Monthly Archives: August 2008

08MOSCOW2603, FORMER PM KASYANOV DOWNBEAT ON COSTS OF WAR,

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Reference ID Created Released Classification Origin
08MOSCOW2603 2008-08-29 15:34 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO1872
RR RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHMO #2603/01 2421534
ZNY CCCCC ZZH
R 291534Z AUG 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 9773
INFO RUCNCIS/CIS COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 002603 
 
SIPDIS 
 
E.O. 12958: DECL: 08/28/2018 
TAGS: PREL PGOV RS BO UP
SUBJECT: FORMER PM KASYANOV DOWNBEAT ON COSTS OF WAR, 
OPPOSITION PARTIES 
 
REF: MOSCOW 2550 
 
Classified By: Ambassador John Beyrle for reasons 1.4 (b) and (d). 
 
1. (C)  Summary: In an August 28 meeting, Ambassador and 
former PM Mikhail Kasyanov discussed the Russian-Georgian 
conflict, its economic consequences, and the future electoral 
prospects for liberal opposition parties.  Kasyanov, who 
heads the liberal Russian People's Democratic Union (RNDS) 
party, argued that Russia had employed disproportionate force 
against Georgia and should withdraw its troops from Georgia. 
According to Kasyanov, the Russian people -- fed only 
propaganda from pro-Kremlin media -- did not realize the 
Western stance toward Georgia before the conflict.  Kasyanov 
added that the potential economic fallout from the conflict 
could lead to international investor skepticism and broader 
financial repercussions.  Regarding opposition parties, 
Kasyanov observed that most Russians are too afraid to oppose 
the government publicly, which limits opposition 
effectiveness.  Kasyanov described himself and his party as 
the true voices of democracy in Russia.  Kasyanov also 
revealed that he had canceled his planned September trip to 
Washington.  End Summary. 
 
Economic Costs of "Disproportionate" War, Lower Oil Prices 
--------------------------------------------- ------------- 
 
2. (C)  Opening a wide-ranging discussion with the Ambassador 
August 28, former PM Kasyanov stated firmly that Russia 
should withdraw its troops immediately from Georgian 
territory, adding that Russia's actions against Georgia had 
been aggressive and disproportionate.  The "buffer zone" that 
Russia aspires to create in Georgia, he added, does not 
reflect a "real zone" in any meaningful sense that keeps 
Russian troops off Georgian soil.  Kasyanov acknowledged, 
however, that Russia's actions are now a fait accompli, which 
he predicted will beget numerous negative consequences. 
 
3. (C)  Ambassador discussed the difference between broad 
Russian popular support for actions against Georgian 
President Saakashvili and less-than-unanimous support for 
recognition of Abkhazia and South Ossetia, noting that 
Russians may feel differently about the long-term costs of 
the latter.  Kasyanov agreed that the financial costs of 
recognition would be enormous for Russia.  The sharp decline 
of the Russian stock market after the conflict began, 
Kasyanov observed, has "left the business community 
depressed," and a continuing economic downturn would threaten 
to "destroy their business structures."  For example, 
Kasyanov said, deflated stock prices and decreased investor 
confidence could result in major margin calls.  Kasyanov 
predicted that after the new fiscal quarter begins on October 
1 investors will begin to pull money out of Russia, which 
would result for the first time in years in a weaker ruble 
and shrinking foreign reserves. 
 
4. (C)  Kasyanov said that decreasing oil prices worry him 
the most, however.  Although oil prices remain above 100 USD 
per barrel, Kasyanov said that the price has dropped sharply 
this summer.  According to Kasyanov, Russia will have 
significant difficulties financing its deficit if oil drops 
to near 70 USD per barrel because the Russian budget assumes 
oil prices above 67 USD per barrel.  Looking at the mid-term, 
Kasyanov warned that lower oil prices together with investor 
angst stemming from the Georgian conflict would lead to 
inadequate refinancing and then "within one to two years 
there will be serious problems" because "state monopolies 
have destroyed competition" that otherwise could buoy the 
economy.  The added direct costs of the war with Georgia and 
of supporting Abkhazia and South Ossetia would compound these 
difficulties, Kasyanov said.  "Russian leaders are 
unprincipled," Kasyanov noted, observing that in Russia money 
equals power and the current Russian leadership is not overly 
concerned with the economic hardships of average Russians. 
Instead, he added, prestige and money are the leadership's 
goals. 
 
Nervous Neighborhood: Ukraine and Belarus 
----------------------------------------- 
 
5. (C)  Ambassador noted some analysts' view that the 
situation in the Caucasus would freeze as it did in Cyprus, 
with the more worrisome prospect now being possible Russian 
provocations toward Ukraine.  For example, Russia could begin 
issuing Russian passports to Ukrainians as Russia did in 
South Ossetia.  Kasyanov agreed that Ukraine poses a serious 
situation that requires close observation.  Noting the role 
of Europe in resolving the current situation, Kasyanov 
observed that the European Parliament now realized that 
everything is not normal in Russia.  Kasyanov said that he 
 
MOSCOW 00002603  002 OF 002 
 
 
was not convinced that Europe knows how to deal with Russia, 
with one exception: German Chancellor Merkel.  "She is the 
only one in Europe who can quietly say strong things" since 
"she understands how to treat Russians."  Kasyanov also 
speculated that the Russia-Georgia conflic
t may lead 
Belarusian President Lukashenko to open more to the West now 
that he has witnessed Russian aggression against a former 
Soviet republic.  "Lukashenko was shocked to see that he 
could be next," Kasyanov observed, adding that the Belarusian 
leader may now consider it wiser to democratize rather than 
face Russian tanks down the road. 
 
6. (C)  Ambassador said that the United States does not seek 
a relationship of enmity with Russia, but the conflict would 
have consequences for bilateral relations.  Russians, 
according to Ambassador, perceive the situation now as 
"everyone versus us."  Kasyanov agreed that such negative 
relations and perceptions are unfortunate.  However, this 
current row is not permanent since Russian "government elites 
are not ideological opponents of the West" as they were in 
Soviet times. 
 
7. (C)  Explaining how the conflict had unfolded with such 
strong Russian public support, Kasyanov stated that Russians 
"did not understand Georgia or its Rose Revolution."  For 
this reason, 90 percent of Russians oppose Saakashvili 
because of what they perceive as the Georgian leader's 
unilateral actions, even if they were provoked by Russia. 
Without access to a free mass media (in particular 
television), Russians did not know enough beforehand about 
the West's position on Georgia to understand that the United 
States would not instigate a war in Georgia.  "People who see 
Western media, BBC or CNN, see the other side," Kasyanov 
remarked.  Ambassador confirmed that the USG in no way 
encouraged Saakashvili to act militarily against Russia. 
 
Opposition Prospects Low 
------------------------ 
 
8. (C)  Ambassador raised the prospects for liberal 
opposition parties in Russia, asking about the recent August 
19 joint statement signed by Kasyanov, Vladimir Ryzhkov of 
the Republican Party, and Nikita Belykh of the Union of Right 
Forces (SPS).  Kasyanov described a recent rally held on 
August 22 (Russian National Flag Day) at the White House in 
Moscow, which he described as peaceful but underattended (see 
reftel: Only 500 people attended despite Kasyanov's 
prediction that more than 1,000 would come).  A major 
problem, Kasyanov lamented, is that Russians are afraid to 
oppose the ruling government publicly.  When pressed on 
whether other members of the new liberal party coalition are 
speaking out enough to encourage wider public opposition, 
Kasyanov quickly and firmly responded, "No."  Kasyanov 
identified Yabloko leader Sergey Mitrokhin in particular as 
unwilling to do any heavy lifting for the liberal opposition. 
 (Note: Mitrokhin's signature was conspicuously missing from 
the August 19 joint statement.)  Kasyanov described himself 
as alone in being a voice for democracy in Russia.  In an 
aside to the Ambassador, Kasyanov also noted that many in 
Russia believe that he is an American spy because of his ties 
to the West and government opposition. 
 
Canceled Trip to United States 
------------------------------- 
 
9. (C)  Kasyanov informed Ambassador that he had canceled his 
planned trip to Washington in September ("I was advised that 
this was not the best time" by his U.S. hosts) but hopes to 
reschedule at some point. 
 
10. (C)  COMMENT: Kasyanov is one of Russia's more outspoken 
liberal opposition voices, and he was frank in criticizing 
the Russian leadership for its limits of press freedoms and 
its inability to comprehend long-term economic consequences. 
However, Kasyanov is unable to muster more than minimal 
support to his cause, and his opposition now to the hugely 
popular war with Georgia will not engender new support among 
Russians.  The intermittent unity of the deeply fractured 
opposition parties leaves little hope for them to make any 
inroads on the public support and legislative bloc of the 
major "ruling parties" and the Communists.  Kasyanov's 
statement that he is a lone voice for democracy succinctly 
captures that disunity, since it is exactly what Yabloko's 
Mitrokhin said about himself at his own August 21 press 
conference.  However, Kasyanov's experience as Finance 
Minister, Prime Minister and now owner of a large consulting 
firm make him uniquely credible regarding economic trends in 
Russia. 
BEYRLE

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08MOSCOW2602, PRESSURING RUSSIA ECONOMICALLY: DIFFICULT CHOICES

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Reference ID Created Released Classification Origin
08MOSCOW2602 2008-08-29 15:22 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXYZ0000
PP RUEHWEB

DE RUEHMO #2602/01 2421522
ZNY CCCCC ZZH
P 291522Z AUG 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 9771
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RUEATRS/DEPT OF TREASURY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
RHEHNSC/NSC WASHDC PRIORITY

C O N F I D E N T I A L MOSCOW 002602 
 
SIPDIS 
 
STATE FOR EUR/RUS, EEB/IFD 
TREASURY FOR MEYER, TORGERSON 
DOC FOR 4231/MAC/EUR/JBROUGHER 
NSC FOR WARLICK 
 
E.O. 12958: DECL: 08/25/2018 
TAGS: ECON EFIN ETRD PREL RS
SUBJECT: PRESSURING RUSSIA ECONOMICALLY: DIFFICULT CHOICES 
 
Classified By: Ambassador John Beyrle, Reasons 1.4 (b/d). 
 
