No. 001 To Live and Die in Primorye:The Strange World of Yevgeniy Nazdratenko

                                                                                                        No. 001

                                   U.S. Consulate General, Vladivostok

                                               December 15, 2000

 

 

 

 

To Live and Die in Primorye:

The Strange World of Yevgeniy Nazdratenko

 

By James Schumaker, Acting Consul General, Vladivostok

 

 

The Port of Vladivostok as seen from the U.S. Consulate General

 

 

Introduction and Comment

 1.  For the past seven years, the history of the Primorye region, and Vladivostok in particular, has been written in the fortunes and misfortunes of one man: Primorye Governor Yevgeniy Ivanovich Nazdratenko.  The stocky metalworker and would-be Red Director was first appointed to the post of Governor by former President Yel’tsin in 1993. By almost any objective standard, his stewardship of Primorye has been disastrous, at least in terms of the welfare of the 2.2 million citizens he is charged with governing. Nonetheless, he has won re-election twice by lopsided margins, and is no doubt contemplating running for a third term in 2003.  What is his secret?

 

2.  It turns out that Nazdratenko’s political career reads much like the biographies of many post-Soviet leaders of our time, including former Serbian President Milosevic, current Belarusian President Lukashenko, and, some would now say, Ukrainian President Leonid Kuchma. During his years in office, Nazdratenko has gathered around him a powerful group of men dedicated to two objectives: first, retain and expand the Governor’s political power; and second, use that power to acquire control of every viable economic asset in the region.

 

3.  Nazdratenko has built his political power through the systematic destruction of his rivals, the cowing of the free press, and the transfer of all blame for his economic failures to others. As part of this overall strategy, he has also sought to distract the people from their day-to-day worries by raising the specter of external enemies, drawing on post-Soviet resentment at the outcome of the Cold War, as well as popular fears of China, the Center, and the West. Nazdratenko’s strategy has worked so far, but in the long run he is playing a loser’s game. The ground is already beginning to shift beneath Nazdratenko’s feet, and his political fiefdom is no longer the secure haven it once was, as Russia has moved from the Yel’tsin to the Putin era.

 

Vladivostok, Then And Now

 4.  Like so many other cities in the former Soviet Union, Vladivostok has undergone something of a metamorphosis over the past decade.  Ten years ago, Vladivostok was a militarily closed city, a staid naval town, home to the Soviet Pacific fleet, and a growing center of commercial and business activity. Its politics were repressive, its economy unremarkable, and its citizenry wary of foreigners, but the system worked after a fashion.  In the decade since, Vladivostok has been transformed into a wide-open port town whose primary businesses – fishing and transshipment – are under pressure from more efficient foreign competitors in Japan, Korea, and China.  Vladivostok’s erstwhile pride – the Russian Pacific Fleet – sits rusting at its moorings, or sunk in the bay.  The promise of Western investment to revive Vladivostok’s key economic sectors has largely been unrealized, due to the rapacious activities of the customs and tax police, and the hostile attitudes of the city authorities. 

 

5.  In many ways, the changes in Vladivostok today remind one a little bit of the Jimmy Stewart movie, “It’s a Wonderful Life.” In this movie, the quiet and unremarkable town of Bedford Falls is magically transformed into a crowded and noisy Potterville, whose economy runs on honky-tonks and money of dubious provenance, and whose respectable residents don’t venture out on the streets at night.  The Vladivostok of today does not exactly have a casino or nightclub on every corner, but there is often an advertisement for one.  Organized crime is flourishing. The biggest growth industry is telecommunications (cell phones). The streets, once relatively empty, are jammed with Sports Utility Vehicles – often stolen – as well as older model right-hand drive imports from Japan.   A decade ago, Vladivostok’s late-night TV more often than not consisted of an automated warning to turn off your Soviet TV set before you went to bed, in order to avoid the all too real danger of an apartment fire.  These days, it consists of endless first runs of pirated American movies, with their own form of a financial ticker running across the bottom of the screen.  The ticker does not give stock prices, however, but the numbers of escort services and call girls.  The hills of Vladivostok, which were once lauded for their beauty at the turn of the last century, have now been scarred and dotted by the ugly detritus of the Soviet era: disused industrial sites and hodgepodges of ghastly apartment buildings seemingly plopped down at random. Meanwhile, the city of Vladivostok, and the entire region of Primorye, is suffering from a progressive decline in its basic infrastructure. The buses run on time, but there aren’t enough of them.  The electricity is on and off.  Fuel for heating and gasoline is in short supply.  And the city water system is, shall we say, not going to give Evian spring water a run for its money any time soon.

