXXXXX told us everyone knows that Russia's laws do

not

Cable Viewer
work. The Moscow system is based on officials making money.

The government bureaucrats, FSB, MVD, police, and
prosecutor's offices all accept bribes. XXXXXXXXXXXX stated that
everything depends on the Kremlin and he thought that
Luzhkov, as well as many mayors and governors, pay off key
insiders in the Kremlin. XXXXXXXXXXXX argued that the vertical
works because people are paying bribes all the way to the
top. He told us that people often witness officials going
into the Kremlin with large suitcases and bodyguards, and he
speculated that the suitcases are full of money. The
governors collect money based on bribes, almost resembling a
tax system, throughout their regions. XXXXXXXXXXXX described how
there are parallel structures in the regions in which people
are able to pay their leaders. For instance, the FSB, MVD,
and militia all have distinct money collection systems.
Further, XXXXXXXXXXXX told us that deputies generally have to buy
their seats in the government. They need money to get to the
top, but once they are there, their positions become quite
lucrative money making opportunities. Bureaucrats in Moscow
are notorious for doing all kinds of illegal business to get
extra money.
¶10. (S) According to XXXXXXXXXXXX, Luzhkov is following orders

from the Kremlin to not go after Moscow's criminal groups.
For example, XXXXXXXXXXXX argued that it was only a public
relations stunt from Putin to close gambling. In contrast to
XXXXXXXXXXXX said he did not see the sense in suitcases
of money going into the Kremlin since it would be easier to
open a secret account in Cyprus. He speculated that the
Moscow police heads have a secret war chest of money.
XXXXXXXXXXXX said that this money is likely used to solve
problems that the Kremlin decides, such as rigging elections.
It can be accessed as a resource for when orders come from
above, for example, for bribes or to pay off people when
necessary. XXXXXXXXXXXX postulated that the Kremlin might say
to a governor that he can rule a certain territory but in
exchange he must do what the Kremlin says.
¶11. (C) Notwithstanding Luzhkov's solid position, some of our

contacts believe that cracks have appeared in his armor, due
MOSCOW 00000317 003 OF 003
to his corrupt activities. XXXXXXXXXXXX told us that Luzhkov has

many enemies because his wife has the most lucrative business
deals in Moscow and many people think Luzhkov has received
too much money. The son of the head of the interior police,
Vladimir Kolokotsev, told XXXXXXXXXXXX that Kolokotsev's number
one
job is to get Luzhkov out within a year. Kolokotsev was
credited with removing long-standing Governor Yegor Stroyev
from Orel. XXXXXXXXXXXX asserted that Luzhkov is "on his way

Cable Viewer
out," although he acknowledged that the Kremlin has not

identified a suitable replacement yet. Issues such as
corruption and traffic congestion have, to a certain degree,
eroded Luzhkov's popularity. Putin, XXXXXXXXXXXX said, will
likely pick the quietest and least expected person to replace
Luzhkov.
In Moscow, Everyone Needs a "Krysha"

------------------------------------
¶12. (C) According to many observers, the lawless criminal

climate in Russia makes it difficult for businesses to
survive without being defended by some type of protection.
XXXXXXXXXXXX explained how bribes work in Moscow: a cafe owner
pays the local police chief via cash through a courier. He
needs to pay a certain negotiated amount over a certain
profit. The high prices of goods in Moscow cover these
hidden costs. Sometimes people receive "bad protection" in
the sense that the "krysha" extorts an excessive amount of
money. As a result, they cannot make enough of a profit to
maintain their businesses. If people attempt to forego
protection, they will instantly be shut down. For example,
officials from the fire or sanitation service will appear at
the business and invent a violation. According to
XXXXXXXXXXXX, everyone has bought into the idea of protection
in Moscow, so it has become a norm. In general, Muscovites
have little freedom to speak out against corrupt activities
and are afraid of their leaders.
¶13. (C) XXXXXXXXXXXX explained that Moscow business owners

understand that it is best to get protection from the MVD and
FSB (rather than organized crime groups) since they not only
have more guns, resources, and power than criminal groups,
but they are also protected by the law. For this reason,
protection from criminal gangs is no longer so high in
demand. Police and MVD collect money from small businesses
while the FSB collects from big businesses. According to
XXXXXXXXXXXX, the FSB "krysha" is allegedly the best protection.
He
told us that, while the MVD and FSB both have close links to
Solntsevo, the FSB is the real "krysha" for Solntsevo. This
system is not an incentive for smaller businesses and nobody
is immune; even rich people who think they are protected get
arrested. According to Transparency International's 2009
survey, bribery costs Russia USD 300 billion a year, or about
18 percent of its gross domestic product. XXXXXXXXXXXX argued
that the "krysha" system has led to an erosion of police
internal discipline. For instance, young police officers
spend their money buying luxury vehicles that a normal worker
could never afford.
Comment