-------- 
Overview 
-------- 
 
1.  (C) As Washington contemplates next steps toward Russia 
in the aftermath of the conflict with Georgia, including 
possible economic punishment, the Mission would like to share 
its perspective.  First, the U.S.-Russia economic 
relationship has been growing fast in recent years and was 
showing great potential to continue that trend.  However, 
that relationship is more important symbolically than in 
actual fact.  The U.S. trades more with Mexico in a month 
than with Russia in a year and bilateral direct investment -- 
perhaps $20 billion -- is very small relative to the size of 
the economies. 
 
2.  (C) As a consequence, we have limited direct leverage 
over Russia's economy.  Europe, of course, has more but the 
Russians clearly do not fear they will use it.  We have more 
leverage indirectly through our influence in the 
international economic institutions, but the Russian 
government has already written off WTO for the time being, 
does not believe we will be able to make good on our threats 
to kick them out of the G-8, and has no further need of the 
IMF or World Bank. 
 
3. (C) Where we do have real leverage is in the marketplace, 
which is proving sensitive to the prospect of an extended 
downturn in U.S.-Russia relations.  And the markets are 
pummeling the Russian economy.  The Georgia conflict, 
following several other incidents (TNK-BP, Mechel), appears 
to be the final straw for many investors' confidence in the 
GOR and in its economic policies.  It has led to heavy 
capital flight and rising risk premiums on Russian equities 
and on Russian borrowing.  The long-term consequence is 
likely to be slower economic growth and lower living 
standards. 
 
----------------------------- 
Russian Economic "Highlights" 
----------------------------- 
 
3.  (C) Among the economic consequences of the conflict in 
Georgia, we would highlight the following: 
 
-- Russian stock markets fell more than 10 percent following 
the invasion.  After recovering slightly following the 
announcement of the cease-fire, they fell again, on the news 
of Russia's delayed withdrawal, and then again following the 
decision to recognize Abkhazia and South Ossetia's 
independence. 
 
-- Approximately a fourth of the $600 billion loss in 
shareholder value since May is directly attributable to the 
Georgian conflict.  The markets are now at levels not seen 
since the fall of 2006 and further losses are likely to 
follow absent a resolution to the conflict and an easing of 
tensions with the West. 
 
 
-- Finance Minister Kudrin admitted that $7 billion left 
Russia on August 8 alone.  One of our contacts estimated a 
net capital outflow of $15 billion in the first week of the 
conflict.  Another said the outflow was closer to $20 billion. 
 
-- We know from one source in the financial community here 
that two major institutional U.S. investors decided last week 
not to invest in Russia, citing the rising risks.  The total 
not invested was in the hundreds of millions of dollars. 
There are doubtless other examples of opportunity costs to 
the Russian economy caused by the conflict that we are 
unaware of. 
 
-- We have also been told that many investors in investment 
funds active in Russia have given notice of their intention 
to withdraw their money at the next available moment, the end 
of the third quarter on October 1.  We have been told that 
the total is likely to be in the billions. 
 
-- The ruble immediately fell 2.5 percent against the dollar 
following the invasion, its first drop since 2003, and has 
generally continued to drop since.  The Russian Central Bank 
has already spent $16.4 billion in reserves, that it 
acknowledged, to prop up the ruble and provide liquidity to 
the banking sector in an effort to avoid a crisis of 
confidence. 
 
-- Russia's reserves (which include the Reserve Fund and the 
National Welfare Fund) fell from $597 billion to $581 billion 
as a result of these interventions, the first drop in total 
reserves since 2006, when Russia paid off the last of its IMF 
debt.  Although still large, the reserves must be balanced 
against Russia's roughly $500 billion in foreign corporate 
debt, much of it held by state corporations that hope to 
avoid refinancing at higher rates by accessing the reserves. 
 
------------------------------- 
Sanctions: A Double-Edged Sword 
------------------------------- 
 
4.  (C) Although the U.S. lacks direct leverage over the 
Russian economy, Russia is much more globally integrated than 
its government likes to admit.  Global markets can punish the 
GOR and they have reacted very negatively to the conflict. 
We should draw attention to that reaction and what it may &
#x000A;mean for the future of the Russian economy.  Moreover, more 
general sanctions, such as we deploy for instance against 
Iran, in and of themselves are not likely to affect Russia's 
commodity exports, which are the foundation of the economy. 
They will, however, signal continued U.S. disapproval and 
could, therefore, have a further chilling effect on the 
global markets' interaction with the Russian economy. 
 
5.  (C) In addition, sanctions could, no matter how targeted 
on separatist leaders, put American business and commercial 
interests at risk.  Just one potential example is last year's 
$3.5 billion deal for Aeroflot to buy 22 Dreamliners from 
Boeing.  The GOR could tear this deal up and purchase planes 
from Airbus instead, hurting the U.S. and driving a wedge 
between the U.S. and Europe.  Sanctions could also undermine 
our long-term goal of further global integration for a 
modernized Russian economy.  WTO membership, which would help 
the pace of promised reforms, is far from a universal 
aspiration here, and sanctions would remove our remaining 
moral suasion to pursue accession. 
 
6.  (C) Russian officials have clearly signaled that U.S. 
sanctions could provoke a counter-response.  In an August 27 
conversation with the Ambassador, Deputy Foreign Minister 
Karasin alluded to "rumors" that Washington may be 
considering economic sanctions as a policy response.  Karasin 
advised that any such approach should be "thought through 
carefully" because "certain things will follow" from the 
Russian side.  He pointed specifically to services provided 
by the Russian Volga-Dnepr company (which provides heavy 
cargo lift into Afghanistan for the U.S. and other European 
allies) in that regard. 
 
------- 
Comment 
------- 
 
7.  (C) Our strategic goal should remain a more democratic 
and rules-based Russia that is not isolated from, or hostile 
to, the West.  Further integrating Russia into the global 
economy is a major component of that goal.  U.S. trade and 
investment and related activities (e.g., business exchanges) 
have promoted that integration far beyond the modest trade 
and investment figures mentioned above.  While we should 
support actions to target specific entities or individuals 
with financial interests tied to Abkhazia and South Ossetia, 
we must work to limit the fallout and to avoid broader 
sanctions on economic activity that will have limited effect 
and, as described above, risk damaging our own interests more 
than Russia's.  End Comment. 
BEYRLE

Wikileaks

08MOSCOW2601, MFA HANDS OVER PACKAGE DOCUMENTING GEORGIAN

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Reference ID Created Released Classification Origin
08MOSCOW2601 2008-08-29 15:22 2011-08-30 01:44 UNCLASSIFIED Embassy Moscow

VZCZCXRO3225
OO RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHMO #2601/01 2421522
ZNR UUUUU ZZH
O 291522Z AUG 08 ZDS
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9769
INFO RUCNCIS/CIS COLLECTIVE IMMEDIATE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE IMMEDIATE
RUEHXD/MOSCOW POLITICAL COLLECTIVE IMMEDIATE
RUEKJCS/JOINT STAFF WASHDC IMMEDIATE
RUEAIIA/CIA WASHDC IMMEDIATE
RHEHNSC/NSC WASHDC IMMEDIATE
RUEKJCS/SECDEF WASHDC IMMEDIATE

UNCLAS SECTION 01 OF 02 MOSCOW 002601 
 
 
C O R R E C T E D  C O P Y  (DOWNGRADED CLASSIFICATION) 
 
SENSITIVE BUT UNCLASSIFIED 
 
SIPDIS 
 
E.O. 12958: DECL: N/A 
TAGS: PREL PGOV RS GG
SUBJECT: MFA HANDS OVER PACKAGE DOCUMENTING GEORGIAN 
ACTIONS IN SOUTH OSSETIA 
 
MOSCOW 00002601  001.2 OF 002 
 
 
1.  (SBU)  Summary:  On August 27, Deputy Foreign Minister 
Grigoriy Karasin passed to the Ambassador a package of photos 
and a video documentary meant to document Georgian aggression 
in South Ossetia.  The documentary argued that Georgians 
intended to kill the South Ossetian people and destroy their 
cities, while Russia was only a peacekeeper who fought 
valiantly to protect the South Ossetians.  The video 
contained several allegations of U.S. involvement in the 
conflict, and asserted that Georgia had been preparing to 
attack South Ossetia since June 2008.  Direct quotes from the 
documentary related to Georgia's intent and the destruction 
of South Ossetia are provided in paragraphs 6-7.  End 
Summary. 
 
2.  (SBU)  On August 27, Deputy Foreign Minister Grigoriy 
Karasin passed to the Ambassador a package of materials meant 
to illustrate Georgian aggression in South Ossetia.  The 
package consisted of 40 photos from state-funded ITAR-TASS 
and a 25-minute documentary video by the pro-Kremlin NTV 
television station dubbed in English.  The photos primarily 
consisted of distraught mothers and children, hospital staff 
administering care, people returning to destroyed buildings, 
and deceased individuals in coffins. 
 