 

 

Yevgeniy Nazdratenko

Nazdratenko’s Battle For Regional Power

6.  Into this situation has stepped Yevgeniy Nazdratenko and his political allies. Their agenda is not to reform.  Nor is it to reverse the decline of an economy that still has real potential. Instead, as in so many other parts of the former Soviet Union, it is to amass political power, and to use it to acquire those assets that are still turning a profit. In his bid for political preeminence in Primorye, Nazdratenko has been remarkably successful. Over the past seven years, he has won the Gubernatorial elections in 1994 and 1999 by lopsided totals, even when the inevitable accusations of fraud and vote fixing are taken into account.  He has also marginalized much of his local opposition, and, up to now, he has successfully fended off the relatively feeble efforts of the Center to bring him into line.

 

                                                          Nazdratenko Versus Yel’tsin

7.  As he has expanded his political power, and as evidence of his misrule has accumulated, Nazdratenko and his allies have had to spend increasing amounts of time and energy fending off attempts by Moscow to reassert control.  In June, 1997 President Yel’tsin appointed then-FSB Primorye Chief Viktor Kondratov as his personal representative in the region, giving him the power to control the issuance of lucrative fishing and timber quotas and other financial powers, but presumably also charging him to accumulate “Kompromat” on the wily Governor.

 

Viktor Kondratov

 

8.  Kondratov did his job, and filed a report with startling details on the links between many of Nazdratenko’s deputies and Organized Crime figures (a summary of the Kondratov Report, published in “Zavtra Rossii” in 1999, is attached).  Among other things, Kondratov alleged that Nazdratenko’s minions systematically used law enforcement agencies and organized crime figures to enhance their profits, stole money intended to buy fuel oil, and organized a syndicate to smuggle goods via Chechnya.  Nazdratenko’s principal deputy, Konstantin Tolstosheyn, was alleged to have: collaborated with OC group leader Alekseyenkov to sell the Vladivostok hotel and skim off the profits; to have organized the systematic coercion of commercial competitors with the help of OC leaders, as well as the abduction of unfriendly journalists; and to have used members of Vladivostok’s principal OC groups to provide security for his many enterprises.  Vice Governor Chechel’nitskiy was alleged to have participated in fuel theft in cooperation with OC figures (the case was dropped due to Chechel’nitskiy’s “sudden death”), and former Vice Governor Sadomskiy was alleged to have participated the Chechnya smuggling scheme noted above.  In all, six Vice Governors were named in the report.

 

9.  In a Western country, such a report would be political dynamite, to say the very least.  In Vladivostok, it was merely cause for Nazdratenko and his crew to start political maneuvering in earnest. With economic crisis consuming Russia in 1998, Nazdratenko saw his chance and formed an alliance with then-Prime Minister Yevgeniy Primakov, loudly defending him at every opportunity and adopting nearly all of his political and economic positions as his own.  In a few months, Kondratov’s power was first curtailed in February 1998, and then Kondratov himself was transferred back to Moscow in March 1999.  The new Presidential Representative in Primorye was none other than Vice-Governor Valentin Kuzov, Nazdratenko’s personnel chief and yes-man.  Yel’tsin’s attack on Nazdratenko’s power was effectively rebuffed, and thus secured, Nazdratenko began to move against his remaining principal political opponents.

 

Viktor Cherepkov

 

Nazdratenko Versus Cherepkov

 10.  Nazdratenko’s long-running battle with his most prominent opponent, Mayor Viktor Cherepkov, came to a climax in December 1998, when he prevailed upon President Yel’tsin to fire Cherepkov and schedule new Mayoral elections for early 1999.  Since September of 1998, Cherepkov and his supporters had barricaded themselves inside City Hall, after Nazdratenko had arranged for Cherepkov’s name to be stricken from the ballot for the Fall Mayoral elections, allegedly for misusing city funds for his own political campaign.  The election campaign had been marked by heated rhetoric on both sides, and made the recent unpleasantness in Florida look mild by comparison.  In addition to allegations of financial malfeasance, Nazdratenko accused Cherepkov of blocking 14 attempts to form a City Duma, thus making Vladivostok the only major city in the Russian Federation without a local legislature. Nazdratenko also blamed Cherepkov for the frequent outages of heating and power, concluding with commendable understatement: “what has happened is genocide against the residents of Vladivostok.”  Nazdratenko also accused Cherepkov, an ESP enthusiast, of being a UFO loony, noting that: “I don’t understand how it is possible to govern the city from under a table while talking about links with outer space.”