Cable Viewer
-------
¶14. (S) Despite Medvedev's stated anti-corruption campaign,

the extent of corruption in Moscow remains pervasive with
Mayor Luzhkov at the top of the pyramid. Luzhkov oversees a
system in which it appears that almost everyone at every
level is involved in some form of corruption or criminal
behavior. Putin and Medvedev's dilemma is deciding when
Luzhkov becomes a bigger liability than asset. While public
sentiment against Luzhkov has grown since the "tainted"
elections in October 2009, United Russia's leadership knows
that he has been a loyal supporter who can deliver voter
support. Ousting Luzhkov before he is ready to go could
create major difficulties because he could link others in the
government to the corruption. While reforming Luzhkov's
questionable activities might seem like the right thing to
do, for now keeping him in place, efficiently running the
city, is United Russia's best option. Ultimately, the tandem
will put Luzhkov out to pasture, like it has done with fellow
long-term regional leaders like Sverdlovsk oblast governor
Edward Rossel and Tatarstan President Mintimir Shaymiyev.
Beyrle

Cable Viewer
Twitter this
Digg this page
Viewing cable 10MOSCOW392, IRAN DOMINATES NETANYAHU'S VISIT TO MOSCOW




Discussing cables

2010-02-22 2010-11-28 Embassy
11:11 18:06 Moscow
VZCZCXRO9554
PP RUEHBC RUEHDBU RUEHKUK RUEHTRO
DE RUEHMO #0392/01 0531132
ZNY CCCCC ZZH
P 221132Z FEB 10
FM AMEMBASSY MOSCOW
INFO RUCNIRA/IRAN COLLECTIVE

Cable Viewer

RUEHJM/AMCONSUL JERUSALEM 0342
SIPDIS
E.O. 12958: DECL: 02/21/2019

TAGS: PGOV PREL RS IR
SUBJECT: IRAN DOMINATES NETANYAHU'S VISIT TO MOSCOW
Classified By: Acting Political Minister Counselor Eric Green for

reaso
ns 1.4 (b) and (d).
¶1. (C) Summary: In a two-day visit to Moscow, PM Netanyahu

pressed his case on Iran while the GOR was more focused on
trade than the MEPP. The Israeli PM downplayed disagreements
over Hamas and welcomed government initiatives to help
crisis-depleted economic relations. Netanyahu came away
pleasantly surprised with Moscow's tougher attitude towards
Tehran and the GOR's willingness to countenance sanctions,
even though disagreement remains on their content. Israeli
contacts are confident Russia will not deliver the S-300s to
Iran anytime soon. End Summary.
----------------------
A Special Relationship
----------------------
¶2. (C) In his first official visit to Russia, PM Netanyahu

met with President Medvedev and Prime Minister Putin as well
as leaders from Russia's Jewish community. Both sides
described this as a productive visit with "frank but positive
discussions."
¶3. (C) Israeli DCM Roi Rosenblit said Netanyahu's visit

emphasized the "special relationship" between Israel and
Russia. He indicated that this the connection between the
two countries has flourished in the past year. Thanks to
visa free travel, 400,000 Russian tourists travelled to
Israel in 2009.
--------------------------------------------- --
Bilateral Economic and Cultural Ties Increasing
--------------------------------------------- --
¶4. (C) According to Dmitri Lebedov, Second Secretary in the

MFA's Israel and Palestine Department, there was some
discussion of economic issues, including cooperation in
nanotechnology, agriculture, tourism and banking. The

Cable Viewer
Russian-Israeli Bilateral Economic and Trade Commission last

met in November 2009. The commission is planning another
meeting in 2010 in Jersusalem although a date has not yet
been selected. Lebedev noted that Putin has agreed to visit
Israel in 2010.
¶5. (C) Rosenblit said both sides blamed the economic crisis
for the decrease in bilateral trade in 2009 which affected
Israeli imports of both raw diamonds and petrochemicals.
Both sides are looking for ways to diversify trade to include
more agricultural products. Rosenblit noted that Russia was
very interested in attracting Israeli investment, citing a
bilateral agreement on industrial research and development
which gives both governments the ability to finance joint
start-ups.
¶6. (C) Elaborating on economics issues, Rosenblit said that