3.  (SBU)  The focus of the documentary was to convince the 
viewer about the intent of the Georgian side to kill or harm 
South Ossetians and bring about the physical destruction of 
South Ossetia.  It made the argument that Georgia started the 
conflict and intentionally used BM-21 multiple-launch "GRAD" 
rockets to kill innocent South Ossetians.  It portrayed 
Russia as only a peacekeeper whose troops fought valiantly to 
protect South Ossetians and alleged that Georgia and the West 
launched an information war against the South Ossetians and 
Russians.  The footage used in the documentary mainly 
consisted of rocket-fire at night, destroyed buildings, brief 
interviews with Tskhinvali residents, and crying families. 
 
U.S. Involvement in the Georgian Operation 
------------------------------------------ 
 
4.  (SBU)  The documentary also argued that the West, and 
specifically the U.S., assisted the Georgian military.   To 
this end, the documentary included an interview with Russian 
nationalist Alexander Dugin who said that the Georgians used 
American military tactics.  It showed a Russian soldier 
displaying a confiscated green plastic bag with English text 
that he referred to as "American writing."  Furthermore, the 
video showed a South Ossetian official saying that his troops 
"had found items from among the Georgian troops that belonged 
to Americans." 
 
Georgian Intent 
--------------- 
 
5.  (SBU)  The video also included a brief interview of a 
"captured Georgian commando" with a burned face who spoke 
only a few words, but off-camera the Russian translator spoke 
for a minute, saying that the commando knew about the attack 
on Tskhinvali since August 3.  As further evidence of 
Georgia's well-prepared plans, the documentary said that the 
FSB had discovered a Georgian spy network.  It showed footage 
of the June 11, 2008 arrest of Russian Alexander Kachirov, 
who said that Georgian intelligence services paid him U.S. 
dollars to take video of the positions of Russian 
peacekeepers in South Ossetia. 
 
6.  (SBU)  To show that Georgia intended to destroy South 
Ossetia's people and towns, the documentary includes the 
following direct quotes: 
 
--"The night of August 7 Georgian President Saakashvili 
claimed he was ready for negotiations, but at 11:30 that 
evening, Georgia opened fire on Tskhinvali with GRAD rockets 
from the Georgian towns of Nikozi and Ergeti.  GRAD rockets 
can hardly be called a method to establish order, it was just 
an execution of the city of several thousand people." 
 
--"On August 8, Georgian tanks wiped out 10 South Ossetian 
villages from the face of the earth and entered Tskhinvali, 
systematically killing peaceful residents only because they 
were Ossetians.  Georgians fired at residential buildings on 
their way into the city.  They used GRAD rockets and then 
machine-gunned houses.  They also knew people were hiding in 
 
MOSCOW 00002601  002.2 OF 002 
 
 
basements, so they threw grenades into the basements.  The 
Georgians attacked ambulances and destroyed the hospital. 
They fired at people who decided to leave by car, fired at 
young boys and old women." 
 
--"Georgia said that the South Ossetians fired first because 
it had to establish the constitutional order to suppress the 
provocation.  Russian peacekeepers were in the way so 
Georgian troops killed t
hem.  All laws worldwide prohibit 
shooting at peacekeepers; it is a war crime." 
 
--"The name of the Georgian mission in South Ossetia was 
"Clear Field."  The Russian military captured documents and 
maps that prove the Georgians had a well-prepared plan.  It 
is now clear what the purpose was of NATO and the U.S. arming 
Georgia." 
 
South Ossetia Destruction 
------------------------- 
 
7.  (SBU)  The following are direct quotes made during the 
documentary meant to show the destruction of South Ossetia 
and its people: 
 
--"Tskhinvali residents fled to their basements, men fought 
with Kalishnikovs but were no match for Georgian artillery 
fire.  There was no electricity or water, food was scarce for 
South Ossetians." 
 
--"On August 8, Russians entered to stop the extermination of 
South Ossetia.  All Ossetians knew they would be slaughtered 
without Russia's assistance.  Investigators are now 
collecting evidence of genocide." 
 
--Interview of a crying Tskhinvali man:  "This was an 
extermination of a peaceful people, he (Saakashvili) crushed 
a family with tanks.  Bloodsucker! Such barbarity never 
existed among human beings." 
 
--Interview with woman:  "Georgian troops jumped out of tanks 
and threw grenades into basements because they knew people 
were hiding there.  A Georgian tank crushed a fleeing woman 
and her grandsons." 
 
--The documentary ends with a tearful woman crying, "We will 
rebuild our city but we will never revive our boys," and the 
commentator saying that in the future the Ossetians will hold 
a blood revenge against Saakashvili according to the 
tradition of people in the Caucasus. 
BEYRLE

Wikileaks

08MOSCOW2599, CASUALTY FIGURES IN SOUTH OSSETIA VARY, STILL

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Reference ID Created Released Classification Origin
08MOSCOW2599 2008-08-29 14:40 2011-08-30 01:44 UNCLASSIFIED Embassy Moscow

VZCZCXRO1806
RR RUEHLN RUEHPOD RUEHVK RUEHYG
DE RUEHMO #2599 2421440
ZNR UUUUU ZZH
R 291440Z AUG 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 9767
INFO RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE

UNCLAS MOSCOW 002599 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM PREL RS
SUBJECT: CASUALTY FIGURES IN SOUTH OSSETIA VARY, STILL 
UNKNOWN 
 
1.  (SBU) Summary.  In the aftermath of active fighting in 
South Ossetia, numerous leaders and agencies from Russia, 
Georgia, the United States, international agencies, and the 
self-proclaimed South Ossetian government have reported 
varying death toll figures.  While there is no consensus, 
published figures from the Russian and so-called South 
Ossetian governments vastly exceed those from the U.S., 
Georgia, and human rights agencies.  Council of Europe Human 
Rights Commissioner Thomas Hammarberg stated in an Interfax 
press conference on August 29 that the number of casualties, 
while still unknown and undeterminable, exceeds figures 
quoted by international organizations.  End Summary. 
 
Civilian Deaths 
--------------- 
 
2.  (SBU) Since August 8, civilian casualty estimates cited 
publicly by Russian and foreign officials in South Ossetia 
have ranged from 44 to over 2,000; however, Russian and South 
Ossetian figures are all 1,000 or higher. South Ossetia's 
Prosecutor General's Office proclaimed on August 29 that 
exactly 1,692 people were killed, but ventured that only 
1,500 were injured in the Georgian conflict, a figure 
slightly lower than that cited by South Ossetian President 
Eduard Kokoity.  On August 25, Kokoity claimed that 2,000 
civilians died in the conflict.  Yet, on August 22, Chief of 
the South Ossetian Press and Information Committee Irina 
Gagloyeva stated that 1,492 civilians died in South Ossetia. 
Russian Federation Council Speaker Sergei Mironov declared on 
August 25 that approximately 1,000 South Ossetian citizens 
perished in the conflict. The lowest figure from the Russian 
side came on August 20 from Deputy Chairman of the 
Investigations Committee of the Russian Prosecutor General's 
Office Boris Salmaksov who totaled known South Ossetian 
casualties at 133. 
 
3.  (SBU) Calling the situation a humanitarian catastrophe 
but not genocide, Hammarberg in an August 29 press conference 
discouraged the publication of casualty numbers, positing 
that it is too difficult to know exact figures at this stage 
(Note: Hammarberg made a similar statement on August 23).  In 
an August 27 meeting with the Ambassador, Russian Human 
Rights Ombudsman Vladimir Lukin also refused to estimate 
casualty figures and to call events in South Ossetia 
"genocide."  In Hammarberg's August 29 meeting with Duma 
Speaker Boris Gryzlov, he noted that some people had been 
buried quickly in family gardens to prevent an epidemic, and 
the possibility of more buried civilians complicated casualty 
estimates.  At the same time, Hammarberg said the death toll 
was higher than that reported by some international 
organizations.  On August 14, Human Rights Watch Moscow 
Deputy Director Tanya Lokshina stated that the Tshkinvali 
city hospital reported 44 civilian deaths.  The Washington 
Post printed the same figure for Tshkinvali on August 25, 
also noting figures from hospitals in Tbilisi (70) and Gori 
(64).  Georgia-based Kavkaz Press reported 25 deaths in Gori 
on August 25.  In wild contrast, Russian military experts 
estimated Georgia's death toll at 4,000 on August 15. 
 
Military Deaths 
--------------- 
 
4.  (SBU) While the precise count for Russian military deaths 
has varied since the outbreak of violence, the majority of 
officials reported fewer than 70 deaths.  On August 24, 
Russian military officials tallied 64 deceased military 
personnel, a figure supported by Russian Colonel-General 
Anatoly Novogitsyn on August 20.  Russian daily Komsomolskaya 
Pravda reported 51 Russian military deaths on August 18 while 
Rossiya TV reported over 70 Russian military deaths on August 
15. Russian officials stated on August 25 that approximately 
200 Georgian soldiers died in the fighting, with another 
150-180 Georgian soldiers still missing. 
 
Comment 
------- 
 
5.  (SBU) Despite numerous reports from government officials, 
human rights watchdogs, and press outlets in South Ossetia, 
there is not a consistent estimate, much less a precise 
number, of casualties. 
BEYRLE

Wikileaks

08MOSCOW2596, LATEST SALVO IN OLIGARCH FRIDMAN’S DISPUTE WITH

WikiLeaks Link

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Reference ID Created Released Classification Origin
08MOSCOW2596 2008-08-29 11:49 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXYZ0000
RR RUEHWEB

DE RUEHMO #2596/01 2421149
ZNY CCCCC ZZH
R 291149Z AUG 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 9762
INFO RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUEHKV/AMEMBASSY KYIV 0283
RUCPDOC/DEPT OF COMMERCE WASHDC
RHEHNSC/NSC WASHDC
RHEHAAA/WHITE HOUSE WASHDC

C O N F I D E N T I A L MOSCOW 002596 
 
SIPDIS 
 
DEPARTMENT FOR EUR/RUS, EEB/CIP, EEB/IFD/OIA 
STATE PLS PASS USTR (BHAFNER) 
 
E.O. 12958: DECL: 08/28/2018 
TAGS: ECPS EINV ETRD ECON RS
SUBJECT: LATEST SALVO IN OLIGARCH FRIDMAN'S DISPUTE WITH 
TELENOR 
 
REF: 07 MOSCOW 2206 
 
Classified By: Economic Minister Counselor Eric T. Schultz, Reasons 1.4 
(b,d). 
 