 

11.  The January 17, 1999 elections for Mayor were invalidated when, once again, more than 50 percent of the electorate stayed away from the polls. However, Yuriy Kopylov was appointed Mayor in December, and continued in that post until finally elected on June 19, 2000. Kopylov, needless to say, is Nazdratenko’s picked man. Despite periodic claims to the contrary, it is evident that the abuses of which Cherepkov was accused continue in the Kopylov administration, and with a vengeance.  Nazdratenko now looks elsewhere when assigning blame for the power and heating problems that plague Vladivostok, and does not mention the fact the City Duma is still not formed, having failed to elect a quorum (two out of 22 members) for the nineteenth time in December, 2000.  On the plus side, however, one should note that there is no reliable evidence that Mayor Kopylov is in regular communication with extraterrestrials.

The Economics Of Plunder: Nazdratenko Cleans Up

12. In early 1999, Nazdratenko moved against his other major political opponents in Primorye, including Kray Duma Chairman Sergey Dudnik. Dudnik was accused of mismanaging the Nakhodka Free Zone, and of causing the collapse of Bank Nakhodka, among other things.  A year later, on January 23, 2000, Dudnik was replaced as Chairman by Sergey Zhekov, an apparatchik loyal to Nazdratenko.

 

13. Nazdratenko and his allies also seized the opportunity to move in on the most profitable companies in the Vladivostok area and gain a “piece of the action.”  A case in point was FESCO – the Far East Shipping Company – one of the few major enterprises in Vladivostok that turns a legitimate profit and benefits from the involvement of foreign investors, who have a forty-six percent share.  Nazdratenko first reportedly threatened Andrew Fox, a board member representing foreign interests, with a long term in jail unless the foreigners handed over seven percent of FESCO to the Primorye Administration.  Fox left the country instead. 

Andrew Fox

Then, after a year-long battle, Nazdratenko and his allies effectively took over the management of FESCO in May, 2000, gaining seven seats on the 11-member board of Directors.  FESCO has not flourished under the Nazdratenko management team.  Its assets, once valued at over a billion U.S. dollars, now are valued at under 400 million. FESCO is losing about ten to twenty percent of its asset value every year.

 

                        To Live And Die In Primorye: The End Of A Free Press

14.  Not the least of Nazdratenko’s objectives over the past decade has been the taming of Primorye’s boisterous free press.  He has succeeded for the most part, driving many small newspapers out of business, and muzzling many of those that remain. Nazdratenko exerts similar control over the electronic media. Late last year, the director of the independent radio station Radio Lemma was called in by a local official and told to watch his step as he crossed the street, lest he “have an accident.”  The director got the message, and toned down Lemma’s broadcasts in Primorye. In late 1999, the Far East Edition of Moskosvskiy Komsomolets ran a headline satirizing Nazdratenko’s election campaign slogan “To Live and Work in Primorye.”  Displaying the picture of a dead body on its front page, it led with the headline “To Live and Die in Primorye.”  This was probably an attempt to satirize the over-rosy view the largely Nazdratenko-controlled media sought to paint of their glorious leader.  Also, perhaps unconsciously, it echoed the theme of a particularly unsatisfactory American movie, “To Live and Die in L.A.,” which tells the story of two policemen who, in their pursuit of a notorious gangster, descend to his own moral level.  Whatever the motivation behind the piece, it enraged Nazdratenko and his entourage.  The end result was that the Moscow headquarters of the newspaper pronounced it biased and promptly installed a censor, prompting the resignation of one of the editors who had authored the piece. The Vladivostok News faces similar pressures, and appears to have toned down its reporting as well.  And in early December, two reporters from ORT television’s Far East Bureau were fired and replaced by two reporters who openly support Nazdratenko.  “Zavtra Rossii,” which published the Kondratov report (see para 8) was driven out of business.  Recently, we contacted the editor of that newspaper, and she denied ever having run the Kondratov story.

 

15.  A climate of fear has taken over in the Primorye press corps, and it is not just because of the threat of being put out of business or thrown out of a job. On December 6, Maya Shchokina, the director of Vladivostok’s Dalpress, was shot and critically wounded by two unidentified gunmen. Dalpress is the major state-run publishing firm in Primorye, publishing 87 newspapers, or 90 percent of the region’s total.  It was the second attack on Shchokina since she had fired one of Nazdratenko’s supporters, and refused a request by Nazdratenko representatives to cancel the print run of Moskosvskiy Komsomolets, which ran a number of scathing articles about the Governor during the 1999 election campaign. The Governor’s office, after much prompting, said it had no information on the attack and would send inquiries to Federal law enforcement agencies and Primorye’s Federal Inspector, Pavel Lysov.