Netanyahu and Putin discussed energy issues. Rosenblit said
that Israel had discussed with Russia and Turkey the
possibility of extending to Israel a gas pipeline but this
proposal became unnecessary after Israel found offshore gas
reserves in Haifa. Although Gazprom is still interested in
building facilities in Haifa and aiding in distribution,
Rosenblit said this was now a question for the private
sector. Rosenblit also claimed that an agreement was
reached to launch a bilateral agricultural business forum in
Moscow, possibly in March 2010. This would also be a private
effort, but under governmental auspices. He also said that
there was some discussion about future outer space
cooperation for peaceful purposes.
¶7. (C) Rosenblit claimed that the 65th anniversary of World

War II and Holocaust remembrance were high on the agenda. He
said that both the GOI and the GOR are unhappy with recent
attempts to revise the history of these events. He noted
that a Holocaust Museum will be built in Russia and a
commemorative site recognizing the Red Army's role in WWII
will be constructed in Israel. Rosenblit also said that PM
Putin invited President Peres to the May 9 Victory Day
ceremonies in Moscow later this year. Medevedev also
reportedly green lighted the idea of a cultural program
including a "Year of Russia in Israel" and "Year of Israel in
Russia" exchange.
-------------------------------------------
Middle East Peace Not High on Either Agenda
-------------------------------------------
¶8. (C) According to Rosenblit, MEPP was not thoroughly

discussed and he "doubted that the Moscow Conference
specifically was mentioned." Rosenblit also downplayed the

Cable Viewer
MOSCOW 00000392 002 OF 003
recent visits of Abbas and Meshaal and the importance

attached to them by the Russians. He said that he believed
Georgia was of greater importance to Russia than Syria,
Lebanon or Palestine.
¶9. (C) Rosenblit said that Netanyahu emphasized his openness

to talks between the GOR and the Palestinians because he
welcomed any way to bring them back to negotiations. "We
wanted everyone to tell Abbas to return to negotiations
because we can't give him a deal until he sits down." He
noted that Israel prefers direct contacts but supports any
kind of negotiations. Rosenblit said that Israel still
insists on talks without preconditions and no interim
agreements: "Nothing is agreed until everything is agreed."
Rosenblit said that Israel supported Russia's efforts to
achieve comprehensive negotiations including Syria and
Lebanon.
¶10. (C) Referring to the recent visit to Moscow of Khaled

Meshaal, Netanyahu told his interlocutors that Hamas should
not be legitimized by other countries. Although Meshaal had
only a 15 minute meeting with Lavrov, it received significant
coverage in the media. Rosenblit said Medvedev asked what
Russia could do to help with Hamas. Netanyahu repeated that
Israel does not see Hamas as a legitimate partner but would
use the Russia-Hamas channel to discuss humanitarian issues
such as the proposed prisoner swap for IDF soldier Gilad
Shalit.
------------------------
Closer than Ever on Iran
------------------------
¶11. (C) Lebedov sought to downplay discussions of Iran saying
that, while it was discussed, other bilateral issues took up
most of the discussions.
¶12. (C) Rosenblit, however, claimed that Iran was clearly at

the top of Israel's agenda for this visit. He said Netanyahu
was "keen to form a group of like-minded parties" who
recognized the danger of Iran's program and would cooperate
to stop its "militant nuclearlization." Netanyahu emphasized
that Israel believes that once Iran has nuclear capabilities,
other regional powers will immediately seek their own nuclear
weapons. Because of this danger, and the threat from Tehran
itself, Netanyahu urged Russia to cooperate on tougher
sanctions against Iran.
¶13. (C) The Israeli side, according to Rosenblit, was