1. (C) SUMMARY:  A $2.8 billion judgment against Norwegian 
telecom company Telenor in a Khantiy Mansiisk court is the 
latest salvo from oligarch Mikhail Fridman in his years-long 
battle with Telenor for control of VimpelCom, Russia's second 
biggest mobile phone provider.  Given the dubious nature of 
the court judgment, Telenor is confident it will see the 
billion-dollar judgment overturned on appeal.  Despite 
conflict with Fridman, Telenor wants to remain a player in 
the profitable Russian and Ukrainian telecoms markets, and 
insists, notwithstanding recent press reports, that there are 
no serious discussions about selling Telenor's stake in 
VimpelCom to Fridman.  The judgment against Telenor is 
another blow to Russia's battered investment climate and to 
the long-term development of Russia's telecommunications 
industry.  END SUMMARY. 
 
--------------------------- 
A Lawsuit in a Remote Court 
--------------------------- 
 
2. (C) On August 16, a Siberian court in Khantiy Mansiisk 
ordered Norwegian telecom company Telenor to pay $2.8 billion 
in damages to VimpelCom, Russia's second largest mobile phone 
company, for having opposed and delayed VimpelCom's purchase 
of Ukrainian Radio Systems (URS), Ukraine's fourth largest 
telecom firm.  Telenor owns 29.9 percent of VimpelCom's 
voting stock, making it the second largest shareholder. 
VimpelCom's largest shareholder is Altimo, which owns over 45 
percent of VimpelCom's stock.  Altimo is a telecom investment 
vehicle owned by Russian oligarch Mikhail Fridman through his 
Alfa Group holding company. 
 
3. (SBU) In the lawsuit, Farimex claimed that Telenor and 
certain other shareholders' opposition to the URS acquisition 
had inflicted $5.7 billion in losses on VimpelCom.  In 
Farimex's view, had the URS purchase not been put off from 
2005 to 2006, URS would have become a successful company with 
a greater share of the Ukrainian telecoms market, instead of 
a loss-making asset on VimpelCom's books.  Farimex also 
accused Altimo and other companies of damaging VimpelCom, but 
the judge dismissed the case against all of the other 
defendants. 
 
4. (C) Natalia Schneider, Corporate Affairs Director for 
Telenor's Russian operations, told us that Fridman had 
orchestrated the Khantiy Mansiisk lawsuit against Telenor as 
the latest salvo in his years-long feud with Telenor over 
control of Russian and Ukrainian telecom assets.  Farimex 
Products, a British Virgin Islands company owned by a cousin 
of Fridman's, and which owns only 0.002 percent of 
VimpelCom's outstanding shares, brought the lawsuit. 
Schneider said Telenor had unsuccessfully argued that the 
case should be dismissed because of Farimax's ties to 
Fridman.  She noted in that regard that Farimex had 
introduced evidence of internal VimpelCom board deliberations 
about the URS acquisition to which only Fridman and Telenor 
were privy. 
 
5. (C) Schneider, who is also the head of the IT and Telecom 
Committee of the Association of European Businesses in 
Russia, said that Telenor had explained to the court that it 
had opposed the URS acquisition during VimpelCom board 
discussions in 2005 and 2006 because it didn't make good 
business sense.  URS was a small player in Ukraine's mobile 
telecoms market, and had never been a genuine competitor with 
larger companies, including market leader Kyivstar, in which 
both Telenor and Fridman were also the largest shareholders. 
Despite Telenor's initial opposition to the URS acquisition, 
VimpelCom had ultimately voted to buy URS for $230 million. 
URS had proved to be a bad investment and still had never 
turned a profit.  Schneider said that Fridman blamed Telenor 
for delaying the URS acquisition and effectively turning the 
investment into a loss, and noted that Fridman had also sued 
Telenor for damages in Switzerland. 
 
6. (C) Scheider said Telenor had also unsuccessfully disputed 
the court's jurisdiction.  Khantiy Mansiisk was apparently 
chosen as a venue for the suit, because Fridman's cousin 
 
owned another business there and had influence with the 
courts.  Otherwise, there was no business connection to 
VimpelCom and no other nexus providing Khantiy Mansiisk with 
jurisdiction to hear the case.  Finally, Telenor had argued 
that although Russian law grants certain minority 
shareholders the right to sue major shareholders over board 
decisions that allegedly cause financial damage to a 
corporation, Farimex did not own the minimum one percent of 
outstanding shares to be able to bring such a suit. 
 
7. (C) In Schneider's view, the Khantiy Mansiisk judge 
ignored the many substantive and procedural irregularities in 
the case, and decided to aw
ard $2.8 billion in damages, half 
of the amount claimed by Farimex.  Given the many flaws in 
the Khantiy Mansiisk case, Telenor was confident it would 
ultimately prevail on appeal through the Russian court system 
and succeed in having the billion-dollar judgment overturned. 
 However, Telenor had also brought a second suit in New York 
to enjoin the Khantiy Mansiisk litigation, because the 
shareholder agreement between Telenor and Fridman contained a 
choice-of-venue clause requiring all lawsuits to be brought 
in either Switzerland or New York. 
 
------------------------------------------ 
Latest Tactical Move From Oligarch Fridman 
------------------------------------------ 
 
8. (C) Roger Martinsen, the Norwegian Embassy's Commercial 
Counselor, told us it was a common tactic of Fridman and the 
Alfa Group to apply pressure to foreign investment partners 
by bringing suits in obscure Russian courts that can easily 
be controlled.  Although Fridman often succeeded in winning 
cases at the trial court level in Russia, he frequently lost 
on appeal or in foreign courts.  In the Swiss litigation, for 
instance, he said Fridman had never succeeded in convincing 
any court that his claims against Telenor had merit. 
 
9. (C) Martinsen said in his view, Fridman's sharp business 
tactics, for example in the TNK-BP incident, were 
increasingly well known to investors.  Fridman's long-running 
dispute with Telenor had also been well-publicized over the 
last three years.  He speculated that the case would not 
likely have an impact on the Russian operations of Norway's 
StatoilHydro, which remained a minority partner in the 
development of Russia's Shtokmann gas field. 
 
10. (C) Martinsen said the pace of Norwegian companies' 
investments in Russia had been increasing.  Aside from oil 
and gas, Norwegian companies were also active investors in 
printing and publishing, hotels, shipping, confections, 
agricultural equipment, concrete, and salmon and other fish 
products.  Still, he acknowledged that recent incidents like 
TNK-BP, Mechel, the Georgian conflict and now the Telenor 
judgment, could slow investment growth and potentially turn 
away Norwegian companies that were considering investing in 
Russia for the first time. 
 
---------------------------------- 
Telenor Invested for the Long Term 
---------------------------------- 
 
11. (C) Despite the legal dispute with Fridman, both Telenor 
and the Norwegian Embassy (Telenor is majority-owned by the 
Norwegian Government) confirmed that Telenor would like to 
continue as a major shareholder in VimpelCom.  Schneider 
noted that Telenor's investments in both VimpelCom and 
Kyivstar had been highly profitable.  They denied recent 
press reports that Telenor was ready to wash its hands of the 
Russian telecom market.  Schneider noted that the Khantiy 
Mansiisk case could be an attempt by Fridman to extract a 
cheaper buyout price from Telenor for its VimpelCom shares. 
Thus far, however, there had been no serious discussions with 
Fridman about a VimpelCom buy-out or a possible swap of 
Fridman's shares in Kyivstar for Telenor's VimpelCom shares. 
 
------- 
COMMENT 
------- 
 
12. (C) The Telenor case is another blow to sagging investor 
confidence in Russia, albeit a small one compared to the war 
in Georgia.  As one contact recently put it, a year ago the 
Telenor case would have been front-page news; now it barely 
 
caused a ripple.  The consequences for Russia's telecoms 
industry, however, are significant.  Despite fast growth and 
record profits, Telenor is the only large-scale foreign 
investor in an industry that with an infusion of western 
technology could serve as a driver in the development of a 
Russian high-tech and innovation economy.  Oligarchic and 
Kremlin insider control of all three of Russia's major 
service providers has been the main impediment to foreign 
investment.  In addition to VimpelCom, Fridman is a major 
player in Megafon along with Kremlin Information Society and 
Innovation Adviser and former Telecommunications Minister 
Leonid Reyman (Reftel).  Russian conglomerate Sistema, owned 
by oligarch Vladimir Yevtushenkov, owns the majority of 
shares in the third large firm, MTS.  Telenor's continuing 
difficulties are likely to further depress foreign investor 
interest in Russian telecoms. 
BEYRLE

Wikileaks

08MOSCOW2590, RUSSIANS REACT TO RECOGNITION: CRITICS

WikiLeaks Link

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Reference ID Created Released Classification Origin
08MOSCOW2590 2008-08-28 15:13 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXRO0831
OO RUEHAG RUEHROV
DE RUEHMO #2590/01 2411513
ZNY CCCCC ZZH
O 281513Z AUG 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9754
INFO RUCNCIS/CIS COLLECTIVE IMMEDIATE
RUCNMEM/EU MEMBER STATES COLLECTIVE IMMEDIATE
RUEHXD/MOSCOW POLITICAL COLLECTIVE IMMEDIATE

C O N F I D E N T I A L SECTION 01 OF 03 MOSCOW 002590 
 
SIPDIS 
 
E.O. 12958: DECL: 08/27/2018 
TAGS: PREL PGOV MARR RS GG
SUBJECT: RUSSIANS REACT TO RECOGNITION: CRITICS 
OUTNUMBERED, BUT NOT SILENT 
 
Classified By: Ambassador John R. Beyrle: Reasons 1.4 (b, d). 
 