  

The Empire Strikes Back: Putin Renews The Challenge

 

16.  The early retirement of Yel’tsin and the arrival of Vladimir Putin on the Russian political scene put an end to Nazdratenko’s dream of ruling his fiefdom by the sea with majestic impunity. Nazdratenko and his colleagues continued with their strategy of supporting the Center in exchange for non-interference, but with limited success.  They joined the Yedinstvo Party, and turned it into the preeminent political party in Primorye. Nazdratenko also attempted to enhance his clout by regular trips to Moscow and liberal dispensations from his "Zelyonyy Chemodanchik" (suitcase full of money). 

 

17.  At first, this strategy appeared to be working.  Nazdratenko was able to gain Putin’s blessing to deal harshly with the one remaining government body in Vladivostok not doing his bidding: the Primorye Arbitration Court.  This body had ruled in a number of bankruptcy cases against the business interests of Nazdratenko and his cronies. Tatyana Loktionova, the “rebellious” chairperson of the Arbitration Court, was dismissed after an investigative team was sent out from Moscow.

 

18.  However, recent developments suggest that Nazdratenko has fallen out of the federal government’s favor and is in danger of being ousted from the governor’s seat. Early in his term, Putin began reasserting the control of the Center over the regions.  Seven Presidential Representatives, or “supergovernors” were appointed to oversee the work of vast regions.  The arrival in Khabarovsk of General Konstantin Pulikovskiy, Presidential Envoy to the Russian Far East, effectively sent Valentin Kuzov, Nazdratenko’s tame Presidential Pepresentative, to the knacker’s yard and ushered in a new era in Center-Primorye relations.

 

Dark Summers, Frozen Winters 

19.  During the summer of 2000, several areas of Primorye were hit by serious electrical power blackouts, which lasted up to 16 hours per day.  Dalenergo, the primary energy supplier to the region, was forced under the existing cost-sharing arrangements to cut off power to consumers who did not pay their bills, and in turn Dalenergo was unable to find sufficient fuel to generate the power necessary to power the grid. Nazdratenko, pointing the finger of blame everywhere but at himself, persuaded Moscow to allow the removal of the previous head of Dalenergo -- a Chubays man -- and his replacement by Yuriy Likhoyda, Nazdratenko’s deputy in charge of energy questions.  Unfortunately, the power shortages continued into the fall and winter, and soon the major problem for many outlying municipalities was not light, but heat.  Nazdratenko began looking elsewhere to cast blame.

 

Konstantin Pulikovskiy (foreground) and Konstantin Tolstosheyn

20. As the fuel crisis began to build, Pulikovskiy visited Primorye in early October - a visit undertaken earlier than planned in order to coincide with Nazdratenko’s hospitalization. During his visit, Pulikovskiy commented that he was displeased with the “ineffectiveness of fishing quota distribution by Primorye management.” When Pulikovskiy completed his familiarization visits to all the RFE territories on October 20, he gave a press conference in Magadan in which he mentioned that he considered Primorye to be the “region with the most irrational management…,” and remarked that “the economic situation in Primorye has been worsening for the past four years, which demonstrates the economic incompetence of the regional administration…” Pulikovskiy also noted that most complaints he receives come from Primorye. “People did not complain about bad housing or low salary. They complained about the governor’s, mayor’s, and federal government’s actions. This means that the local government is far from people and is not performing its functions.”

 

21.  On October 26, Pulikovskiy gave a TV interview in which he said that the Primorye Governor and Dalenergo managers were informed that they “will have to resign,” if they fail to provide stable heat and energy supplies to Primorye. Pulikovskiy said that “if these leaders are not able to stabilize the energy situation in the region, then they cannot manage the region and should not occupy the positions for which they were elected or appointed.”

 

22.  Since then, Nazdratenko’s team has failed to curb the energy crisis in Primorye, the extent of which has been so serious that it made the major news in all federal and regional mass media, as over 90,000 people were left totally without heat for extended periods in sub-zero temperatures. Putin called the situation “a crying shame,” while United Energy Systems head Anatoliy Chubays blamed Nazdratenko’s incompetent management for the problem.  He noted, in particular, that “we can deliver the heat, but we cannot channel it through the destroyed municipal infrastructure.” Nazdratenko countered, implausibly, that his team could not solve the crisis because Primorye was owed over 5 billion rubles by the Federal authorities.

