07MOSCOW933, RUSSIAN SCIENCE: TURNING BIOWEAPONS INTO BOTTLE

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Reference ID Created Released Classification Origin
07MOSCOW933 2007-03-05 13:04 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXYZ0001
PP RUEHWEB

DE RUEHMO #0933/01 0641304
ZNY CCCCC ZZH
P 051304Z MAR 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 7991
INFO RUEAIIA/CIA WASHDC
RUEKJCS/SECDEF WASHDC
RHEHAAA/WHITE HOUSE WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEHNSC/NSC WASHDC

C O N F I D E N T I A L MOSCOW 000933 
 
SIPDIS 
 
SIPDIS 
 
DEPARTMENT ALSO FOR ISN/CTR (GOODMAN, DOLLIFF, BERNSTEIN), 
EUR/RUS (GUHA), EUR/ACE, OES/STC (DAUGHARTY) 
. 
WHITE HOUSE: OSTP FOR MARBURGER 
 
E.O. 12958: DECL: 03/02/2017 
TAGS: KIPR KPAO TBIO RS
SUBJECT: RUSSIAN SCIENCE: TURNING BIOWEAPONS INTO BOTTLE 
TOPS 
 
REF: 06 MOSCOW 11278 
 
Classified By: EST Counselor Daniel O'Grady. Reasons: 1.4(b,d) 
 
1.  (C) SUMMARY:  A super-secret, elite bioweapons institute 
during Soviet times, the Institute of Immunological 
Engineering (IIE) now hosts an American company on its 
territory in an attempt to replace the state funding that 
ceased in 1994.  Institute Director Dr. Sergey Pchelnitsov, 
who has spent most of his career at IIE, described to 
visitors on February 22 a once-great institute that somehow 
survived the "shock therapy" of the perestroika era, leaving 
behind its glory days as a magnet for some of the USSR's best 
biochemists to become a facility with a skeleton crew staff, 
contrasting with state-of-the-art equipment provided by the 
international community via nonproliferation assistance 
programs.  The Institute has proven its entrepreneurial 
abilities by finding tenants for several of its facilities, 
yet has not found commercial success from its scientific 
endeavors.  IIE weathered the loss of GOR funding, albeit 
emerging from the storm on a far more modest scale.  It is 
less likely to survive the loss of international grants.  END 
SUMMARY. 
 
---------------------------------- 
From Scientist to Property Manager 
---------------------------------- 
 
2.  (C) On February 22, EST visited IIE, which is located in 
the Chekhov district of the Moscow region, accompanying a 
representative of the International Science and Technology 
Center (ISTC) and a scientist from the Department of State's 
Jefferson Science Fellows program.  Established in 1978 by 
the USSR Council of Ministers, IIE belonged to the Soviet 
Union's elite Biopreparat structure, which was charged with 
developing chemical and biological warfare agents.  In 1994, 
IIE was abruptly abandoned by the Russian government, an 
action which IIE Director Sergey Pchelnitsov likened to being 
"thrown under a locomotive."  While funding levels had been 
"excellent" during the Soviet era, IIE suddenly found itself 
without a kopek of government support.  Instead, the Russian 
government revamped IIE as a joint stock company, retaining 
49 percent of the shares.  Of that 49 percent, 10 was awarded 
directly to Biopreparat and the other 30 percent was placed 
in a trust for Biopreparat to oversee. 
 
3.  (C) Pchelnitsov praised the situation, observing that "If 
(the shares) hadn't gone to Biopreparat, they could've gone 
to anyone."  (Note: Biopreparat was represented at the 
meeting by Leonid Mikhailovich Keromkin, deputy director for 
the direction of science at Biopreparat headquarters in 
Moscow.  End note.)  Nearly drowning in debt and facing 
bankruptcy, the Institute surrendered some of its property to 
settle its tax bills and turned to the ISTC to fund its 
scientific research.  Since 1994, the ISTC has exclusively 
funded IIE's research; Pchelnitsov maintained the GOR has 
contributed nothing to the Institute's survival. 
 
4.  (C) Money to maintain the Institute's aging 
infrastructure has been generated by property-related 
revenue, totaling 30 million rubles annually.  IIE's main 
tenant is Alcoa, which uses its space to manufacture the 
metal tabs found on soda cans.  Three to four other companies 
are now renting space to manufacture "biomedicines." 
Pchelnitsov noted that IIE hopes to someday manufacture its 
own biopharmaceuticals, but currently "has no means" to do 
so.  IIE also provides basic utilities to its tenants, 
although none of the IIE scientists work with the private 
sector projects being conducted on IIE property.  When asked 
why companies are attracted to the IIE facilities, 
Pchelnitsov praised the Institute's "pristine surroundings 
and environment."  (Note: It was somewhat incongruous to hear 
about the pristine ecology of a former bioweapons lab.  End 
note)  Pchelnitsov claimed that the water table is incredibly 
pure and has unique characteristics -- it is only one of 
three such water sources within Russia.  He said he hopes to 
bottle and market the water at some point.  Indeed, he 
apologized that the water served to his guests was from 
elsewhere. 
 