1.  (C) Summary:  Public and elite opinion in Russia is split 
into two, unequal camps over the decision to recognize the 
independence of South Ossetia and Abkhazia. The overwhelming 
majority of the population considers recognition unavoidable 
(87 percent), given the Georgian "aggression" and the 
reaction of the international community. Within this group, 
many see Medvedev's action as an answer to a long list of 
perceived U.S. slights since the breakup of the Soviet Union 
and discount the costs Russia will ultimately pay for its 
actions.  On the other end of the spectrum, more "liberal" 
intellectuals and political activists see the action as 
illegitimate and short-sighted. These critics argue that 
recognition was a setback to U.S.-Russia relations, a 
catalyst for problems in the North Caucasus, and a cause for 
international isolation.  To date, these voices of dissent 
cannot compete with the patriotic rallying around Russian 
foreign policy, but as the consequences of Russian actions 
become clearer this dynamic could change.  End Summary. 
 
Public supports Recognition 
--------------------------- 
 
2.  (U) Medvedev's decision to recognize the two separatist 
regions met broad public support, according to initial 
polling surveys. In a poll published on August 27 by VTsIOM, 
data collected from August 16-17 indicated that 71 percent of 
Russians surveyed expressed support for Russia's recognition 
of South Ossetia and Abkhazia as independent nations. 
However, only 63 percent supported the incorporation of the 
two regions into the Russian Federation. Most of the 
population appears to accept the administration's 
justifications for its actions; an August 27 Levada Center 
poll showed that 87 percent believed Russia acted correctly 
in its response to the conflict. Indeed, polling shows that 
the population has accepted the administration's logic for 
taking action. When asked about the reasons for Russian 
military engagement in South Ossetia, those surveyed echoed 
the administration's own case for military intervention. 
Respondents listed the following reasons for action -- 
establishment of peace (44 percent), defense of the Ossetian 
population (43 percent), and defense of Russian peacekeeping 
force (33 percent). Only a small number, 27 percent, gave a 
more "cynical" assessment that the combat provided a warning 
to NATO. 
 
3. (SBU) Polling also suggests that the broad population is 
more or less ambivalent about the possible costs of war. In 
an August 15-18 Levada Center poll, 94 percent of respondents 
considered relations with Georgia to be "cool" or worse, and 
84 percent responded similarly when asked about Russia-U.S. 
relations. Moreover, 48 percent of respondents believed 
relations will normalize relatively soon, versus 35 percent 
who saw the conflict as a new turn in the "Cold War." 
 
Kremlin Bandwagon 
----------------- 
 
4.  (U) Almost immediately after Medvedev's announcement, 
supporters of the Kremlin hastened to commend Medvedev's 
recognition decree. Putin's party "United Russia" predictably 
lauded Medvedev's decision as opening a new page in the 
history of Russia. Deputy Chairman of the Federation Council 
Svetlana Orlova praised Medvedev's action as "a courageous 
step," showing "true democracy" in protecting a "peaceful 
population."  Konstantin Kosachev, chairman of the Duma 
Committee for International Affairs, echoed the pervasive 
stance that Russia "had been forced to recognize the 
breakaway republics."  He maintained that relations with NATO 
and the EU were important only if they were beneficial to 
Russia, but were unnecessary if they did not serve Russian 
national interests and help solve Russia's problems. 
Kosachev saw value in these relations, if the West stopped 
defending Tbilisi's actions. 
 
5.  (U) Ostensibly "opposition parties" with ties to the 
Kremlin also rallied around the flag. Gennadiy Zyuganov of 
the Communist Party considered Medvedev's decision overdue, 
the only possible solution that took the South Ossetian and 
Abkhaz peoples' will into account, and a sign of Russia's 
return to the international arena. The Agrarian Party of 
Russia described Medvedev's decision as "reasonable," while 
Aleksandr Ryavkin of the Civil Force Party explained 
Medvedev's action as the only possible solution under the 
circumstances, and a "profoundly moral act" in defense of the 
Abkhaz and South Ossetian peoples. 
 
6.  (U) Beyond the political parties, nationalist 
organizations, Kremlin-supporters, and even representatives 
 
MOSCOW 00002590  002 OF 003 
 
 
from the Russian Orthodox Church rallied behind the 
recognition decision. Russian-based youth groups Nashi, 
Mestnii, Molodaya Gvardia, and Young Russia all posted 
website comments supporting Medvedev's recognition of South 
Ossetia and Abkhazia. The groups did not promote additional &#x0
00A;protests or anti-American or anti-Georgian activity. Deputy 
head of the Moscow Patriarchate Department for External 
Church Relations Archpriest Vsevolod Chaplin told Interfax on 
August 27 that "any unprejudiced person" clearly understood 
Georgia to be at fault in the conflict. 
 
7. (SBU) Some commentators resorted to inflammatory language. 
 Reactionary General-Major (ret.) Leonid Ivashov compared the 
situation today to the Cuban missile crisis of 1962, accused 
"Western forces" of organizing the conflict, and called on 
Russia to seek new allies in the South and East.  Aleksandr 
Lugin of the International Eurasian Movement saw the world 
bordering on a sustained nuclear war.  He said Russia had 
broken the pattern where countries were "impertinent to their 
fathers" (the U.S.), but always subordinated themselves in 
the end.  Now, he said, there were two fathers, who had to 
delineate their spheres of influence -- Russia had just 
challenged the U.S. to see who is stronger.  However, Lugin 
noted that Russia had only won a battle, not the war. 
 
Moderates Shift to the Right 
---------------------------- 
 
8. (C) Even traditionally "moderate" analysts have added 
their voices in support of the administration's decisions. 
For example, Vitaliy Naumkin, ordinarily a thoughtful critic, 
asserted that Medvedev's decision was the result of a long 
history of U.S. policy blunders.  He listed the perceived 
lack of U.S. support for Russia during the 1990's; the 
missile defense (MD) program, which he stated was obviously 
aimed at Russia (the timing of the U.S.-Poland agreement on 
MD was proof, he said); the U.S. failure to freeze Georgia's 
NATO aspirations while tensions were high; and U.S. disregard 
of Georgian President Saakashvili's authoritarian and 
anti-democratic sides.  Now Russia had restored the old 
balance in international relations, Naumkin contended. 
Naumkin told us August 27 that Russia could easily live 
without NATO relations, or WTO membership.  He said Russia 
could assure a worried Europe of its good intentions by now 
pushing for a peaceful and equitable resolution of the 
Transnistria and Nagorno-Karabach conflicts.  He could not 
foresee any negative consequences for the situation in the 
North Caucuses -- in fact, he postulated that the regions in 
southern Russia would be happy to have buffer states between 
them and Georgia. 
 
8. (C) Yevgeniy Satanovskiy, President of the Institute for 
Middle East Studies, warned that Western attempts to punish 
Russia for recognizing Abkhazian and South Ossetian 
independence would only strengthen the "national consensus" 
in support of the Kremlin and increase anti-American 
sentiment.  This would further propel the GOR along the 
course of pursuing Russian interests at any cost. 
Satanovskiy said that Russians believed American ambitions 
had become "too big" and were fed up with the U.S. desire to 
have a role in every part of the world, even those where it 
was unclear what the U.S. interest really was.  This appeared 
to blind the U.S. to recognizing Russian warnings that it 
would pursue its interests in Georgia; Satanovskiy hoped the 
U.S. would not misread the Kremlin's determination to do so 
in Ukraine. 
 
Critical Voices Emerge 
---------------------- 
 
9. (C) Amidst the "party" atmosphere of patriotic enthusiasm 
for the Kremlin and its policies, there are those who opposed 
the administration's decision to recognize the two separatist 
regions and warned of the coming "hangover" of economic, 
political, and diplomatic consequences. As expected, the more 
Western-oriented liberal parties opposed both the war and the 
decision to recognize the two separatist regions. People's 
Democratic Union leader Mikhail Kasyanov and the Union of 
Right Forces (SPS) consider Medvedev's decision to be 
erroneous, leading Russia into international isolation. 
Moreover, the more "independent" think-tankers and foreign 
relations experts, who enjoy funding or support from beyond 
Kremlin coffers, expressed concern that the war and then 
recognition of the two regions would accelerate negative 
trends in Russian society. 
 
10. (C) Fyodor Lukyanov, editor of Russia in Global Affairs, 
lamented to RIA Novosti that Russian recognition of Abkhazia 
and South Ossetia would not help either to "break out" of 
their current international isolation and both could end up 
 
MOSCOW 00002590  003 OF 003 
 
 
like Northern Cyprus, which only Turkey has recognized for 34 
years.  He observed that the situation was unlikely to follow 
the Kosovo model, in which the U.S. was able to persuade 
influential countries to recognize the Serbian province's 
independence; Russia's current international isolation denied 
it similar influence.  Lukyanov concluded that rather than 
pursue the difficult diplomatic efforts necessary to settle 
the Georgian crisis in a manner that could actually benefit 
the breakaway regions, the Kremlin opted to appeal to a 
domestic audience and demonstrate that Russia was unconcerned 
by further isolation or damage to its image.  Similarly, 
Eurasia Foundation's Andrey Kortunov speculated to us that 
Medvedev's decision was "guided by emotions, not by 
cold-blooded calculations of political gains and losses." 
Kortunov expressed regret at the decision, noting that even 
policymakers and analysts loyal to the Kremlin questioned the 
rush to decide.  While it would be difficult to oppose 
openly, Kortunov noted, many of the "politically enlightened 
class" remained concerned about its implications, including 
the economic costs. 
 