 

23. In late November, Nazdratenko left for Moscow “to solve the energy problem resulting from higher-than-expected costs of fuel and nonpayment of federal debts to Primorye,” where he remained for over a week. While there, he met with Putin, Prime Minister Kasyanov and numerous Duma deputies.  Significantly, while many Deputies were critical of Nazdratenko, he received strong support from Zyuganov’s Communists and Zhirinovskiy’s Liberal Democrats (they know a like-minded autocrat when they see one). Nazdratenko returned to Primorye with promises of Federal infusions of cash, but with few new places to turn or people to blame if the heat stays off in Primorye. Putin, like a calculating fisherman, is slowly drawing the net around Nazdratenko, the biggest fish of all.

 

 

How Will It End?

 

24.    Like his political contemporaries, Nazdratenko faces a fundamental and inescapable problem: he is playing a loser’s game. In the end, if he does not provide for the security and welfare of his own people, they will turn on him, and his hold on power, no matter how absolute it may appear in the short term, will eventually collapse. It is unlikely that he will suffer the fate of former Serbian leader Milosevic, whose own people drove him out of office, after taking over a decade to awaken from their delusion that Serbia’s misfortunes were all the fault of those without, and not those within. It is also unlikely, however, that he will last as long as Belarusian leader Lukashenko, whose people are legendary for their political passivity, and who have many years to go before they wake from their political sleep.  What is most likely is that at some point, a stronger Center will reassert its power over Primorye, and drive Nazdratenko from office. Word on the street in Vladivostok is that Putin is giving Nazdratenko until June to straighten things out before taking decisive action.  This may simply be wishful thinking, but there is little doubt that most of the people of Primorye would breathe a sigh of relief should Nazdratenko be removed.  In the meantime, the people of Primorye will continue to endure their summers and winters of discontent, and to hope that the fuel will last.

 

 

Postscript

 

25.  On February 5, 2001, following a phone conversation with President Putin, Governor Nazdratenko announced his resignation.  Shortly afterward, Nazdratenko’s principal deputies, including First Deputy Governor Tolstoshein, also resigned.  On February 16, Putin appointed Nazdratenko as Minister of Fisheries, potentially a very lucrative post for someone with Nazdratenko’s connections in the Primorye fishing industry.  Gubernatorial elections have been scheduled for May 27.  The Center’s candidate is Presidential Representative Pulikovskiy’s principal deputy, Gennadiy Apanasenko. In addition, there are more than thirty other candidates in the race, many of whom were political opponents of Nazdratenko.  In the meantime, acting Governor Valentin Dubinin is in charge of day-to-day operations in Primorye.  The electricity and fuel oil crisis in Primorye has abated, with the onset of warmer weather.           

 

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Attachment:  The Kondratov Report (Note: the attachment was printed in full in the newspaper “Zavtra Rossii” in 1999.  English translation provided by an independent source.)

 

 

From Viktor Kondratov

Representative of the President of the Russian Federation in

Primorye

22 Svetlanskaya Street

Vladivostok, 690110

Tel. 22-39-13

Fax 22-18-37,

N 277-c 19.06.97

 

To Ye. V. Savostianov

Deputy director

Head of the staff of the Administration of the President of Russia

Moscow

 

Beginning in 1993, the negative tendencies of local authorities' corruption and their uniting with the leaders of organized crime groups have continued to develop. The staff policy of choosing directors for governmental agencies based on the principle of personal faith significantly boosts the crisis in the social and economic spheres.

 

Following the governor's initiative, individuals who use their work in Primorye power structure for strengthening their own influence on the economic mechanism in order to increase their own wealth were appointed on the key positions in the local government. Besides, officials use both the law enforcement agencies and opportunities of working with organized crime leaders for their profit-seeking interests.

 

Thus, the first governor's deputy, K.B. Tolstoshein, while mayor of Vladivostok, actively participated in the process of illegal privatization of municipal property. Together with a leader of an organized crime group, Alexeyenkov, he conducted an unprecedented deal for selling the largest hotel, the Vladivostok, to Amis and Co. Company for virtually nothing. The stock exchange experts estimate the cost of the hotel as 40 billion rubles, while it was sold for 127 million [Editor's note: This was apparently during a time when the exchange rate was 6,000 rubles to the dollar, making the value of the hotel $6.7 million]. As a payment for such a "service," Tolstoshein's under-aged daughter received 20 percent of stock of the Amis and Co.