----------------- 
Bygone Glory Days 
----------------- 
 
 
5.  (C) Despite the Institute's relative success in finding 
tenants from the private sector, Pchelnitsov bemoaned the 
impact capitalism has had on Russian science.  Science, 
according to Pchelnitsov, is now racked by the "disease" of 
business.  Promising young scientists shun research 
institutes in favor of the healthy salaries the business 
community can provide.  Whereas in the Soviet era IIE offered 
a host of alluring perks to young researchers from subsidized 
housing to special kindergartens, the Institute no longer 
even has a dormitory or cafeteria to recommend it.  When 
asked how Russian science could attract the next generation 
to its labs, Pchelnitsov wistfully said he believed
 the 
business sector would soon be full, thus forcing potential 
scientists to turn to research institutes such as his. 
Meanwhile, however, IIE's staff is dwindling; it has slid 
from a peak of 500 total staff in 1993 to about 100 now, of 
whom only 18 are full PhDs.  Most of the scientists with whom 
EST met had been at the Institute from between 20 to 30 
years. 
 
6.  (C) Soda cans and bottled water are a long distance from 
IIE's original mission.  Pchelnitsov relived the Institute's 
glory days with his visitors, fondly reminiscing about his 
work with the USSR Ministry of Defense on pathogens and 
regional immunities.  From his desk in the near-empty 
institute, Pchelnitsov recounted how the MOD provided him 
with "thousands" of conscripts to treat with experimental 
interferon tablets.  Explaining that the number of indigenous 
populations in the USSR produced a great diversity of 
diseases and immunological reactions to study, Pchelnitsov 
cited one example of the Institute's work with a military 
divers school in Sevastopol as a highlight. 
 
7.  (C) IIE continues to conduct scientific work with ISTC 
funding.  When asked whether they had tried to diversify 
their funding sources to include GOR research grants, IIE 
staff responded that it had proven impossible to obtain any 
funding from Russian ministries since the Institute was now 
completely "outside" official responsibility.  The Ministry 
of Health, for instance, was interested in only funding the 
institutes for which it had oversight.  Approaches to Federal 
Public Health Officer Gennadiy Onishchenko had produced no 
results.  He is interested in promoting and funding only 
those institutes under his purview, an approach the 
scientists felt was reasonable. 
 
8.  (C) Applications to the U.S. National Institutes of 
Health (NIH) were also impossible, since NIH grants would be 
subject to Russian taxes, rendering the actual grant amounts 
so small as to be worthless.  Thus, the IIE scientists made 
repeated pitches in support of the ISTC, one going so far as 
to display a PowerPoint slide that baldly stated, "ISTC Is 
Great."  On a tour of the facilities, each ISTC project 
number on each piece of equipment was pointed out, driving 
home the point that without international support, IIE would 
have withered long ago.  While the premises were 
well-maintained, albeit basic, the stillness characterizing 
the Institute was not just a result of the thick blanket of 
snow outside, but the dearth of personnel. 
 
9.  (C) Despite their entree into property management and 
plans to bottle water, IIE management and staff indicated 
they had met with little success in commercializing their 
research. Indeed, Pchelnitsov and his staff professed to be 
unaware that the ISTC even had a commercialization team and 
could contribute resources and advice to IIE on marketing 
ISTC project results.  While in many ways the Institute has 
adapted its administrative approach to market conditions by 
bringing in tenants, it has yet to view its scientific 
research from a market-oriented perspective. 
 
-------------------------- 
Comment: The Future is Now 
-------------------------- 
 
10.  (C) In some ways, the cocoon of ISTC funding has 
buffered the IIE from orienting its work to meet market 
demand.  Pchelnitsov has found creative ways to improve the 
administration of the Institute, but the approach to 
scientific research is remarkably Soviet-era in its 
indulgence of research for the sake of "science," rather than 
revenue.  Other mementos of the Soviet era abound, from the 
 
 
blank areas on the wall once dedicated to proclamations of 
the Communist Party to the quaint "Parents' Corner," 
undoubtedly once heavily used when the Institute actually 
employed staff young enough to have small children.  Another 
relic of the Communist era was the presence of Dr. Keromkin, 
the Biopreparat minder who said little but listened to 
everything.  While the GOR may not provide any financial 
support, it does take an interest in the Institute's work and 
interactions with foreigners. 
 
11.  (C) IIE's trajectory -- from its illustrious origins to 
its current humble state -- might foreshadow what other 
institutes will experience if the current trends in science 
reform continue (REFTEL).  The metaphorical train that "ran 
over" IIE in 1994 appears to be heading for the institutes 
affiliated with the Russian Academy of Sciences (RAS).  These 
RAS institutes have taken GOR funding for granted and are 
generally unused to commercialization.  Like IIE, many of 
them will first turn to property management for revenue, 
rather than commercialization.  This will take them farther 
and farther from the work they dreamed of doing, back in an 
era where to be a scientist was a mark of prestige, one that 
came with housing, special schools for one's children, and 
financial security.  As IIE has demonstrated, nostalgia is a 
powerful thing, but it won't generate funding. 
BURNS

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