Impact on Russia's Development 
------------------------------ 
 
11. (C) Critics of the decision to recognize the two 
separatist regions also worry about the longer term impact on 
Russia's development. Dmitry Danilov, Head of the Department 
of European Security Studies at the Russian Academy of 
Sciences, said that the decision to recognize Abkhazia and 
South Ossetia demonstrated the Kremlin's willingness to 
increase Russian isolation.  He warned that Russia, alone in 
a corner, could have disastrous effects.  Danilov was most 
concerned with the domestic impact, explaining that the 
harsh, even crude rhetoric coming from the Kremlin during the 
Georgian crisis played to Russia's revanchist tendencies, 
which, if further enflamed, could lead Russia away from 
whatever progress it had made towards democracy. 
 
12. (C) Political commentator Dmitriy Oreshkin similarly 
worried about the continued slide into "Soviet-think" and the 
penchant for a mobilization economic plan and increased 
discrepancy between reality and the constitution -- a 
contradiction that contributed to the collapse of the Soviet 
Union. Engelhardt acknowledged that it would be impossible 
for President Medvedev to return to a liberal path", and 
added Medvedev "has lost to Putin's crowd."  Engelhardt sees 
the tensions in the North Caucasus becoming worse, and 
predicted t
hat over the next couple months North Ossetia and 
Ingushetia may attempt to redefine their borders. 
 
Comment 
------- 
 
13.  (C) The Georgian conflict stokes all the national fires 
of Russian patriotism, stirring a self-righteous indignation 
among the population. For a society relentlessly reminded of 
the sacrifices made to stop the "madman" Hitler in the Second 
World War, the administration's message of Saakashvili's 
"irrational behavior" and the relentless coverage of crying 
women and children because of Georgian aggression resonates 
and rallies in a purely emotional way. Recognition, to most 
of Russian society, is the only possible outcome - a 
punishment to Georgia (and its ostensible patron, the U.S.) 
for violence against the innocents. The more sober-minded 
members of the educated elite predict that the truth will out 
and a more rational assessment of the causes, conduct, and 
consequences of the war are sure to follow. But we are not 
there yet. 
BEYRLE

Wikileaks

08MOSCOW2586, HUMAN RIGHTS OMBUDSMAN LUKIN ON RECOGNITION,

WikiLeaks Link

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. #08MOSCOW2586.
Reference ID Created Released Classification Origin
08MOSCOW2586 2008-08-28 14:00 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXYZ0007
OO RUEHWEB

DE RUEHMO #2586/01 2411400
ZNY CCCCC ZZH
O 281400Z AUG 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9749
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY

C O N F I D E N T I A L MOSCOW 002586 
 
SIPDIS 
 
E.O. 12958: DECL: 08/28/2018 
TAGS: PGOV PREL PHUM RS GG
SUBJECT: HUMAN RIGHTS OMBUDSMAN LUKIN ON RECOGNITION, 
RUSSIAN INTERESTS, NEED FOR U.S. DIALOGUE 
 
Classified By: Ambassador John R. Beyrle; reasons 1.4(b/d). 
 
1. (C) Summary: In a cordial but contentious discussion 
August 27, Ambassador Beyrle reviewed the Georgian-Russian 
conflict with Russian Human Rights Ombudsman Ambassador 
Vladimir Lukin.  Lukin, a liberal on the Russian political 
scene, said he had refused to label Georgian actions in South 
Ossetia as genocide, or estimate the number of persons 
killed.  However, he defended Russian military action, as 
well as recognition of the independence of South Ossetia and 
Abkhazia.  He said that steps by NATO and in particular the 
U.S. to build Georgia's military potential had emboldened 
Saakashvili to attack Tskhinvali, and that Russia had finally 
demonstrated that it would do what it deemed necessary to 
defend its national security interests.  While the climate in 
Moscow or Washington would likely not support immediate 
high-level dialogue, he called for sustained official and 
unofficial engagement that might pave the way for renewed 
interaction between the new Medvedev and post-election U.S. 
administrations.  End Summary. 
 
The Culmination of Years of Mistakes 
------------------------------------ 
 
2. (C) Ambassador Beyrle told Lukin that there will be 
consequences for U.S.-Russia bilateral relations, but it is 
necessary to maintain frank and hopefully constructive 
dialogue, given that each country has global responsibilities 
on which they had to work together.  Lukin (a former Russian 
ambassador to Washington) agreed.  Though "strong winds have 
damaged relations, it is necessary to gather stones together 
and begin to rebuild."  The current situation was not an 
accident of history; many factors brought us to this point. 
At the time of the fall of communist regimes in Europe and 
the break-up of the USSR, he opposed the continued existence 
of NATO, and also rejected subsequent steps toward NATO 
enlargement, especially in light of the exclusion of Russia 
from serious inclusion in the process or from serious 
discussions with NATO.  Putting those developments in the 
context of current geo-political realities, he said the 
alliance had lost sight of a concrete plan or logic for 
enlargement and for its policies toward such countries as 
Georgia.  Since the end of the Soviet period, Ossetia had 
been divided in two. South Ossetia had had its own government 
for 16 years.  Too much had happened for it to agree to 
return to under Georgian control.  Furthermore, no Russian 
government would ever agree to that, and the same was true of 
Abkhazia. 
 
3. (C) Lukin said he is not a propagandist for the Russian 
government, but that the sequence of events was clear.  The 
Georgian military started the war with its indiscriminate 
bombardment of Tskhinvali, using excessive force to try to 
subdue the city.  Russia responded.  Some human rights groups 
in Russia, Lukin said, were arguing that any use of force in 
response to Georgia was wrong, comparing the situation to 
what happened in Chechnya.  Lukin said he recalls very well 
those events and that the situation in South Ossetia is 
absolutely different.  He reminded the Ambassador that he was 
one of Duma members at the time who voted for impeachment of 
(then) President Yeltsin for ordering the move on Groznyy. 
 
4. (C) Lukin went on to question how Saakashvili could have 
launched the military strike without having first cleared the 
decision with Washington.  Ambassador Beyrle responded firmly 
that the U.S. had for months discouraged Saakashvili from 
taking military action against Abkhazia and South Ossetia. 
Secretary Rice and other US officials had tried to convince 
the Georgian president until the last moment not to use 
force.  It was dangerous, the Ambassador said, to allege that 
the U.S. had given Saakashvili the green light to attack. 
Lukin conceded that, in the end, Saakashvili had taken the 
decision himself. 
 
Human Rights Violations in South Ossetia 
---------------------------------------- 
 
5. (C) Turning to his recent trip to South Ossetia with COE 
Human Rights Commissioner Hammarberg, Lukin produced a pile 
of photos taken during the visit.  He described the 
destruction that they showed, not of the whole of Tskhinvali, 
but of major sections of the city.  Among the pictures were 
images of a completely destroyed outpost used by Russian 
peacekeepers (prior to the conflict) which, Lukin charged, 
demonstrated that Georgian attacks had targeted those 
facilities and the military personnel who staffed them. 
 
6. (C) The Ambassador made clear that the continued presence 
of Russian forces in South Ossetia was unwelcome and 
indefensible.  And launching a military campaign against 
civilian targets inside Georgia itself and seeking the 
removal of Saakashvili, went too far.  Lukin did not respond 
directly, but rather argued that the portrayal of the 
conflict by the U.S. media had focused on "Russian 
aggression" without the context of it being a response to 
in
itial Georgian attacks.  He charged that the uniform manner 
in which the Georgian actions had been ignored by the 
American media "was reminiscent of a period in the history of 
totalitarian press."  He also expressed dismay that European 
human rights groups and organization had said little or 
nothing about Georgian actions; their reaction to the 
conflict and its consequences had not been balanced. 
 
Recognition 
----------- 
 
7. (C) Lukin, who had opposed immediate recognition by Russia 
of the independence of South Ossetia and Abkhazia, 
nonetheless argued that there was logic behind Medvedev's 
decision to do so at this time.  When a strong military 
organization (NATO) is on the country's borders, steps need 
to be taken for security.  Asked how he would reconcile 
recognition with Russia's commitment in the Medvedev-Sarkozy 
agreement to international discussions on security for South 
Ossetia and Abkhazia, Lukin said "We are already too late for 
that."  He said he had recommended that Russia hold off on 
immediate recognition to see what next steps NATO would take 
with regard to Georgia at its December meetings, and was 
critical that the government had played this card for free. 
The escalation of measures on the part of the U.S. and 
Europe, including the agreement with Poland on MD, all 
demonstrated that actions against Russia would not stop.  The 
West had to understand Russian psychology:  Moscow had to 
show that, like the U.S., it can and will take steps it deems 
necessary to defend its interests. 
 
Tribunal 
-------- 
 
8. (C) Lukin elaborated on his call for an international 
tribunal to investigate crimes committed in South Ossetia. 
He sketched his broad conception that the tribunal be "ad 
hoc, as in the case of the body examining crimes committed in 
Kosovo" and said it should not target Georgia alone or 
Saakashvili in particular, but all those who destroyed 
property and caused civilian suffering, including Russians. 
The tribunal might be convened under the jurisdiction of the 
International Court of Justice in The Hague, or under the 
European Court of Human Rights in Strasbourg.  If those who 
committed crimes can be located, they should be tried and, if 
found guilty, punished.  He said he would refrain from 
declaring one side or the other good or evil in the conflict 
zone. 
 