Cable Viewer
pleasantly surprised at Russia's harsh tone on Iran which had

changed dramatically even since FM Lieberman's visit in
November. "We heard words from them that we've never heard
before," Rosenblit claimed, "and we aren't hearing the same
old arguments." Rosenblit credited this change to the
Iranians themselves, saying that their rejection of the TRR
proposal and their decision to enrich to 20 percent had
toughened Russia's stance on Iran. He remarked that just a
few months ago, there was concern in Israel that Iran would
divide the international community, but Iran's actions have
only served as a unifying factor. "Russia's understanding of
the Iranian nuclear issue is closer to ours than it was a few
months ago."
--------------------------
Ready to Discuss Sanctions
--------------------------
¶14. (C) On the issue of sanctions, Netanyahu reportedly

handed the GOR a list of areas where Israel felt sanctions
could affect change in Iran's behavior. The list included
restrictions on Iranian exports of energy products; Iranian
imports of refined petroleum products; the financial and
banking sectors; and, shipping and aerospace companies. He
noted that, while Russia was ready to discuss sanctions, the
two did not necessarily see eye to eye on the specifics.
Both sides did agree, however, that the UNSC had to agree on
sanctions. Rosenblit said that Russian officials do not
believe that unilateral sanctions will have the desired
effect. They believe that the international community has to
maintain united and either agree to impose or not impose
sanctions.
¶15. (C) Netanyahu encouraged Russia to be an example for
China regarding sanctions. Rosenblit said both Israel and
Russia had been working bilaterally with China to convince
them that it was time for a serious discussion on sanctions.
--------------------------------------------- --
S-300s: No Quid Pro Quo, but We Trust Medevedev
--------------------------------------------- --
MOSCOW 00000392 003 OF 003
¶16. (C) When asked about media reports citing Netanyahu

himself which suggested that Israel had agreed not to restart
arms deals with Georgia in exchange for Russia's continued
inaction on the S-300s contract with Iran, Lebedov noted
that, in spite of this statement, there had been no change in
the GOR's policy. He claimed that fulfillment of the S-300s
contract remained a political decision. He remarked that the

Cable Viewer
S-300 system was itself defensive in nature and could not be

used against another party, such as Israel.
¶17. (C) Rosenblit also would not acknowledge that a deal had
been made. Instead, he said that Netanyahu had reiterated
his trust in Medvedev regarding the S-300s. According to
Rosenblit, Netanyahu believes that Russia has taken "all
aspects of regional stability" into account when taking
decisions on the S-300s. Rosenblit did note that the S-300s
issue offered a window onto the different vectors in Russian
foreign policy, with the contradictory statements that their
delivery was imminent, and the delay being caused by
technical and political issues, coming just days before
Netanyahu's visit.
¶18. (C) Rosenblit said that neither Russia nor Israel was
linking the S-300 issue with arms sales to Georgia. Israel,
he claimed, as a Russian partner, was "listening attentively"
to Russia's concerns about weapons supplies to Georgia and
the effects this could have in the region. Israel has
friendly relations with Georgia but the Russian relationship
was also very important, he said. He indicated that both
sides were trying to come to an "understanding."
¶19. (C) Comment: The Russian media built up the Prime

Minster's visit as the final stage of Russia's
Abbas-Meshaal-Netanyahu trifecta of Middle East callers.
While both sides paid lip-service to MEPP issues, Iran was
the main agenda item. This reflects Netanyahu's priorities
and the GOR's belief that it is Washington's job, not
Moscow's, to pressure the Israelis on MEPP issues. Israel
came away pleased with Russia's changed posture on Iran, but
disappointed that its list of sanctions was too ambitious for
the GOR. Separately, the widely reported "quid-pro-quo" on a
mutual freeze of the Russian S-300 delivery for Iran and
Israeli military sales to Georgia could be a convenient
Israeli invention. While Israeli contacts say there is no
formal deal, Netanyahu's statements to the media created
enough speculation to put Russia in a corner. Should Moscow
eventually deliver the system to Iran, Israel has a pretext
to step up arms sales to Georgia.
Beyrle

RITFW - Russia - Chronos

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

RITFW - Russia - Chronos

Uploaded by

Copyright:

Available Formats

Cable Viewer

Viewing cable 06MOSCOW5645, CHECHNYA: THE ONCE AND FUTURE

Reference ID Created Released Classification Origin

http://wikileaks.ch/cable/2006/05/06MOSCOW5645.html (16 of 37)12/5/2010 3:29:26 PM

C O N F I D E N T I A L SECTION 01 OF 10 MOSCOW 005645

EO 12958 DECL: 05/25/2016

Classified By: Ambassador William J. Burns. Reason 1.4 (b, d)