 

Along with illegal financial operations, Tolstoshein uses his connections with the leaders of criminal groups in order to conduct violent operations toward competitors and provide for the normal functioning of the commercial companies under his control, such as Oksitur, Voles, and Magnolia. As a punishment for the criticism on one of the Vladivostok Broadcasting Corporation's (VBC) radio programs, with the help from the criminal leader A.B. Makarenko, he organized abduction of radio reporters [Alexei] Sadykov and [Andrei] Zhuravlyov.

 

Because of the pressure on the detectives during the investigation of the criminal case, the police failed to reveal the cause of the attack on the reporters.

 

Together with the head of Vladivostok's Pervorechensky district, Mr. Dyomin, Tolstoshein helped the leaders of a criminal gang, the Babakekhyan brothers, to get control over the so-called Chinese market by reregistering documents on their names. He received a bribe for that in the form of a Lexus car of an approximate cost of $30,000.

 

Via his relatives, Tolstoshein founded the commercial companies Atlantida, Bgat, Spektr and others. The leaders of the largest and most stable criminal groups -- Kostenko, Alexeyenkov, Koptev, and Petrakov, who were sued for violent crimes many times -- are providing the companies' security. Tolstoshein's mother-in-law, Kutilova, 67, is a co-founder of eight commercial companies and has up to 35 percent of the stock in them. For the assistance in getting favorable conditions for the commerce, Tolstoshein, having broken the law, received a five-room apartment worth 600 million rubles from V.G. Beloshapkin, director of Dalvemo.

 

Vice Governor V.S. Dubinin drew our attention while investigating Chechen community criminal leader P.A. Aldamov, who was involved in major financial machinations, money extortion from merchants, and the murder of a tax police officer. Dubinin used his power to assist Aldamov in organizing wholesale trade of oil products, investing illegal capital of the Chechen community into the region's economy, covering debts of the companies under his control from the regional budget.

 

In 1996, the local FSB office investigated a criminal case on Vice Governor M.B. Chechelnitsky, later the chairman of the Committee for Fuel Resources, who was conducting machinations concerning fuel  deliveries for the region, together with the criminal leader I.V. Vorontsov, who has been convicted a several times, once for a murder. The investigation revealed that Chechelnitsky had misused 400 billion rubles out of the regional money. The criminal case was closed because of Chechelnitsky's sudden death.

 

According to the preliminary results of an audit the FSB conducted together with the Finances Ministry regional office on the companies delivering fuel, during the heating seasons of 1995-1996 and 1996-1997, fuel worth 100 billion rubles was not delivered to the region despite the contracts. This is regarding the fact that the governor directly controls the work of the heads of the Department for Household Maintenance and Committee for Fuel Resources, V.G. Chepik and S.B. Zorin.

 

In 1994, during the time of privatizing the largest fishery company, Primorrybprom, the corrupt connections of Vice Governor F.T. Novikov revealed themselves actively. Using his power, Novikov promoted for the position of the chairman of the board A.M. Brekhov, later arrested by regional prosecutors for organizing the contract killing of a former general director of the company, A.S. Zakharenko. Together with Brekhov, Novikov used the money of a Vladivostok criminal gang leader, O. Kozhemyako, and a Moscow criminal leader, Yu. I. Yesin, arrested by Italian police, to acquire a controlling block of shares of the company. Novikov's share was 27 percent. In November of 1996, Adam Magomed Eminovich Imadayev was hired as the governor's advisor on national issues. This was the same person as Adam Mikhailovich Kovalyov. He drew the FSB attention as an individual who had two civilian passports. He used one of the passports to establish a commercial firm called Primorye Regional Accounting Chamber. We have just received evidence that Imadayev, with the help of [former] Vice Governor N.G. Sadomsky, is trying to organize an air company to fly from Grozny to the United Arab Emirates and other countries of the region. Considering the absence of border guard and customs regimes in Grozny, he plans to smuggle in expensive goods and food products.

 

Together with the revealed abuses of the law found in the Primorye Bank, which, following the regional administration's instruction, had concentrated all the budget-financed companies (we reported that to the first vice premier of the Russian Federation government, A. Chubais), there is a document confirming that [former] Vice Governor V.A. Kolesnichenko has a special account for 300 million rubles with 1,000 percent interest.

 

All the above has been reported following your order.

V.Ye. Kondratov

Representative of the President of the Russian Federation in Primorye