Genocide and Estimated Casualties 
--------------------------------- 
 
9. (C) Lukin said he had not and would not use the term 
"genocide" to describe what happened.  Causes were 
complicated and events had been ugly, and they all needed to 
be investigated.  Genocide connotes actions on a scale or 
with the kind of racial or ethnic motives of the Nazis.  This 
was not genocide.  Moreover, there was no way to determine 
the exact number of deaths at this time and that he would 
continue to refrain from making any estimates.  Ultimately, 
there will be an accounting.  One complicating factor in 
determining the exact number of deaths at this point is that 
many people are simply unaccounted for.  It is not know if 
they fled the fighting and, if so, to where.  Others may have 
been detained by Russian or Georgian forces.  He noted, for 
example, that at the request of COE Hammarberg, who gave him 
a list with the names of 86 people detained by Russian 
forces, he undertook work with the MOD.  Those persons had 
now been released.  Ambassador Beyrle suggested that the 
tribunal might also be charged with investigated the number 
of deaths resulting from the conflict.  Lukin agreed. 
 
Next Steps 
--------- 
 
10. (C) Lukin said he regretted the cancellation of the 
Kissinger "wise men" group to Moscow.  Consultations between 
senior officials from both countries are needed to begin a 
process of dealing with new realities.  He said he understood 
that the U.S. did not want to lose face in the showdown over 
Georgia.  Finding a way forward in bilateral relations, he 
contended, depends less on who won in Abkhazia and South 
Ossetia than on who will win forthcoming US elections. 
Ambassador Beyrle forcefully said Russia should not downplay 
the seriousness with which the current administration is 
approaching relations with Russia and its desire to leave for 
its successor a relationship based on respect for 
international norms and that promoted mutual interests.  He 
urged against waiting for the next administration while 
important issues and work remained.  Recognition of South 
Ossetia and Abkhazia had further complicated the relationship 
and would have an impact both on what could be done now, and 
how the new administration would be able to work with Russia. 
 
11. (C) Lukin called for high-level discussions between the 
U.S. and Russia.  Difficult times were ahead, he said, but 
the long-term consequences for bilateral relations and 
international cooperation could be mitigated only if the U.S. 
and Russia discussed issues with an appreciation of each 
other's interests.  Lukin declared that the U.S. had in Putin 
and Medvedev two serious interlocutors, people who more so 
than any previous post-Soviet leaders were truly interested 
in cooperation with the West, two men who had taken each 
decision carefully and whose overall priority was what was 
best for Russia.  Medvedev had begun his administration with 
a focus on domestic reforms which, for now, were on hold. 
Lukin hoped that within 4-5 months he would be able to return 
to these important matters. 
 
12. (C) COMMENT: Lukin is a liberal on the Russian political 
spectrum, someone disposed toward cooperation with the U.S. 
Still, his statements on recognition, Russian perceptions of 
one-sided American media coverage of the war and U.S. 
culpability for arming Georgia under Saakashvili reflect the 
thinking of the majority of Russian foreign policy elite. 
Nonetheless, in the coming months, as the foreign economic 
and political costs to Russia mount, we stand our best chance 
of getting our views heard, and conveyed to GOR officials, 
through interlocutors such as Lukin. 
BEYRLE

Wikileaks

08MOSCOW2584, DFM KARASIN: CONCERN OVER PAKISTAN NUCLEAR

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Reference ID Created Released Classification Origin
08MOSCOW2584 2008-08-28 09:09 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow
Appears in these articles:
http://www.ndtv.com/article/wikileaks-revelations/wikileaks-us-raised-concerns-about-safety-of-pakistans-nuclear-assets-108219

VZCZCXRO0411
OO RUEHPW
DE RUEHMO #2584 2410909
ZNY CCCCC ZZH
O 280909Z AUG 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9746
INFO RUCNAFG/AFGHANISTAN COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY

C O N F I D E N T I A L MOSCOW 002584 
 
SIPDIS 
 
E.O. 12958: DECL: 08/27/2018 
TAGS: PREL KNDP PGOV PTER RS PK
SUBJECT: DFM KARASIN: CONCERN OVER PAKISTAN NUCLEAR 
STABILITY 
 
REF: A. (A) MOSCOW 2575 
     B. (B) STATE 88734 
 
Classified By: Ambassador John R. Beyrle: Reasons 1.4 (b, d). 
 
1.  (C)  At the end of an August 27 meeting focused on 
Georgia (reftel), Deputy Foreign Minister Grigoriy Karasin 
told the Ambassador that Russia was very concerned about 
events in Pakistan.  In the wake of Musharraf's resignation, 
and with the departure of Nawaz Sharif from the coalition, 
"chaos reigned."  Russia was "worried" about the recent 
political developments, with Karasin stressing Russia's 
proximity to the South Asian nuclear power.  Karasin 
requested further information on U.S. views of Pakistan 
political developments, including the U.S. assessment of "how 
Russia should interpret the situation with respect to 
Pakistan's nuclear weapons." 
 
2.  (C)  Action Request:  We appreciate any additional 
guidance beyond Ref B that can be shared with Karasin's 
office. 
BEYRLE 

=======================CABLE ENDS============================

Wikileaks

08MOSCOW2583, CAUCASUS EXPERTS PRESAGE CAUSES AND CONSEQUENCES

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Reference ID Created Released Classification Origin
08MOSCOW2583 2008-08-28 09:08 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXYZ0000
PP RUEHWEB

DE RUEHMO #2583/01 2410908
ZNY CCCCC ZZH
P 280908Z AUG 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 9744
INFO RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY

C O N F I D E N T I A L MOSCOW 002583 
 
SIPDIS 
 
E.O. 12958: DECL: 08/26/2018 
TAGS: PGOV PREL PHUM RS GG
SUBJECT: CAUCASUS EXPERTS PRESAGE CAUSES AND CONSEQUENCES 
OF RECOGNIZING SOUTH OSSETIA AND ABKHAZIA 
 
REF: A. A) MOSCOW 2566 
     B. B) MOSCOW 2488 
 
Classified By: Deputy Chief of Mission Eric Rubin; 
reasons 1.4(b/d). 
 
1. (C) SUMMARY: In a roundtable discussion with the DCM 
August 21, Russian experts on the Caucasus foreshadowed some 
of the arguments that Russian government officials are now 
making in defense of the decision to recognize the 
independence of South Ossetia and Abkhazia.  All supported 
Russian military action to repeal the Georgian attack on 
Tskhinvali, but differed on the need and reasons for 
advancing into Georgia, itself.  They justified the Russian 
(i.e., Medvedev/Putin) response as necessary to demonstrate, 
to foreign and domestic audiences, that Russia will do 
whatever is necessary to project power in the Caucasus, and 
that Europe and the U.S. will have to deal with new realities 
on the ground  To gain credibility with Russian liberals, 
they argued, the U.S. would have to recognize Georgian human 
rights violations in South Ossetia.  END SUMMARY. 
 
2. (C) The DCM hosted five well-known and widely respected 
Russian experts on the Caucasus for a roundtable discussion 
August 21.  The discussion quickly turned to analysis of the 
present situation in South Ossetia and Abkhazia.  Only two of 
the interlocutors had been to the region (Sergey Markedonov 
and Tanya Lokshina from Human Rights Watch) in recent weeks, 
but all were following events there and have written and 
spoken frequently of late in Russian mass media on 
developments since the beginning of hot conflict on August 7. 
 
3. (C) Sergey Markedonov argued that the conflict did not 
begin August 7.  South Ossetia had won its autonomy from 
Tbilisi in 1990-91, when more than 1,000 people died. 
Georgia at the time tried to ethnically cleanse not only 
South Ossetia, but also clear Ossetians out of the rest of 
Georgia.  Thus, the (at the time) Georgian leaders 
Ghamsakurdia can be said to have forced the Ossetians into to 
becoming "separatists."  Since 1992, Georgia's policy of only 
speaking with "their" Georgians in South Ossetia had further 
alienated the Ossetian population.  Since coming to power 
Saakashvili has made it clear he wanted to reunite South 
Ossetia and Abkhazia with Georgia.  Markedonov charged that 
Saakashvili had acquainted himself with the lightning 
military action taken by Croatia in 1995 to capture back 
parts of Serb-held territory, and he put the example to work 
in his attack on Tskhinvali.  He went on to argue that, "If 
Georgia had succeeded, then the Ingush would ask 'Why can't 
we do the same in Progorodniy as the Georgians did in 
Tskhinvali?'" 
 
4. (C) Carnegie Moscow Center's Sergey Malashenko contended 
that, while animosity between Russian and Georgian leaders is 
deep and irreconciable, Putin and Medvedev were acting on the 
basis of Russian security interests when they decided to use 
force, and Boris Yeltsin would have done the same (though he 
would have kept Russian forces out of Gori, he said).  The 
U.S. and Europe need to understand that Russia had to show 
its "brute strength" in the region so that there would be no 
similar problems in the rest of the Caucasus, or that others 
would think seriously about whether to challenge Russian 
interests.  In dealing with Putin (and to a lesser extent 
Medvedev), he cautioned that "The more you try to scare him, 
the greater his reaction will be.  There is a difference 
between Putin and Medvedev, but the more you force Medvedev 
to react, the more you pressure him, he'll react the same as 
Putin, and it is going to be a problem for the West." 
Medvedev's domestic plans may now be on hold as a result of 
all of this, an even more likely scenario if (speaking on 
August 21) South Ossetia and Abkhazia are recognized.  Events 
in South Ossetia, and the western military support for 
Georgia over the past years, have lead Russian leaders to 
determine that demonstrating Russian resolve is now a matter 
of national security, and that they are ready to weather the 
consequences. 
 