¶1. (C) Introduction: Chechnya has been less in the glare of

http://wikileaks.ch/cable/2006/05/06MOSCOW5645.html (17 of 37)12/5/2010 3:29:26 PM

¶2. (C) President Putin has pursued a two-pronged strategy to

The Starting Point: Problems of the “Russianized” Conflict

http://wikileaks.ch/cable/2006/05/06MOSCOW5645.html (18 of 37)12/5/2010 3:29:26 PM

resists pulling its forces out. Its diplomatic efforts have

¶6. (C) We would propose an additional factor: the determination

¶7. (C) This “military-entrepreneurial” bloc soon formed an

http://wikileaks.ch/cable/2006/05/06MOSCOW5645.html (19 of 37)12/5/2010 3:29:26 PM

The Secret History of the Chechen War

http://wikileaks.ch/cable/2006/05/06MOSCOW5645.html (20 of 37)12/5/2010 3:29:26 PM

¶12. (C) Given the gangsterish background of the war, it is no

¶13. (C) Before they lost this “cash-cow” to their enemies,

http://wikileaks.ch/cable/2006/05/06MOSCOW5645.html (21 of 37)12/5/2010 3:29:26 PM

Russian forces carried out this murder attempt. The cease-fire,

No Exit for Putin

http://wikileaks.ch/cable/2006/05/06MOSCOW5645.html (22 of 37)12/5/2010 3:29:26 PM

also sent to Siberia as the Presidential Representative in

Chechenization, Ahmad-Haji Kadyrov, and the Salafists

¶18. (C) Chechenization is associated with Ahmad-Haji Kadyrov,

¶19. (C) The traditional Islam of Dagestan, Chechnya and

http://wikileaks.ch/cable/2006/05/06MOSCOW5645.html (23 of 37)12/5/2010 3:29:26 PM

commander, the murshid. Shaykh Shamil, the Naqshbandi murshid who

¶21. (C) Wahhabism-based forms of Islam started appearing in

¶22. (C) Al-Khattab’s fighters were never a major military factor

http://wikileaks.ch/cable/2006/05/06MOSCOW5645.html (24 of 37)12/5/2010 3:29:26 PM

Basayev’s initial interest in al-Khattab, as indeed with other

Battle Lines in Peacetime

¶24. (C) Chechen society is distinguished by its propensity to

¶25. (C) This power struggle took on a religious expression.

http://wikileaks.ch/cable/2006/05/06MOSCOW5645.html (25 of 37)12/5/2010 3:29:26 PM

Since Basayev was associated with al-Khattab and Salafism,

¶26. (C) The religious division dictated certain policies to each

http://wikileaks.ch/cable/2006/05/06MOSCOW5645.html (26 of 37)12/5/2010 3:29:26 PM

would take over Maskhadov’s place at the head of the Russian-

¶29. (C) If the objective of Chechenization was to win over

The Military Overstays Its Welcome

¶30. (C) The development of Kadyrov’s fighting force, along with

¶31. (C) Kadyrov could not be fully autonomous until he -- not

http://wikileaks.ch/cable/2006/05/06MOSCOW5645.html (27 of 37)12/5/2010 3:29:26 PM

rejecting Kadyrov’s demand. Under the circumstances, one cannot

In the Reign of Ramzan

¶33. (C) Ramzan Kadyrov has none of the religious or personal

http://wikileaks.ch/cable/2006/05/06MOSCOW5645.html (28 of 37)12/5/2010 3:29:26 PM

their home towns demonstrate that the guerrillas cannot or at

¶35. (C) Despite its successes to date, however, Putin’s strategy

¶36. (C) Another approach is the Chechenization of the Federal

What Can We Expect in the Future?

http://wikileaks.ch/cable/2006/05/06MOSCOW5645.html (29 of 37)12/5/2010 3:29:26 PM

¶39. (C) Prospects would be poor for the nationalists even if

¶40. (C) We expect that Salafism will continue to grow. The

http://wikileaks.ch/cable/2006/05/06MOSCOW5645.html (30 of 37)12/5/2010 3:29:26 PM

defended his doctoral dissertation at Moscow State University --

http://wikileaks.ch/cable/2006/05/06MOSCOW5645.html (31 of 37)12/5/2010 3:29:26 PM

blood-feud reasons. Wahhabist jamaats flourished in the strategic

¶43. (C) Indeed, destabilization is the most likely prospect we