5. (C) Tanya Lokshina of Human Rights Watch, who had just 
returned from South Ossetia, including Tskhinvali, reported 
that fighting there had destroyed enough that she believed 
few if any Georgians would return.  Tensions between 
Ossetians and Georgians were such that it would be impossible 
for the two to resume a normal existence anytime soon, 
perhaps never.  She lamented this, because of mixed 
marriages, family and other ties between many ethnic 
Ossetians and Georgians.  Before the conflict, relations 
between Ossetians and the Georgians were better than between 
Ossetians and the Ingush.  Given this caldron of ethnic 
emotions, she argued, it will be essential that as many 
international groups as possible establish a presence in 
South Ossetia to meet the basic needs of citizens and to 
 
serve as conduits and buffers between the two predominant 
ethnic groups.  She praised the role that the Russian 
military played in South Ossetia in protecting Geor
gian 
villages from reprisals after the Georgian attack on 
Tskhinvali and called on the U.S., in order to improve its 
credibility among Russians (especially liberal Russians), to 
acknowledge that Georgia committed human rights violations in 
South Ossetia. 
 
6. (C) Markedonov bitterly criticized Saakashvili for his 
actions since 2004.  He declared that Abkhaz and South 
Ossetians want their own state, or affiliation with Russia. 
The younger generation of Abkhaz hate Georgians and the 
Georgian government has made no attempt - certainly not under 
Saakashvili - to correct the mistakes it made in the past. 
Aleksandr Cherkasov of the Human Rights Group Memorial added 
that Russian forces can no longer be considered peacekeepers 
in the conflict zone.  Sergey Artyunov of Russian Academy of 
Sciences agreed, but argued that Russian forces were in South 
Ossetia and Abkhazia to stay.  Like the involvement on many 
larger powers in so-called separatist or ethnic conflicts 
over time, their long-term presence "would not start World 
War III."  He and Malashenko urged that Russian leaders and 
Western partners (primarily the U.S.) to come to an 
agreement, recognizing Russian, Abkhaz and Ossetian 
interests.  They warned that the more West strikes at Russia, 
the stronger will be the reaction.  They stated that the U.S. 
had forfeited its moral authority by recognizing Kosovo, and 
that it should approach discussions with Russia acknowledging 
interests that it had a right to protect. 
 
7. (C) COMMENT: The discussion was spirited, presenting a 
strong defense, from some of our most liberal contacts, of 
Russian military action, condemnation of Saakashvili, and 
justifications of steps by Putin (and Medvedev) to 
demonstrate Russian resolve, even in the face of 
international consequences.  While we have little chance of 
changing public perceptions of the decision to recognize in 
the short to near term, it is representatives of the foreign 
policy elite, such as this group, predisposed toward at least 
listening to our views, whom we need to convince that 
recognition is not in the long-term interests of Russia. 
BEYRLE

Wikileaks

08MOSCOW2582, SAMODUROV DEPARTS SAKHAROV CENTER UNDER LEGAL,

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Reference ID Created Released Classification Origin
08MOSCOW2582 2008-08-28 08:56 2011-08-30 01:44 CONFIDENTIAL Embassy Moscow

VZCZCXYZ0002
RR RUEHWEB

DE RUEHMO #2582/01 2410856
ZNY CCCCC ZZH
R 280856Z AUG 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 9742
INFO RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE

C O N F I D E N T I A L MOSCOW 002582 
 
SIPDIS 
 
E.O. 12958: DECL: 08/28/2018 
TAGS: KIRF PGOV PHUM PREL RS SOCI
SUBJECT: SAMODUROV DEPARTS SAKHAROV CENTER UNDER LEGAL, 
FINANCIAL PRESSURE 
 
REF: 07 MOSCOW 5365 
 
Classified By: Classified by Political Minister Counselor 
Alice G. Wells for reason 1.4 (d) 
 
1.  (C) Summary: Sakharov Center Director Yuri Samodurov quit 
his position after facing mounting financial shortfalls, 
legal difficulties, and strategic differences with the 
Sakharov Foundation leadership.  Arguing that his fate was in 
the hands of a Kremlin leadership heavily influenced by the 
Russian Orthodox Church, Samodurov said he was dependent on 
the support of leading human rights activists to try and 
convince Medvedev to intervene in reducing any ultimate 
punishment.  The criminal prosecution against Samodurov 
became more lopsided, with witnesses for the prosecution 
outnumbering those for the defense by 142 to 2.  Samodurov 
hoped that the museum would again be able to attract 
benefactors in the wake of his departure. 
 
Abandoning Ship 
--------------- 
 
2.  (C) Sakharov Center Director Yuri Samodurov told us 
August 26 that he left his position at the museum because he 
could do nothing more to help it develop as an artistic 
center.  Samodurov resigned from the post he held for 12 
years on August 19, claiming that the art museum's financial 
troubles and differences in opinion with the museum's 
trustees encouraged his departure.  Samodurov's decision to 
quit came after the June 30 decision of the museum's 
constituents not to present a sequel to the controversial 
exhibit "Forbidden Art - 2006" (reftel) that led to a 
criminal prosecution against Samodurov and exhibit curator 
Andrei Yerofeev under Article 282 of the Criminal Code for 
the incitement of racial, national, and religious hatred. 
Yerofeev was subsequently fired from his position as curator 
at the renowned Tretyakov Gallery. 
 
3.  (C) Samodurov lamented that the Sakharov Center had come 
under negative scrutiny during his tenure.  In addition to 
the Russian Orthodox Church's (ROC) public criticism, he 
believed that the ROC played an unhelpful role behind the 
scenes in his legal battle.  He added that the museum had 
entered a period of stagnation, suffering from poor finances 
and a fear of government repression, and suggested that he, 
like all museum directors, wanted to give the art a chance to 
speak for itself while also balancing the museum's budget. 
Recent legal action and financial hardship proved too great 
an obstacle for him to continue.  Samodurov claimed to have 
no future plans, nor to have heard additional details about 
his court case, even though he expected more details to 
emerge in the coming weeks.  He also noted that the Board of 
Directors for the Sakharov Foundation, led by Edward Kline, 
had not asked him to leave; he chose to depart on his own 
accord.  Numerous press outlets covered his departure, 
including the Kommersant daily which said Samodurov had grown 
quite nervous about the lawsuit. 
 
Financial Problems 
------------------- 
 
4.  (C) Samodurov told us in an earlier July 30 meeting that 
the museum faced extremely difficult financial straits.  The 
Sakharov Center operated on a budget of USD 450,000 per year; 
however, Samodurov complained that the institute had managed 
to raise only an estimated USD 100,000 to that point in 2008 
for the Center's archives (Note: he deemed the archives to be 
noncontroversial).  As Russia's only non-governmental and 
non-commercial museum and community center, the Sakharov 
Center consistently needed wealthy patrons to maintain 
operations, conduct research projects, and house permanent 
exhibitions.  Part of the problem, Samodurov noted, stemmed 
from the U.S.- based Sakharov Foundation Board of Director's 
decision to reduce funding drastically in the wake of the 
2007 presentation of "Forbidden Art - 2006."  Additionally, 
he mentioned that fewer international agencies offered grants 
to the Sakharov Center, probably due to their reluctance to 
be associated with an organization in poor favor with the 
government.  Since the museum did not charge an admission 
fee, Samodurov knew it would need to fire the majority of its 
staff, including the guards and maintenance personnel charged 
to keep the museum running. 
 
Legal Troubles 
-------------- 
 
5.  (C) Samodurov acknowledged that human rights advocate and 
Moscow Helsinki Group leader Lyudmila Alekseyeva offered her 
assistance for fundraising purposes in 2007.  Samodurov told 
us that Alekseyeva had written letters to the ambassadors of 
numerous European countries, including Portugal, Spain, 
Norway, Estonia, Italy, and Germany in recent weeks, 
soliciting their support, but with mixed results.  He also 
noted that SPS Leader Boris Nemtsov had appealed to two 
undisclosed billionaires in Russia for their patronage, and 
added that he hoped for help from Garry Kasparov.  That said, 
he doubted any significant financial assistance from outside 
donors would be forthcoming. 
 
6.  (C) Samodurov maintained that the court case filed 
against him for the 2007
 exhibition would not be decided by 
the court itself, but by Medvedev.  Drawing a comparison to 
his 2005 legal proceedings, in which the government reduced 
his penalty to 100,000 rubles, Samodurov stated that Putin 
himself authorized the reduced punishment after receiving 
several appeals for leniency from human rights advocates.  In 
late July, Samodurov received a legal document from the 
prosecution detailing the case's status.  Samodurov told us 
about two interesting items from the prosecution's case: 
first, the prosecution admitted that no victims existed in 
the case; second, the procuracy had identified 142 witnesses 
for the prosecution, but only two witnesses for the defense, 
both of whom served on the Board of Directors for the 
Sakharov Center.  Samodurov asked for an explanation on both, 
but the prosecution simply told him that they were "just 
doing their job."  Samodurov reluctantly conceded that in a 
rigged legal proceeding in Russia, one does not really need 
any witnesses anyway -- the result will be what the 
authorities want.  Again facing prison time, Samodurov 
believed the best course of action to avoid imprisonment 
would be a personal letter to Medvedev in conjunction with 
additional appeals from Alekseyeva and Lev Ponomaryov. 
 
Comment 
------- 
 
7.  (C) Samodurov's departure from the museum is emblematic 
of the reduced government tolerance for dissent, and the 
inability of civil society and the Sakharov Center to build a 
constituency for their work. The Center's difficulties were 
compounded by the provocative nature of some of their 
exhibits, which often differed from mainstream tastes and 
became the easy targets of antics, including outcry from the 
Russian Orthodox Church. 
BEYRLE

Wikileaks